FACTS:

Private respondents filed a complaint for the annulment or rescission of a contract of sale of two parcels of land against petitioners in the Regional Trial Court of Quezon City. They sought various reliefs, including the nullification of the contract of sale and the voidness of the deed of absolute sale. Upon filing the complaint, the clerk of court required private respondents to pay docket and legal fees totaling P610.00. Petitioners moved for the dismissal of the complaint, arguing that the trial court did not acquire jurisdiction due to the alleged nonpayment of the correct amount of docket fees. They claimed that in addition to the fees already paid, private respondents should have paid additional fees based on the alleged value of the two parcels of land. The trial court denied the motion to dismiss but required private respondents to pay the docket fees based on the estimated value of the land. Private respondents filed a motion for reconsideration, which was denied. They then brought the matter to the Court of Appeals, which held that an action for rescission or annulment of a contract is not capable of pecuniary estimation. The Court of Appeals annulled the orders of the trial court. Petitioners filed a motion for reconsideration, which was denied. Hence, this petition for review on certiorari.

ISSUES:

1. Whether the docket fees for filing an action for annulment or rescission of a contract of sale of real property should be based on the value of the real property, subject matter of the contract, or should be a flat rate as provided in the Rules of Court.

RULING:

1. The Supreme Court held that an action for annulment or rescission of a contract of sale of real property is not susceptible of pecuniary estimation. Therefore, the docket fees should be the flat rate of P400.00 as provided in Rule 141, §7(b)(1) of the Rules of Court.

PRINCIPLES:

• Pecuniary Estimation Actions incapable of pecuniary estimation include those where the principal issue is something other than the right to recover a sum of money.

• Docket Fees For actions where the subject matter cannot be pecuniarily estimated, the docket fee is a flat rate rather than being based on the value of the property.

• Rulings on Jurisdiction Jurisdiction is determined based on the nature of the principal action or remedy sought; if it is primarily for the recovery of a sum of money, it is capable of pecuniary estimation, otherwise, it is not.

• Legal Precedent The principles established in Lapitan v. Scandia, Inc. and Bautista v. Lim are applied, where the nature of the action controls the assessment of filing fees, not the end result, which may involve recovery of property.