Fedman Development Corporation v. Agcaoili
REITERATIONFacts
The Antecedents: Fedman Development Corporation (FDC) was the developer of Fedman Suites Building (FSB). Interchem Laboratories Incorporated (Interchem) purchased Unit 411 under a contract to sell. Interchem transferred its rights to respondent Federico Agcaoili (Agcaoili), who assumed payment obligations to FDC. In December 1983, the centralized air-conditioning unit of FSB's fourth floor broke down. Agcaoili, adversely affected, demanded repairs from FDC and Fedman Suite Condominium Corporation (FSCC), but his demands were unheeded. Consequently, Agcaoili suspended payment of his condominium dues and monthly amortizations. Procedural History: FDC cancelled the contract to sell and cut off the electric supply to Unit 411. Agcaoili sued FDC and FSCC for injunction and damages. A compromise agreement was reached and approved by the RTC on August 26, 1985. Agcaoili paid outstanding dues and amortizations, and FDC reinstated the contract. However, FDC again disconnected the electric supply to Unit 411 on April 22, 1986. Agcaoili moved for execution of the RTC decision. On March 6, 1987, Agcaoili filed a new complaint for damages against FDC and FSCC, alleging unjust deprivation of use of the unit, suffering, inconvenience, embarrassment, violation of the compromise agreement, and illegal interest increases. FDC and FSCC filed their respective answers, raising defenses including separate personalities, Agcaoili's non-compliance with payment terms, cancellation of the contract, forfeiture of payments, and res judicata. The RTC rendered judgment in favor of Agcaoili, ordering FDC/FSCC to reinstate the contract, restore services, and pay damages. FDC appealed to the Court of Appeals (CA), which affirmed the RTC decision. The Petition: FDC appealed to the Supreme Court, claiming the RTC failed to acquire jurisdiction due to insufficient docket fees and that jurisdiction should have pertained to the Housing and Land Use Regulatory Board (HLURB). FDC also argued that the RTC and CA erred in ruling that Agcaoili had the right to suspend payment, that FDC's cancellation of the contract was improper, and that FDC and FSCC were one and the same corporation.
Issue(s)
Whether the Regional Trial Court (RTC) acquired jurisdiction over the case despite the alleged insufficiency of docket fees paid by the respondent. Whether the RTC had jurisdiction over the subject matter of the action, or if it pertained to the Housing and Land Use Regulatory Board (HLURB). Whether the respondent was justified in suspending the payment of his monthly amortizations. Whether the cancellation of the contract to sell by Fedman Development Corporation (FDC) was proper. Whether FDC and Fedman Suite Condominium Corporation (FSCC) were one and the same corporation and thus solidarily liable to the respondent.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed. The Clerk of Court of the Regional Trial Court, Makati City, Branch 150, is directed to assess and collect the additional docket fees from the respondent as fees in lien.
Ratio Decidendi
On the issue of jurisdiction and docket fees: The Court reiterated that the filing of the complaint or initiatory pleading and the payment of the prescribed docket fee are the acts that vest a trial court with jurisdiction. While the complaint did not specify the amounts of moral damages, exemplary damages, and attorney's fees, leading to an insufficient docket fee payment, the RTC still acquired jurisdiction because Agcaoili paid the assessed docket fees. This payment negated bad faith or intent to defraud the Government. The Court emphasized that the clerk of court has the responsibility to make a deficiency assessment, and the plaintiff can be required to pay the deficiency without automatic loss of jurisdiction, provided there is no bad faith. The Court directed the respondent to remit any docket fee deficiency. On the issue of jurisdiction pertaining to HLURB: The Court held that FDC was barred by estoppel from asserting that the HLURB, not the RTC, had jurisdiction. FDC actively participated in the RTC proceedings, submitted a compromise agreement for approval, and sought affirmative relief through its counterclaim, thereby recognizing the RTC's jurisdiction. FDC invoked the HLURB's authority only after an unfavorable judgment, which the Court found to be an inappropriate and intolerable practice. The principle of estoppel precludes FDC from denying the RTC's jurisdiction after its voluntary submission and active participation. On the respondent's right to suspend payment: The Court upheld Agcaoili's right to suspend payment due to FDC's unilateral and unjustified increase in interest rates. The contract to sell allowed for interest rate adjustments based on increased bank interest rates, but FDC failed to substantiate the alleged increase with sufficient proof. The Court cited Article 1308 of the Civil Code, stating that a contract must bind both parties and its compliance cannot be left to the will of one of them. FDC's failure to justify the increased interest rates rendered its cancellation of the contract to sell improper. On the propriety of the cancellation of the contract to sell: The Court found FDC's cancellation of the contract to sell improper, noting FDC's failure to comply with Republic Act No. 6552 (Maceda Law). The Maceda Law aims to protect buyers of real estate on installment payments. Section 3(b) of the law requires FDC to refund the cash surrender value of the payments made before a valid cancellation can occur. Since FDC did not comply with these requisites, the contract to sell remained valid and subsisting, and FDC could not unilaterally forfeit the payments made by Agcaoili. On the separate personalities of FDC and FSCC: The Court considered FDC's claim of separate personalities from FSCC as a question of fact not reviewable under Rule 45. However, the Court noted that FDC and FSCC failed to fulfill their obligations to unit owners, such as repairing the air-conditioning unit and providing water supply, which contributed to Agcaoili's decision to suspend payments. The Court also found that FDC and FSCC's actions, including the disconnection of electricity and unilateral increase of interest rates without justification, clearly made FDC liable for damages under Article 1171 of the Civil Code.
Main Doctrine
The non-payment of the prescribed filing fees at the time of the filing of the complaint or other initiatory pleading fails to vest jurisdiction over the case in the trial court. Yet, where the plaintiff has paid the amount of filing fees assessed by the clerk of court, and the amount paid turns out to be deficient, the trial court still acquires jurisdiction over the case, subject to the payment by the plaintiff of the deficiency assessment. Furthermore, a party who actively participates in court proceedings and seeks affirmative relief is estopped from later assailing the court's jurisdiction.