ALGURA v. NAGA

 

SPOUSES ALGURA v. LOCAL GOVERNMENT OF NAGA

SPOUSES ANTONIO F. ALGURA and LORENCITA S.J. ALGURA, petitioners, vs. THE LOCAL GOVERNMENT UNIT OF THE CITY OF NAGA, ATTY. MANUEL TEOXON, ENGR. LEON PALMIANO, NATHAN SERGIO and BENJAMIN NAVARRO, SR., respondents.

[G.R. No. 150135. October 30, 2006.]

TOPIC: Indigent/Pauper Litigants

FACTS:

On September 1, 1999, Spouses Antonio F. Algura and Lorencita S.J. Algura filed a Complaint for damages against the Naga City Government and its officers, arising from the alleged illegal demolition of their residence and boarding house and for payment of lost income derived from fees paid by their boarders amounting to PhP 7,000.00 monthly.

Simultaneously, petitioners filed an Ex-Parte Motion to Litigate as Indigent Litigants, to which petitioner Antonio Algura's Pay Slip was appended, showing a gross monthly income of PhP 10,474.00 and a net pay of PhP 3,616.99. Also attached is a Certification issued by the Office of the City Assessor of Naga City, which stated that petitioners had no property declared in their name for taxation purposes. The RTC judge granted petitioners’ plea for exemption from filing fees.

Respondents filed an Answer with Counterclaim arguing that the defenses of the petitioners in the complaint had no cause of action, the spouses' boarding house blocked the road right of way, and said structure was a nuisance per se.

Respondents also filed a Motion to Disqualify the Plaintiffs for Non-Payment of Filing Fees. They asserted that in addition to the more than PhP 3,000.00 net income of petitioner Antonio Algura, who is a member of the Philippine National Police, his spouse Lorencita Algura also had a mini-store and a computer shop on the ground floor of their residence and that petitioners' second floor was used as their residence and as a boarding house, from which they earned more than PhP 3,000.00 a month. In addition, it was claimed that petitioners derived additional income from their computer shop patronized by students and from several boarders who paid rentals to them. Hence, respondents concluded that petitioners were not indigent litigants.

On April 14, 2000, RTC Naga issued an Order disqualifying petitioners as indigent litigants on the ground that they failed to substantiate their claim for exemption from payment of legal fees and to comply with the third paragraph of Rule 141, Section 18 of the Revised Rules of Court — directing them to pay the requisite filing fees.

Petitioner filed a Motion for Reconsideration where Lorencita claimed that the demolition of their small dwelling deprived her of a monthly income amounting to PhP 7,000.00. She, her husband, and their six (6) minor children had to rely mainly on her husband's salary as a policeman which provided them a monthly amount of PhP 3,500.00, more or less. Also, they did not own any real property as certified by the assessor's office of Naga City. More so, according to her, the meager net income from her small sari- sari store and the rentals of some boarders, plus the salary of her husband, were not enough to pay the family's basic necessities.

On July 17, 2000, the RTC denied the MR, hence this petition for certiorari.

ISSUE: Whether or not petitioners should be considered as indigent litigants to qualify for exemption from paying filing fees.

RULING:

Instead of disqualifying the Alguras as indigent litigants, the trial court should have called a hearing to enable the petitioners to adduce evidence to show that they didn't have property and money sufficient and available for food, shelter, and basic necessities for them and their family. Since this Court is not a trier of facts, it will have to remand the case to the trial court to determine whether petitioners can be considered as indigent litigants using the standards set in Rule 3, Section 21.

The Complaint was filed on September 1, 1999. However, the Naga City RTC, in its April 14, 2000 and July 17, 2000 Orders, incorrectly applied Rule 141, Section 18 on Legal Fees when the applicable rules at that time were Rule 3, Section 21 on Indigent Party which took effect on July 1, 1997 and Rule 141, Section 16 on Pauper Litigants Rule 141, which became effective on July 19, 1984 up to February 28, 2000.

There are two (twin) requirements under the old Section 16, Rule 141:

a) income requirement — the applicants should not have a gross monthly income of more than PhP 1,500.00, and

b) property requirement –– they should not own property with an assessed value of not more than PhP 18,000.00.

In the case at bar, petitioners Alguras do not own real property as shown by the Certification of the Naga City assessor and so the property requirement is met. However, with respect to the income requirement, it is clear that the gross monthly income of PhP 10,474.00 of petitioner Antonio F. Algura and the PhP 3,000.00 income of Lorencita Algura when combined, were above the PhP 1,500.00 monthly income threshold prescribed by then Rule 141, Section 16 and therefore, the income requirement was not satisfied.

However, if the trial court finds that one or both requirements have not been met, then it would set a hearing to enable the applicant to prove that the applicant has "no money or property sufficient and available for food, shelter and basic necessities for himself and his family." In that hearing, the adverse party may adduce countervailing evidence to disprove the evidence presented by the applicant; after which the trial court will rule on the application depending on the evidence adduced. In addition, Section 21 of Rule 3 also provides that the adverse party may later still contest the grant of such authority at any time before judgment is rendered by the trial court, possibly based on newly discovered evidence not obtained at the time the application was heard. If the court determines after hearing, that the party declared as an indigent is in fact a person with sufficient income or property, the proper docket and other lawful fees shall be assessed and collected by the clerk of court. If payment is not made within the time fixed by the court, execution shall issue or the payment of prescribed fees shall be made, without prejudice to such other sanctions as the court may impose.

Thus, the trial court should have applied Rule 3, Section 21 to the application of the Alguras after their affidavits and supporting documents showed that petitioners did not satisfy the twin requirements on gross monthly income and ownership of real property under Rule 141.

Recapitulating the rules on indigent litigants, therefore, if the applicant for exemption meets the salary and property requirements under Section 19 of Rule 141, then the grant of the application is mandatory. On the other hand, when the application does not satisfy one or both requirements, then the application should not be denied outright; instead, the court should apply the "indigency test" under Section 21 of Rule 3 and use its sound discretion in determining the merits of the prayer for exemption.

WHEREFORE, the petition is GRANTED and the April 14, 2000 Order granting the disqualication of petitioners, the July 17, 2000 Order denying petitioners' Motion for Reconsideration, and the September 11, 2001 Order dismissing the case in Civil Case No. RTC-99-4403 before the Naga City RTC, Branch 27 are ANNULLED and SET ASIDE. Furthermore, the Naga City RTC is ordered to set the " Ex-Parte Motion to Litigate as Indigent Litigants" for hearing and apply Rule 3, Section 21 of the 1997 Rules of Civil Procedure to determine whether petitioners can qualify as indigent litigants.