FACTS:

The present cases involve a complaint filed by David Lu and others against Paterno Lu Ym Sr., Lu Ym father and sons, and Ludo & LuYm Development Corporation (LLDC), seeking the nullity of share issue, receivership, and dissolution. The RTC ruled in favor of David Lu and others, declaring the issuance of shares of stock subscribed and paid by Lu Ym father and sons at less than par value as invalid, and ordering the dissolution and liquidation of LLDC. The trial court's decision is currently on appeal before the CA.

Several incidents arising from the complaint were brought before the Supreme Court through three consolidated petitions. In one petition, David Lu and others questioned the appellate court's dismissal of their complaint and annulment of the receivership order due to an incomplete signatory in the certificate of non-forum shopping. The Supreme Court found this issue moot as an amended complaint was already filed. In another petition, Lu Ym father and sons challenged the appellate court's restraint on the trial court from lifting the receivership order. The Supreme Court ruled this issue moot as the main action had been decided. In the third petition, Lu Ym father and sons' application for a writ of preliminary injunction was denied by the appellate court allegedly due to non-payment of correct docket fees. The Supreme Court initially dismissed the petition but later reconsidered, ruling that the trial court lacked jurisdiction due to the failure to pay the correct docket fees.

The present cases were referred to the Court En Banc due to falling under three types of cases specified in the IRSC and referred by three members of the Court's Second Division. The Court accepted the referral to resolve doubts on the validity of challenged resolutions, which appear to modify or reverse doctrines or principles of law. The cases were treated as En Banc cases, and oral argument was granted. The Court clarified that the action does not imply incapability of the Division of origin in rendering fair justice, but the nature of the cases warrants En Banc attention. The doctrine of immutability of decisions applies only to final and executory decisions, and since these cases may entail a modification or reversal of a Court-ordained doctrine or principle, the judgment by the Special Third Division may be unconstitutional and cannot become final.

In a motion for reconsideration filed by David Lu, the Court reversed the Resolutions issued by the Special Third Division, modifying settled doctrines on payment of docket fees, estoppel by laches, and annotation of lis pendens. The Court reinstated the August 26, 2008 Decision, holding that the case filed before the RTC is not capable of pecuniary estimation and correct docket fees were paid. The plaintiffs were estopped from challenging the jurisdiction of the trial court due to their active participation. Any docket fee deficiency could be considered a lien on the judgment. The Court stressed that the value of the shares of stock should be the basis for the computation of filing fees, but David and his co-plaintiffs do not claim ownership of the shares.

ISSUES:

1. Whether the original and amended complaints filed by David Lu, et al., in the intra-corporate controversy were actions incapable of pecuniary estimation.

2. Whether the insufficient payment of docket fees by David Lu, et al., deprived the Regional Trial Court (RTC) of jurisdiction.

3. Whether the doctrine of estoppel applies to Lu Ym, et al., so as to preclude them from assailing the jurisdiction of the RTC.

4. Whether there was bad faith or fraud on the part of David Lu, et al., in paying the docket fees that would warrant the dismissal of their complaint.

RULING:

1. The original and amended complaints filed by David Lu, et al., were classified as actions incapable of pecuniary estimation. The Supreme Court (SC) ruled that the complaints were actions incapable of pecuniary estimation because the main relief sought was the declaration of nullity of shares of stock issuance, dissolution, and liquidation of assets, which are not actions for the recovery of a sum of money.

2. The insufficient payment of docket fees, if any, did not divest the RTC of jurisdiction. The Supreme Court reinstated its previous decision, holding that even assuming there was a deficiency in the docket fees, this could be considered a lien on the judgment; the proceeding need not be dismissed outright.

3. Estoppel applies to Lu Ym, preventing them from questioning the RTC's jurisdiction. Considering that Lu Ym, et al., actively participated in the trial proceedings without raising the issue of insufficient docket fees promptly, they are estopped from assailing the trial court's jurisdiction.

4. There was no bad faith or fraud on the part of David Lu, et al. The Court acknowledged that there was no intent to defraud the government on the part of David Lu, et al. Missteps in assessing docket fees were attributed to the clerk of court rather than the petitioners, and any error did not automatically result in the loss of jurisdiction.

PRINCIPLES:

1. Actions Incapable of Pecuniary Estimation The nature of the action determines the computation of docket fees. Intra-corporate controversies, such as those for nullity, dissolution, and asset liquidation, are generally classified as incapable of pecuniary estimation.

2. Jurisdiction over Subject Matter and Docket Fees Jurisdiction over the subject matter of a case depends on compliance with procedural rules, including the payment of docket fees. However, if there is a deficiency in payment due to a mistake by court personnel, such deficiency does not automatically divest the court of jurisdiction.

3. Doctrine of Estoppel in Jurisdictional Challenges A party's active participation in proceedings without timely raising jurisdictional issues can lead to estoppel, which prevents them from assailing the court’s jurisdiction at a later stage.

4. Good Faith in Litigating Parties The Court operates on the presumption of good faith among litigants, and bad faith or fraud must be clearly evidenced. Simple procedural errors, especially those attributable to court officers, should not prejudice litigants’ rights unduly.