Far East Bank v. Shemberg Marketing
REITERATIONFacts
The Antecedents: Respondents, Shemberg Marketing Corporation and several other related corporations, along with individual members of the Dacay family, entered into various credit transactions with Far East Bank and Trust Company (FEBTC) prior to 1998. These transactions were secured by real estate mortgages on properties owned by the respondents. The mortgage contracts stipulated that upon failure to pay, the entire principal, interest, and charges would become immediately demandable, and FEBTC would have the discretion to foreclose the mortgages extrajudicially. Respondents subsequently failed to pay their loans, which matured on February 14, 2001, prompting FEBTC to initiate foreclosure proceedings. Procedural History: On February 28, 2001, respondents filed a Complaint with the Regional Trial Court (RTC) of Mandaue City, seeking declaratory relief, injunction, damages, and annulment of promissory notes, documents, and contracts, alleging that FEBTC's employees filled in blanks with false entries on standard bank forms. The RTC issued a Temporary Restraining Order (TRO) on March 9, 2001, and subsequently denied FEBTC's Motion to Dismiss on March 27, 2001, while also issuing a writ of preliminary injunction. FEBTC's motions for reconsideration were denied by the RTC on August 16, 2001. FEBTC then filed a petition for certiorari, prohibition, and mandamus with the Court of Appeals (CA), assailing the RTC's orders. The CA dismissed FEBTC's petition on February 16, 2004, and denied its motion for reconsideration on May 28, 2004. The Petition: Petitioner FEBTC filed a petition for review on certiorari with the Supreme Court, raising two main issues: (1) whether the trial court acquired jurisdiction over Civil Case No. MAN-4045 due to alleged deficiencies in docket fees, and (2) whether the Court of Appeals committed grave abuse of discretion in dismissing its petition for certiorari, prohibition, and mandamus. FEBTC argued that the complaint failed to allege the assessed values of the properties, thus preventing proper computation of filing fees. Respondents countered that the primary relief sought was the cancellation of mortgages, an action incapable of pecuniary estimation, and thus the docket fees were correctly computed. The Supreme Court affirmed the Court of Appeals' decision, holding that the action was indeed incapable of pecuniary estimation and that the trial court had acquired jurisdiction. The Court also found no grave abuse of discretion on the part of the CA in upholding the trial court's actions.
Issue(s)
Whether the trial court acquired jurisdiction over Civil Case No. MAN-4045, considering the alleged deficiency in docket fees. Whether the Court of Appeals committed grave abuse of discretion amounting to lack or excess of jurisdiction in issuing the questioned orders.
Ruling
The Supreme Court denied the petition and affirmed the assailed Decision and Resolution of the Court of Appeals. The Court held that the trial court acquired jurisdiction over the case and that the Court of Appeals did not commit grave abuse of discretion.
Ratio Decidendi
On the issue of jurisdiction: The Court reiterated that a court acquires jurisdiction over a case upon payment of the prescribed fees. It clarified that an action for cancellation of mortgages is an action incapable of pecuniary estimation. Applying the test from Singsong v. Isabela Sawmill, the Court found that the primary relief sought by respondents was the cancellation of mortgages for want of consideration, making the action incapable of pecuniary estimation. Therefore, the contention that there was a deficiency in docket fees was without merit, as respondents paid the fees as computed by the clerk of court. Consequently, the trial court acquired jurisdiction over Civil Case No. MAN-4045. On the issue of grave abuse of discretion: The Court held that the Court of Appeals did not commit grave abuse of discretion in issuing the questioned orders. It defined grave abuse of discretion as an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or an arbitrary and despotic exercise of judgment. The Court found that the trial court acted in a fair, reasonable, and expeditious manner, conducting hearings and allowing parties to submit memoranda. The records did not indicate any grave abuse of discretion. The Court reiterated that certiorari will not lie to correct alleged grave abuse of discretion when the court has jurisdiction over the person and the subject matter of the action, as its decisions on all questions arising from the case are but exercises of such jurisdiction. Any alleged errors in findings would be questions of law, not abuse of discretion correctible by certiorari.
Main Doctrine
An action for cancellation of mortgages is an action incapable of pecuniary estimation, and the trial court acquires jurisdiction upon payment of docket fees as computed by the clerk of court. Certiorari will not lie to correct alleged grave abuse of discretion when the court has jurisdiction over the subject matter and the parties, as its decisions on questions arising from the case are exercises of such jurisdiction.