Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION
PANAY RAILWAYS INC., G. R. No. 154061
Petitioner,
Present:

- versus - CARPIO, J., Chairperson,

PEREZ,
HEVA MANAGEMENT and SERENO,
DEVELOPMENT CORPORATION, REYES, and
PAMPLONA AGRO-INDUSTRIAL PERLAS-BERNABE, JJ.
CORPORATION, and SPOUSES
CANDELARIA DAYOT and
EDMUNDO DAYOT, Promulgated:
Respondents.
January 25, 2012
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

SERENO, J.:

The present Petition stems from the dismissal by the Regional Trial Court
(RTC) of Iloilo City of a Notice of Appeal for petitioners failure to pay the
corresponding docket fees.

The facts are as follows:

On 20 April 1982, petitioner Panay Railways Inc., a government-owned and

controlled corporation, executed a Real Estate Mortgage Contract covering several
parcels of lands, including Lot No. 6153, in favor of Traders Royal Bank (TRB) to
secure ₱20 million worth of loan and credit accommodations. Petitioner excluded
certain portions of Lot No. 6153: that already sold to Shell Co., Inc. referred to as
6153-B, a road referred to as 6153-C, and a squatter area known as 6153-D.[1]
 Petitioner failed to pay its obligations to TRB, prompting the bank to extra-
judicially foreclose the mortgaged properties including Lot No. 6153. On 20
January 1986, a Certificate of Sale was issued in favor of the bank as the highest
bidder and purchaser. Consequently, the sale of Lot No. 6153 was registered with
the Register of Deeds on 28 January 1986 and annotated at the back of the transfer
certificates of title (TCT) covering the mortgaged properties.

Thereafter, TRB caused the consolidation of the title in its name on the basis
of a Deed of Sale and an Affidavit of Consolidation after petitioner failed to
exercise the right to redeem the properties. The corresponding TCTs were
subsequently issued in the name of the bank.

On 12 February 1990, TRB filed a Petition for Writ of Possession against

petitioner. During the proceedings, petitioner, through its duly authorized manager
and officer-in-charge and with the assistance of counsel, filed a Manifestation and
Motion to Withdraw Motion for Suspension of the Petition for the issuance of a
writ of possession.[2] The pertinent portions of the Manifestation and Motion state:
3. That after going over the records of this case and the case of
Traders Royal Bank vs. Panay Railway, Inc., Civil Case No. 18280, PRI
is irrevocably withdrawing its Motion for Suspension referred to in
paragraph 1 above, and its Motion for Reconsideration referred in
paragraph 2 above and will accept and abide by the September 21, 1990
Order denying the Motion For Suspension;

4. That PRI recognizes and acknowledges petitioner (TRB) to

be the registered owner of Lot 1-A; Lot 3834; Lot 6153; Lot 6158;
Lot 6159, and Lot 5 covered by TCT No. T-84233; T-84234; T-
84235; T-84236; T-84237, T-84238 and T-45724 respectively, free of
liens and encumbrances, except that portion sold to Shell Co. found
in Lot 5. That Petitioner (TRB) as registered owner is entitled to
peaceful ownership and immediate physical possession of said real
properties.

5. That PRI further acknowledges that the Provincial Sheriff

validly foreclosed the Real Estate Mortgage erected by PRI due to
failure to pay the loan of ₱20,000,000.00. That TRB was the purchaser
of these lots mentioned in paragraph 4 above at Sheriffs Auction Sale as
evidenced by the Certificate of Sale dated January 20, 1986 and the
Certificates of Titles issued to Petitioner;
 6. That PRI further manifests that it has no past, present or
future opposition to the grant of the Writ of Possession to TRB over
the parcels of land mentioned in paragraph 4 above and subject of
this Petition and even assuming arguendo that it has, PRI
irrevocably waives the same. That PRI will even assist TRB in
securing possession of said properties as witness against squatters,
illegal occupants, and all other possible claimants;

7. That upon execution hereof, PRI voluntarily surrenders

physical possession and control of the premises of these lots to TRB,
its successors or its assigns, together with all the buildings,
warehouses, offices, and all other permanent improvements
constructed thereon and will attest to the title and possession of
petitioner over said real properties. (Emphasis supplied)

TCT No. T-84235 mentioned in the quoted portion above is Lot No. 6153,
which is under dispute.

It was only in 1994 that petitioner realized that the extrajudicial foreclosure
included some excluded properties in the mortgage contract. Thus, on 19 August
1994, it filed a Complaint for Partial Annulment of Contract to Sell and Deed of
Absolute Sale with Addendum; Cancellation of Title No. T-89624; and Declaration
of Ownership of Real Property with Reconveyance plus Damages.[3]

It then filed an Amended Complaint[4] on 1 January 1995 and again filed a

Second Amended Complaint[5] on 8 December 1995.

Meanwhile, respondents filed their respective Motions to Dismiss on these

grounds: (1) petitioner had no legal capacity to sue; (2) there was a waiver, an
abandonment and an extinguishment of petitioners claim or demand; (3) petitioner
failed to state a cause of action; and (4) an indispensable party, namely TRB, was
not impleaded.

On 18 July 1997, the RTC issued an Order[6] granting the Motion to Dismiss
of respondents. It held that the Manifestation and Motion filed by petitioner was a
judicial admission of TRBs ownership of the disputed properties. The trial court
pointed out that the Manifestation was executed by petitioners duly authorized
representative with the assistance of counsel. This admission thus operated as a
waiver barring petitioner from claiming otherwise.

On 11 August 1997, petitioner filed a Notice of Appeal without paying the

necessary docket fees. Immediately thereafter, respondents filed a Motion to
Dismiss Appeal on the ground of nonpayment of docket fees.

In its Opposition,[7] petitioner alleged that its counsel was not yet familiar
with the revisions of the Rules of Court that became effective only on 1 July 1997.
Its representative was likewise not informed by the court personnel that docket fees
needed to be paid upon the filing of the Notice of Appeal. Furthermore, it
contended that the requirement for the payment of docket fees was not mandatory.
It therefore asked the RTC for a liberal interpretation of the procedural rules on
appeals.

On 29 September 1997, the RTC issued an Order[8] dismissing the appeal

citing Sec. 4 of Rule 41[9] of the Revised Rules of Court.

Petitioner thereafter moved for a reconsideration of the Order[10] alleging that

the trial court lost jurisdiction over the case after the former had filed the Notice of
Appeal. Petitioner also alleged that the court erred in failing to relax procedural
rules for the sake of substantial justice.

On 25 November 1997, the RTC denied the Motion.[11]

On 28 January 1998, petitioner filed with the Court of Appeals (CA) a

Petition for Certiorari and Mandamus under Rule 65 alleging that the RTC had no
jurisdiction to dismiss the Notice of Appeal, and that the trial court had acted with
grave abuse of discretion when it strictly applied procedural rules.

On 29 November 2000, the CA rendered its Decision[12] on the Petition. It

held that while the failure of petitioner to pay the docket and other lawful fees
within the reglementary period was a ground for the dismissal of the appeal
pursuant to Sec. 1 of Rule 50 of the Revised Rules of Court, the jurisdiction to do
so belonged to the CA and not the trial court. Thus, appellate court ruled that the
RTC committed grave abuse of discretion in dismissing the appeal and set aside
the latters assailed Order dated 29 September 1997.
 Thereafter, respondents filed their respective Motions for Reconsideration.

It appears that prior to the promulgation of the CAs Decision, this Court
issued Administrative Matter (A.M.) No. 00-2-10-SC which took effect on 1 May
2000, amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of the 1997 Revised Rules
of Court. The circular expressly provided that trial courts may, motu proprio or
upon motion, dismiss an appeal for being filed out of time or for nonpayment of
docket and other lawful fees within the reglementary period. Subsequently,
Circular No. 48-2000[13] was issued on 29 August 2000 and was addressed to all
lower courts.

By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders
of the trial court by issuing the assailed Amended Decision[14] in the present
Petition granting respondents Motion for Reconsideration.

The CAs action prompted petitioner to file a Motion for Reconsideration

alleging that SC Circular No. 48-2000 should not be given retroactive effect. It also
alleged that the CA should consider the case as exceptionally meritorious.
Petitioners counsel, Atty. Rexes V. Alejano, explained that he was yet to
familiarize himself with the Revised Rules of Court, which became effective a
little over a month before he filed the Notice of Appeal. He was thus not aware that
the nonpayment of docket fees might lead to the dismissal of the case.

On 30 May 2002, the CA issued the assailed Resolution [15] denying

petitioners Motion for Reconsideration.

Hence, this Petition.

Petitioner alleges that the CA erred in sustaining the RTCs dismissal of the
Notice of Appeal. Petitioner contends that the CA had exclusive jurisdiction to
dismiss the Notice of Appeal at the time of filing. Alternatively, petitioner argues
that while the appeal was dismissible for failure to pay docket fees, substantial
justice demands that procedural rules be relaxed in this case.

The Petition has no merit.

Statutes and rules regulating the procedure of courts are considered

applicable to actions pending and unresolved at the time of their passage.
Procedural laws and rules are retroactive in that sense and to that extent. The effect
of procedural statutes and rules on the rights of a litigant may not preclude their
retroactive application to pending actions. This retroactive application does not
violate any right of a person adversely affected. Neither is it constitutionally
objectionable. The reason is that, as a general rule, no vested right may attach to or
arise from procedural laws and rules. It has been held that a person has no vested
right in any particular remedy, and a litigant cannot insist on the application to the
trial of his case, whether civil or criminal, of any other than the existing rules of
procedure.[16] More so when, as in this case, petitioner admits that it was not able to
pay the docket fees on time. Clearly, there were no substantive rights to speak of
when the RTC dismissed the Notice of Appeal.

The argument that the CA had the exclusive jurisdiction to dismiss the
appeal has no merit. When this Court accordingly amended Sec. 13 of Rule 41
through A.M. No. 00-2-10-SC, the RTCs dismissal of the action may be
considered to have had the imprimatur of the Court. Thus, the CA committed no
reversible error when it sustained the dismissal of the appeal, taking note of its
directive on the matter prior to the promulgation of its Decision.

As early as 1932, in Lazaro v. Endencia,[17] we have held that the payment of

the full amount of the docket fees is an indispensable step for the perfection of an
appeal. The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fees.[18]

Moreover, the right to appeal is not a natural right and is not part of due
process. It is merely a statutory privilege, which may be exercised only in
accordance with the law.[19]

We have repeatedly stated that the term substantial justice is not a magic
wand that would automatically compel this Court to suspend procedural rules.
Procedural rules are not to be belittled or dismissed simply because their non-
observance may result in prejudice to a partys substantive rights. Like all other
rules, they are required to be followed, except only for the most persuasive of
reasons when they may be relaxed to relieve litigants of an injustice not
commensurate with the degree of their thoughtlessness in not complying with the
procedure prescribed.[20]
 We cannot consider counsels failure to familiarize himself with the Revised
Rules of Court as a persuasive reason to relax the application of the Rules. It is
well-settled that the negligence of counsel binds the client. This principle is based
on the rule that any act performed by lawyers within the scope of their general or
implied authority is regarded as an act of the client. Consequently, the mistake or
negligence of the counsel of petitioner may result in the rendition of an
unfavorable judgment against it.[21]

WHEREFORE, in view of the foregoing, the Petition is DENIED for lack

of merit.

SO ORDERED.
Maria Consolacion Rivera-Pascualv.Sps. Marilyn Lim and George Lim and the Registry of
Deeds of Valenzuela City, G.R. No. 191837, September 19, 2012

Facts:

The present controversy involves a parcel of land located in Valenzuela City registered under the
name of the Spouses Lim (or private respondents). On September 2004, the petitioner filed
before the Office of the Regional Agrarian Reform (RARAD) for Region IV-A a petition to be
recognized as a tenant of a property located in Valenzuela City against one Deato. At that time,
the property was under Deato’s name. During the pendency of the petition, Deato sold the
property to Spouses Lim. The sale was registered on December 2004 leading to the issuance of a
TCT in favor of the private respondents. Thus, the petitioner filed a motion on March 2005 to
implead the Spouses Lim.

On December 2005, the petition was granted by the Regional Adjudicator (RA). The dispositive
portion of the decision includes, inter alia, that the petitioner is the tenant of the subject land by
succession from her deceased father and that she should be subrogated to the rights of the private
respondents. The judgment of the RA became final. Thus, Consolacion filed a motion for
execution to which a writ of execution was issued by the RA on January 2008. Seven days after,
the petitioner filed a petition against the private respondents and the Registrar of Deeds praying
for the issuance of an order directing Spouses Lim to accept the amount of P10million which she
undertook to tender, declare the property redeemed and cancel the TCT.

RARAD: The petition was given due course by the RA, the dispositive portion of the decision
stating that the property is lawfully redeemed, ordering the private respondents to accept the
amount consigned with the DARAB, execute a deed of redemption in favor of the petitioner and
directing the RD to cancel the TCT registered in the name of the private respondents and issue a
new one in favor of the petitioner.

DARAB: The decision of RARAD was reversed. Consolacion moved for reconsideration which
the DARAB denied.

CA: Consolacion filed a petition for review under Rule 43 of the Rules of Court. The CA did not
give due course to the petition due to the following technical grounds: a) failure of counsel to
indicate in the petition his MCLE Certificate of Compliance or Exemption Number and b) the
jurat of Consolacion’s verification and certification against non-forum-shopping failed to
indicate any competent evidence of Consolacion’s identity apart from her community tax
certificate.

She moved for reconsideration but was denied.

Issue: WON the petition should be denied due to the unexplained failure to comply with basic
procedural requirements of the Rules of Court.
Held: Yes, the petition should be denied.

Consolacion and her counsel claimed inadvertence and negligence but they did not explain the
circumstances thereof. Absent valid and compelling reasons, the requested leniency and
liberality in the observance of procedural rules appears to be an afterthought, hence, cannot be
granted. The CA saw no compelling need meriting the relaxation of the rules. Neither did the
Court see any.

The Court is aware of the exceptional cases where technicalities were liberally construed.
However, in these cases, outright dismissal is rendered unjust by the presence of a satisfactory
and persuasive explanation. The parties therein who prayed for liberal interpretation were able
to hurdle that heavy burden of proving that they deserve an exceptional treatment. It was never
the Court’s intent “to forge a bastion for erring litigants to violate the rules with impunity.”

This Court will not condone a cavalier attitude towards procedural rules. It is the duty of every
member of the bar to comply with these rules. They are not at liberty to seek exceptions should
they fail to observe these rules and rationalize their omission by harking on liberal construction.

While it IS the negligence of Consolacion's counsel that led to this unfortunate result, she is
bound by such.

G.R. No. 180434 Case Digest

G.R. No. 180434, January 20, 2016
CIR
vs Mirant Pagbilao Corp.

Facts:
MPC is corporation engaged in generation and distribution of
electricity to NAPOCOR under a build, operate , trnasfer scheme.

1999, BIR approved MPC's application for effective zero-rating for

the construction and operation of its power plant.

2002, MPC filed before BIR an administrative claim for refund of

its input VAT covering year 2000. Thereafter, fearing that the
period for filing a judicial claim for refund was to expire, MPC
proceeded to file a petition for review before CTA.

CTA division partially granted MPC's claim for refund and ordered
CIR to grant refund or tax credit but have reduced the amount. CTA
division held that by virtue of NAPOCOR's exemption from direct and
indirect taxes MPC's sale of services to NAPOCOR is subject to VAT
at 0% rate.

CIR filed a motion for reconsideration . CTA En Banc affirmed in

toto the decision of the division. CIR now seeks recourse to the SC
via petition for review on certiorari.

Ruling:

Clearly, MPC's failure to observe the mandatory 120-day period

under the law was fatal to its immediate filing of a judicial claim
before the CTA. It rendered the filing of the CTA petition
premature, and barred the tax court from acquiring jurisdiction
over the same. Thus, the dismissal of the petition is in order.
"[T]ax refunds or tax credits - just like tax exemptions - are
strictly construed against taxpayers, the latter having the burden
to prove strict compliance with the conditions for the grant of the
tax refund or credit."

With the CTA being barren of jurisdiction to entertain MPC's

petition, the Court finds it unnecessary, even inappropriate, to
still discuss the main issue of MPC's entitlement to the disputed
tax refund. The petition filed by MPC with the CT A instead
warrants a dismissal. It is settled that "a void judgment for want
of jurisdiction is no judgment at all."38

WHEREFORE, the Decision dated September 11, 2007 and Resolution

dated November 7, 2007 of the Court of Tax Appeals en banc in E.B.
Case Nos. 216 and 225 are SET ASIDE, as the CTA Case No. 6417 was
prematurely filed, and therefore, the CTA lacked jurisdiction to
entertain Mirant Pagbilao Corporation's judicial claim.

G.R. No. 197151 October 22, 2012

SM LAND, INC. vs. CITY OF MANILA

FACTS:
Respondent City of Manila assessed herein petitioners, together with their other sister
companies, increased rates of business taxes for the year 2003 and the first to third quarters of
2004 based on the strength of the provisions of Tax Ordinance Nos. 7988 and 8011, known as
the Revenue Code of Manila. Petitioners and their sister companies paid the additional taxes
under protest.
Subsequently, petitioners and their sister companies claimed with herein respondent City
Treasurer of Manila a credit or refund of the increased business taxes which they paid for the
period abovementioned. However, the City Treasurer denied their claim.
Aggrieved, petitioners and their sister companies filed with the Regional Trial Court of Pasay
City a Complaint for Refund and/or Issuance of Tax Credit of Taxes Illegally Collected. The RTC
rendered a summary judgment in favor of herein petitioners. The RTC held that Tax Ordinance
Nos. 7988 and 8011, which were the bases of the City of Manila in imposing the assailed
additional business taxes on petitioners and their co-plaintiffs, had already been declared null
and void by this Court in the case of Coca-Cola Bottlers Philippines, Inc. v. City of Manila. On this
ground, the RTC ruled that respondents cannot use the assailed Ordinances in imposing
additional taxes on petitioners and their co-plaintiffs.
Respondents moved for reconsideration, but the RTC denied it.
After the CTA granted their request for extension of time, herein respondents filed a petition
for review with the tax court.
The CTA Second Division rendered its Decision, sustained the ruling of the RTC that Ordinance
Nos. 7988 and 8011 are null and void. The CTA Second Division, nonetheless, held that herein
petitioners' claims for tax refund should be denied because of their failure to comply with the
provisions of the Rules of Court requiring verification and submission of a certificate of non-
forum shopping. The CTA Second Division noted that petitioners failed to attach to the
complaint filed with the RTC their respective Secretary's Certificates authorizing their supposed
representative, a certain Atty. Rex Enrico V. Cruz III, to file the said complaint in their behalf.
The CTA also observed that in the Verification and Certification of Non-Forum Shopping
attached to the complaint, petitioner SM Land, Inc. was not included in the list of corporations
represented by the person who executed the said Verification and Certification.
Petitioners filed a Motion for Partial Reconsideration. Attached to the said Motion was the
Verification and Certification executed by Atty. Cruz as the representative of petitioner SM
Land, Inc. Also attached were petitioners' Secretary's Certificates authorizing Atty. Cruz as their
representative. The CTA Second Division, however, denied the Motion for Partial
Reconsideration.
Aggrieved, petitioners filed a petition for review with the CTA En Banc, the CTA En Banc
rendered its assailed Decision affirming in toto the judgment of the CTA Second Division. It also
subsequently denied Petitioners' Motion for Reconsideration.
Hence, this present petition.

ISSUES:
1. Whether the CTA Second Division erred in holding that the 30-day period provided by law
within which to appeal decisions of the RTC to the CTA may be extended; and
2. Whether the CTA Second Division committed error in denying herein petitioners' claim for
tax refund on the ground that they violated the rules on verification and certification of non-
forum shopping.

HELD:
1. No. The period to appeal the decision or ruling of the RTC to the CTA via a Petition for
Review is specifically governed by Section 11 of Republic Act No. 9282, and Section 3 (a), Rule 8
of the Revised Rules of the CTA.
Section 11 of Republic Act No. 9282 provides:
SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. – Any party adversely affected by
a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of
Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of
Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an
Appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after
the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein.
Appeal shall be made by filing a petition for review under a procedure analogous to that
provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30)
days from the receipt of the decision or ruling or in the case of inaction as herein provided,
from the expiration of the period fixed by law to act thereon. x x x. (Emphasis supplied.)
Section 3(a), Rule 8 of the Revised Rules of the CTA states:
SEC 3. Who may appeal; period to file petition. – (a) A party adversely affected by a decision,
ruling or the inaction of the Commissioner of Internal Revenue on disputed assessments or
claims for refund of internal revenue taxes, or by a decision or ruling of the Commissioner of
Customs, the Secretary of Finance, the Secretary of Trade and Industry, the Secretary of
Agriculture, or a Regional Trial Court in the exercise of its original jurisdiction may appeal to the
Court by petition for review filed within thirty days after receipt of a copy of such decision or
ruling, or expiration of the period fixed by law for the Commissioner of Internal Revenue to act
on the disputed assessments. x x x.
It is crystal clear from the afore-quoted provisions that to appeal an adverse decision or ruling
of the RTC to the CTA, the taxpayer must file a Petition for Review with the CTA within 30 days
from receipt of said adverse decision or ruling of the RTC.
It is also true that the same provisions are silent as to whether such 30-day period can be
extended or not. However, Section 11 of Republic Act No. 9282 does state that the Petition for
Review shall be filed with the CTA following the procedure analogous to Rule 42 of the Revised
Rules of Civil Procedure. Section 1, Rule 42 of the Revised Rules of Civil Procedure provides that
the Petition for Review of an adverse judgment or final order of the RTC must be filed with the
Court of Appeals within: (1) the original 15-day period from receipt of the judgment or final
order to be appealed; (2) an extended period of 15 days from the lapse of the original period;
and (3) only for the most compelling reasons, another extended period not to exceed 15 days
from the lapse of the first extended period.
Following by analogy, Section 1, Rule 42 of the Revised Rules of Civil Procedure, the 30-day
original period for filing a Petition for Review with the CTA under Section 11 of Republic Act No.
9282, as implemented by Section 3 (a), Rule 8 of the Revised Rules of the CTA, may be extended
for a period of 15 days. No further extension shall be allowed thereafter, except only for the
most compelling reasons, in which case the extended period shall not exceed 15 days.

2. Yes. The Court agrees with petitioners' contention in its second argument that there are
compelling reasons in the present case which justify the relaxation of the rules on verification
and certification of non-forum shopping.
It must be kept in mind that while the requirement of the certification of non-forum shopping is
mandatory, nonetheless, the requirements must not be interpreted too literally and, thus,
defeat the objective of preventing the undesirable practice of forum shopping.
Time and again, this Court has held that rules of procedure are established to secure substantial
justice. Being instruments for the speedy and efficient administration of justice, they must be
used to achieve such end, not to derail it. In particular, when a strict and literal application of
the rules on non-forum shopping and verification will result in a patent denial of substantial
justice, these may be liberally construed. In the instant case, petitioner Watsons' procedural
lapse was its belated submission of a Secretary's Certificate authorizing Atty. Cruz as its
representative. On the other hand, petitioner SM Land, Inc.'s infraction was not only its late
submission of its Secretary's Certificate but also its failure to timely submit its verification and
certification of non-forum shopping.
In a number of cases, this Court has excused the belated filing of the required verification and
certification of non-forum shopping, citing that special circumstances or compelling reasons
make the strict application of the rule clearly unjustified. This Court ruled that substantial
justice and the apparent merits of the substantive aspect of the case are deemed special
circumstances or compelling reasons to relax the said rule.
The Court has held that even if there was complete non-compliance with the rule on
certification against forum shopping, the Court may still proceed to decide the case on the
merits, pursuant to its inherent power to suspend its own rules on grounds, as stated above, of
substantial justice and apparent merit of the case.