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[ G.R. No. 122471. March 1, 2000]

EUSEBIO COQUINCO vs. CONSOLIDATED BANK & TRUST CO., et al.

SECOND DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated MAR 1 2000.

G.R. No. 122471 (Eusebio Coquinco vs. Consolidated Bank and Trust Co., Manchester Development Corporation, and Court of Appeals.)

This petition for review on certiorari seeks to set aside the decision rendered by the Court of Appeals on August 31, 1995, in CA-G.R. CV No. 41461, and its resolution dated October 26, 1995, which denied petitioner's motion for reconsideration.

The facts of this case are as follows:

Petitioner and his brother, Juan Coquinco, were general partners in the partnership known as Coquinco & Company, each owning fifty percent (50%) of the firm. The partnership owned parcels of land located in Quiapo, Manila, titled in the name of the partnership. These properties are now the subject of the present dispute.

In 1980, the partnership ceased all its business operations. Consequently, both partners, represented by their respective sons, agreed to sell all partnership properties and divide the proceeds between the two of them after all the necessary deductions were made.

On September 30, 1982, a certain Johnny Uy filed with the Court of First Instance of Bulacan a collection suit against Manila Mill & Timber Incorporated and Coquinco & Company represented by its attorney-in-fact, Carlos Coquinco (son of Juan). On December 1, 1982, Johnny Uy entered into a compromise agreement with Carlos Coquinco where both agreed that the indebtedness shall be paid in monthly amortizations.

Petitioner insists, however, that there was really no indebtedness since the partnership ceased to exist as of 1980. When the compromise agreement was filed in the Court of First Instance of Bulacan for approval, defendants were found to have defaulted in their payments as provided for in the compromise agreement. Consequently, the CFI of Bulacan issued a writ of execution against the subject parcels of land. On August 26, 1983, the said properties were auctioned. Herein private respondent Manchester Development Corporation won as the highest bidder. The judicial sale in its favor was annotated on June 2, 1983, at the back of the title of the properties. Ultimately, the subject real properties were transferred to private respondent Consolidated Bank and Trust Corporation.

Thus, petitioner filed on August 7, 1985, with the Regional Trial Court of Manila a complaint for declaration of ownership and nullity of title with damages. In said complaint, petitioner prayed that he be declared as the fifty percent (50%) owner of disputed properties, and that the Register of Deeds of Manila be ordered to cancel all titles issued subsequent to that of Coquinco & Company, and thereafter to issue new certificates in petitioner's name to the extent of his ownership. In the alternative, petitioner sought that the defendants therein be solidarily ordered to pay actual and/or compensatory damages computed at P2,600.00 per square meter as the fair market value of the properties. He likewise asked for moral and exemplary damages in such amount as may be proven or may be awarded by the court as well as P300,000.00 as litigation expenses and attorney's fees plus costs.

Upon filing aforesaid complaint, petitioner assessed P810.00 as docket fees, which he promptly paid. The case was set for pre-trial, after which trial on the merits ensued. Thereafter, Manchester Development Corporation filed a motion to dismiss based on newly discovered facts and supervening events as follows: (1) the correct filing fees were not paid; (2) petitioner's action which was based on fraud had prescribed; and (3) the present action is barred by res judicata.

The parties were required to submit their respective memoranda and on the basis thereof, the trial court issued the order on April 29, 1992, dismissing the complaint on grounds of lack of jurisdiction for failure of petitioner to pay proper filing fees and for lack of cause of action as a result of prescription.

Expectedly, petitioner appealed to the Court of Appeals which, however, dismissed said appeal. His motion for reconsideration having been also denied, petitioner filed the instant petition, which we now find less than meritorious.

Petitioner contends that the appellate court erred in ruling that his complaint was not duly filed with trial court for failure to pay the proper docket fees. He also avers that public respondent erred in sustaining the lower court's finding that his action has prescribed.

In Manchester Development Corporation vs. CA, [149 SCRA 562, 569 (1987)] this Court already held that the court acquires jurisdiction over the case only upon the payment of the prescribed docket fees. An amendment of the complaint or similar pleading will not thereby vest jurisdiction in the court, much less the payment of the docket fees based on the amount sought in the amended pleading. There is no dispute that the aforesaid ruling applies to the complaint filed by petitioner as statues governing procedure of courts are applicable to actions pending and undetermined at the time of their passage. However, this Manchester ruling has been clarified in Sun Insurance Office Ltd. vs. Asuncion [170 SCRA 274 (1989)] and Tacay vs. Regional Trial Court of Tagum [180 SCRA 433 (1989)] where this Court held that in cases where the initiatory pleading is not accompanied by the payment of docket fees, the trial court may allow payment of the fees within reasonable time but in no case beyond the applicable reglementary or prescriptive period.

In the case at bar, although the trial court recognized its authority to allow petitioner to amend his complaint and pay the prescribed fees, it nevertheless ruled that "it has no more discretion to allow petitioner to pay the deficiency filing fees since his claim has prescribed in the meantime". On this score, we are in agreement.

Petitioner's complaint was based on fraud in the compromise agreement and in the execution sale conducted by the sheriff and his subsequent issuance of certificate of sale, which resulted in the cancellation of the titles of the partnership. Hence, petitioner's action prescribes in four (4) years from the time of discovery of fraud or from June 2, 1983, when the judicial sale was annotated at the back of the title which is a constructive notice to all parties. The complaint was filed on August 7, 1985, or before the expiration of the 4-year prescriptive period. But the complaint is deemed not duly filed because of the failure of petitioner to state the assessed value of the property claimed and pay the corresponding docket fees. Thus, the filing of the complaint did not interrupt the prescriptive period. When the Manchester rule was relaxed in the case of Sun Insurance Office Ltd. vs. Asuncion, supra, on February 13, 1989, where payment of filing fees was allowed within reasonable time but not beyond the prescriptive or reglementary period, petitioner's case had already prescribed. Therefore, the trial court correctly held that it had no more discretion to allow petitioner to pay the deficiency filing fees. Accordingly, the appellate court cannot be said to have erred in dismissing petitioner's appeal.

WHEREFORE, the instant petition is hereby DENIED for lack of merit.

Very truly yours,

(Sgd.) TOMASITA M. DRIS

Clerk of Court

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