Primary Holding

An action for annulment of deed of sale involving real property, where title and possession have already been transferred to the adverse party, is a real action. The docket fees must be computed based on the fair market value of the property under Section 7(a), Rule 141 of the Rules of Court, as amended.

Background

Ruby Shelter obtained a loan of P95,700,620.00 from respondents Tan and Obiedo, secured by real estate mortgages over five parcels of land. After defaulting, they entered into a Memorandum of Agreement allowing extension of payment and requiring execution of Deeds of Absolute Sale. When Ruby Shelter failed to pay, the respondents registered the properties in their names.

Facts

• 1. Petitioner obtained a P95.7M loan secured by mortgages on 5 properties
• 2. Memorandum of Agreement dated March 17, 2005 granted extension until December 31, 2005
• 3. Agreement required execution of Deeds of Absolute Sale
• 4. Petitioner failed to pay by deadline
• 5. Respondents registered properties in their names on March 8, 2006
• 6. Petitioner filed complaint seeking annulment of deeds and damages
• 7. Initial docket fees paid: P13,644.25
• 8. Additional fees required: P720,392.60

Arguments of the Petitioners

• 1. Action is primarily for annulment of deeds, incapable of pecuniary estimation
• 2. Docket fees should be under Section 7(b)(1) of Rule 141
• 3. Additional fees would cause grave injustice due to prohibitive amount
• 4. Previous case (De Leon v. CA) ruled annulment cases as incapable of pecuniary estimation

Arguments of the Respondents

• 1. Case involves recovery of real property, making it a real action
• 2. Proper docket fees should be based on property value per Section 7(a)
• 3. Petitioner deliberately avoiding real action classification to pay lower fees
• 4. Transfer of title and possession already completed

Issues

• 1. Whether the complaint is a real action or one incapable of pecuniary estimation
• 2. Whether the docket fees should be computed based on property values
• 3. Whether the RTC and CA erred in requiring additional docket fees

Ruling

• 1. Complaint is essentially a real action despite being labeled as annulment
• 2. True nature involves recovery of title and possession
• 3. Previous transfer of title and possession makes it a real action
• 4. Docket fees must be based on property values per Section 7(a)
• 5. No exemption for corporate entities from proper docket fees
• 6. Additional fees of P720,392.60 properly required
• 7. Petition DENIED, CA decision AFFIRMED

Doctrines

• 1. Complaint is essentially a real action despite being labeled as annulment
• 2. True nature involves recovery of title and possession
• 3. Previous transfer of title and possession makes it a real action
• 4. Docket fees must be based on property values per Section 7(a)
• 5. No exemption for corporate entities from proper docket fees
• 6. Additional fees of P720,392.60 properly required
• 7. Petition DENIED, CA decision AFFIRMED

Precedents Cited

• 1. Manchester Development v. CA - Payment of docket fees is jurisdictional
• 2. Sun Insurance v. Asuncion - Guidelines on docket fee payment
• 3. Gochan v. Gochan - Real action determination despite complaint caption
• 4. Siapno v. Manalo - Disregarding title for true nature of action
• 5. Spouses De Leon v. CA - Distinguished from present case

Statutory and Constitutional Provisions

• 1. Rule 141, Section 7(a) and (b) of the Rules of Court
• 2. A.M. No. 04-2-04-SC amending Rule 141
• 3. Supreme Court Administrative Circular No. 35-2004
• 4. Section 1, Rule 4 of the Rules of Court