Tokio Marine Malayan Insurance Company, Inc. vs. Valdez

A litigant may be authorized to sue as an indigent upon an ex parte showing of indigency, and the docket fees exempted thereby become a lien on any judgment rendered in his favor; the certification against forum shopping need only substantially comply with the rule's requirements, and the taking of a deposition outside the enjoined proceedings does not constitute indirect contempt.

Tokio Marine Malayan Insurance Company Incorporated is a domestic corporation engaged in the insurance business. The individual petitioners are its corporate officers, except Antonio B. Lapid, who served as one of Tokio Marine's consultants. Jorge Valdez was a former unit manager of Tokio Marine pursuant to a Unit Management Contract entered into between them on August 16, 1977. The dispute arose from Valdez's claim that petitioners violated the terms of the Unit Management Contract by refusing to pay him commissions and bonuses, prompting him to file a complaint for damages and, subsequently, criminal complaints against petitioners.

On October 15, 1998, Jorge Valdez filed with the Regional Trial Court, Branch 35, Manila, a complaint for damages against Tokio Marine Malayan Insurance Company Incorporated and its corporate officers, docketed as Civil Case No. 98-91356. Valdez alleged that petitioners violated the terms of the Unit Management Contract entered into on August 16, 1977 by refusing to pay him, among others, his commissions and bonuses. He prayed for actual damages in the amount of ₱71,866,205.67 with corresponding interest, moral damages of ₱10,000,000.00, exemplary damages of ₱10,000,000.00, attorney's fees equivalent to 30% of the said amounts, and costs of suit. Valdez also filed an "Urgent Ex Parte Motion For Authority To Litigate As Indigent Plaintiff," representing that he did not own any real property in the City of Manila or elsewhere.

On October 28, 1998, the trial court issued an Order allowing Valdez to litigate as a pauper, directing the Clerk of Court to accept the complaint without payment of filing fees computed at ₱615,672.83, which amount was to constitute a lien upon any judgment rendered in his favor. Petitioners filed their separate motions to dismiss the complaint on December 11, 1998. On December 17, 1998, Valdez manifested before the trial court that he had filed various criminal complaints against petitioners with the Office of the City Prosecutor of Makati City. The trial court denied the motions to dismiss on January 20, 1999, and subsequent motions for reconsideration were likewise denied. Petitioners then filed an "Answer Ad Cautelam" on March 12, 1999.

On May 24, 1999, petitioners elevated the matter to the Court of Appeals via a petition for certiorari with prayer for a temporary restraining order and preliminary injunction, docketed as CA-G.R. SP No. 52914. On October 15, 1999, the Court of Appeals issued a Resolution directing the issuance of a writ of preliminary injunction restraining the trial court from conducting further proceedings in Civil Case No. 98-91356. On December 7, 1999, Valdez, then 75 years old and sickly, filed with the Court of Appeals an "Urgent Notice of Taking of Deposition Upon Oral Examination" for purposes of the pending case and such other legal purposes as warranted. Petitioners treated this as a violation of the preliminary injunction and filed on December 13, 1999 a petition to cite Valdez in contempt, docketed as CA-G.R. SP No. 56579, which was subsequently consolidated with CA-G.R. SP No. 52914.

On December 14, 1999, Valdez's deposition was taken before a notary public for Manila and filed with the Court of Appeals on the same date. On September 13, 2001, the Court of Appeals rendered its Decision dismissing both petitions and lifting and dissolving the writ of preliminary injunction. The appellate court found that Valdez's certificate against forum shopping substantially complied with Section 5, Rule 7, and that the deposition was taken in good faith to clarify a misunderstanding created during earlier depositions, not to violate the injunction. Petitioners elevated the case to the Supreme Court via the instant consolidated petitions for review on certiorari.

• Indigent Status Defect: Petitioners maintained that respondent's ex parte motion to litigate as an indigent was defective because it was not accompanied or supported by the affidavits of his children, the immediate members of his family, and that it was not supported by sufficient evidence to show his indigent status.
• Forum Shopping: Petitioners insisted that respondent committed forum shopping when he failed to report to the trial court that he filed criminal cases against petitioners with the Office of the City Prosecutor of Makati City.
• Indirect Contempt: Petitioners claimed that the deposition of respondent taken on December 14, 1999 violated the injunction issued by the Court of Appeals on October 15, 1999, and that such act was tantamount to indirect contempt of court.

• Indigent Litigant Qualification: Whether respondent's complaint was properly allowed to proceed despite nonpayment of docket fees, given the alleged defects in his indigent litigant application.
• Forum Shopping: Whether respondent engaged in forum shopping by filing criminal cases against petitioners with the Office of the City Prosecutor of Makati City.
• Indirect Contempt: Whether respondent was guilty of indirect contempt of court for taking his deposition during the pendency of the preliminary injunction issued by the Court of Appeals.

• Indigent Litigant Qualification: No, the complaint was properly allowed. Section 19, Rule 141 of the Revised Rules of Court requires only the litigant's own affidavit, not those of all immediate family members, and the Court will not reweigh the evidence supporting the trial court's factual determination of indigency.
• Forum Shopping: No, respondent did not engage in forum shopping. His certificate against forum shopping substantially complied with Section 5, Rule 7 of the 1997 Rules of Civil Procedure, as it disclosed the criminal cases filed or to be filed, and he subsequently manifested before the trial court the actual filing of those criminal cases.
• Indirect Contempt: No, respondent was not guilty of indirect contempt. The deposition was taken in good faith to clarify a misunderstanding from earlier depositions, and the taking of a deposition is not part of the court proceedings in Civil Case No. 98-91356 and thus not covered by the writ of injunction.

• Indigent Litigant Qualification: It is hornbook law that courts acquire jurisdiction over any case only upon payment of the prescribed docket fee, with the exception provided in Section 21, Rule 3 of the 1997 Rules of Civil Procedure for indigent parties. The guidelines for determining indigent status are found in Section 19, Rule 141 of the Revised Rules of Court, which requires that the litigant execute an affidavit attesting that he and his immediate family do not earn gross income exceeding double the monthly minimum wage and do not own real property with a fair market value exceeding ₱300,000.00, supported by an affidavit of a disinterested person. Petitioners argued that the affidavits of respondent's children were also required, but the Rule clearly states that it is the litigant alone who shall execute the affidavit — the express mention of the litigant excludes others (expressio unius est exclusio alterius). As to the sufficiency of evidence, the Court declined to reweigh the evidence, being a court of law whose function is not to analyze and weigh anew the evidence supportive of a factual determination already made by the trial court.

• Forum Shopping: Forum shopping is defined as the act of repetitively availing of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and essential facts and raising substantially the same issues, to increase the chances of obtaining a favorable decision. Section 5, Rule 7 of the 1997 Rules of Civil Procedure requires a certification against forum shopping stating that the party has not commenced any action involving the same issues and, if there is such pending action, a complete statement of its present status, with an undertaking to report any subsequent filing of a similar action within five days. Respondent's certificate disclosed the criminal cases for estafa, falsification, and violation of the Insurance Code that he had filed or intended to file before the Makati Prosecutor's Office, as well as an administrative case. The Court agreed with the Court of Appeals that this constituted substantial compliance with Section 5 of Rule 7. Moreover, respondent had manifested before the trial court on December 16, 1998 that he had actually filed the criminal cases, thus fulfilling his undertaking to report.

• Indirect Contempt: Indirect contempt under Section 3, Rule 71 of the 1997 Rules of Civil Procedure includes disobedience of or resistance to a lawful writ, process, order, or judgment of a court, and any improper conduct tending to impede, obstruct, or degrade the administration of justice. Before one may be convicted of indirect contempt, there must be compliance with three requisites: (a) a charge in writing filed; (b) an opportunity for respondent to comment within the period fixed by the court; and (c) an opportunity to be heard by himself or counsel. Records showed these requirements were complied with. However, the Court of Appeals found that the deposition was taken in good faith — respondent sought to clarify a misunderstanding created when he was cross-examined during earlier depositions on June 9 and 28, 1999, at which time no injunction had yet been issued. The Court found no reason to depart from this finding. Critically, the taking of respondent's deposition was not part of the court proceedings in Civil Case No. 98-91356 and was therefore not covered by the writ of injunction. The Court reiterated the doctrine that contempt powers must be exercised sparingly.

• Indigent Litigant Rule — Under Section 19, Rule 141 of the Revised Rules of Court, an indigent litigant (a) whose gross income and that of his immediate family do not exceed double the monthly minimum wage of an employee, and (b) who does not own real property with a fair market value exceeding ₱300,000.00, shall be exempt from payment of legal fees. The exemption requires the litigant's own affidavit, supported by an affidavit of a disinterested person, with the current tax declaration attached if any. The Rule requires only the litigant's affidavit — not affidavits from all members of the immediate family — pursuant to the principle expressio unius est exclusio alterius. The legal fees exempted shall be a lien on any judgment rendered in favor of the indigent.

• Substantial Compliance with Certification Against Forum Shopping — Under Section 5, Rule 7 of the 1997 Rules of Civil Procedure, a certificate against forum shopping must state that the party has not commenced any action involving the same issues in any court, tribunal, or quasi-judicial agency, and must disclose any pending action with a complete statement of its present status, with an undertaking to report any subsequent filing within five days. Substantial compliance with these requirements suffices; the certificate need not be perfect so long as it discloses the other actions or claims and their status.

• Sparing Exercise of Contempt Power — Courts must exercise their contempt powers sparingly. The taking of a deposition, which is a mode of discovery outside the court proceedings proper, does not fall within the scope of a writ of preliminary injunction that restrains the trial court from conducting further proceedings in a civil case. Good faith in the act sought to be penalized negates indirect contempt.

• "Section 19 clearly states that it is the litigant alone who shall execute the affidavit. The Rule does not require that all members of the litigant's immediate family must likewise execute sworn statements in support of the petition. Expressio unius est exclusio alterius." — This passage defines the scope of the indigent litigant affidavit requirement, applying the canon of statutory construction to hold that only the litigant's own affidavit is necessary.

• "We agree with the Court of Appeals that the foregoing certification is a substantial compliance with Section 5 of Rule 7." — This statement establishes that substantial compliance with the certification against forum shopping is sufficient, resolving the issue of whether respondent's disclosure of criminal cases in his certificate satisfied the rule.

• "Moreover, the taking of respondent's deposition is not a part of the court proceedings in Civil Case No. 98-91356, hence, not covered by the writ of injunction issued by the Court of Appeals. Let it be stressed at this point that we have always abided by the dogma that courts must exercise their contempt powers sparingly." — This passage articulates the ratio decidendi on the contempt issue, distinguishing between modes of discovery and court proceedings, and reaffirms the doctrine of sparing exercise of contempt power.

• Magaspi vs. Ramolete, G.R. No. 34840, July 20, 1982, 115 SCRA 193 — Cited for the doctrine that correct docket fees must be paid before courts can act on a petition or complaint; reiterated the principle from Lazaro vs. Endencia that jurisdiction is acquired only upon payment of prescribed docket fees.
• Manchester Development Corp. vs. Court of Appeals, G.R. No. 75919, May 7, 1987, 149 SCRA 562 — Cited as foundational authority for the rule that courts acquire jurisdiction over any case only upon payment of the prescribed docket fee.
• Gatmaytan vs. Court of Appeals, G.R. No. 123332, February 3, 1997, 267 SCRA 487 — Cited for the definition of forum shopping as the repetitive availing of several judicial remedies in different courts, all substantially founded on the same transactions and essential facts and raising substantially the same issues.
• Lumabas vs. Banzon, A.M. No. MTJ-02-1221, August 18, 2005, 467 SCRA 257 — Cited for the three requisites before one may be convicted of indirect contempt: (a) a charge in writing filed; (b) an opportunity for respondent to comment; and (c) an opportunity to be heard by himself or counsel.

• Section 21, Rule 3, 1997 Rules of Civil Procedure — Provides the exception to the rule on payment of docket fees by allowing a party to litigate as an indigent if the court, upon ex parte application and hearing, is satisfied that the party has no money or property sufficient and available for food, shelter, and basic necessities. The exempted docket and lawful fees shall be a lien on any judgment favorable to the indigent. Applied to uphold the trial court's order allowing respondent to litigate as an indigent.
• Section 19, Rule 141, Revised Rules of Court — Sets the guidelines for indigent litigant exemption: gross income of the litigant and immediate family not exceeding double the monthly minimum wage, and no real property with a fair market value exceeding ₱300,000.00. Requires the litigant's affidavit supported by a disinterested person's affidavit. Applied to determine that only the litigant's own affidavit is required, not those of all family members.
• Section 5, Rule 7, 1997 Rules of Civil Procedure — Requires a certification against forum shopping in the complaint or initiatory pleading, stating that the party has not commenced any action involving the same issues, disclosing any pending action, and undertaking to report any subsequent filing within five days. Applied to find that respondent's certificate, which disclosed the criminal cases filed or to be filed, constituted substantial compliance.
• Section 3, Rule 71, 1997 Rules of Civil Procedure — Governs indirect contempt, including disobedience of a lawful writ, process, order, or judgment of a court, and any improper conduct tending to impede, obstruct, or degrade the administration of justice. Requires a charge in writing, opportunity to comment, and opportunity to be heard. Applied to find that while procedural requisites were met, respondent's act of taking his deposition did not constitute contempt because it was not covered by the injunction.

Chief Justice Reynato S. Puno (Chairperson), Associate Justice Renato C. Corona, Associate Justice Adolfo S. Azcuna, and Associate Justice Teresita J. Leonardo-De Castro concurred.