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DAVID LU, petitioner, vs. PATERNO LU YM, SR.

, lenge such an order, which undoubtedly is


PATERNO LU YM, JR., VICTOR LU YM, ET AL. & interlocutory, is through a special civil action
LUYM DEVELOPMENT CORP., respondents. for certiorari under Rule 65. This procedural defect,
therefore, bars the Court from ruling on the propriety of
G.R. No. 157381. August 26, 2008.* such admission. We cannot take cognizance of proceedings
PATERNO LU YM, SR., PATERNO LU YM, JR., before the RTC unless they are brought before us through
VICTOR LU YM, JOHN LU YM, KELLY LU YM, and the proper mode of review. To be sure, the Urgent Motion
LUDO & LUYM DEVELOPMENT CORP., cannot be a substitute for the remedy of a special civil
petitioners, vs. DAVID LU, respondent. action for certiorari. Consequently, the amended complaint
admitted by the RTC stands.
G.R. No. 170889. August 26, 2008.* Same; Actions; Moot and Academic; Courts do not
JOHN LU YM and LUDO & LUYM DEVELOPMENT entertain a moot question; An issue becomes moot and
CORPORATION, petitioners, vs. THE HON. COURT academic when it ceases to present a justiciable controversy,
OF APPEALS OF CEBU CITY (former Twentieth so that a declaration on the issue would be of no practical
Division), DAVID LU, ROSA GO, SILVANO LUDO & use or value.It is settled that courts do not entertain a
moot question. An issue becomes moot and academic when
CL CORPORATION, respondents.
it ceases to present a justiciable controversy, so that a
Remedial Law; Certiorari; Proper mode to challenge an declaration on the issue would be of no practical use or
interlocutory order is through a special civil action for value. This Court, therefore, abstains from expressing its
certiorari under Rule 65; The Urgent Motion cannot be opinion in a case where no legal relief is needed or called for.
a substitute for the remedy of a special civil action for Same; Same; Same; Exceptions where courts will still
certiorari.While it is true that the Lu Ym father and sons decide moot and academic cases.It is true that we have
questioned the admission of the aforesaid amended held in a number of cases that the moot and academic
complaint before this Court, the same was done only principle is not a magical formula that can automatically
through an Urgent Motion. Under the Rules of Court, the dissuade the courts from resolving a case. Courts will still
proper mode to chal- decide cases otherwise, moot and academic if: first, there is
_______________ a grave violation of the Constitution; second, the
exceptional character of the situation and the paramount
* THIRD DIVISION.
public interest is involved; third, when the constitutional
255 issue raised requires formulation of controlling principles to
guide the bench, the bar, and the public; and, fourth, the
VOL. 563, 2 case is capable of repetition yet evading review. However,
AUGUST 26, 2008 55 not one of the enumerated exceptions obtains in the instant
Lu vs. Lu Ym, Sr. case. Thus, a denial of the instant petition is warranted.
Same; Injunctions; Petition should be denied for the which is more delicate, which requires greater caution,
sole reason that the act sought to be enjoined is already fait deliberation and sound discretion, or more dangerous in a
accompli.The RTC decision on the merits of the case gives doubtful case than the issuance of an injunction. It is the
this Court more reasons to declare the mootness of the strong arm of equity that should never be extended unless
instant petition. It must be recalled that the motion to lift to cases of great injury, where courts of law cannot afford
the receivership was filed before the RTC ancillary to the an adequate or commensurate remedy in damages. Every
principal action, and what was sought to be enjoined was court should remember that an injunction is a limitation
the hearing on that particular motion. With the decision on upon the freedom of action of the defendant and should not
the merits rendered by the RTC, albeit still on appeal, there be granted lightly or precipitately. It should be granted only
is nothing more to be enjoined. More importantly, the RTC when the court is fully satisfied that the law permits it and
ordered that the receivers256 the emergency demands it.
Same; Docket Fees; Court acquires jurisdiction over a
2 SUPREME case only upon the payment of the prescribed fees.A court
56 COURT REPORTS acquires jurisdiction over a case only upon the payment of
ANNOTATED the prescribed fees. The importance of filing fees cannot be
Lu vs. Lu Ym, Sr. gainsaid for these are intended to take care of court
cease from performing their functions and that a expenses in the handling of cases in terms of costs of
management committee be created. Clearly, these supplies, use of equipment, salaries and fringe benefits of
supervening events mooted the petition. Time and again, personnel, and others, computed as to man-hours used in
we have declared that a petition should be denied for the the handling of each case. Hence, the non-payment or
sole reason that the act sought to be enjoined is already fait insufficient payment of docket fees can entail tremendous
accompli. losses to the government in general and to the judiciary in
Same; Same; Every court should remember that an particular.
injunction is a limitation upon the freedom of action of the Same; Same; The test in determining whether the
defendant and should not be granted lightly or precipitately; subject matter of an action is incapable of pecuniary
It should be granted only when the court is fully satisfied estimation by ascertaining the nature of the principal action
that the law permits it and the emergency demands it.In or remedy sought.The Court had,257
the instant case, John and LLDC failed to satisfy the above
VOL. 563, 2
requisites. Except for their claim of nullity of the RTC
decision because of insufficient payment of docket fees, no
AUGUST 26, 2008 57
evidence was offered to establish the existence of a clear Lu vs. Lu Ym, Sr.
and unmistakable right on their part that must be in the past, laid down the test in determining whether
protected, as well as the serious damage or irreparable loss the subject matter of an action is incapable of pecuniary
that they would suffer if the writ is not granted. It has been estimation by ascertaining the nature of the principal
consistently held that there is no power, the exercise of action or remedy sought. If the action is primarily for
recovery of a sum of money, the claim is considered capable 258
of pecuniary estimation. However, where the basic issue is 258 SUPREME COURT
something other than the right to recover a sum of money, REPORTS
the money claim being only incidental to or merely a ANNOTATED
consequence of, the principal relief sought, the action is Lu vs. Lu Ym, Sr.
incapable of pecuniary estimation.
Same; Estoppel; If a party invokes the jurisdiction of a NACHURA, J.:
court, he cannot thereafter challenge the courts jurisdiction Before us are three consolidated petitions assailing
in the same case; To rule otherwise would amount the decisions rendered and the resolutions issued by
to speculating on the fortune of litigation which is the Court of Appeals (CA) in CA-G.R. SP No. 64523,
against the policy of the Court.Well-established is the CA-G.R. SP No. 73383 and CA-G.R. CV No. 81163.
rule that after vigorously participating in all stages of the In G.R. No. 153690, David Lu (David) prays that
case before the trial court and even invoking the trial this Court annul and set aside the Decision1 dated
courts authority in order to ask for affirmative relief, John December 20, 2001 in CA-G.R. SP No. 64523
and LLDC are barred by estoppel from challenging the trial dismissing the initial complaint filed before the
courts jurisdiction. If a party invokes the jurisdiction of a Regional Trial Court (RTC) of Cebu City, Branch 52 in
court, he cannot thereafter challenge the courts jurisdiction
Civil Case No. CEB-25502,3for non-compliance with
in the same case. To rule otherwise would amount to
speculating on the fortune of litigation, which is against the
the rules on non-forum shopping. Likewise assailed is
policy of the Court. Thus, even if, indeed, the docket fees the courts Resolution4dated May 28, 2002 denying his
paid were inadequate, this allegation having been raised for motion for reconsideration.
the first time on appeal, should be disallowed. In G.R. No. 157381, Paterno Lu Ym, Sr. (Paterno
Sr.), Paterno Lu Ym, Jr. (Paterno Jr.), John Lu Ym
PETITIONS for review on certiorari of the decisions of (John), Kelly Lu Ym (Kelly) (collectively referred to as
the Court of Appeals. the Lu Ym father and sons), and Ludo and Luym
The facts are stated in the opinion of the Court. Development Corp. (LLDC) assail the CA
Calderon, Davide, Trinidad & Tolentino Law Decision5dated February 27, 2003 ordering the RTC to
Offices; Sycip, Salazar, Hernandez & desist from conducting any proceeding relating to the
Gatmaitan; and Alvarez, Nuez, Galang, Espina & receivership over LLDC.
Lopez for petitioner. In G.R. No. 170889, John and LLDC question the CA
Pepito & Ventura Law Offices for John Lu Ym and Resolutions dated September 6, 20046 denying their
Ludo & Lu Ym Development Corporation. applica-
Gochan, Gochan, & Gochan Law Offices special _______________
counsel for John Lu Ym.
1 Penned by Associate Justice Romeo A. Brawner, with Associate Hence, the complaint9 filed on August 14, 2000, by
Justices Elvi John S. Asuncion and Juan Q. Enriquez, Jr.,
concurring, Rollo, (G.R. No. 153690) pp. 69-78.
David, Rosa Go (Rosa), Silvano Ludo (Silvano) and CL
2 It was later re-raffled to Branch 11. Corporation (CL Corp.) against the Lu Ym father and
3 Pursuant to the Interim Rules of Procedure Governing Intra- sons, namely: Paterno Sr., Paterno Jr., Victor Lu Ym
Corporate Controversies under R.A. 8799, the case was re-docketed (Victor), John, Kelly, and LLDC, for Declaration of
as SRC Case No. 021-CEB.
4 Rollo (G.R. No. 153690), pp. 80-86.
Nullity of Share Issue, Receivership and Dissolution,
5 Penned by Associate Justice Eubolo G. Verzola, with Associate before the RTC of Cebu City. The case was raffled to
Justices Sergio L. Pestao and Amelita G. Tolentino, Branch 5 and was docketed as Civil Case No. CEB-
concurring; Rollo (G.R. No. 157381), pp. 313-319. 25502. In said complaint, David, et al. asked that the
6 Penned by Associate Justice Arsenio J. Magpale, with Associate
Justices Vicente L. Yap and Ramon M. Bato, Jr.,
issuance of said shares be nullified.10They further
concurring; Rollo (G.R. No. 170889), pp. 72-73. asserted that the Lu Ym father and sons gravely
abused their powers as members of LLDCs Board of
259
Directors by issuing such shares, to the prejudice of
VOL. 563, AUGUST 259
David, et al. They, therefore, asked for the dissolution
26, 2008
of the corporation as their ultimate remedy to obtain
Lu vs. Lu Ym, Sr. redress for their grievances.11 To protect the interest of
tion for a writ of preliminary injunction; and dated the corporation during the pendency of the case,
December 8, 20057 denying their motion for David et al. asked that a receiver for the corporation
reconsideration and further deferring the resolution of be appointed.12
the issue on docket fees. _______________

Factual and Procedural Antecedents 7 Rollo (G.R. No. 170889), pp. 76-78.
8 Rollo (G.R. No. 153690), p. 96.
LLDC is a family corporation founded by Paterno Sr. 9 Id., at pp. 95-102.
10 Id., at p. 97.
and his brothers (the fathers of Rosa, Silvano and 11 Id., at p. 99.
David), primarily to hold real estate for the family.8 In 12 Id., at p. 101.
1997, LLDCs Board of Directors authorized the
260
issuance of its 600,000 unsubscribed and unissued 260 SUPREME COURT
shares at par value of P100.00 per share. The Lu Ym
REPORTS
father and sons subscribed to and paid most of such
ANNOTATED
shares. David, et al., however, claimed that the
600,000 LLDC stocks were issued in favor of the Lu Lu vs. Lu Ym, Sr.
Ym father and sons for less than their real values.
On August 25, 2000, the Lu Ym father and sons _______________
moved to dismiss13 the complaint for non-compliance
13 Id., at pp. 103-108.
with the Rules of Court on the required certificate of 14 Id., at pp. 109-110.
non-forum shopping, since only one of the four 15 Id., at pp. 117-118.
plaintiffs signed the same, without any showing that 16 Id., at pp. 123-128.
17 Rollo (G.R. No. 157381), pp. 181-182.
he was authorized to sign on behalf of the other parties. 18 Rollo (G.R. No. 153690), p. 555.
They, likewise, contended that the case was
dismissible because they did not exert earnest efforts 261
toward a compromise. VOL. 563, AUGUST 261
In a Resolution14 dated December 4, 2000, the court 26, 2008
denied the motion solely on the ground that the case Lu vs. Lu Ym, Sr.
was exempt from the observance of the Katarungang The appellate court initially dismissed19 the petition,
Pambarangay Law. In another Resolution15 dated finding no grave abuse of discretion on the part of the
March 2, 2001, the court held that the signature of RTC when it denied the Lu Ym father and sons
only one of the plaintiffs was a substantial compliance motion to dismiss and because of the prematurity of
with the rules on the certificate of non-forum shopping. the petition on the issue of receivership (since there
On February 16, 2001, the court, on motion of was still a motion for reconsideration pending before
David, et al., placed LLDC under the RTC).20 However, on motion of the Lu Ym father
receivership pendente lite.16 Consequently, the court and sons, the court reconsidered its earlier ruling and,
appointed Atty. Edward U. Du and Mr. Luis A Caete consequently, reinstated the earlier petition.21 The Lu
as receivers.17 Yms then filed a Supplement to their petition.
Aggrieved, the Lu Ym father and sons elevated the On December 20, 2001, the CA granted22 the Lu Ym
matter to the Court of Appeals assailing the courts father and sons petition and, thus, dismissed the
resolutions denying their motion to dismiss and their complaint filed by David Lu, et al. for the parties
motion for reconsideration; and placing the corporation (except David Lu) failure to sign the certificate of non-
under receivership and appointing two persons as forum shopping. In ruling for the dismissal of the
receivers. The case was docketed as CA-G.R. SP No. initiatory pleading, the court applied Loquias v.
64154, but the same was dismissed on the ground that Ombudsman.23As a consequence of the dismissal of the
the verification and certification against forum complaint, the appellate court likewise annulled the
shopping were signed by only two petitioners.18 They resolutions placing the corporation under receivership
later refiled the case. This time, it was docketed and appointing the receivers.24On May 28, 2002, the
as CA-G.R. SP No. 64523. CA denied the motion for reconsideration25 filed by
David Lu, et al. Hence, the petition for review On October 8, 2002, the Lu Ym father and sons filed
on certiorari before this Court filed by David Lu alone in SRC Case No. 021-CEB a Manifestation and Motion
in G.R. No. 153690. praying for the immediate lifting of the receivership
Meanwhile, the Lu Ym father and sons filed a order over LLDC which was immediately set for
Motion for Inhibition against the then RTC Judge hearing.27 However, the hearing did not proceed as
Ireneo Gako, Jr., which was granted on October 1, scheduled due to the repeated motions of David to stop
2002. Thus, the case was re-raffled to Branch 11, it. It turned out later that David instituted a special
presided by Judge Isaias Dicdican, who civil action for Certiorari and Prohibition with the CA,
_______________ with Urgent Application for Temporary Restraining
Order (TRO) and Writ of Preliminary Injunction, on
19 Penned by Associate Justice Ma. Alicia Austria-Martinez, with
Associate Justices Hilarion L. Aquino and Jose L. Sabio, Jr., the sole issue of whether or not the RTC should
concurring, Rollo (G.R. No. 153690) pp. 257-259. proceed to hear the Lu Ym father and sons motion to
20 Id., at pp. 257-259. lift the receivership. The case was docketed as CA-G.R.
21 Id., at pp. 323-324.
SP No. 73383.28
22 Penned by Associate Justice Romeo A. Brawner, with
Associate Justices Elvi John S. Asuncion and Juan Q. Enriquez, Jr., On December 4, 2002, the CA issued a Resolution
concurring, Rollo (G.R. No. 153690), pp. 69-78. temporarily restraining the RTC from conducting any
23 G.R. No. 139396, August 15, 2000, 338 SCRA 62. proceeding in SRC Case No. 021-CEB.29 On February
24 Rollo (G.R. No. 153690), pp. 69-78.
25 Id., at pp. 80-86.
27, 2003, the appellate court finally resolved to grant
the petition and ordered the RTC to desist from
262 conducting any proceeding relating to the receivership
262 SUPREME COURT over LLDC.30 The court concluded that the proceedings
REPORTS on receivership could not proceed without the parties
ANNOTATED complying first with the earlier court order which
Lu vs. Lu Ym, Sr. required the parties to amend their pleadings. The
directed the parties to amend their respective court ratiocinated that it could not rule on the
pleadings in order to conform with the requirements propriety of the appointment of a receiver because it
laid down in Sections 4(2) and 6(7), Rule 2 of the would have to base its decision on the
Interim Rules of Procedure Governing Intra-Corporate _______________
Controversies under Republic Act (R.A.) No.
26 Rollo (G.R. No. 157381), p. 316.
8799.26 The case was re-docketed as SRC Case No. 021- 27 Id., at p. 24.
CEB. 28 Id., at p. 26.
29 Id., at p. 317.
30 Penned by Associate Justice Eubolo G. Verzola, with Associate LLDCs 600,000 shares of stocks thereby divesting the
Justices Sergio L. Pestao and Amelita G. Tolentino, concurring; id.,
at pp. 313-319.
Lu Ym father and sons of their shares and canceling
their certificates of stocks. The court further ordered
263 the dissolution of LLDC and the liquidation of its
VOL. 563, AUGUST 263 assets. Consequently, a management committee was
26, 2008 created to take over LLDC, and the corporations
Lu vs. Lu Ym, Sr. officers were stripped of their powers as such.34 The
pleadings that were yet to be amended. Besides, the court further declared that the decision was
pendency of G.R. No. 153690 before this Court immediately executory. Aggrieved, the Lu Ym father
necessitated the deferment of any action on the lifting and sons seasonably filed a Notice of Appeal. The case
of receivership. was docketed as CA-G.R. CV No. 81163.
Aggrieved, the Lu Ym father and sons instituted _______________
the instant petition in G.R. No. 157381.
31 Rollo (G.R. No. 170889), p. 16.
Meanwhile, Judge Dicdican inhibited himself, and 32 Id., at pp. 22-23.
the case was thus transferred from Branch 11 to 33 Id., at pp. 106-121.
Branch 12. 34 Id., at pp. 119-121.
On March 31, 2003, David filed a Motion to Admit 264
Complaint to Conform to the Interim Rules Governing 264 SUPREME COURT
Intra-Corporate Controversies, which the court REPORTS
admitted on July 18, 2003.31 ANNOTATED
On January 23, 2004, the Lu Ym father and sons Lu vs. Lu Ym, Sr.
inquired from the Clerk of Court on the amount of
In view of the courts declaration of the executory
docket fees paid by David, et al. John Lu Ym further
nature of the assailed decision, the Lu Ym father and
inquired from the Office of the Court Administrator
sons applied for a Writ of Preliminary Injunction
(OCA) as to the correctness of the amount paid by
and/or Temporary Restraining Order (TRO),35which
David, et al. After a series of letters sent to the OCA,
was opposed36 by David.
the latter informed John that the matter of docket fees
On January 28, 2004, the appellate court issued a
should be brought to the attention of the regular
TRO valid for a period of sixty (60) days.37 However, in
courts and not to the OCA which was not in the
a Resolution38 dated September 6, 2004, the court
position to give an opinion.32
denied the application for a writ of preliminary
On March 1, 2004, the RTC rendered a decision33on
injunction. Since the original records had been
the merits of the case, annulling the issuance of
transmitted to the appellate court, the RTC was
divested of jurisdiction to resolve pending incidents Lu vs. Lu Ym, Sr.
therein. Thus, it ordered that all motions be filed with [a] WHETHER OR NOT THE COURT OF APPEALS
the CA. GRAVELY ERRED IN DISREGARDING THE
In their motion for reconsideration,39 the Lu Ym NUMEROUS FATAL DEFECTS AND RULES OF COURT
father and sons assailed the denial of their application AND IRCA VIOLATIONS OF RESPONDENTS APRIL 30,
for preliminary injunction and, in addition thereto, 2001 PETITION, MOTION AND SUPPLEMENT.
[b] WHETHER OR NOT THE COURT OF APPEALS
they questioned the sufficiency of the docket fees paid
GRAVELY ERRED IN DISMISSING THE RTC CASE IN
by David, et al. in the RTC where the original
ITS ENTIRETY AND IN REFUSING TO PERMIT IT TO
complaint was filed. PROCEED AS TO PETITIONER DESPITE [I]
On December 8, 2005, the appellate court did not PETITIONERS EXECUTION OF A CERTIFICATION
reconsider its earlier resolution. As to the sufficiency of AGAINST FORUM SHOPPING FOR THE COMPLAINT
the docket fees, it ruled that the matter be raised in AND [II] THE FACT [THAT] THE RTC CASE INVOLVES
their appellants brief and that the issue be threshed ONLY A PERMISSIVE JOINDER OF PARTIES.41
out in the appeal on the merits.40 Hence, this special
On August 19, 2003, the Lu Ym father and sons
civil action for certiorari and prohibition in G.R. No.
filed an Urgent Motion with Prayer for a TRO and/or
170889.
Writ of Preliminary Injunction42 before this Court
The Issues questioning the RTCs admission of David Lus
amended complaint. They sought to enjoin said
G.R. No. 153690 admission as it would render moot and academic the
David Lu raises the following issues for resolution: cases pending before this Court.
_______________ G.R. No. 157381
The Lu Ym father and sons base their petition on
35 Id., at pp. 193-214.
36 Id., at pp. 215-221.
the following alleged errors:
37 Id., at p. 72. I.
38 Penned by Associate Justice Arsenio J. Magpale, with THE JUDGMENT OF THE COURT OF APPEALS IS
Associate Justices Vicente L. Yap and Ramon M. Bato, Jr., NULL AND VOID ON ITS FACE FOR LACK OF
concurring; id., at pp. 72-73. JURISDICTION IN ENJOINING THE TRIAL COURT
39 Rollo, pp. 288-320. BECAUSE THE DISMISSAL OF THE CASE BELOW IS
40 Id., at pp. 76-78.
ALREADY PENDING APPEAL WITH THIS HONORABLE
265 COURT AND IT IS, THEREFORE, THIS HONORABLE
VOL. 563, AUGUST 265 COURT THAT HAS EXCLUSIVE JURISDICTION OVER
26, 2008
THE REMEDIES OF CERTIORARI, PROHIBITION AND complaint; and G.R. No. 157381 for the RTCs act of
INJUNCTION GRANTED BY THE COURT OF APPEALS. resolving the case on the merits.45 For their part, the
_______________
Lu Ym father and sons agree on the mootness of G.R.
41 Rollo (G.R. No. 153690), p. 623. No. 153690, but not G.R. No. 157381. This is without
42 Id., at pp. 646-664. prejudice to the resolution of the issue they raised on
266 the propriety of the admission of the amended
complaint.46
266 SUPREME COURT G.R. No. 170889
REPORTS In coming before this Court in this special civil
ANNOTATED action for certiorari and prohibition, John Lu Ym and
Lu vs. Lu Ym, Sr. LLDC raise the following issues:
II. _______________
THE PETITION FOR CERTIORARI AND PROHIBITION
43 Rollo (G.R. No. 157381), pp. 17-52.
WAS WRONGFULLY GRANTED BY THE COURT OF
44 Id., at pp. 645-649.
APPEALS BECAUSE ITS DECISION DID NOT CONTAIN 45 Id., at p. 649.
THE BASIC FINDING THAT THE TRIAL COURT 46 Id., at pp. 654-658.
COMMITTED A GRAVE ABUSE OF DISCRETION
TANTAMOUNT TO LACK OR EXCESS OF 267
JURISDICTION, NOR DID IT EVEN DEFINE IT AS AN VOL. 563, AUGUST 267
ISSUE IN THE CASE, NOR WAS THERE ANY GRAVE 26, 2008
ABUSE OF DISCRETION. Lu vs. Lu Ym, Sr.
III. I.
EVEN ASSUMING IN GRATIA ARGUMENTI THAT THE WHETHER OR NOT THE RESPONDENT COURT OF
COURT OF APPEALS HAD JURISDICTION OVER THE APPEALS COMMITTED GRAVE ABUSE OF
CASE, IT HAD ABSOLUTELY NO LEGAL BASIS IN DISCRETION IN DENYING PETITIONERS MOTION
ENJOINING THE TRIAL COURT FROM ACTING ON FOR RECONSIDERATION DESPITE THE FACT THAT
THE URGENT MOTION OF THE PETITIONERS TO LIFT THE TRIAL COURT DID NOT ACQUIRE JURISDICTION
THE HIGHLY OPPRESSIVE ORDER OF OVER THE SUBJECT MATTER OF THE CASE FOR
RECEIVERSHIP.43 FAILURE OF THE RESPONDENTS TO PAY THE
CORRECT DOCKET FEES WHEN THE ORIGINAL
On June 7, 2006, David filed a Manifestation44 that
COMPLAINT WAS FILED.
the cases pending before this Court are moot and II.
academicG.R. No. 153690 for the admission of the WHETHER OR NOT THE RESPONDENT COURT OF
amended complaint which superseded the original APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION IN NOT DISMISSING SRC CASE NO. 021- The Ruling of This Court
CEB DESPITE CLEAR SHOWING THAT RESPONDENTS
WERE GUILTY OF BAD FAITH IN AVOIDING In G.R. No. 153690, David claims that the Lu Ym
PAYMENT OF THE CORRECT DOCKET FEES.47 father and sons petition (in CA-G.R. SP No. 64523)
On January 23, 2006, we issued a Status Quo Order before the CA should not have been entertained
specifically enjoining the implementation of the CA because of the following fatal defects: 1) the petition
resolutions denying the application for a writ of questioning the approval of the receivership was
preliminary injunction.48 prematurely filed because of the pendency of their
Stripped of the non-essentials and combining all the motion for reconsideration before the RTC; 2) their
arguments set forth in the consolidated petitions, the motion and supplement were filed without asking
issues for our resolution are as follows: leave of court to do so; 3) considering that the motion
I. Whether the original complaint filed before the RTC and supplement contained new allegations, there was
should have been dismissed for: a failure to attach a new certificate of non-forum
A. non-compliance with the rules on certificate of shopping; and 4) the motion and supplement were filed
non-forum shopping; and out of time.49
B. non-payment of the correct docket fees At the outset, we find the procedural issues raised by
II. Whether the receivership proceedings were validly David to be of no moment. Basic is the rule that a
suspended pending the amendment of the initial complaint motion for the reconsideration of an assailed order
in compliance with the Interim Rules of Procedure for may be filed by an aggrieved party within the
Intra-Corporate Controversies. reglementary period. No motion for leave to file such
_______________
motion is required under the Rules or in any other
47 Rollo (G.R. No. 170889), pp. 483-484. circular of the Supreme Court. As long as the same is
48 Id., at pp. 141-142. filed within fifteen (15) days from receipt of the
268 assailed order, there is no reason for the courts not to
entertain it. In fact, in some exceptional cases as when
268 SUPREME COURT substantial justice so requires, a motion belatedly filed
REPORTS may still be taken cognizance of. As to the
ANNOTATED supplemental petition filed without leave of court,
Lu vs. Lu Ym, Sr. suffice it to state that the CA entertained the same,
III. Whether a writ of preliminary injunction should required David to comment thereon, and decided the
have been issued pending the resolution of the appeal on case on the basis thereof. Such actions of the appellate
the merits filed before the Court of Appeals.
court adequately show that the supplemental petition
was admitted. Lastly, as to the lack of certificate of has been filed or is pending, he shall report that fact within five (5)
days therefrom to the court wherein his aforesaid complaint or
non-forum shopping in the motion for reconsideration initiatory pleading has been filed.
and supplement to the petition, Failure to comply with the foregoing requirements shall not be
_______________ curable by mere amendment of the complaint or other initiatory
pleading but shall be cause for the dismissal of the case without
49 Rollo (G.R. No. 153690), pp. 613-637. prejudice, unless otherwise provided, upon motion and after hearing.
The submission of a false certification or non-compliance with any of
269
the undertakings therein shall constitute indirect contempt of court,
VOL. 563, AUGUST 269 without prejudice to the corresponding administrative and criminal
26, 2008 actions. If the acts of the party or his counsel clearly constitute
willful and deliberate forum shopping, the same shall be ground for
Lu vs. Lu Ym, Sr. summary dismissal with prejudice and shall constitute direct
we need only reiterate that the certificate is required contempt, as well as a cause for administrative sanctions.
only in cases of initiatory pleadings.50
270
Now on the substantial issues.
270 SUPREME COURT
In G.R. No. 153690, the assailed CA decision dismissed
REPORTS
David et al.s original complaint for their failure to
ANNOTATED
sign the verification and certification of non-forum
shopping. Subsequent to the aforesaid decision, Lu vs. Lu Ym, Sr.
however, the RTC ordered David et al. to amend the mitted the amended complaint, proceeded to hear the
complaint to conform to the interim rules of procedure case, and decided the same on the merits.
for intra-corporate controversy. In compliance with the While it is true that the Lu Ym father and sons
order, David, et al. amended the complaint and filed questioned the admission of the aforesaid amended
the same with leave of court. The RTC, thereafter, ad- complaint before this Court, the same was done only
_______________ through an Urgent Motion.51Under the Rules of Court,
the proper mode to challenge such an order, which
50 Section 5, Rule 7 of the Rules of Court provides: undoubtedly is interlocutory, is through a special civil
SEC. 5. Certification against forum shopping.The plaintiff or
principal party shall certify under oath in the complaint or other
action for certiorari under Rule 65. This procedural
initiatory pleading asserting a claim for relief, or in a sworn defect, therefore, bars the Court from ruling on the
certification annexed thereto and simultaneously filed therewith: (a) propriety of such admission. We cannot take
that he has not theretofore commenced any action or filed any claim cognizance of proceedings before the RTC unless they
involving the same issues in any court, tribunal or quasi-judicial
agency and, to the best of his knowledge, no such other action or are brought before us through the proper mode of
claim is pending therein; (b) if there is such other pending action or review. To be sure, the Urgent Motion cannot be a
claim, a complete statement of the present status thereof; and (c) if substitute for the remedy of a special civil action
he should thereafter learn that the same or similar action or claim
for certiorari.52 Consequently, the amended complaint value.55 This Court, therefore, abstains from
admitted by the RTC stands. expressing its opinion in a case where no legal relief is
With the issue of admission of the amended needed or called for.56
complaint resolved, the question of whether or not the In G.R. No. 157381, the Lu Ym father and sons
original complaint should have been dismissed was insist that the CA had no jurisdiction to issue the writ
mooted. Section 8, Rule 10 of the Rules of Court of preliminary injunction, more so, to make the same
specifically provides that an amended pleading permanent, in view of the pendency of G.R. No. 153690.
supersedes the pleading that it amends. In this They argue that the application for a writ should have
case, the original complaint was deemed withdrawn been filed before this Court and not through a separate
from the records upon the admission of the amended special civil action before the CA. They further assert
complaint.53 This conclusion becomes even more that the CA should not have issued a writ as there was
pronounced in that the RTC already rendered a no finding of grave abuse of discretion, to begin
decision on the merits of the said amended complaint, with. Lastly, they argue that the order of the trial
not to mention the Lu Ym father and sons concurrence court requiring the parties to amend their pleadings
in the mootness of the issue in the instant petition.54 did not bar the RTC from acting on the provisional
_______________ remedy of receivership. Since this Court did not issue
a restraining order, the receivership proceedings could
51 Rollo (G.R. No. 153690), pp. 646-664.
52 See Air Materiel Wing Savings and Loan Association, Inc., et still proceed.57
al. v. Manay, et al., G.R. No. 175338, April 29, 2008, 552 SCRA 643. It is noteworthy at this point to reiterate the factual
53 Figuracion v. Libi, G.R. No. 155688, November 28, 2007, 539 circumstances surrounding the instant petition. G.R.
SCRA 50, citing The Philippine American Life & General Insurance
No. 157381 has its origin in the Lu Ym father and sons
Company v. Breva, 442 SCRA 217, 223 (2004); Negros Merchants
Enterprises, Inc. v. China Banking Corporation, G.R. No. 150918, motion to lift the receivership over LLDC. David, for
August 17, 2007, 530 SCRA 478, 487. his part, went up to the CA and asked that the RTC be
54 Rollo (G.R. No. 157381), pp. 654-657. enjoined from hearing said motion pending resolution
271 of his petition before this Court in G.R. No. 153690
VOL. 563, AUGUST 271 and the amendment of his complaint as ordered by the
26, 2008 RTC. Davids petition was granted by the appellate
Lu vs. Lu Ym, Sr. court in the assailed decision. It ratiocinated that any
It is settled that courts do not entertain a moot matter, principal or collateral, should be held in
question. An issue becomes moot and academic when it abeyance pending the amendment of the original
ceases to present a justiciable controversy, so that a complaint. Besides, said the appellate court, the
declaration on the issue would be of no practical use or dismissal of the original com-
_______________ RTC, albeit still on appeal, there is nothing more to be
enjoined. More importantly, the RTC ordered that the
55 Pulido v. Abu, G.R. No. 170924, July 4, 2007, 526 SCRA 483,
496; Garayblas v. Atienza, Jr., G.R. No. 149493, June 22, 2006, 492 receivers cease from performing their functions and
SCRA 202, 216. that a management committee be created.58 Clearly,
56 Pulido v. Abu, id., at p. 496. these supervening events mooted the petition. Time
57 Rollo (G.R. No. 157381), pp. 17-52.
and again, we have declared that a petition should be
272 denied for the sole reason that the act sought to be
272 SUPREME COURT enjoined is already fait accompli.59
REPORTS To reiterate, the trial courts decision on the merits
ANNOTATED rendered the issue on the propriety of the injunction
Lu vs. Lu Ym, Sr. moot and academic, notwithstanding the fact that said
plaint on which the Lu Ym father and sons based their decision has been appealed to the Court of
motion to lift receivership was still the subject of an Appeals.60 Courts are called
_______________
appeal before this Court.
Again, the propriety of such injunction is mooted by 58 Rollo (G.R. No. 170889), pp. 119-120.
the amendment of the complaint, and the RTC 59 Caneland Sugar Corporation v. Alon, G.R. No. 142896,
decision in the case on the merits thereof. The September 12, 2007, 533 SCRA 28, 32.
60 See Kho v. Court of Appeals, G.R. No. 115758, March 19, 2002;
appellate court ordered that the hearing on the motion
See also La Vista Association, Inc. v. Court of Appeals, 278 SCRA 498
to lift the receivership be held in abeyance primarily (2002).
because the original complaint was yet to be amended.
273
Upon the amendment of the complaint and the
VOL. 563, AUGUST 273
admission thereof by the RTC, the reason for such
injunction ceased to exist. Thus, the CA could resolve, 26, 2008
as it in fact resolved, the question of whether or not Lu vs. Lu Ym, Sr.
the receivership should be lifted. upon to resolve actual cases and controversies, not to
The RTC decision on the merits of the case gives render advisory opinions.61
this Court more reasons to declare the mootness of the It is true that we have held in a number of cases
instant petition. It must be recalled that the motion to that the moot and academic principle is not a magical
lift the receivership was filed before the RTC ancillary formula that can automatically dissuade the courts
to the principal action, and what was sought to be from resolving a case. Courts will still decide cases
enjoined was the hearing on that particular motion. otherwise, moot and academic if: first, there is a grave
With the decision on the merits rendered by the violation of the Constitution; second, the exceptional
character of the situation and the paramount public 274 SUPREME COURT
interest is involved; third, when the constitutional REPORTS
issue raised requires formulation of controlling ANNOTATED
principles to guide the bench, the bar, and the public; Lu vs. Lu Ym, Sr.
and, fourth, the case is capable of repetition yet In short, John and LLDC seek the dismissal of the
evading review.62However, not one of the enumerated initial complaint on the ground of lack of jurisdiction
exceptions obtains in the instant case. Thus, a denial occasioned by the insufficient payment of docket fees.
of the instant petition is warranted. A court acquires jurisdiction over a case only upon
In G.R. No. 170889, John Lu Ym and LLDC explain the payment of the prescribed fees. The importance of
that while it may be possible to raise the issue of filing fees cannot be gainsaid for these are intended to
docket fees in their appellants brief as suggested by take care of court expenses in the handling of cases in
the CA, it would already be too late because the issue terms of costs of supplies, use of equipment, salaries
would be rendered moot and academic by the and fringe benefits of personnel, and others, computed
dissolution of the corporation. They further question as to man-hours used in the handling of each case.
the propriety of the creation of the management Hence, the non-payment or insufficient payment of
committee, arguing that there was non-observance of docket fees can entail tremendous losses to the
substantive and procedural rules. As to the issue of government in general and to the judiciary in
estoppel, they claim that they first raised the issue of particular.64
docket fees only in their motion for reconsideration In the instant case, however, we cannot grant the
before the CA because they had yet to await the OCAs dismissal prayed for because of the following
response to their inquiry on the correct docket reasons: First, the case instituted before the RTC is
fees. Lastly, they argue that David et al. are now one incapable of pecuniary estimation. Hence, the
precluded from paying the correct docket fees by the correct docket fees were paid. Second, John and LLDC
lapse of the prescriptive period. Neither can a lien be are estopped from questioning the jurisdiction of the
created on the judgment in lieu of dismissal.63 trial court because of their active participation in the
_______________
proceedings below, and because the issue of payment
61 Ticzon v. Video Post, Manila,Inc., 389 Phil. 20, 30; 333 SCRA of insufficient docket fees had been belatedly raised
472, 480 (2000). before the Court of Appeals, i.e., only in their motion
62 Manalo v. Calderon, G.R. No. 178920, October 15, 2007, 536 for reconsideration. Lastly, assuming that the docket
SCRA 290, 303.
63 Rollo (G.R. No. 170889), pp. 464-559.
fees paid were truly inadequate, the mistake was
committed by the Clerk of Court who assessed the
274 same and not imputable to David; and as to the
deficiency, if any, the same may instead be considered 65 Far East Bank and Trust Company v. Shemberg Marketing
Corporation, id., at p. 700, citing Singson v. Isabela Sawmill, 88
a lien on the judgment that may thereafter be SCRA 623 (1979); Russell v. Hon. Vestil, 364 Phil. 392, 400; 304
rendered. SCRA 738, 745 (1999).
The Court had, in the past, laid down the test in 66 In their original complaint, David, et al. specifically prayed:
determining whether the subject matter of an action is WHEREFORE, based on the foregoing premises, it is
respectfully prayed that this Honorable Court rule in favor of the
incapable of pecuniary estimation by ascertaining the Plaintiffs, as follows:
nature of the principal action or remedy sought. If the 1. Declare null and void the issuance of 600,000
action is primarily for recovery of a sum of money, the unsubscribed and unissued shares to Defendants Lu Ym
claim is considered capable of pecuniary estimation. father and sons and their spouses, children and holding
companies, for a price of only one-eighteenth of their real
However, where the basic issue is value, as having been done in breach of directors fiduciary
_______________ duty to stockholders, in violation of Plaintiffs minority
stockholders rights, and in unjust enrichment of the
64 Far East Bank and Trust Company v. Shemberg Marketing Defendants, majority/controlling stockholders/directors, at the
Corporation, G.R. No. 163878, December 12, 2006, 510 SCRA 685, expense of their cousins, the other stockholders.
700. 2. Order the dissolution of Defendant Ludo and LuYm
275 Development Corporation, in order to protect the rights and
redress the injuries of Plaintiffs;
VOL. 563, AUGUST 275 3. During the pendency of the instant case, order the
26, 2008 appointment of a receiver pendente lite for LuDo and LuYm
Lu vs. Lu Ym, Sr. Development Corporation.
Such other reliefs as may be just and equitable on the premises
something other than the right to recover a sum of are likewise prayed for; Rollo, G.R. No. 170889, pp. 84-85.
money, the money claim being only incidental to or In his amended complaint, David specifically prayed:
merely a consequence of, the principal relief sought,
276
the action is incapable of pecuniary estimation.65 276 SUPREME COURT
In the current controversy, the main purpose of the REPORTS
complaint filed before the RTC was the annulment of
ANNOTATED
the issuance of the 600,000 LLDC shares of stocks
Lu vs. Lu Ym, Sr.
because they had been allegedly issued for less than
their par value. Thus, David sought the dissolution of ment of the shares, the dissolution of the corporation
the corporation and the appointment of and the appointment of receivers/management
receivers/management committee.66 To be sure, the committee are actions which do not consist in the
annul- recovery of a sum of money. If, in the end, a sum of
_______________ money or real property would be recovered, it would
simply be the consequence of such principal action.
Therefore, the case before the RTC was incapable of 277
pecuniary estimation. Accordingly, Johns and VOL. 563, AUGUST 277
LLDCs contention cannot be sustained. And since 26, 2008
David paid the docket fees for an action the subject of Lu vs. Lu Ym, Sr.
which was incapable of pecuniary estimation, as considered a lien on the judgment that may hereafter
computed by the Clerk of Court, the trial court validly be rendered.
acquired jurisdiction over the case. We note that the Lu Ym father and sons belatedly
Even assuming that the subject in the instant case is raised the issue of insufficient payment of docket fees
capable of pecuniary estimation, still, the case should in their motion for reconsideration before the CA. A
not be dismissed because the insufficiency of the fees perusal of the records reveals that the Lu Ym father
actually paid was belatedly raised; David relied on the and sons filed several pleadings before the RTC,
assessment made by the Clerk of Court; and if there is specifically, a Motion to Dismiss and Motion to Lift the
a deficiency, it may instead be Appointment of a Receiver, among others. They,
_______________ likewise, filed several pleadings before the Court of
Appeals and before this Court either as initiatory
WHEREFORE, based on the foregoing premises, it is respectfully
prayed that this Honorable Court rule in favor of the Plaintiffs, as pleadings or in opposition to those filed by the adverse
follows: party. Considering their prompt action and reaction to
1. Declare null and void the issuance of 600.000 ensure that their rights are protected, their belated
unsubscribed and unissued shares of the defendant
corporation to Defendants Lu Ym father and sons and their
objection to the payment of docket fees is, therefore,
spouses, children, and holding companies, for a price of one- inexcusable. Well-established is the rule that after
eighteenth of their real value, for being inequitable, having vigorously participating in all stages of the case before
been done in breach of directors fiduciary duty to stockholders, the trial court and even invoking the trial courts
in violation of Plaintiffs minority stockholders rights, and in
unjust enrichment of the Defendants, majority controlling
authority in order to ask for affirmative relief, John
stockholders/directors, at the expense of their cousins, the and LLDC are barred by estoppel from challenging the
other stockholders. trial courts jurisdiction.67 If a party invokes the
2. Order the dissolution of Defendant Ludo and Luym jurisdiction of a court, he cannot thereafter challenge
Development Corporation, in order to protect the rights and
redress the injuries of Plaintiffs; the courts jurisdiction in the same case. To rule
3. Order the creation of a management otherwise would amount to speculating on the fortune
committee pendente lite, and order receiver Luis Caete to of litigation, which is against the policy of the
turn over all assets and records to the management committee. Court.68 Thus, even if, indeed, the docket fees paid
Such other relief as may be just and equitable on the premises
are likewise prayed for. [Rollo (G.R. No. 153690), pp. 689-690.] were inadequate, this allegation having been raised for
the first time on appeal, should be disallowed.69
While it is true that this Court had previously the payment of the docket fees, as assessed, negates
dismissed complaints for non-payment of docket fees, any imputation of bad faith to the respondent or any
as in the early case of Manchester Development intent of the latter to defraud the government. Thus,
Corporation v. Court of Appeals,70 these cases when insufficient filing fees were initially paid by the
uniformly involved bad faith on the part of respondent, and there was no intention to defraud the
_______________ government, the Manchester rule does not apply.
In Yambao,75 this Court concluded that petitioners
67 Heirs of Bertuldo Hinog v. Melicor, G.R. No. 140954, April 12,
2005, 455 SCRA 460, 473; Pantranco North Express, Inc. v. Court of cannot be faulted for their failure to pay the required
Appeals, G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491. docket fees for, given the prevailing circumstances,
68 Heirs of Bertuldo Hinog v. Melicor, id., at p. 473. such failure was clearly not a dilatory tactic or
69 Idolor v. Court of Appeals, G.R. No. 161028, January 31, 2005,
intended to circumvent the Rules of Court. In Ayala
450 SCRA 396, 404.
70 No. L-75919, May 7, 1987, 149 SCRA 562. Land,76 the Court held that despite the jurisdictional
nature of the rule on payment of docket fees, the
278
appellate court still has the discretion to relax the rule
278 SUPREME COURT
in meritorious cases.
REPORTS In the instant case, David paid the docket fees as
ANNOTATED assessed by the Clerk of Court. Even if the amount
Lu vs. Lu Ym, Sr. was insufficient, as claimed by John and LLDC, fraud
the plaintiff, such that the correct amount of damages and bad faith cannot be attributed to David to warrant
claimed was not specifically stated. The Court, in such the dismissal of his complaint. Consistent with the
cases, concluded that there was bad faith on the part principle of liberality in the interpreta-
of the complainant and a clear intent to avoid payment _______________
of the required docket fee, thus, the dismissal of the
cases was warranted. 71 G.R. No. 169108, April 18, 2006, 487 SCRA 339.
72 G.R. No. 140894, November 27, 2000, 346 SCRA 141.
It may be recalled that despite the payment of 73 G.R. No. 140162, November 22, 2000, 345 SCRA 579.
insufficient fees, this Court refrained from dismissing 74 Supra note 71, at p. 350.
the complaint/petition in Intercontinental 75 Supra note 72, at p. 148.
76 Supra note 73, at p. 585.
Broadcasting Corporation (IBC-13) v. Alonzo-
Legasto,71Yambao v. Court of Appeals72 and Ayala Land, 279
Inc. v. Carpo.73 In those cases, the inadequate payment VOL. 563, AUGUST 279
was caused by the erroneous assessment made by the 26, 2008
Clerk of Court. In Intercontinental,74 we declared that Lu vs. Lu Ym, Sr.
tion of the Rules, in the interest of substantial justice, the RTC decision because of insufficient payment of
this Court had repeatedly refrained from dismissing docket fees, no evidence was offered to establish the
the case on that ground alone. Instead, it considered existence of a clear and unmistakable right on their
the deficiency in the payment of the docket fees as a part that must be protected, as well as the serious
lien on the judgment which must be remitted to the damage or irreparable loss that they would suffer if
Clerk of Court of the court a quoupon the execution of the writ is not granted.
the judgment.77 _______________
Lastly, we now resolve the issue of whether or not
77 Moskowsky v. Court of Appeals, 366 Phil. 189, 196; 306 SCRA
the CA abused its discretion in denying the Lu Ym 516, 521 (1999); Pantranco North Express, Inc. v. Court of Appeals,
father and sons application for a writ of preliminary G.R. No. 105180, July 5, 1993, 224 SCRA 477, 491.
injunction. Section 3, Rule 58 of the Rules of Court sets 280
forth the requisites for the issuance of a writ of 280 SUPREME COURT
preliminary injunction, thus: REPORTS
(a) That the applicant is entitled to the relief
ANNOTATED
demanded, and the whole or part of such relief consists
Lu vs. Lu Ym, Sr.
in restraining the commission or continuance of the act
or acts complained of, or in requiring the performance It has been consistently held that there is no power,
of an act or acts, either for a limited period or the exercise of which is more delicate, which requires
perpetually; greater caution, deliberation and sound discretion, or
(b) That the commission, continuance or non- more dangerous in a doubtful case than the issuance of
performance of the act or acts complained of during an injunction. It is the strong arm of equity that
the litigation would probably work injustice to the should never be extended unless to cases of great
applicant; or injury, where courts of law cannot afford an adequate
(c) That a party, court, agency or a person is doing, or commensurate remedy in damages. Every court
threatening, or is attempting to do, or is procuring or should remember that an injunction is a limitation
suffering to be done, some act or acts probably in upon the freedom of action of the defendant and should
violation of the rights of the applicant respecting the not be granted lightly or precipitately. It should be
subject of the action or proceeding, and tending to granted only when the court is fully satisfied that the
render the judgment ineffectual. law permits it and the emergency demands it.78
Clearly then, no grave abuse of discretion can be
In the instant case, John and LLDC failed to satisfy attributed to the Court of Appeals in denying the Lu
the above requisites. Except for their claim of nullity of
Ym father and sons application for a writ of The Court of Appeals is DIRECTED to proceed with
preliminary injunction. CA-G.R. CV No. 81163 and to resolve the same with
One final note. We observe that these consolidated dispatch.
cases involve interlocutory orders of the RTC. The SO ORDERED.
delay in the disposition of the main case, which is now
pending appeal before the CA, was occasioned by the
actions of all the contending parties in seeking
affirmative relief before the Court of Appeals and
before this Court. Our disposition of these three
petitions should now pave the way for the final
resolution of the corporate dispute which started as
early as 2000.
In view of the above disquisitions, we deem it
proper to lift the status quo order which this Court
issued on January 23, 2006. The CA is directed to
proceed to rule on the appeal with dispatch.
WHEREFORE, premises considered, the petitions
in G.R. Nos. 153690 and 157381 are DENIED for being
moot and academic; while the petition in G.R. No.
170889 is DIS-
_______________

78 Yujuico v. Quiambao, G.R. No. 168639, January 29, 2007, 513


SCRA 243, 263; MIAA v. Court of Appeals, 445 Phil. 369, 382; 397
SCRA 348, 360-361 (2003), citing Garcia v. Burgos, 291 SCRA 546
(1998).

281
VOL. 563, AUGUST 281
26, 2008
Lu vs. Lu Ym, Sr.
MISSED for lack of merit. Consequently, the Status
Quo Order dated January 23, 2006 is hereby LIFTED.

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