Contents

RULE 37- NEW TRIAL OR RECONSIDERATIONS ............................................................................................ 2

Sec. 1. Grounds of and period for filing motion for new trial or reconsideration ................................... 2
Garcia v. Court of Appeals, G.R. No. 169005, January 28, 2013 .......................................................... 2
Fraud ..................................................................................................................................................... 12
Samonte v. Samonte, G.R. No. L-40683, June 27, 1975 .................................................................... 12
Palanca v. American Food, G.R. No. L-22822, August 30, 1986 ......................................................... 19
Accident ................................................................................................................................................ 26
NFD International v. Illescas, G.R. No. 183054, September 29, 2010 ................................................ 26
Soloria v. De la Cruz, G.R. No. L-20738, January 31, 1966 ................................................................. 42
Mistake ................................................................................................................................................. 45
Viking Industrial v. Court of Appeals, G.R. No. 143794, July 13, 2004 ............................................... 45
Building Care v. Macaraeg, G.R. No. 198357, December 10, 2012 (Supra.) ...................................... 52
Excusable Negligence ............................................................................................................................ 57
Multi-Trans Agency v. Oriental Assurance, G.R. no. 180817, June 23, 2009 ..................................... 57
Spouses Que v. Court of Appeals, G.R. No. 150739, August 18, 2005 ............................................... 69
Newly Discovered Evidence .................................................................................................................. 78
Ybiernas v. Gabaldon, G.R. No. 178925, June 1, 2011 ....................................................................... 78
G.R. No. 178925 ........................................................................................................................................ 78
Sec. 2. Contents of motion for new trial or reconsideration and notice thereof .................................. 89
Pangasinan Five Star Bus v. Spouses Barredo, G.R. No. 152714, August 10, 2006 ............................ 89
Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998 (Supra.).......................................... 99
Sec. 3. Action upon motion for new trial or reconsideration .............................................................. 106
Sec. 4. Resolution of motion ............................................................................................................... 106
Sec. 5. Second motion for new trial .................................................................................................... 106
Cleofas v. St. Peter Memorial Park, G.R. No. 84905, February 1, 2000 ........................................... 106
Casalla v. People, G.R. No. 138855, October 29, 2002 .................................................................... 112
University of the East v. UE Employees’ Assoc., G.R. No. 179593, September 14, 2011 ................. 115
McBurnie v. Guanzon, G.R. Nos. 178034, 178117, 186984-85, October 17, 2013 .......................... 125
Sec. 6. Effect of granting of motion for new trial ................................................................................ 146
 Sec. 7. Partial new trial or reconsideration ......................................................................................... 147
Sec. 8. Effect of order for partial new trial .......................................................................................... 147
Sec. 9. Remedy against order denying a motion for new trial or reconsideration .............................. 147
Jose v. Javellana, G.R. No. 158239, January 25, 2012 (Supra.) ........................................................ 147
RULE 38- RELIEF FROM JUDGMENTS, ORDERS, OR OTHER PROCEEDINGS ............................................. 158
Sec. 1. Petition for relief from judgment, order, or other proceedings .............................................. 158
Samonte v. Naguiat, G.R. No. 165544, October 2, 2009 ................................................................. 158
Ex. of “other proceedings”- order of writ of execution, order dismissing an appeal .......................... 166
Francisco v. Puno, G.R. No. L-55694, October 23, 1981 .................................................................. 166
Redeña v. Court of Appeals, G.R. No. 146611, February 6, 2007 (Supra.) ....................................... 171
Spouses Dela Cruz v. Spouses Andres, G.R. No. 161864, April 27, 2007 ......................................... 182
Sec. 2. Petition for relief from denial of appeal .................................................................................. 186
Redeña v. Court of Appeals, G.R. No. 146611, February 6, 2007 supra .......................................... 186
Sec. 3. Time for filing petition; contents and verification ................................................................... 186
Madarang v. Spouses Morales, G.R. No. 199283, June 9, 2014 ...................................................... 186
Sec. 4. Order to file an answer ............................................................................................................ 194
Sec. 5. Preliminary injunction pending proceedings ........................................................................... 194
Mayuga v. Court of Appeals, G.R. No. 123899, August 30, 1996 .................................................... 194
Sec. 6. Proceedings after answer is filed ............................................................................................. 199
Miraflor v. Hon. Carpio-Morales, G.R. No. L-77568, December 14, 1988 ....................................... 199
Sec. 7. Procedure where the denial of an appeal is set aside ............................................................. 202

RULE 37- NEW TRIAL OR RECONSIDERATIONS

Sec. 1. Grounds of and period for filing motion for new trial or reconsideration

Garcia v. Court of Appeals, G.R. No. 169005, January 28, 2013

G.R. No. 169005 January 28, 2013

WINSTON F. GARCIA, in his capacity as President and General Manager of the GOVERNMENT SERVICE
INSURANCE SYSTEM (GSIS), Petitioner,
vs.
COURT OF APPEALS and RUDY C. TESORO, Respondents.

DECISION

VILLARAMA, JR., J.:

Assailed in this petition for certiorari under Rule 65 are the Decision 1 dated April 11, 2005 and
Resolution2 dated July 20, 2005 of the Court of Appeals (CA) in CA-G.R. SP No. 82751.

In February and March, 2003, the Government Service Insurance System (GSIS) published an Invitation
to Pre-Qualify to Bid for the construction of the GSIS Iloilo City Field Office (GSIS-ICFO) Building with an
approved budget cost of P57,000,000.00.3 Out of the eight (8) pre-qualified contractors, only four
submitted their financial bids, as follows:

P55,350,000.0
Embrocal Builders, Inc. -
0
NelsonS. Lee Construction - 55,125,000.00
F. Gurrea Construction - 53,503,013.33
4
H .S. Oaminal Construction - 51,307,146.30

After evaluation of the bids and post-qualification, the Bids and Awards Committee (BAC) declared the
bid of Embrocal Builders, Inc. (Embrocal) as the "Lowest Calculated and Responsive Bid." Subsequently,
Atty. Henry S. Oaminal requested that they be awarded the contract for having submitted the lowest
responsive bid, while Mr. Felix Gurrea sought clarification of certain bid instructions. Said bidders were
informed of their disqualification only on December 10, 2003 through a letter signed by GSIS Iloilo Field
Office Manager, Jesusa Ruby A. Teruel.5

In its Resolution No. 01-03 dated November 4, 2003, the BAC recommended to the Senior Vice-
President of the Field Operations Group (SVP-FOG), herein private respondent Rudy C. Tesoro, that the
proposed construction of the GSIS-ICFO building be awarded to Embrocal in the amount
of P55,350,000.00 for a contract period of 300 days to be reckoned 15 days from the date of Notice to
Proceed. The Notice of Award dated November 4, 2003 was signed by Manager Teruel, Mateo E. Basa,
Jr., VP Area II-FOG and private respondent. On even date, the Contract for the Construction of the GSIS-
Iloilo Office Building was executed between GSIS represented by private respondent and Embrocal
represented by its President Edgardo M. Brocal. In his letter dated November 20, 2003, Mr. Brocal
requested for the release of the 15% mobilization fee pursuant to the terms of the contract. 6

On November 24, 2003, petitioner Winston F. Garcia, then GSIS President and General Manager, issued
Office Order No. 104-03 reassigning private respondent and designating him as SVP, Corporate Services
Group (SVP-CSG), while SVP-CSG Enriqueta P. Disuanco was designated/reassigned to his post. The said
reassignment order, received by the Office of the SVP-FOG on November 27, 2003, was to take effect
immediately. Meanwhile, private respondent had approved and signed the Disbursement Voucher for
the amount of P7,430,737.50 as mobilization fee (net of taxes) for the GSIS-ICFO building construction
contract. Embrocal received the check payment and issued the corresponding receipt on November 27,
2003. However, due to several letters from losing bidders and the protest filed by F. Gurrea
Construction, Inc. questioning the conduct of the bidding, SVP Disuanco investigated the matter. 7

The Report8 dated January 26, 2004 prepared by SVP-FOG Disuanco and Alfredo B. Pineda II of the
OSVP-FOG concluded that the bidding process conducted by the BAC was flawed for non-compliance
with the strict provisions of Republic Act (R.A.) No. 9184. It was further observed that the field office
committed oversights such as the presence of unofficial BAC members with no defined roles and the
BAC’s failure to comply with the requirement of promptly replying to formal queries in consonance with
the provisions of R.A. No. 6713.

On January 28, 2004, Ma. Josefina V. Rivas, Regional Cluster Director, Commission on Audit (COA), GSIS-
Iloilo City, submitted her observations to Manager Teruel recommending that her office explain the
reason for the release of mobilization fee to Embrocal despite non-issuance of the Notice to Proceed,
contrary to Section IB 10.10 (1) of Presidential Decree (P.D.) No. 1594. Rivas also noted that per their
ocular inspection conducted in late December 2003 at the project site, there was no discernible major
construction activity nor deliveries of construction materials or presence of construction crew except for
two security guards.9

Under Memorandum dated February 6, 2004, private respondent along with other branch officers were
directed by the GSIS Investigation Unit to submit within three days from receipt their Counter-
Affidavit/Comment explaining why no administrative sanctions shall be imposed upon them, pursuant to
Section 11 of the Uniform Rules on Administrative Cases in the Civil Service (URACCS). Private
respondent and Mateo E. Basa, Jr. submitted their written explanation under oath on February 11,
2004.10

On February 16, 2004, the GSIS Investigation Unit submitted its Preliminary Investigation
Report11recommending that administrative charges be filed against the following branch officials and
employees: private respondent, Basa, Jr., Teruel, Branch Attorney Catherine Portia P. Corteza, Finance
Division Chief Adelaida J. Jamantoc, Senior General Insurance Specialist Jose Ma. C. Capalla and
Administrative Division Chief Lita L. Sonalan. It was further recommended that said officials be placed
under preventive suspension.

On February 19, 2004, private respondent was formally charged with Gross Neglect of Duty, Grave
Misconduct and/or Violation of Reasonable Office Rules and Regulations as provided under Section 46,
paragraphs (3), (4) and (12), Chapter 6, Book V, Title I, Subtitle A of Executive Order No. 292, otherwise
known as the "Administrative Code of 1987," in relation to Section 52 (A), paragraphs (2) and (3), and
(C), paragraph (3), Rule IV of the Civil Service Commission Resolution No. 99-1936 (URACCS). The Formal
Charge12 reads as follows:

That on or about November 4, 2003, you approved the award for the construction of the Government
Service Insurance System (GSIS) Iloilo City Field Office (ICFO) building to Embrocal Builders, Inc. and
thereafter entered into contract with the same to the disadvantage of GSIS in view of the fact that
Embrocal Builders, Inc. had submitted the HIGHEST BID during the bid opening conducted at the ICFO on
September 19, 2003;
That on November 27, 2003 you approved the payment of 15% mobilization fee in the amount of Eight
Million Three Hundred Two Thousand Five Hundred Pesos (P8,302,500) to Embrocal Builders, Inc. in
excess and/or without authority and contrary to the Manual on Signing Authorities for Disbursement
Voucher and Check approved by the Board of Trustees of GSIS per Resolution No. 383 dated December
18, 2002. The records show that effective November 24, 2003 you were already effectively reassigned to
the Office of Corporate Services pursuant to Office Order No. 104-03 dated November 24, 2003;

That you approved the payment of 15% mobilization fee to Embrocal Builders, Inc. prior to the issuance
of the Notice to Proceed in violation of Section 30.5 of the Implementing Rules and Regulations of E.O.
40; and

That you approved the payment of 15% mobilization fee to Embrocal Builders, Inc. contrary to Section
91 of P.D. 1445, otherwise known as the "Government Auditing Code of the Philippines." It was shown
that on November 27, 2003 you were not anymore authorized to approve the payment in behalf of the
GSIS Field Operations Group.

Private respondent was also placed on preventive suspension for a period of ninety (90) days. On
February 23, 2004, he filed his Answer to the charges, in addition to the previous joint explanation dated
February 9, 2004 submitted to the Investigation Unit.

However, on March 15, 2004 during the pendency of formal investigation being conducted by GSIS,
private respondent filed before the CA a Petition With Prayer for Temporary Restraining Order and/or
Writ of Preliminary Injunction (CA-G.R. SP No. 82751)13 In his petition, private

respondent questioned the legality of the formal charge which he claimed was issued without going
through the process of preliminary investigation. He thus prayed that petitioner be permanently
enjoined from "enforcing and implementing the said illegally issued Formal Charge with the order of
preventive suspension."14

On May 24, 2004, petitioner rendered his Decision 15 finding private respondent administratively liable,
as follows:

WHEREFORE, premises considered, respondent RUDY C. TESORO, is hereby found GUILTY OF GROSS
NEGLECT OF DUTY and GRAVE MISCONDUCT pursuant to Section 46 (b) (3) and (4), Chapter 7, Book V,
Title I, Subtitle A of Executive Order No. 292, otherwise known as the "Administrative Code of 1987", in
relation to Section 52 (A)(2) and (3), Rule IV of the Uniform Rules on Administrative Cases in the Civil
Service (URACCS). Consequently, respondent is hereby meted the penalty of DISMISSAL FROM THE
SERVICE, WITH PERPETUAL PROHIBITION FROM REEMPLOYMENT IN THE GOVERNMENT SERVICE,
FORFEITURE OF RETIREMENT BENEFITS AND CANCELLATION OF HIS ELIGIBILITY.

SO ORDERED.16

The Board of Trustees of GSIS through Resolution No. 118 dated May 26, 2004, approved the draft
decision. Copy of the decision was served on private respondent on June 2, 2004 but was returned to
the Investigation Unit because private respondent has not reported for work since June 1, 2004. 17
On June 28, 2004, private respondent filed a motion for reconsideration from the May 24, 2004 Decision
but it was denied by petitioner in his Resolution dated July 5, 2004. 18

In his Comment19 filed before the CA on June 11, 2004, petitioner contended that private respondent’s
petition for certiorari is already moot and academic with the rendition of the decision in the
administrative case. Petitioner also pointed out that private respondent is misleading the appellate
court when the petition alleged that the Formal Charge was issued without any preliminary
investigation. Further, petitioner asserted that private respondent violated the principle of exhaustion of
administrative remedies when he filed the petition for certiorari despite the availability of appeal.

Private respondent filed his Reply to which a Rejoinder was filed by the petitioner.

Aside from the petition filed in the CA, private respondent also appealed the order of preventive
suspension, as well as the Decision dated May 24, 2004 finding him administratively liable for gross
neglect of duty and grave misconduct and imposing the penalty of dismissal from service, to the Civil
Service Commission (CSC).20

In the meantime, upon reevaluation the GSIS Physical Resources Bids and Awards Committee (PRBAC)
declared a "failure of bidding" pursuant to Section 41 of the Implementing Rules and Regulations (IRR)
of R.A. 9184. Embrocal and its counsel were advised that the contract for the construction of the GSIS-
ICFO building entered into with private respondent was null and void ab initio, and hence Embrocal
should return the amount of mobilization fees illegally released to it. 21 The COA Regional Legal and
Adjudication Office later issued a Notice of Disallowance of the amount released to Embrocal as
mobilization fee. Private respondent along with Teruel, Jamantoc, Corteza, Sonalan, Capalla and Basa, Jr.
were all found liable for the disallowed sum. Private respondent has not filed any motion for
reconsideration of the said disallowance.22

On April 11, 2005, the CA rendered the assailed Decision 23 which decreed, as follows:

WHEREFORE, in view of the foregoing premises, the assailed Formal Charge dated 19 February 2004 of
the respondent, and his Decision dated 24 May 2004, are hereby MODIFIED as follows:

(a) The administrative offense of gross neglect of duty and grave misconduct and/or violation of
reasonable office rules and regulations for which petitioner is charged is hereby set aside, and
modified to the lower administrative offense of SIMPLE NEGLECT OF DUTY.

(b) The Decision dated 24 May 2004 of herein respondent, the dispositive portion of which
reads:

xxxx

is hereby set aside, and a new one is hereby rendered, finding the petitioner RUDY C. TESORO, GUILTY
OF SIMPLE NEGLECT OF DUTY pursuant to Section 52 (B) (I), Rule IV, Uniform Rules on Administrative
Cases in the Civil Service (URACCS). Consequently, petitioner is hereby meted the penalty of suspension
for six (6) months, without pay, the period for which he was preventively suspended and subsequently
dismissed shall be credited for the purpose of serving the penalty hereof. Accordingly, the respondent is
directed to immediately reinstate the petitioner to his last position, without loss of seniority rights and
other privileges with payment of backwages inclusive of allowances and other benefits from the time of
his suspension and dismissal exceeding six (6) months until actual reinstatement. The petitioner is
further sternly warned that a repetition of the same or similar acts shall be dealt with more severely.

SO ORDERED.24

Petitioner received a copy of the above decision on April 22, 2005, and thus had only until May 7, 2005
within which to file a motion for reconsideration. However, on May 4, 2005, it filed a Motion for
Extension of Time to File the Motion for Reconsideration alleging that the lawyer in charge of the case,
Atty. Violeta C.F. Quintos of the Investigation Unit, had to immediately take a flight to Cebu City on April
24, 2005 because her father died; she is expected to report for work on May 5, 2005. The motion for
reconsideration was filed on May 16, 2005.25

Private respondent filed a Motion for Entry of Judgment and Writ of Execution asserting that the
decision had attained finality for failure of petitioner to file a timely motion for reconsideration or
appeal.26 He likewise filed a Manifestation and Motion to Withdraw Appeal in CSC Adm. Case No. 04-001
(Preventive Suspension and Illegal Dismissal)27

By Resolution dated July 20, 2005, the CA, citing the case of Habaluyas Enterprises, Inc. v.
Japson28 denied petitioner’s motion for extension to file a motion for reconsideration and merely noted
private respondent’s motion.

The present petition filed on August 10, 2005 alleges that –

A. The Court of Appeals acted with grave abuse of discretion amounting to lack or excess of
jurisdiction when it ruled on the merits of the case despite the fact that it did not have the
complete records of the case thus depriving petitioner of due process;

B. The Honorable Court of Appeals acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it went beyond the Petition for Certiorari filed by respondent and
proceeded to rule on the formal charge and the merits of the case;

C. Factual errors and misapplication of law were committed by the Honorable Court of Appeals
even as the evidence does not support the decision;

D. Petitioner’s notice to the Court of Appeals of the Decision in the administrative case rendered
the Petition for Certiorari filed by respondent moot and academic;

E. The Honorable Court of Appeals gravely erred in failing to appreciate and apply the principle
of Exhaustion of Administrative Remedies when it gave due course to the Petition for Certiorari
filed by respondent;

F. There is no plain, adequate and speedy remedy available to petitioner.29

In his Comment,30 private respondent argues that with the denial by the CA of petitioner’s motion for
extension to file a motion for reconsideration, the April 11, 2005 Decision of the CA is already final and
executory. Hence, he prays for the outright dismissal of the present petition.
As to the issue of non-exhaustion of administrative remedies, private respondent contends that this
case falls under the recognized exceptions to the said rule considering the purely legal issue involved
and the violation of his right to due process. He further asserts that no grave abuse of discretion was
committed by the CA when it modified the charge against him considering that: (1) there was no
document or evidence showing that he received the November 24, 2003 reassignment order on the
date he signed the disbursement voucher (November 25, 2003) for the release of the 15% mobilization
fee to Embrocal; (2) even assuming he was informed immediately on November 24, 2003 regarding his
transfer, his act of signing the check and disbursement voucher was still valid and legal since he has not
assumed the duties of the new position (SVP-CSG) at that time; (3) he was not in a position to overturn
the decision and recommendation of the BAC and the previous signatories to the check and voucher; (4)
he cannot be charged with gross neglect of duty in relying on the expert recommendation of the BAC
members and his subordinates.

Petitioner counters that the private respondent may not deprive this Court of appellate jurisdiction over
the CA’s April 11, 2005 Decision, citing Barnes v. Padilla. 31 He reiterates that the CA gravely abused its
discretion when it ruled on the merits of the administrative case despite the absence of complete
records and transformed the petition for certiorari filed by private respondent into an appeal. The CA
also ignored the more than substantial evidence showing that private respondent was guilty of gross
neglect of duty and grave misconduct that would justify the imposition of a higher penalty.

Petitioner stresses that contrary to private respondent’s assertions, he was the final approving authority
who could accept, modify or completely disregard the BAC’s recommendation after evaluation of the
bidding process. The CA decision, in fact, had confirmed petitioner’s finding that private respondent was
really remiss in his job and is actually to be blamed for the anomalous award to the highest bidder.
Moreover, BAC members were not appointed for their expertise in the bidding process but are
employees designated to said committee by virtue of their positions in the Iloilo City Field Office
Department (ICFOD). Private respondent’s supervision over the ICFOD-BAC, as SVP-FOG, includes
authority over their recommendations. On his continuing claim that he signed the disbursement voucher
and check on November 25, 2003 prior to his receipt of the transfer order, petitioner cites the affidavit
of Manager Teruel stating that the disbursement voucher and check were hand-carried from the Iloilo
City Field Office to the OSVP-FOG for private respondent’s signature on November 27, 2003.

The assailed CA resolution upheld the general rule that the filing of a motion for extension of time to file
a motion for reconsideration in the CA does not toll the fifteen-day period to appeal, citing Habaluyas
Enterprises, Inc. v. Japson.32 However, in previous cases we suspended this rule in order to serve
substantial justice.33

In Barnes v. Padilla,34 we exempted from the operation of the general rule the petitioner whose motion
for extension of time to file a motion for reconsideration was denied by the CA. In the Resolution
denying the motion for reconsideration of our Decision dated September 30, 2004, we held that:

A suspension of the Rules is warranted in this case since the procedural infirmity was not entirely
attributable to the fault or negligence of the petitioner. Petitioner’s counsel was understandably
confused with the absence of an explicit prohibition in the 2002 Internal Rules of the Court of Appeals
(IRCA) that the period of filing a motion for reconsideration is non-extendible, which was expressly
stated in the Revised Internal Rules of the Court of Appeals that was in effect prior to the IRCA. The
lawyer’s negligence without any participatory negligence on the part of the petitioner is a sufficient
reason to set aside the resolution of the CA.
More significantly, a careful study of the merits of the case and the lack of any showing that the review
sought is merely frivolous and dilatory, dictated the setting aside of the resolutions of the CA in CA-G.R.
SP No. 69573 and Branch 215 in Civil Case No. Q-99-37219, as both are patently erroneous. x x x

Furthermore, the private respondents will not be unjustly prejudiced by the suspension of the rules.
What is subject of the appeal is only a question of law, involving the issue of forum-shopping, and not a
factual matter involving the merits of each party’s respective claims and defenses relating to the
enforcement of the MOA, wherein petitioner was given an option to purchase the subject property.
Litigations should, as much as possible, be decided on their merits and not on mere technicalities. Every
party-litigant should be afforded the amplest opportunity for the proper and just disposition of his
cause, freed from the constraints of technicalities. 35(Emphases supplied)

After a conscientious review, we hold that a suspension of the Rules is warranted in this case since the
delay of one week and two days in the filing of the motion for reconsideration was not occasioned by
negligence on the part of petitioner’s lawyer in charge of the case, the latter having a valid excuse to
immediately take leave of absence in view of her fathers’ sudden demise. Additionally, the merits of the
case impel us to adopt a more liberal stance. There is likewise no showing that the review sought is
merely frivolous and dilatory. As we said in Barnes v. Padilla: 36

Invariably, rules of procedure should be viewed as mere tools designed to facilitate the attainment of
justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather
than promote substantial justice, must always be eschewed. Even the Rules of Court reflects this
principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter
even that which this Court itself had already declared to be final.

xxxx

Indeed, the emerging trend in the rulings of this Court is to afford every party litigant the amplest
opportunity for the proper and just determination of his cause, free from the constraints of
technicalities.

While private respondent filed his answer to the Formal Charge issued by petitioner, he filed a petition
for certiorari in the CA questioning its validity and the order of preventive suspension, even before the
hearing proper was conducted. The CA found no jurisdictional ground to invalidate the Formal Charge,
and did not make any ruling on the issue of whether grave abuse of discretion attended the imposition
of the preventive suspension order. However, the CA proceeded to review the merits of the
administrative charge against private respondent, concurring with petitioner’s finding that private
respondent was remiss in his duties and responsibilities but declaring private respondent liable for the
lesser offense of Simple Neglect and imposing on him the lower penalty therefor. The CA thus exceeded
its certiorari jurisdiction when it reviewed the alleged errors of the disciplining authority not only in
finding a prima facie case against the private respondent but also in determining his guilt. This despite
the fact that the rendition of the decision in Adm. Case No. 04-001 by the disciplining authority (GSIS)
was earlier brought to the attention of the CA.

A certiorari proceeding is limited in scope and narrow in character. The special civil action for certiorari
lies only to correct acts rendered without jurisdiction, in excess of jurisdiction, or with grave abuse of
discretion. Certiorari will issue only to correct errors of jurisdiction, not errors of procedure or mistakes
in the findings or conclusions of the lower court. 37 As long as the court acts within its jurisdiction, any
alleged errors committed in the exercise of its discretion will amount to nothing more than mere errors
of judgment, correctible by an appeal or a petition for review under Rule 43 of the Rules of Court, 38 and
not a petition for certiorari.

Considering that the CA did not declare any act of the petitioner to have been exercised without or in
excess of jurisdiction, or with grave abuse of discretion, the grant of relief to private respondent by
sentencing him to a lower offense with reduced penalty cannot be sustained. Whether the private
respondent may be held liable for Gross Neglect of Duty as stated in the Formal Charge or for the lower
offense of Simple Neglect of Duty should be properly threshed out in Adm. Case No. 04-001 and
thereafter in a timely appeal to the Civil Service Commission, not in the certiorari proceedings before
the CA seeking nullification of the Formal Charge and preventive suspension order.

In the case of People v. Court of Appeals, 39 accused-respondents were convicted by the Regional Trial
Court (RTC) of violation of Section 68 of P.D. No. 705 and accordingly sentenced with the prescribed
penalty of imprisonment. Instead of appealing the RTC judgment after the denial of their motion for
reconsideration, respondents filed a petition for certiorari under Rule 65 with the CA, praying for the
reversal of their conviction. The CA reviewed the trial court’s assessment of the evidence on record, its
findings of facts, and its conclusions based on the said findings. The CA forthwith concluded that the said
evidence was utterly insufficient on which to anchor a judgment of conviction, and acquitted one of the
respondents of the crime charged.

On appeal by the People to this Court, we reversed and set aside the CA’s decision ordering a re-
promulgation of the RTC decision against the two respondents and acquitting one respondent.
Addressing the issue of whether the CA acted in excess of its jurisdiction or without jurisdiction when it
acquitted one of the respondents in a petition for certiorari for the nullification of the trial court’s
decision, we held:

x x x. However, instead of appealing the decision by writ of error, the respondents filed their petition for
certiorari with the CA assailing the decision of the trial court on its merits. They questioned their
conviction and the penalty imposed on them, alleging that the prosecution failed to prove their guilt for
the crime charged, the evidence against them being merely hearsay and based on mere inferences. In
fine, the respondents alleged mere errors of judgment of the trial court in their petition. It behooved the
appellate court to have dismissed the petition, instead of giving it due course and granting it.

The CA reviewed the trial court’s assessment of the evidence on record, its findings of facts, and its
conclusions based on the said findings. The CA forthwith concluded that the said evidence was utterly
insufficient on which to anchor a judgment of conviction, and acquitted respondent

Almuete of the crime charged.

The appellate court acted with grave abuse of its discretion when it ventured beyond the sphere of its
authority and arrogated unto itself, in the certiorari proceedings, the authority to review perceived
errors of the trial court in the exercise of its judgment and discretion, which are correctible only by
appeal by writ of error. Consequently, the decision of the CA acquitting respondent Almuete of the
crime charged is a nullity. If a court is authorized by statute to entertain jurisdiction in a particular case
only, and undertakes to exercise the jurisdiction conferred in a case to which the statute has no
application, the judgment rendered is void. The lack of statutory authority to make a particular
judgment is akin to lack of subject-matter jurisdiction. In this case, the CA is authorized to entertain and
resolve only errors of jurisdiction and not errors of judgment.40 (Emphasis supplied)

In this case, records showed that private respondent appealed the May 24, 2004 Decision of petitioner
finding him administratively liable for gross neglect of duty and grave misconduct and imposing the
penalty of dismissal from service, to the CSC. He also separately appealed the preventive suspension
order to the CSC. Later, however, private respondent filed a Manifestation and Motion to Withdraw
Appeal (both the preventive suspension and illegal dismissal cases) with the CSC on May 25, 2005,
without mentioning the April 11, 2005 Decision of the CA modifying the Formal Charge and the
aforesaid May 24, 2004 Decision of petitioner.1âwphi1

In a petition for certiorari, the public respondent acts without jurisdiction if it does not have the legal
power to determine the case; there is excess of jurisdiction where the respondent, being clothed with
the power to determine the case, oversteps its authority as determined by law. There is grave abuse of
discretion where the public respondent acts in a capricious, whimsical, arbitrary or despotic manner in
the exercise of its judgment as to be said to be equivalent to lack of jurisdiction. Mere abuse of
discretion is not enough.41

Excess of jurisdiction as distinguished from absence of jurisdiction means that an act, though within the
general power of a tribunal, board or officer is not authorized, and invalid with respect to the particular
proceeding, because the conditions which alone authorize the exercise of the general power in respect
of it are wanting.42The supervisory jurisdiction of the court to issue a certiorari writ cannot be exercised
in order to review the judgment of the lower court as to its intrinsic correctness, either upon the law or
the facts of the case. In the absence of a showing that there is reason for the Court to annul the decision
of the concerned tribunal or to substitute its own judgment, it is not the office of the Court in a petition
for certiorari to inquire into the correctness of the assailed decision or resolution. 43

Since petitioner is vested with the requisite legal authority to issue the Formal Charge, after due
investigation in accordance with existing rules and regulations of the Civil Service, and to commence
administrative proceedings against the private respondent, 44 and in the absence of grave abuse of
discretion in the exercise of such powers, it behooved the CA to dismiss the petition instead of giving it
due course and granting it. In resolving the merits of the decision rendered in the administrative case
despite the pendency of private respondent’s appeal before the CSC assailing the correctness of the
same decision, the CA clearly exceeded its certiorari jurisdiction.

WHEREFORE, the present petition is hereby GIVEN DUE COURSE and the writ prayed for, accordingly
GRANTED. The Decision dated April 11, 2005 and Resolution dated July 20, 2005 of the Court of Appeals
in CA-G.R. No. SP No. 82751 are hereby ANNULLED AND SET ASIDE.

No pronouncement as to costs.

SO ORDERED.
Fraud

Samonte v. Samonte, G.R. No. L-40683, June 27, 1975

G.R. No. L-40683 June 27, 1975

ARTURO SAMONTE, ET AL., plaintiffs,

vs.
FAUSTINO SAMONTE, ET AL., defendants. FAUSTINO SAMONTE AND LOURDES MANUEL, defendants-
appellees, vs. CAYETANO SAMONTE, ET AL., defendants-appellants.

Sixto T. Antonio for plaintiffs-appellees.

Ernesto M. Tomaneng for defendants-appellants.

Rodrigo Law Office for defendants-appellees.

MARTIN, J.:

Appeal taken by the defendants-appellants Cayetano Samonte, et al. from a judgment of the Court of
First Instance of Bulacan in Civil Case No. 3521, entitled "Arturo Samonte, et al. vs. Faustino Samonte, et
al." which was certified to this Court by the Honorable Court of Appeals, purely on questions of law
being raised therein.

The records before Us reveal that plaintiffs Arturo and Francisco and defendants Ricardo and Cayetano
and Raul and Lourdes all surnamed Samonte are the children of defendant Faustino Samonte by his first
marriage with Bernardina Rodriguez (now deceased). Raul Samonte during his lifetime married and
begot Jaime Samonte. Lourdes Samonte also during her lifetime married Alejandro Villanueva and begot
Cipriano, Ernesto and Teresita, all surnamed Villanueva. During the first marriage of defendant Faustino
Samonte with Bernardina Rodriguez, they acquired conjugal properties consisting of three (3) parcels of
unregistered land described in the complaint and a residential house. When Bernardina Rodriguez died
in February 1935, defendant Faustino Samonte continued to hold and administer the above-described
parcels of land, together with a parcel of land of Bernardina Rodriguez 1 situated at Bambang, Bulacan
for the benefit of the aforementioned children and of his own. With the income from the properties and
with a borrowed capital secured by them, defendant Faustino Samonte, with the help of his sons and
son-in-law by his first wife entered in long term leases of first class fishponds in Bulacan, Bulacan among
which are fishponds known as the "Kay Bituin", the "Kay Sombrero", the "Kay Gogue", the "Kay
Katwiran", the "Kay Katig", and the "Kay Tubong".

In their complaint plaintiffs Arturo Samonte and Francisco Samonte claim that defendant Faustino
Samonte contracted his second marriage with defendant Lourdes Manuel, without liquidating the
conjugal properties and the income therefrom of his first marriage and as a matter of fact used their
rights, interests and participation in said properties as his capital in the conjugal partnership with his
second wife, defendant Lourdes Manuel. They therefore contend that whatever defendant Faustino
Samonte has acquired during his second marriage as well as the income derived from the operations of
the leased fishponds should be divided into two parts — one part to his children by the first marriage
and the other to form part of the conjugal partnership between him and defendant Lourdes Manuel.
Thus plaintiffs requested the defendant-spouses Faustino Samonte and Lourdes Manuel to account,
partition and settle what is due to them out of the properties brought by defendant Faustino Samonte
from the first to the second marriage and of the products from the leased fishponds, which request was
unceremoniously ignored. To restrain defendant-spouses Faustino Samonte and Lourdes Manuel from
gathering and harvesting the products of the properties in question and of the leased fishponds, plaintiff
prayed for the issuance of a writ of preliminary injunction ex parte upon the filing of the corresponding
bond until such time that a receiver shall have been appointed for all the properties in litigation. Most
importantly, they prayed that they be declared as co-owners with defendant Faustino Samonte of all the
properties described in paragraph 5 of the complaint and as one-half co-owners with defendant-spouses
Faustino Samonte and Lourdes Manuel of all the properties described in paragraph 11 thereof and that
said defendant-spouses Faustino Samonte and Lourdes Manuel be ordered to render a complete
accounting of all the fruits and income of all the properties in litigation, including that of the leased
fishponds, and to pay plaintiffs attorney's fees in the amount of P20,000.00.

On June 30, 1967 defendant-spouses Faustino Samonte and Lourdes Manuel filed their
answer 2 admitting partially some of the material allegations of the plaintiffs' complaint and denying the
others and by way of special defenses claim that the complaint has no cause of action inasmuch as he
(defendant Faustino Samonte) was even before the filing of the complaint willing to partition the
properties acquired by him during his first marriage with plaintiffs' mother and that said plaintiffs have
absolutely no participation whatsoever with the properties acquired by him in his second marriage with
defendant Lourdes Manuel. By way of counter-claim, defendant-spouses claim for moral damages and
attorney's fees.

On August 8, 1967 defendants Cayetano Samonte, Alejandro Villanueva, Cipriano Villanueva, Ernesto
Villanueva, Teresita Villanueva, Jaime Samonte and Juliana Vda. de Samonte filed their answer 3 to the
plaintiffs' complaint denying the material allegations therein and by way of cross-claim against
defendant-spouses Faustino Samonte and Lourdes Manuel allege that they have joined the two in their
business venture with the owner of the fishpond "Kay Bituin" who agreed to lease to them for 20 years
the fishpond with a yearly rental of P4,000.00 payable in advance every rive years or sooner. In this
business venture Cayetano Samonte, et al. agreed to place all contracts of leases of fishponds in the
name of defendant Faustino Samonte with Raul Samonte as manager and administrator of all the
fishponds they will lease. Cayetano Samonte was to help Raul. Under the set-up, several fishponds were
taken by defendants Cayetano Samonte, et al. for long term lease, among which was fishponds, the "Kay
Katwiran". When Raul Samonte died, Cayetano Samonte with the help of Jaime and Ricardo Samonte
took over the management of the leased fishponds. Sensing that defendant-spouses Faustino Samonte
and Lourdes Manuel would take away from him the management of the leased fishponds, Cayetano
Samonte and the other defendants who joined the latter in the business set-up were forced to file an ex
partemotion to restrain defendant-spouses Faustino Samonte and Lourdes Manuel from disturbing
and/or modifying the agreed business arrangement.

On September 1, 1967 defendants Cayetano Samonte, et al. filed an urgent motion for preliminary
injunction 4 to restrain defendant-spouses Faustino Samonte and Lourdes Manuel from executing or
signing any contract whatsoever relative to the leased fishponds until further orders from the Court.
On September 15, 1967 plaintiffs Arturo Samonte, Francisco Samonte and Deogracias Samonte and
defendants Ricardo Samonte, Jaime Samonte, Cayetano Samonte, Romeo Samonte, Cipriano Villanueva,
Teresita Villanueva, Ernesto Villanueva and Alejandro Villanueva and defendant-spouses Faustino
Samonte and Lourdes Manuel signed and executed a compromise agreement which reads as follows:

COMPROMISE AGREEMENT

COME NOW the undersigned parties in the above-entitled case, and to this Honorable
Court, respectfully submit the following agreement:

1. That defendants spouses Faustino Samonte and Lourdes Manuel, Cayetano Samonte,
Ricardo Samonte, Romeo Samonte, Jaime Samonte, Cipriano Villanueva, Ernesto
Villanueva agree to pay as they have paid to plaintiffs the total sum of P40,000.00 in
consideration of the latter's claim for accounting and further agree to give to said
plaintiffs whatever share they are entitled under the law in the property acquired by
Faustino Samonte with his first wife;

2. That plaintiffs Arturo Samonte, Francisco Samonte and Deogracias Samonte, together
with Romeo Samonte and Consolacion Donato, hereby waive any and all claims for
accounting and partition of the properties in question;

3. That defendants Faustino Samonte, Lourdes Manuel, Alejandro Villanueva, Cayetano

Samonte, Jaime Samonte and Ricardo Samonte are partners in capital of all the
fishponds under leasehold mentioned in the complaint and cross-claim;

4. That the fishponds known as Katwiran and Sombrero now under the leasehold of said
defendants shall pertain to defendants Cayetano Samonte, Alejandro Villanueva, Jaime
Samonte and Ricardo Samonte; however, with respect to the improvements to be
introduced thereon, defendants spouses Faustino Samonte and Lourdes Manuel agree
to share one-half of whatever amount to be spent in excess of P5,000.00;

5. That the fishpond Kay Katig now under leasehold of said defendants shall pertain to
the spouses Faustino Samonte and Lourdes Manuel to the exclusion of the other
defendants;

6. That defendants Alejandro Villanueva, Cayetano Samonte, Jaime Samonte and

Ricardo Samonte hereby waived and renounced whatever capital they have invested in
the partnership,

7. That upon the signing of this Agreement, the partnership among the defendants for
the lease of the aforementioned fishponds shall be deemed terminated and each and
every partner hereby warrant to each other their complete and peaceful possession of
the fishpond that each will respectively occupy and manage;

WHEREUPON, the parties hereby pray that the foregoing Compromise Agreement be
approved and that judgment be rendered in accordance therewith.
 Malolos, Bulacan, September 15, 1967.

On September 19, 1967, the lower court rendered a decision 5 approving the compromise agreement
and enjoining the parties to comply strictly with the terms and conditions thereof.

On March 14, 1968, defendants Cayetano Samonte, et al. filed a motion 6 to suspend the compromise
agreement dated September 15, 1967 and to maintain status quo alleging that they have agreed to
accept the fishpond "Kay Katwiran" on the understanding and representation of defendant-spouses
Faustino Samonte and Lourdes Manuel that the leasehold of said fishpond will expire yet in 1972 as per
contract which said spouses promised to show in some future date; but which lease they later learned
was to expire in 1970 instead of 1972. Because of the misrepresentation they were allegedly deprived of
the benefits and enjoyment of the lease contract for two years.

On March 25, 1968 the lower court issued an order 7 denying the motion to suspend the compromise
agreement for lack of merit.

On April 10, 1968, defendants Cayetano Samonte, et al. filed a motion 8 to set aside the aforesaid
judgment claiming that they did not have any knowledge thereof until the hearing of the motion to
suspend the compromise agreement on March 21, 1968 when they received a copy of the aforesaid
decision.

On April 25, 1968 defendant-spouses Faustino Samonte and Lourdes Manuel filed an oppositions 9 to
the motion to set aside the judgment in question on the ground that it was filed beyond the 6-month
period from the date of said judgment and beyond 60 days from knowledge of the same; that the
allegations in the motion do not constitute any of the grounds provided for by law to set aside the
judgment and that the motion to set aside is fatally defective because it is not verified and the affidavits
of merits are deficient.

After several exchanges of pleadings between the party-litigants relative to the question as to whether
the aforesaid judgment based on the compromise agreement could still be set aside, the lower court
finally issued an order 10 denying the aforesaid motion.

From said order of the lower court, defendants Cayetano Samonte, et al. have taken an appeal to the
Honorable court of Appeals. However, after finding that no question of fact is involved in the
controversy, the Honorable Court of Appeals 11 has certified the same to this Court pursuant to Section
3, Rule 50 of the Rules of Court in relation to Section 17 (4) of the Judiciary Act of 1948, as amended by
Section 2 of Republic Act No. 5440.

In their appeal, defendants-appellants Cayetano Samonte, et al. raised the following assignment of
errors:

1. The lower court erred in denying the motion to set aside the judgment filed by the
defendants-appellants dated April 4, 1968.

2. The lower court erred in not declaring and holding that the lease of the fishpond "Kay
Katwiran' will expire in 1972 as expressly and impliedly admitted by the defendants-
appellees.
 3. The lower court erred in not exercising its inherent power of amending its decision so
as to make it conformable to law and justice.

The threshold issue in this appeal is whether or not the lower court committed a mistake in denying the
motion filed by defendants-appellants Cayetano Samonte, et al. to set aside the judgment of the lower
court approving the compromise agreement submitted by the parties-litigants. Defendants-appellants
contend that they have thirty (30) days from receipt of the decision by their counsel within which to set
aside pursuant to Section 1, Rule 37 12in relation to Section 3 Rule 41 13 of the Rules of Court. Since the
motion to set aside said judgment was filed on April 10, 1968 or 20 days from receipt of the judgment by
their counsel, they submit that said motion was well within the period. Defendants-appellants Cayetano
Samonte, et al. claim that although they signed the compromise agreement in question on September
15, 1967, they never received a copy of the decision of the lower court based on the compromise
agreement. It was only their counsel who received officially a copy of the same on March 21, 1968.
Thus, they reason out that the period within which to file their motion to set aside the judgment or
order in question should be reckoned with from the date their counsel was formally notified of said
decision as notice to their lawyer is the one recognized as notice in law (citing cases of Chainani vs.
Tancinco, et al., G.R. No. L-4782, February 29, 1952; Palad vs. Cue, et al., 28
Phil. 44, 48).

A more incisive reading of Section 1, Rule 37 of the Rules of Court will reveal that only when a judgment
is not yet final and therefore appealable may the aggrieved party move the trial court to set aside the
judgment and grant new trial. However, when the judgment has already become final and executory
because the period for perfecting the appeal has already prescribed, the aggrieved party can no longer
avail himself of the remedy provided in Rule 37. It is by now a well established doctrine that a judgment
of the court approving a compromise agreement is final and immediately executory. 14 In the words of
the Supreme Court it is "right there and then writes finish to the controversy." 15 The reason why a
judgment based on a compromise agreement is final and immediately executory is that when the parties
agree to settle their differences to end up a litigation and request the court to render judgment on the
basis of their agreement, there is an implied waiver of their right to appeal from the judgment. 16 But of
course there is an exception to this rule. A party to a compromise agreement may move to set it aside
on the ground of fraud, mistake or duress in which case an appeal may be taken from the order denying
the motion. 17 The question then is, under what provision of the Rules of Court can the judgment be set
aside? Certainly not under Rule 37 for as earlier expounded said Rule 37 contemplates a judgment that
is not yet final and is therefore still appealable.

But could not the defendants-appellants Cayetano Samonte, et al. have recoursed to Section 3, Rule 38
of the Rules of Court. 18 Pursuant to said provision a motion, to set aside a judgment must be filed within
60 days after the petitioner learned of the judgment, order or other proceeding to be set aside, and not
more than six (6) months after such judgment or order was entered, or such proceeding was taken. In
the instant case, have the defendants-appellants Cayetano Samonte, et al. come within the two periods
fixed in the provision? Was their motion to set aside filed within the 60-day period from the time they
learned of the judgment but not more than six (6) months after such judgment was entered? Admittedly
the parties signed the compromise agreement on September 15, 1967 and submitted it to the Court for
approval and prayed that judgment be rendered thereon on the same date. On September 19, 1967 the
lower court issued and promulgated a decision approving said compromise agreement. Defendants-
appellants Cayetano Samonte, et al. therefore cannot deny that they have learned the judgment
approving their compromise agreement on the very day the same was rendered on September 19, 1967
since they were themselves concerned in its immediate implementation. From September 19, 1967
therefore their right to set aside the judgment in question has commenced and since they filed their
motion only on April 15, 1968, unmistakably they were way out of time — out of the 60-day period from
the time they learned of the judgment and out of the 6-month period from the time such judgment or
order was entered or such proceeding was taken. Elucidating on the two periods set forth in Section 3 of
Rule 38, the Supreme Court explicitly said:

The law does not say six months after the date of the default order. No mention there is
made of the date of rendition of the judgment or order. Neither does it speak of the
date of the finality of the judgment or order. It does say, in plain terms — six months
after the judgment or order "was entered" (Dirige vs. Biranya, Vol. 17, SCRA, p.
840,849).1äwphï1.ñët

And according to Section 2, Rule 36 of the Rules of Court. the judgment or order shall be entered by the
clerk if no appeal or motion for new trial is filed within the time provided in these rules. The recording of
the judgment or order in the book of entries of judgments constitutes its entry. The record shall contain
the dispositive part of the judgment or order and shall be signed by the clerk, with a certificate that such
judgment or order has become final and executory. This, of course, applies to judgment or order that
has to be entered, but as to the alternative phrase "such proceeding was taken" as used in Section 3 of
Rule 38, the Supreme Court in the same case ofDirige vs. Biranya, supra., further explained:

The alternative phrase "or such proceeding was taken" employed in Section 3, of Rule
38 could be taken to mean other proceeding which are not to be "entered", such as a
writ of execution (Aquino vs. Blanco, 79 Phil. 647, 650) and an order approving a
compromise agreement (Bodiongan vs. Ceniza, 102 Phil. 750). In such case, the period
must have to commence from the date of occurrence because entry is either
unnecessary or inconsequential.

In the light of the foregoing doctrine, it can be safely concluded that the six-month period within which
defendants-appellants Cayetano Samonte, et al. could file their motion to set aside the judgment in
question should have started from September 19, 1967 — the date of the occurrence of the "proceeding
which need not be entered." And since they filed the motion only on April 10, 1968, they were not only
out of the 60-day period from knowledge of the judgment but also beyond the six-month limit from its
rendition. Evidently, even under Rule 38 of the Rules of Court their right to set aside the judgment in
question had been foreclosed by their omission to plead on time.

Granting that defendants-appellants Cayetano Samonte, et al. were on time to set aside the judgment in
question they have to show that there was fraud in the procurement of the judgment and not merely
fraud in the original cause of action. 19 Fraud in the procurement of a judgment means any trick or
device which prevents the adversary from presenting defense or conceals from him pendency of
action. 20 The fraud must be perpetrated upon the Court in rendering the judgment, 21 and it must also
appear that there is a valid defense to the judgment. In the present case, the fraud was allegedly
committed by the defendants-spouses Faustino Samonte and Lourdes Manuel when they made
representation and assurances that the lease contract on the fishpond, the "Kay Katwiran" was to expire
in 1972 when it actually expired in 1970 and it was because of such representation and assurances that
defendants-appellants Cayetano Samonte, et al. entered into a compromise agreement with
defendants-spouses Faustino Samonte and Lourdes Manuel. It is evident then that the alleged fraud was
not employed in the procurement of the judgment. It was not perpetrated upon the court. It did not
prevent the parties from having a trial or from presenting all of their case to court. If at all the alleged
fraud could at most be considered intrinsic and not extrinsic. Extrinsic fraud is that where the alleged
deceit was not on a matter raised, controverted or decided. 22 The alleged representation and
assurances made by the defendants-spouses Faustino Samonte and Lourdes Manuel that the lease on
the fishpond the "Kay Katwiran" will expire in 1972 relates to a lease of the fishpond which was a matter
raised and controverted in the pleadings of the parties. As a matter of fact, defendants-appellants
Cayetano Samonte, et al. in their motion to set aside the judgment in question claim that the matter of
lease of the fishpond the "Kay Katwiran" was discussed in the in-chambers meeting of the parties with
the trial judge. Besides the claim of defendants-appellants Cayetano Samonte, et al. that they were the
victims of fraud and misrepresentations in entering into a compromise agreement with the defendants-
spouses Faustino Samonte and Lourdes Manuel appears to be baseless in the face of the admission of
defendants-appellants Cayetano Samonte, et al. in their pleadings that they were in partnership with
defendants-spouses Faustino Samonte and Lourdes Manuel over the lease of the fishponds, including
the "Kay Katwiran" in which partnership defendant-appellant Cayetano Samonte took over as the
manager after Raul Samonte died. As manager therefore of the partnership, he had every reason to
know the period of the leases of the fishponds covered by the partnership. How could defendants-
appellants Cayetano Samonte, et al. allege that they were defrauded in entering into the aforesaid
compromise agreement?

Vainly, defendants-appellants Cayetano Samonte, et al. submit that their motion to suspend the
compromise agreement and to maintain status quo of the case filed on March 14, 1968 could have
served the same purpose as a motion to set aside the judgment in question under Section 3, Rule 38 of
the Rules of Court. To this contention, the Court cannot concede for the motion to suspend the
compromise agreement failed to meet the essential requirements of Section 3 of Rule 38. It was not
accompanied by an affidavit of merits showing the fraud, mistake, or excusable negligence relied upon
and the facts constituting the petitioner's good and substantial cause of action or defense, as the case
may be. Consequently from March 14, 1968 when they filed the motion to suspend the compromise
agreement up to March 25 when the same was denied, the 6-month period has not stopped to run so
that when defendants-appellants Cayetano Samonte, et al. filed their motion to set aside the judgment
on April 10, 1968, they were way beyond the 6-month period. This is particularly so in view of the
established doctrine that the periods provided for in Section 3, Rule 38 is unextendible and is not subject
to any conditions or contingency. 23

Finally, in their futile attempt to impugn the judgment in question, Cayetano Samonte, et al. contend
that a judgment based on the compromise agreement is no judgment at all, mistakingly invoking the
doctrine laid down in the case of Saminiada vs. Mata, 92 Phil. 426, 431, wherein the Supreme Court
held:

... A decision must state clearly and distinctly the facts and the law upon which it is
based. Where the so-called "decision" embodying a compromise agreement lacks these
essentials of a judgment, it is not a decision. When a litigation is adjusted between the
parties and said adjustment is sanctioned by a decree of the court, the agreement or
settlement does not have the effect of a final judgment or the character of res judicata,
the court's approval being considered mainly as an administrative recording of what has
been agreed between the parties.

It must be noted, however, that in the case of Vda. de Corpus vs. Phodaca-Ambrosio 24 the Court ruled
that theSaminiada vs. Mata case is no longer authority for the contention that a decision based on a
compromise agreement is not a judgment. This is so because the view that a decision based upon a
compromise agreement does not become immediately final and executory, was arrived at only by four
members of the Supreme Court, which view is inconsistent with what was adhered to in subsequent
cases and the explicit provision of Article 2037 of the Civil Code. Besides, even the four justices of the
Supreme Court acknowledged, in the Saminiada case, that a decision based upon a compromise
agreement is a judgment. .

May not the defendants-appellants Cayetano Samonte, et al. contend that since the compromise
agreement was signed by the parties-litigants without the assistance of their counsels, the same should
not have any force and effect against them? The Court is not aware of any provision of law or of any
existing jurisprudence that has pronounced a compromise agreement entered into by parties-litigants
without being assisted by their counsel to be null and void and of no legal effect. On the contrary, there
is authority to the effect that an attorney by virtue of his general authority as such, has the exclusive
control of the litigation in which he represents his client, 25 his client on the other hand, is generally
conceded to have the exclusive control over the subject-matter of the litigation 26 and may, according to
the great weight of authority, at any time before judgment, if acting in good faith, compromise, settle
and adjust his cause of action out of court without his attorney's intervention, knowledge, or
consent 27 and, even though he has agreed with his attorney not to do so. 28 The parties may ordinarily
settle and adjust their cause without the intervention of their attorneys. 29

But even granting that defendants-appellants Cayetano Samonte, et al. could take recourse to the
provisions of Rule 38 of the Rules of Court, still they could not get any relief therefrom for the reason
that the motion to set aside filed by them suffered from two fatal defects — (1) the petition for relief
has not been verified and (2) the petition was not accompanied by affidavits of merits. A close
examination of the motion to set aside in question shows these two fatal defects. The lack of verification
is strikingly obvious. So is the absence of the required affidavits of merits.

IN VIEW OF THE FOREGOING, the judgment of the lower court is hereby affirmed in toto with costs
against defendants-appellants Cayetano Samonte, et al.

SO ORDERED.

Palanca v. American Food, G.R. No. L-22822, August 30, 1986

G.R. No. L-22822 August 30, 1968

GREGORIA PALANCA, petitioner-appellant,

vs.
THE AMERICAN FOOD MANUFACTURING COMPANY and TIBURCIO EVALLE, in his capacity as Director
of Patents, respondents-appellees.

Lopez De Joya, Dimaguila and Hermoso for petitioner-appellant.

Domingo F. de Guzman for respondent-appellee American Food Manufacturing Company.
Office of the Solicitor General for respondent-appellee Director of Patents.
ZALDIVAR, J.:

On May 14, 1958, petitioner-appellant Gregoria Palanca filed with the Philippine Patent Office,
Department of Commerce and Industry, an application to register the trademark, "LION and the
representation of a lion's head," alleging that she had been using the trademark since January 5, 1958
on bechin (food seasoning). The application was opposed by herein respondent-appelee. The American
Food Manufacturing Company, on the ground that petitioner's trademark was similar to its
(respondent's) trademark "LION and representation of a lion" previously adopted and used by it on the
same type of product since August 3, 1953.

After hearing, the Director of Patents, on June 14, 1961, rendered a decision, the pertinent portion of
which reads as follows:

The record of the case consisting of respondent-appellant's1 application, the testimonies on

behalf of the parties with accompanying exhibits and the opposer's 2 memorandum have been
given careful consideration. There is no memorandum for respondent-applicant. "There can be
no question but that the trademarks and the goods of the parties are similar. Accordingly the
only issue presented is that of priority of use.

Opposer's record establishes that it has at least since 1957, prior to January 5, 1968, the earliest
date of use asserted by respondent-applicant, continuously used LION and representation
thereof, as a trademark for bechin (food seasoning). The opposer is therefore the prior user
while the respondent-applicant is the later user of substantially the same trademark.

IN VIEW OF THE ABOVE CONSIDERATIONS, the opposition is hereby sustained and application
Serial No. 6321 of Gregoria Palanca is rejected.

The record shows the petitioner's counsel was furnished with copy of the decision on June 16, 1961. 3 No
appeal was taken from the decision of the Director of Patents within the reglementary period from June
16, 1961.

On December 14, 1961, however, herein petitioner-appellant filed with the Patent Office a petition to
set aside the aforementioned judgment of June 14, 1961, invoking section 2 of Rule 38 of the Rules of
Court, alleging fraud and/or negligence committed by her former counsel, Atty. Bienvenido Medel, in
that the latter failed to file a memorandum before the case was submitted for decision; that she had
been fraudulently kept in total ignorance of the proceedings in the case; that her counsel had not
informed her of the decision thus preventing her from resorting to all the legal remedies available to
her; that she came to known of the decision only about the latter part of October, 1961, through her
friend, Mr. Domingo Adevoso; that she had evidence to disprove the claim of opposer The American
Food Manufacturing Company that it had been using the same trademark even before 1958; and that
she had evidence to show that the bechin that the opposer sold prior to 1958 were not of the "Lion"
brand but of the "Lion-Tiger" brand, another trademark of opposer.

In its answer to the petition to set aside the judgment, the opposer, herein respondent-appellee be
American Food Manufacturing Company, denied the allegations of the petition and put up special and
affirmative defenses, to wit: that the petition was filed out of time; that the evidence proposed to be
presented was not new but was already existing and available at the time of the hearing of the case; and
that the decision was not rendered through fraud, accident, mistake, or excusable negligence, as is
contemplated in Section 2 of Rule 38 of the Rules of Court.

The petition to set aside the judgment was set for hearing, wherein petitioner-appellant and a witness,
Ricardo Monfero, testified. Witness Monfero testified that he was the owner of a grocery store in San
Pablo City, that the receipts issued to him by the American Food Manufacturing Company on October
16, 1957 showing that Lion blue bechin had been sold to his store really referred to Lion-Tiger brand
bechin After this hearing, herein respondent-appellee Director of Patents issued resolution No. 20,
dated October 14, 1963, denying the petition to set aside judgment, pertinent portions of which
resolution reads:

Therefore, from the facts established, no extrinsic or collateral fraud would warrant the setting
aside of the judgment herein already rendered.

This office has also carefully considered the possible value of the evidence purportedly showing
that the Opposer falsified its receipt to be proven through the testimony of Ricardo Monfero.
His testimony is of course, immaterial to the issue because what should have been proven was
the alleged fraud but, inasmuch as the purpose for his presentation as witness and the nature of
his testimony has been revealed, this Office might as well rule now that such character of
evidence can not be considered as a new evidence which would alter the result of the
proceedings.

Her motion for reconsideration of the resolution denying the petition to set aside judgment having been
denied, petitioner-appellant filed a notice of appeal "from the decision of the Director of Patents to the
Supreme Court on the ground that said decision is not supported by the evidence presented and is
contrary to law."

In her brief, petitioner-appellant contends that respondent Director of Patents committed the following
errors:1äwphï1.ñët

1. In denying the petition to set aside judgment and resolving that there was no fraud
perpetrated against petitioner-appellant, as contemplated under section 2 of Rule 38 of the
Rules of Court; .

2. In holding that a client is bound even by fraudulent and deliberate lapses of his counsel;.

3. In holding that the testimony of the petitioner-appellant's witness, Ricardo Monfero, is

immaterial and that it cannot be considered as a newly discovered evidence which would alter
the result of the proceedings;

4. In holding that the prior user of the trademark in question is the respondent-appellee, The
American Food Manufacturing Company;

5. In giving more credence to the invoices of the respondent company than on the testimony of
the respondent company's customers denying the genuineness and the truth of the facts
contained in said invoices;
 6. In not considering the failure of the respondent company to register the trademark in
question earlier than 1958 as negating its claim of its prior use as early as 1953; and.

7. In rejecting the application for registration of trademark Lion and Representation in the vetsin
food products of petitioner-appellant and in sustaining the opposition of the respondent
company.

We have noted, upon a reading of herein appellant's notice of appeal and appeal brief, that she does
not only question the correctness of the resolution of appellee Director of Patents denying the petition
to set aside the decision of June 14, 1961 but at the same time prays for the reversal of the said
decision. We believe that in this appeal the most that appellant can ask this Court is to pass upon the
correctness of the resolution denying the petition to set aside the decision.

The record shows that the decision proper, which was rendered on June 14, 1961, had already become
final, because counsel for the appellant had been furnished with copy of said decision on June 16, 1961
and no appeal had been taken from said decision within the reglementary period. Appellant admits that
she had lost completely her right to appeal from the decision. 4 It is a settled rule that notice of any
decision or order of a court to counsel is also notice to the client.5 Appellant claims that she became
aware of the decision only during the last week of October, 1961. 6 Indeed she took the proper step
when on December 14, 1961 she filed a petition to set aside the decision upon the alleged ground of
fraud pursuant to Section 2 of Rule 38 of the Rules of Court. That petition to set aside the decision,
however, was denied by the respondent-appellee Director of Patents on October 14, 1963. It is only
from this order denying the petition to set aside the decision that herein appellant can now appeal to
this Court, and not from the decision proper which was rendered on June 14, 1961. We are, therefore,
concerned only in determining whether the respondent-appellee Director of Patents had correctly
denied the petition to set aside the decision of June 14, 1961. In this connection, we shall dwell only on
the first three errors that have been assigned by the petitioner-appellant.

Petitioner-appellant, in support of the first three assigned errors which she discussed jointly, argues that
the acts committed by her former counsel, Atty. Bienvenido Medel, constitute fraud that would warrant
the setting aside of the decision denying her application to register the controverted trademark. These
acts, allegedly, are: his having kept her ignorant of the proceedings of the case; his having failed to file a
memorandum after the hearing of the evidence before the Patent Office; his having failed to notify her
of the adverse decision after receiving notice of it, of which decision she came to know only after five
months from the time it was rendered; his having intentionally kept himself entirely out of her reach,
thereby causing her to lose the right to appeal in due time and preventing her from informing counsel of
the newly discovered evidence which might have changed the decision had it been timely presented.
Petitioner-appellant also claims that the acts of her counsel also prevented her from presenting all her
case before the Patent Office and deprived her of other available legal remedies. She claims,
furthermore, that the acts and/or behavior of her counsel cannot be considered honest mistakes, but
are fraudulent and deliberate lapses or omissions on his part, which cannot bind her as a client. She also
claims that the Director of Patents erred in finding that the testimony of Ricardo Monfero during the
hearing on the petition to set aside the decision was immaterial, because this witness precisely testified
that the invoices relied upon by the Director of Patents in finding that respondent The American Food
Manufacturing Company had been using the trademark at least since 1957 referred to the trademark
"Lion-Tiger" of said respondent and not to the trademark in question, and so this testimony had directly
refuted the basis of the findings of facts of the respondent Director.
Respondent-appellee Director of Patents, on the other hand, contends that the basic issue in the
petition to set aside the decision of June 14, 1961 is whether there was fraud, as contemplated in
section 2 of Rule 38 of the Rules of Court, to justify the setting aside of the decision. This respondent-
appellee maintains that the acts or omissions of her counsel, cited by petitioner-appellant as
constituting fraud, had not prevented her from presenting fully her case, such that it could not be said
that there had never been a real contest before the Patent Office regarding the subject matter of the
suit. He further maintains that the acts of petitioner-appellant's counsel complained of, including the
failure to file the memorandum, refer to procedural matters, and were binding on her. Regarding the
merit, of the testimony of Monfero, respondent-appellee Director of Patents contends that there is no
use in discussing the same because fraud as would warrant the setting aside of the judgment had not
been shown.

We uphold the stand of respondent-appellee Director of Patents.

Section 2 of Rule 38 of the Rules of Court provides that a judgment or order entered against a party
through fraud, accident, mistake or excusable negligence may be set aside upon proper petition to that
effect. Not every kind of fraud, however, is sufficient ground to set aside a judgment. This Court has held
that only extrinsic or collateral, as distinguished from intrinsic, fraud is a ground for annulling a
judgment.7 Extrinsic fraud refers to any fraudulent act of the successful party in a litigation which is
committed outside the trial of a case against the defeated party, or his agents, attorneys or witnesses,
whereby said defeated party is prevented from presenting fully and fairly his side of the case. On the
other hand, intrinsic fraud refers to acts of a party in a litigation during the trial, such as the use of
forged instruments on perjured testimony, which did not affect the presentation of the case, but did
prevent a fair and just determination of the case.8 The distinctions are pointed out in the case ofUnited
States v. Throckmorton, 98 U.S. 61, 25 L. Ed. 93, — the very case cited by petitioner-appellant — where
the court said:

Where the unsuccessful party had been prevented from exhibiting fully his case, by fraud or
deception practiced on him by his opponent, as by keeping him away from court, a false
promise of a compromise; or where the defendant never had knowledge of the suit, being kept
in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority
assumes to represent a party and connives at his defeat; or where the attorney regularly
employed corruptly sells out his client's interest to the other side - these, and similar cases
which show that there has never been a real contest in the trial or hearing of the case, are
reasons for which a new suit may be sustained to set aside and annul the former judgment or
decree, and open the case for a new and fair hearing.

xxx xxx xxx

On the other hand, the doctrine is equally well settled that the court will not set aside a
judgment because it was founded on a fraudulent instrument, or perjured evidence, or for any
matter which was actually presented and considered in the judgment assailed.

In this connection, this Court, in the case of Varela vs. Villanueva, etc., et al., 95 Phil. 248, 258, said:.

The rule is that an action to annul a judgment, upon the ground of fraud, will not lie unless the
fraud be extrinsic or collateral and the facts upon which it is based have not been controverted
 or resolved in the case where the judgment sought to be annulled was rendered, and that false
testimony or perjury is not a ground for assailing said judgment, unless the fraud refers to
jurisdiction (Labayen vs. Talisay-Silay Milling Co., 68 Phil. 376); that fraud has been regarded as
extrinsic or collateral, where it has prevented a party from having a trial or from presenting all of
his case to the court (33 Am. Jur. pp. 230-232). The reason for this rule has been aptly stated in
Almeda, et al. vs. Cruz, 47 Off. Gaz., 1179:

'Fraud to be ground for nullity of a judgment must be extrinsic to the litigation. Were
not this the rule there would be no end to litigations, perjury being of such common
occurrence in trials. In fact, under the opposite rule, the losing party could attack the
judgment at any time by attributing imaginary falsehood to his adversary's proofs. But
the settled law is that judicial determination however erroneous of matters brought
within the court's jurisdiction cannot be invalidated in another proceeding. It is the
business of a party to meet and repel his opponent's perjured evidence.'

The acts complained of by petitioner-appellant, even if assumed to be true and fraudulent, were all
committed by her own counsel, and not by the successful party or opponent in the case. Hence,
petitioner-appellant had not shown extrinsic fraud that would warrant the setting aside of the decision.

Negligence, mistake or fraud of one's own attorney is not ground for granting a new trial.
(O'Quinn v. Tate, [Tex.] Civ. App. 187 S.W. 2d 241).

xxx xxx xxx

Fraud, such as would authorize the setting aside of the verdict at the instance of the movant, is
fraud of respondent or his counsel. She is not at liberty to avail herself of the misconduct of her
own counsel, for the purpose of annulling the verdict obtained by respondent. (Ketchem v.
Ketchem, 11 S.E. 2d 788).

xxx xxx xxx

In order to obtain relief on this ground it must appear that the fraud was practiced or
participated in by the judgment creditor, or his agent or attorney. The fraud must have been
practiced upon the opposite party." (Amuran vs. Aquino, 38 Phil. 29; Velayo vs. Shell Company
of the Philippines, Ltd., G.R. No. L-8883, July 14, 1959.).

The record shows that petitioner-appellant had all the opportunity to present fully her side of the case
before the decision was rendered, because she and her witnesses. Estrellita Concepcion and Adela
Palmario, testified in the case. The decision in question itself states that "The record of the case
consisting of respondent-applicant's application, the testimonies on behalf of the parties with
accompanying exhibits and the opposer's memorandum have been given careful consideration." 9 The
failure to submit a memorandum was also the negligence of her counsel and could not in any manner be
attributed to any fraud or deception practiced by her opponent.

This Court has held that mistakes of counsel as to the competency of witnesses, the sufficiency and
relevancy of evidence, the proper defense, or the burden of proof, his failure to introduce certain
evidence, or to summon witnesses and to argue the case, are not proper grounds for a new trial, unless
the incompetence of counsel be so great that his client is prejudiced and prevented from fairly
presenting his case. 10

Anent appellant's not having been informed of the adverse decision, this Court has held that:

The failure of counsel to notify her on time of the adverse judgment to enable her to appeal
therefrom does not constitute excusable negligence. Notice sent to counsel of record is binding
upon the client and the neglect or failure of counsel to inform him of an adverse judgment
resulting in the loss of his right to appeal is not a ground for setting aside a judgment valid and
regular on its face. (Duran v. Pagarigan, L-12573, Jan. 29, 1960).

xxx xxx xxx

Relief under Rule 38 will not be granted to a party who seeks relief from the effects of a
judgment on the ground of fraud, where the loss of the remedy is due to his own fault or
negligence or that of his counsel." (Echevarri v. Velasco, 55 Phil. 570.)

The claim of petitioner-appellant that she had evidence, to disprove the claim of opposer (herein
appellee The American Food Manufacturing Company) that it was the prior user of the trademark in
question, and to show that the receipts issued by opposer purporting to be in connection with the sale
of Lion brand bechin were falsified, is tantamount to saying that her adversary in this case had
presented false evidence consisting of perjured testimonies and falsified documents. But even assuming
that the evidence presented by respondent-appellee The American Food Manufacturing Company was
false, this circumstance would not constitute extrinsic fraud, but only intrinsic fraud. This Court, in a
number of cases, held:

Assuming that there were falsities on the aspect of the case, they make out merely intrinsic
fraud which, as already noted, is not sufficient to annul a judgment. (Varela vs. Villanueva, etc.,
et al., supra).

xxx xxx xxx

And we have recently ruled that presentation of false testimony or the concealment of
evidentiary facts does not per se constitute extrinsic fraud, the only kind of fraud sufficient to
annul a court decision. (Cortes vs. Brownell, Jr., etc., et al., 97 Phil. 542, 548).

xxx xxx xxx

That the testimony upon which a judgment has been based was false or perjured is no ground to
assail said judgment, unless the fraud refers to jurisdiction" (Labayen, et al. vs. Talisay-Silay
Milling Co., 68 Phil. 376, 383, quoting Scotten vs. Rosenblum, 231 Fed., 357; U.S. vs. Chung Shee,
71 Fed. 277; Giffen vs. Christ's Church, 48 Cal. A. 151; 191 P. 718; Pratt vs. Griffin, 223 Ill., 349;
79 N.E., 102).

xxx xxx xxx

 As a general rule, extrinsic or collateral fraud would warrant a court of justice to set aside or
annul a judgment, based on fraud (Labayen, et al. v. Talisay-Silay Milling Co., G.R. No. 45843,
June 30, 1939, L.J. Aug. 15, 1939). In seeking the annulment of the decision of Civil Case No. 833
(CA-G.R. No. 8085-R), the alleged fraud does not refer to jurisdiction, but to the admission by
the trial court in said case, of supposedly false or forged documents, which is intrinsic in
character. (Velasco, et al. vs. Velasco, G.R. No. L-15129, June 30, 1961).

We find that respondent-appellee Director of Patents correctly ruled that the testimony of Ricardo
Monfero, — a witness presented by the petitioner-appellant during the hearing on the petition to set
aside the decision — is immaterial to the issue of whether or not the decision should be set aside. This
witness did not testify on any matter which would establish extrinsic fraud that would warrant the
setting aside of the decision.

As we have adverted to at the early part of this opinion, this appeal must be treated only as an appeal
from the resolution of respondent-appellee Director of Patents, dated October 14, 1963, denying the
petition to set aside the decision rendered on June 14, 1961. Having found that respondent Director of
Patents committed no error in denying the petition to set aside the decision, we do not consider it
necessary to discuss the other errors assigned by petitioner-appellant because those other errors are
not pertinent to the appeal now before this Court.

WHEREFORE, the instant appeal is dismissed. The resolution of the Director of Patents, dated October
14, 1963, denying petitioner-appellant's petition to set aside the decision, dated June 14, 1961, in Inter
Partes Case No. 130 before the Philippine Patent Office, is affirmed. Costs against petitioner-appellant. It
is so ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Sanchez, Castro, Angeles and Fernando, JJ.,
concur. 1äwphï1.ñët

Accident

NFD International v. Illescas, G.R. No. 183054, September 29, 2010

Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION
 NFD INTERNATIONAL MANNING AGENTS, G.R. No. 183054
INC./BARBER SHIP MANAGEMENT LTD.,

Petitioners,
Present:

CARPIO, J., Chairperson,

NACHURA,
-versus-
PERALTA,

ABAD, and

MENDOZA, JJ.

ESMERALDO C. ILLESCAS,
Promulgated:
Respondent.

September 29, 2010

x-----------------------------------------------------------------------------------------x

DECISION

PERALTA, J.:

This is a petition for review on certiorari[1] of the Court of Appeals’ Decision dated October 23,
2007 in CA-G.R. SP No. 97941, and its Resolution dated May 9, 2008 denying petitioners’ motion for
reconsideration. The Decision of the Court of Appeals nullified and set aside the decision of the National
Labor Relations Commission (NLRC), and ordered petitioners to pay respondent the amount of
US$90,000.00 as disability benefit. The Resolution dated May 9, 2008 denied petitioners’ motion for
reconsideration and awarded respondent attorney’s fees.

The facts are as follows:

On September 6, 2002, respondent Esmeraldo C. Illescas entered into a Contract of Employment
with petitioner NFD International Manning Agents, Inc., acting for and in behalf of its foreign
principal, co-petitioner Barber Ship Management, Ltd. Under the contract, respondent was employed
as Third Officer of M/V Shinrei for a period of nine months, with a basic monthly salary of
US$854.00. The employment contract complied with the Philippine Overseas Employment
Administration (POEA) Standard Contract for Seafarers, and the standard terms and conditions
governing the employment of Filipino seafarers on board ocean-going vessels under Department
Order No. 4, series of 2000.

After respondent passed the pre-employment medical examination, he boarded the vessel
and started performing his job onOctober 6, 2002.

On May 16, 2003, when respondent had been on board the vessel for seven months, Captain
Jaspal Singh and Chief Officer Maydeo Rajev ordered respondent to carry 25 fire hydrant caps from
the deck to the engine workshop, then back to the deck to refit the caps. The next day, while carrying
a heavy basketful of fire hydrant caps, respondent felt a sudden snap on his back, with pain that
radiated down to the left side of his hips. He immediately informed the ship captain about his
condition, and he was advised to take pain relievers. As the pain was initially tolerable, he continued
with his work. After a few days, the pain became severe, and respondent had difficulty walking.

On May 27, 2003, when the vessel was in Japan, respondent was brought to the Higashiogishima
Clinic. Respondent was diagnosed to be suffering from lumbago and sprain. The doctor gave
respondent medication and advised him to wear a corset, avoid lifting heavy objects and get further
examination and treatment if the symptoms persisted. [2]
Despite the lighter work assigned to respondent, he continued to experience excruciating
pain. On June 13, 2003, petitioner was referred to a doctor upon arrival of M/V Shinrei at
the port of Hay Point, Australia. The doctor declared that respondent was unfit to work, and
recommended that respondent return home for further management.[3]

On June 14, 2003, respondent was repatriated to the Philippines. On June 17, 2003,
respondent was referred to the Alegre Medical Clinic under the care of Dr. Natalio G. Alegre II. Dr.
Alegre advised respondent to undergo a lumbo-sacral x-ray, and later a Magnetic Resonance Imaging
(MRI) of his lumbo-sacral spine. The MRI revealed multi-level disc dessication, broad-based central
and left-sided posterior disc herniation, L4 L5, with severe canal stenosis. [4] Dr. Alegre recommended
laminectomy and discectomy.[5]
 On August 27, 2003, respondent underwent a laminectomy with discectomy at the St.
Luke's Medical Center. He was discharged from the hospital on September 6, 2003. Thereafter, he
underwent physical rehabilitation. Nevertheless, medical examinations showed that there was still
restriction in respondent’s truncal mobility and in the lifting power of his trunk.

As his condition did not improve, respondent sought the expertise of Dr. Marciano F. Almeda, Jr., a
specialist in occupational medicine and orthopedics, at the Medical Center Muntinlupa for the assessment
and evaluation of his health condition and/or disability. Dr. Almeda found that respondent sustained
partial permanent disability with an impediment Grade of 11 (14.93%), described as “slight rigidity or one-
third loss of motion or lifting power of the trunk” under the POEA Standard Contract for Seafarers. [6] Dr.
Almeda declared that respondent was unfit to work at sea in any capacity as a seaman.[7]

On December 29, 2003, petitioners received a letter [8] dated December 16, 2003 from
respondent’s counsel, demanding the payment of disability benefit. The claim was referred to Pandiman
Philippines, Inc., the local correspondent of the P&I Club with which petitioner Barber Ship Management
Ltd. was affiliated. In the meantime, respondent filed a Complaint with the Arbitration Branch of the
NLRC.

During the preliminary conferences in this case, the parties explored the possibility of
settlement. In a letter[9] dated April 12, 20004, Pandiman Philippines, Inc, in behalf of petitioners, offered
to pay respondent disability benefit in the amount of US$16,795.00, corresponding to Grade 8 disability
under the POEA Standard Contract for Seafarers. Respondent, through counsel, refused the offer on the
ground that the injury sustained by him was caused by an accident, which was compensable in the
amount of US$90,000.00 under the Collective Bargaining Agreement (CBA), thus:

If a seafarer/officer, due to no fault of his own, suffers permanent disability as a

result of an accident while serving on board or while traveling to or from the vessel on
Company's business or due to marine peril, and as a result, his ability to work is
permanently reduced, totally or partially, the Company shall pay him a disability
compensation which, including the amounts stipulated by the POEA's Rules and
Regulations Part II, Section C, shall be maximum of US$70,000 for ratings and US$90,000
for officers.[10]

Since the parties failed to arrive at an agreement, the NLRC directed them to file their Position
Papers.
 In his Position Paper,[11] respondent submitted that Section 20 (B.6) of the POEA Standard
Contract for Seafarers provides:

xxxx

In case of permanent total or partial disability of a seafarer during the term of

employment caused by either injury or illness, the seafarer shall be compensated in
accordance with the schedule of benefits enumerated in Section 32 of his
Contract. Computation of his benefits arising from the illness or disease shall be
governed by the rates and the rules of compensation applicable at the time the illness
or disease was contracted.

However, respondent stated that he is a member of the Associated Marine Officers' and
Seamen's Union of the Philippines (AMOSUP), which has a CBA with petitioners. Under the CBA, he is
entitled to a higher disability benefit in the amount of US$90,000.00, since his injury resulted from an
accident while carrying a basketful of heavy fire hydrant caps on board the vessel. [12]

Respondent prayed that petitioners be ordered to pay him disability benefit in the amount of
US$90,000.00, illness allowance equivalent to 120 days, as well as moral and exemplary damages, and
attorney’s fees.

In their Position Paper,[13] petitioners countered that it is the POEA Standard Contract for
Seafarers, and not the CBA, that governs this case. They stated that Black’s Law Dictionary defined
“accident” as an unusual, fortuitous, unexpected, unforeseen or unlooked for event. They argued that
respondent's disability was not the result of an accident, as respondent was merely performing his normal
duty of transporting fire hydrant caps from the deck to the engine workshop, then back to the deck to refit
the caps. During the performance thereof, no unusual, unforeseen and unexpected event transpired as
proved by the absence of any accident report. Moreover, respondent’s Affidavit did not mention the
occurrence of any accident which gave rise to his injury. Petitioners argued that, since no accident took
place, the disability benefits under the CBA do not apply to this case.

Petitioners further averred that based on the assessment of its accredited-clinic, the Alegre
Medical Clinic, respondent suffered from Grade 8 disability, described as “moderate rigidity or two-thirds
(2/3) loss of motion or lifting power of the trunk.” During the preliminary conference, they offered to pay
respondent disability benefit in the amount of US$16,795.00 for the Grade 8 disability under Section 32 of
the POEA Standard Contract for Seafarers.[14]
 The main issue for resolution before the Labor Arbiter was whether the disability of complainant
(respondent) was compensable under the provision of Article 13 of the CBA in the amount of
US$90,000.00.

On January 6, 2005, the Labor Arbiter rendered a Decision[15] finding respondent entitled to
disability benefit under the CBA in the amount of US$90,000.00 as 100% compensation; US$3,456.00
(US$864 x 4) as sickness allowance equivalent to 120 days; and US$9,345.60 as attorney's fees, or a total
of US$102,801.60. The dispositive portion of the Decision reads:
 WHEREFORE, premises considered, judgment is hereby rendered ordering the
respondents NFD International Manning Agents, Inc. and Barber Ship Management Ltd.
to jointly and severally pay complainant Esmeraldo C. Illescas the amount of ONE
HUNDRED TWO THOUSAND EIGHT HUNDRED ONE US DOLLARS & 60/100
(US$102,801.60) in its equivalent in Philippine Peso at the prevailing rate of exchange at
the time of actual payment representing his disability benefits, sickness wages and
attorney's fees.

All other claims are DlSMISSED for lack of merit.[16]

The Labor Arbiter held that the injury suffered by respondent was the result of an accident arising
out of, and in the course of, his employment while carrying the heavy fire hydrant caps, and that his injury
was unexpected and unforeseen by him.

Moreover, the Labor Arbiter stated that respondent was declared unfit to work by the physician
who treated him in Australia, which was confirmed by Dr. Marciano Almeda, Jr. of the Medical Center in
Muntinlupa when he declared complainant “unfit to work back at sea in any capacity as a Seaman.” The
Labor Arbiter also noted that both Dr. Natalio Alegre, the company physician, and Dr. Marciano Almeda,
Jr., respondent’s independent doctor, assessed respondent’s disability as “partial and permanent
disability.” Hence, the Labor Arbiter held that respondent’s disability was 100% compensable under the
CBA in the amount of US$90,000.00, and not merely under the Standard Crew Contract.

Petitioners appealed the Labor Arbiter’s decision to the NLRC.

In a Decision[17] dated July 13, 2006, the NLRC modified the decision of the Labor Arbiter, as it
awarded respondent disability benefit under Section 32
of the POEA Standard Contract for Seafarers.[18] The dispositive portion of the NLRC Decision reads:

WHEREFORE, premises considered, the assailed decision is hereby modified by

deleting the award of US$102,801.60 and instead ordering respondent NFD International
Manning Agents, Inc. and Barber Ship Management Ltd. to jointly and severally pay
complainant Esmeraldo C. Illescas the amount of Sixteen Thousand Seven Hundred
Ninety-Five US Dollars (US$16,795.00) at the prevailing rate of exchange at the time of
actual payment representing his disability benefit.[19]

The NLRC held that the injury sustained by respondent was not the result of an accident,
although it arose out of his work. It stated that the task of carrying hydrant caps was not a fortuitous,
unusual or unforeseen event, or a marine peril. According to the NLRC, back pains or chest-trunk-spine
injuries are inherent in the job of carrying heavy objects, and the injury may occur over a period of time
or on the spot depending upon the physical strength and posture of the workers.

The NLRC deleted the award for sickness allowance based on the letter dated June 9, 2004 of
petitioner NFD International Manning Agents, Inc. to Pandiman Philippines, Inc. The letter stated that
respondent's illness allowance from June 15, 2003 toOctober 14, 2003 (120 days) had already been
processed and remitted to respondent’s bank account. The NLRC held that the payment of the sickness
allowance may be presumed, since respondent did not dispute the letter.

The NLRC also deleted the attorney's fees awarded to respondent on the ground that there was
no unlawful withholding of payment of benefits in view of petitioners’ compromise offer of
US$16,795.00, which was the amount of disability benefit awarded by the NLRC to respondent.

Respondent's motion for reconsideration[20] was denied by the NLRC for lack of merit in a
Resolution[21] dated December 7, 2006.

Respondent filed a special civil action for certiorari with the Court of Appeals, alleging that the
NLRC committed grave abuse of discretion amounting to lack or excess of jurisdiction in holding that his
injury was not the result of an accident on board the vessel; in not applying the pertinent provisions of the
CBA; and in deleting the award of attorney’s fees.

On October 23, 2007, the Court of Appeals rendered a Decision [22] in favor of respondent. The
dispositive portion of the Decision states:
 WHEREFORE, finding merit in the petition, We hereby GRANT the same. The
assailed Decision and Resolution of the NLRC areNULLIFIED and SET ASIDE. Private
respondents are ORDERED to pay petitioner the amount of US$90,000.00 as disability
benefits.[23]

The Court of Appeals, citing Jarco Marketing v. Court of Appeals,[24] held that
respondent’s disability resulted from an accident as the injury was unforeseen and happened without any
fault on his part.

The appellate court declared that the Labor Arbiter correctly applied Article 13 of the CBA [25] in
awarding respondent disability benefit in the amount of US$90,000.00. It ruled that the NLRC acted
with grave abuse of discretion amounting to lack or excess of jurisdiction in disregarding the CBA.

Petitioners and respondent filed separate motions for reconsideration. Petitioners contended
that the absence of an accident report negated the appellate court’s finding that the injury suffered by
respondent was the result of an accident arising out of, and in the course of, his
employment. Respondent’s motion for partial reconsideration sought an additional award of attorney’s
fees equivalent to 10% of the total monetary award.

In a Resolution dated May 9, 2008, the Court of Appeals denied the motion for reconsideration
of petitioners, but granted the motion for partial reconsideration of respondent. The dispositive portion
of the Resolution reads:

WHEREFORE, finding merit in the Motion for Partial Reconsideration filed by

petitioner, the same is hereby GRANTED. The Decision dated October 23, 2007 is
MODIFIED in that private respondents are further ordered to pay TEN PERCENT (10%) of
the total monetary award as attorney’s fees.

The motion for reconsideration filed by private respondents is DENIED.

SO ORDERED.[26]

The Court of Appeals justified the award of attorney’s fees under Article 111 [27] of the Labor Code
and Article 2208[28] of the Civil Code, as respondent was forced to litigate and has incurred expenses to
protect his right and interest.
 Petitioners filed this petition raising the following issues:

I.
THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT RESPONDENT'S
MEDICAL CONDITION WAS A RESULT OF AN ACCIDENT DURING THE TERM OF HIS
EMPLOYMENT WITH PETITIONERS, AND HENCE, COVERED BY THE PROVISIONS OF THE
CBA.

II.
THE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT ORDERED THE PAYMENT
OF ATTORNEY'S FEES TO RESPONDENT.[29]

The issues raised before this Court are: (1) whether or not the disability suffered by respondent
was caused by an accident; (2) whether or not the disability is compensable under the CBA; and (3)
whether or not respondent is entitled to attorney’s fees.

Petitioners contend that respondent did not suffer a disability as a result of an “accident” as
defined under existing laws orjurisprudence. They argue that Jarco Marketing v. Court of Appeals,[30] the
case citied by the Court of Appeals to support its decision, defined an “accident” as:

x x x an unforeseen event in which no fault or negligence attaches to the defendant. It is

"a fortuitous circumstance, event or happening; an event happening without any human
agency, or if happening wholly or partly through human agency, an event which under the
circumstances is unusual or unexpected by the person to whom it happens.”

Petitioners point out that the above definition of the word “accident,” subscribed to by the Court
of Appeals, explicitly states that it pertains to a fortuitous circumstance, event or happening.[31] Petitioners
cited Lasam v. Smith,[32] which defined "fortuitous event" as “an unexpected event or act of God which
could neither be foreseen or resisted, such as floods, torrents, shipwrecks, conflagrations, lightning,
compulsion, insurrections, destruction of buildings by unforeseen accidents and other occurrences of
similar nature.” Petitioners contend that the term "accident," as contemplated by the subject CBA
provision, refers to a separate event or incident which gives rise to the injury of the seafarer.

Petitioners argue that in this case, no such unusual, fortuitous, unexpected or unforeseen event took
place or was reported. Respondent merely went about his normal duties when he transported fire hydrant
caps from the deck to the engine workshop, then back to the deck to refit the caps. The sudden snap
respondent felt on his back while carrying the fire hydrant caps cannot, by itself, qualify as an accident.
Hence, petitioners assert that respondent is not entitled to the benefits provided under the
CBA. They add that if the ruling of the Court of Appeals would be sustained, it would open the
floodgates for absurd claims for double or higher indemnity, especially in insurance cases, considering
that an employee who suffers a stroke, congenital heart failure, or even appendicitis, while at work,
would now be considered as resulting from an accident, since the same may be regarded as an unusual
and unexpected occurrence which happened without the employee’s fault.

Petitioners also contend that there is no basis for the award of attorney's fees, as they did not act
in gross and evident bad faith. They merely acted in the interest of what was just and right, since
respondent was not entitled to full disability benefit under the CBA.

The petition is denied.

The provisions of the CBA, which are relevant to this case, are as follows:

Art. 13 (Compensation for Death and Disability)

If a seafarer/officer, due to no fault of his own, suffers permanent

disability as a result of an accident while serving on board or while traveling to or
from the vessel on Company's business or due to marine peril, and as a result, his
ability to work is permanently reduced, totally or partially, the Company shall pay him
a disability compensation which including the amounts stipulated by the POEA's Rules
and Regulations Part II, Section C, shall be maximum of US$70,000.00 for ratings and
US$90,000.00 for officers.

The degree of disability, which the Company, subject to this Agreement, is liable
to pay, shall be determined by a doctor appointed by the Company. If a doctor
appointed by the Seafarer and his Union disagrees with the assessment, a third doctor
may be agreed jointly between the Company and the seafarer and his/her Union, and
third doctor’s decision shall be final and binding on both parties.

A seafarer who is disabled as a result of an injury, and whose permanent

disability in accordance with the POEA schedule is assessed at 50% or more shall, for the
purpose of this paragraph, be regarded as permanently disabled and be entitled to
100% compensation (USD90,000 for officers and USD70,000 for ratings).

A seafarer/officer who is disabled as a result of any injury, and who is

assessed as less than 50% permanently disabled, but permanently unfit for further
service at sea in any capacity, shall also be entitled to a 100% compensation.
 xxxx

The applicable disability compensation shall be in accordance with the degree of

disability and rate of compensation indicated in the table hereunder, to wit:

DEGREE OF DISABILITY RATE OF COMPENSATION

% RATINGS OFFICERS
US$
100 70,000 90,000
75 52,500 67,500
60 42,000 54,000

xxxx

Any payment effected under any section of this article shall be without prejudice to any
claim for compensation made in law, but such payments shall be deducted from any award of
damages.[33]

Was respondent’s disability the result of an accident?

Black’s Law Dictionary[34] defines “accident” as “[a]n unintended and unforeseen injurious
occurrence; something that does not occur in the usual course of events or that could not be reasonably
anticipated, x x x [a]n unforeseen and injurious occurrence not attributable to mistake, negligence, neglect
or misconduct.”

The Philippine Law Dictionary[35] defines the word “accident” as “[t]hat which happens by chance
or fortuitously, without intention and design, and which is unexpected, unusual and unforeseen.”
 “Accident,” in its commonly accepted meaning, or in its ordinary sense, has been defined as:

[A] fortuitous circumstance, event, or happening, an event happening without any

human agency, or if happening wholly or partly through human agency, an event which
under the circumstances is unusual and unexpected by the person to whom it happens x
x x.

The word may be employed as denoting a calamity, casualty, catastrophe,

disaster, an undesirable or unfortunate happening; any unexpected personal injury
resulting from any unlooked for mishap or occurrence; any unpleasant or unfortunate
occurrence, that causes injury, loss, suffering or death; some untoward occurrence aside
from the usual course of events.”[36]

The Court holds that the snap on the back of respondent was not an accident, but an injury
sustained by respondent from carrying the heavy basketful of fire hydrant caps, which injury resulted in
his disability. The injury cannot be said to be the result of an accident, that is, an unlooked for mishap,
occurrence, or fortuitous event, because the injury resulted from the performance of a duty. Although
respondent may not have expected the injury, yet, it is common knowledge that carrying heavy objects
can cause back injury, as what happened in this case. Hence, the injury cannot be viewed as unusual
under the circumstances, and is not synonymous with the term “accident” as defined above.

Although the disability of respondent was not caused by an accident, his disability is still
compensable under Article 13 of the CBA under the following provision:

A seafarer/officer who is disabled as a result of any injury, and who is assessed as

less than 50% permanently disabled, but permanently unfit for further service at sea in
any capacity, shall also be entitled to a 100% compensation.

The Court notes that the CBA states that the degree of disability, which the company is liable to
pay, shall be determined by a doctor appointed by the company. In this case, the POEA schedule is the
basis of the assessment whether a seafarer’s permanent disability is 50 percent or more, or less than 50
percent.[37] The Alegre Medical Clinic, petitioners’ accredited clinic, found that respondent had a Grade
8 disability (33.59%), described as “moderate rigidity or two-thirds (2/3) loss of motion or lifting power
of the trunk.” Dr. Almeda, respondent’s independent doctor, on the other hand, found respondent to
be suffering from Grade 11 disability (14.93%), described as “slight rigidity or one-third (1/3) loss of
motion or lifting power of the trunk.”

In HFS Philippines, Inc. v. Pilar,[38] the Court held that a claimant may dispute the company-
designated physician’s report by seasonably consulting another doctor. In such a case, the medical
report issued by the latter shall be evaluated by the labor tribunal and the court based on its inherent
merit.[39] In this case, petitioners never questioned the weight given by the Labor Arbiter and the Court
of Appeals to the findings of respondent’s independent doctor in regard to the disability of
respondent.

Dr. Almeda, respondent’s independent doctor, and petitioners’ accredited medical clinic, both
assessed respondent’s disability in accordance with the POEA schedule as less than 50% permanently
disabled. Moreover, Dr. Almeda, who is a specialist in occupational medicine and orthopedics, found
that respondent was unfit to work in any capacity as a seaman. The Medical Report[40] of Dr. Almeda
states:

xxxx

He is now three months post surgery, but still, Mr. Illescas continue to have back
pain. There is still on and off pain and numbness on his left thigh. He is also unable to
tolerate prolonged standing and walking. With his present complaints, Mr. Illescas
cannot withstand the demands of his previous work at sea. Doing so could aggravate his
existing back problem. I therefore recommend a partial permanent
disability with Grade 11 Impediment based on the POEA Contract.

Justification of Impediment:
Grade 11 (14.93%)
Slight rigidity or one-third (1/3) loss of motion or lifting power of the trunk.

Mr. Illescas started having back problems in a workplace incident where he lifted a
basketful of hydrant caps. He underwent surgery which he claimed as afforded him
partial relief initially. However, up to the present time, the residual symptoms continue
to bother him. This has restricted him in the active performance of certain tasks.

Often, symptoms following surgery are relieved only to recur after a variable period. The
causes may include insufficient removal of disc material and further extrusion, rupture
of another disc, adhesions about the nerve root and formation of an osteophyte at the
site of removal of bone. Even a successful disc removal, therefore, does not guarantee a
permanent cure as fibrosis can produce a dense constricting scar tissue, which is
presumed to be a prime cause of recurrent symptoms.

Diagnostic imaging studies, although important, is but a single facet of the overall
evaluation of patients with suspected disc herniation or spinal stenosis, which must
include thorough history taking and physical examination. It is not surprising to
encounter some variation between the neurologic symptoms and the result of the
patient's imaging studies. Each individual has a different spinal canal diameter. While a
mild herniation may not produce any symptom at all in one person, it may be significant
in one with a narrow spinal canal.
 Surgery can never stop the pathological process nor restore the back to its previous
state. Similar poor results have been found with repeated attempts at surgical
intervention for the relief of chronic low back pain. If long term relief is desired,
continued mechanical stress of postural or occupational type must be avoided.
Resuming his usual work, which includes increased loading, twisting, or bending and
extension of the back, will further expose Mr. lllescas to dangers of enhancing his
discomfort even more.

It is for this reason that I find him UNFIT to work back at sea in any capacity as a
Seaman.[41]

The Court finds merit in the reasons stated by Dr. Almeda in his Medical Report for declaring
respondent unfit to work in any capacity as a seaman. Respondent is, therefore, entitled to disability
benefit in the amount of US$90,000.00 under the CBA, thus:

A seafarer/officer who is disabled as a result of any injury, and who is assessed

as less than 50% permanently disabled, but permanently unfit for further service at sea
in any capacity, shall also be entitled to a 100% compensation.

xxxx

The applicable disability compensation shall be in accordance with the degree of

disability and rate of compensation indicated in the table hereunder, to wit:

DEGREE OF DISABILITY RATE OF COMPENSATION

% RATINGS OFFICERS
US$
100 70,000 90,000
75 52,500 67,500
60 42,000 54,000

xxxx

In regard to the award of attorney’s fees, the Court agrees with the Court of Appeals that
respondent is entitled to the same under Article 2208 of the Civil Code:

Art. 2208. In the absence of stipulation, attorney’s fees and expenses of

litigation, other than judicial costs, cannot be recovered, except:

xxxx
 (2) When the defendant’s act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest;

xxxx

(11) In any other case where the court deems it just and equitable that
attorney’s fees and expenses of litigation should be recovered.
 This case involves the propriety of the award of disability compensation under the CBA to
respondent, who worked as a seaman in the foreign vessel of petitioner Barber Ship Management Ltd.
The award of attorney’s fees is justified under Article 2208 (2) of the Civil Code. Even if petitioners did
not withhold payment of a smaller disability benefit, respondent was compelled to litigate to be entitled
to a higher disability benefit. Moreover, in HFS Philippines, Inc. v. Pilar[42] and Iloreta v. Philippine
Transmarine Carriers, Inc.,[43] the Court sustained the NLRC’s award of attorney’s fees, in addition to
disability benefits to which the concerned seamen-claimants were entitled. It is no different in this case
wherein respondent has been awarded disability benefit and attorney’s fees by the Labor Arbiter and
the Court of Appeals. It is only just that respondent be also entitled to the award of attorney’s fees.
In Iloreta v. Philippine Transmarine Carriers, Inc.,[44] the Court found the amount of US$1,000.00 as
reasonable award of attorney’s fees.

WHEREFORE, the petition is DENIED. The Court of Appeals’ Decision dated October 23, 2007 in
CA-G.R. SP No. 97941, and its Resolution dated May 9, 2008 are AFFIRMED insofar as respondent is
awarded disability benefit in the amount of US$90,000.00, as well as attorney’s fees, which is reduced to
US$1,000.00. Petitioners NFD International Manning Agents, Inc. and Barber Ship Management Ltd. are
hereby ORDERED to jointly and severally pay respondent Esmeraldo C. Illescas disability benefit in the
amount of NINETY THOUSAND DOLLARS (US$90,000.00) and attorney’s fees in the amount of ONE
THOUSAND DOLLARS (US$1,000.00) in its equivalent in Philippine Peso at the prevailing rate of exchange
at the time of actual payment.

Costs against petitioners.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Soloria v. De la Cruz, G.R. No. L-20738, January 31, 1966

G.R. No. L-20738 January 31, 1966

JULIANA SOLORIA and ANACLEM PASAMONTE, petitioners,

vs.
CEFRONIO DE LA CRUZ and HON. TOMAS P. PANGANIBAN, Presiding Judge, Court of Agrarian
Relations, First Regional District, respondents.
Guillermo and Navarro for the petitioners.
N.S. Nostratis for the respondents.

REYES, J.B.L., J.:

This is a petition for certiorari to review a resolution denying a motion for reconsideration1 of the
decision rendered in the case entitled "Cefronio de la Cruz, petitioner, versus Juliana Soloria, et al.,
respondents," CAR Case No. 330-TP-61, of the Court of Agrarian Relations, First Regional District, Sala II,
with seat at Tayug, Pangasinan.

The facts gathered from the record of this case before Us are: that sometime in 1961, Cefronio dela Cruz
commenced a proceeding against Juliana Soloria before the above stated court, alleging inter alia, that
since 1959 he has been a share-tenant of said respondent Soloria over her one-hectare parcel of first
class riceland situated at Barrio San Antonio, San Manuel, Pangasinan; that on May 20, 1961, said
respondent, without any justifiable and legal cause or prior approval of the court, summarily ejected
him from the landholding in question; that he had shared on a fifty-fifty (50-50) basis the net harvest of
30 and 45 cavans of palay produced in said land in the agricultural years 1959-1960 and 1960-1961,
respectively, after having furnished all farm labor, implements, working animals and other expenses
incurred in planting and harvesting said palay, except the land which was the sole contribution of said
respondent. Wherefore, petitioner de la Cruz prays that he be reinstated in the disputed landholding;
that the net harvest of palay be reliquidated on the sharing basis provided for by law; that he be
awarded damages for his unrealized shares from the time he was unlawfully ejected until he is fully
reinstated in his holding, and attorney's fees in the amount of P200.00. This petition was later amended
on December 21, 1961 to include as co-respondent Anacleto Pasamonte, who had, in the meantime,
been allegedly placed by Soloria as her new tenant in the disputed landholding (Cf. Annex "I"
respondent Court's answer, record, pp. 46-49).

Respondent Juliana Soloria, through her counsel, Attys. Guillermo and Navarro, filed her answer to the
petition, denying the material allegations thereof and setting up the following special defenses: that no
tenancy relationship exists between her and respondent de la Cruz; that de la Cruz has no legal capacity
to sue, he being a minor, that she is not the exclusive owner of the land in question but she owns it in
common with Emeteria and Ignacio, both surnamed Soloria; and that said land is being cultivated by one
Valeriano de Leon, who lives with its owners, after Pedro de la Cruz, now deceased, voluntarily
surrendered it shortly before his death in the early part of 1961. In their answer to the amended
petition, both respondents denied that said Pasamonte is a new tenant, he being a mere hired farmhand
of said Valeriano de Leon to prepare the land for planting for the agricultural year 1961-1962 (Cf. Annex
"11", respondent Court's answer, record, pp.
50-52).

Issues having been joined, the court a quo set the hearing of the case for June 8, 1962, notice of which
was each furnished by registered mail to the respective counsels of record of the parties. On this
scheduled hearing, neither respondents nor their counsel appeared; hence, the court a quo, upon
motion, allowed petitioner De la Cruz to present his evidence ex parte and thereafter considered the
case submitted for decision. A copy of this order was sent to respondents' counsel, which he received on
August 8, 1962 (Cf. Annex "C", petition, record, pp. 15-19, resolution dated December 4, 1962, p. 3).

On August 30, 1962, the court a quo rendered a decision granting the reliefs prayed for in the petition of
said Cefronio de la Cruz (Cf. Annex "A", petition, record, pp. 5-10).
Three (3) days after receipt of the above decision, counsel for respondents presented a motion to
reconsider and set aside said decision and to allow them to cross-examine petitioners' witnesses and to
present their own evidence in support of their claims and defenses, claiming that they were deprived of
their day in court, because their failure to attend the scheduled hearing on June 8, 1962 was due to an
accident since notice thereof was received only on June 14, 1962, which was six (6) days after said trial.
This claim was supported by an affidavit, attached to the motion, of Atty. Dario R. Navarro, counsel of
respondents, attesting to this fact. Said motion also reiterated and discussed the merits and validity of
the special defenses set up in their answer which, if considered, will materially alter or change the result
of said decision (Cf. Annex "B", petition, record, pp. 11-14).

As above stated in the beginning of this opinion, the court a quo denied respondents' motion for
reconsideration and/or new trial; hence, the present petition before this Court.

In the order of denial, the court a quo ruled that although its records show that counsel for respondents
did not receive the notice of hearing for June 8, 1962 before said date but only later, i.e., on June 14,
1962, which was six (6) days after the scheduled trial, they were still negligent in not filing, before
judgment was rendered on August 30, 1962, any pleading to indicate their intention to cross-examine
petitioners' witnesses and to present their own evidence despite the receipt, on August 8, 1962, of the
order dated June 8, 1962 considering the case as submitted for decision; hence, respondents were not
deprived of their day in court. It also refuted the arguments presented to support the merits of the
special defenses set up in respondents' answer which it ruled as not meritorious. It further maintained
that said denial was proper since respondent failed to attach in their motion, an affidavit of merits to
support the validity of said defenses alleged in the answer.1äwphï1.ñët

We disagree with the above conclusion of the court a quo. It is not disputed that counsel for
respondents (petitioners herein) did not receive notice of hearing on or before June 8, 1962, which was
the scheduled date of trial; hence, they failed to attend said hearing. This circumstance, i.e. failure to
attend trial for lack of advance notice, has been held in previous cases to constitute an "accident" within
the meaning of Section 1, Rule 37, of the (old or revised) Rules of Court which, in turn, is a proper and
valid ground to grant a new trial (Muerteguy vs. Delgado, 22 Phil. 109; Lavitoria vs. Judge of Court of
First Instance of Tayabas, 32 Phil. 204; Villegas vs. Roldan, 76 Phil. 349). This rule (Rule 37) is applicable
to cases filed in the Court of Agrarian Relations (Rule 20 of the Rules of Court of Agrarian Relations).

This Court has also held that:

Where the movant has been deprived of his day in court through no fault or negligence on his
part and because no notice of hearing was furnished him in advance so as to enable him to
prepare for trial, the judgment or order is absolutely null and void for denying him his day in
court, a constitutional right. In such case, the judgment or order suffers from an inherent
procedural defect and is absolutely void. Under such circumstances, no showing of merits is
necessary to support an application to have the order vacated (1 Freeman on Judgments, p.
599). (Valerio vs. Tan, 97 Phil. 558, 561.)

Affidavits of merits are not necessary when the granting of the motion for new trial is not
discretionary with the court but is demandable as of right, as where the movant has been
deprived of his day in court, through no fault or negligence of his own (Valerio vs. Tan, et al.,
G.R. No. L-6446, Sept. 19, 1955). (Navarro vs. Bello, L-11647, January 31, 1958; 54 O.G. 6588)
 However, affidavits of merits are not necessary if the granting of the motion for new trial is not
discretionary with the court, but is demandable as of right, . . . as where the movant has been
deprived of his day in court through no fault or negligence on his part because no notice of
hearing was furnished him in advance so as to enable him to prepare for trial (Moran, Rules of
Court, 1957 Ed., Vol. 1, p. 515; citing Valerio vs. Tan, G.R. No. L-6446, September 19, 1955).
(Gattoe vs. Sarenas, L-11752, July 30, 1958.)

Conformably with the above cited rulings, the court a quo should have granted a new trial..

The appealed order stresses that petitioners-appellants were negligent in failing to apprise the court in
due time of their intention to cross-examine the witnesses of the opposing party and produce evidence
of their own. When they had from August 8, 1963 to August 30, 1963 to do so. This delay can only be
relevant as evidence to a waiver of the right to be heard. But there is no evidence of any such intention
on the part of the appellants, and a renunciation of such a fundamental right (to their day in court) is
not to be lightly inferred. After all, the Rules allow a party to move for a new trial on the ground of
unavoidable accident within the period for perfecting an appeal (Rule 37, Sec. 1), as the appellants have
done; or even to ask relief within 60 days after learning of a judgment or order against them (Rule 28,
sec. 3). That by greater diligence counsel could have avoided the court's rendering, and then setting
aside, a decision, is no ground for refusing his clients a relief to which they are entitled. Especially so
when the trial court had before it a record clearly showing that appellants herein were not heard
through no fault of their own.

Wherefore, the present petition for certiorari is hereby granted, the disputed resolution (dated
December 4, 1962) reversed and set aside, and a new trial granted. The case is remanded to the court of
origin for further proceedings consonant with this opinion. Without pronouncement as to costs.

Bengzon, C.J., Bautista Angelo, Concepcion, Dizon, Regala, Bengzon J.P., and Zaldivar, JJ., concur.
Makalintal, J., is on leave.

Mistake

Viking Industrial v. Court of Appeals, G.R. No. 143794, July 13, 2004

THIRD DIVISION

[G.R. No. 143794. July 13, 2004]

VIKING INDUSTRIAL CORPORATION, petitioner, vs. THE COURT OF APPEALS and JOSE L. LUISON,
JR.,respondents.

DECISION
SANDOVAL-GUTIERREZ, J.:

Litigation is a not a “trial and error” proceeding. A party who moves for a new trial on the ground
of “honest mistake” must show that ordinary prudence could not have guarded against it. A new trial is
not a refuge for the obstinate.
In this petition for review on certiorari, petitioner Viking Industrial Corporation assails the Court of
Appeals (a) Decision[1] dated February 29, 2000 in CA-G.R. SP No. 55253 finding grave abuse of discretion
on the part of Judge Vivencio S. Baclig, Regional Trial Court (RTC), Branch 77, Quezon City, in granting
petitioner’s motion for new trial; and (b) Resolution[2] dated June 28, 2000 denying its motion for
reconsideration.
The facts are as follows:
In 1993, petitioner extended to respondent Jose L. Luison, Jr. a loan amounting to P2,000,000.00
secured by a promissory note and a real estate mortgage. Two years thereafter, petitioner demanded
from respondent the payment of P19,102,916.39, purportedly representing the principal amount of the
loan, plus interest and penalties. Respondent disputed the accuracy of the amount. Thus, petitioner
threatened to foreclose the real estate mortgage, prompting respondent to file a petition for prohibition
and declaratory relief [3]with the RTC, Branch 77, Quezon City, docketed as Civil Case No. Q-96-
27553. Petitioner refused to answer the petition because it was erroneously impleaded as “Viking
Trading Corporation,” instead of “Viking Industrial Corporation.” Consequently, the court, upon motion
of respondent, declared petitioner in default and allowed respondent to present his evidence ex parte.
On July 8, 1996, the RTC, then presided by Judge Ignacio L. Salvador, rendered a judgment by
default in favor of respondent, the decretal portion of which reads:

“WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered as follows:

1. holds that the principal amount of the loan is only P1,453,500.00;

2. orders the reduction of the interest stipulated in the promissory note and deed of real estate
mortgage from 60% per annum to 30% per annum only to commence on the first week of October 1993;

3. orders the injunction permanent until and/or unless respondent (now petitioner) makes the
necessary adjustment or correction of its computation of petitioner’s (now respondent’s) total
indebtedness as determined by this Court in page six (6) of this Decision;

4. orders respondent (now petitioner) to pay petitioner by way of attorney’s fees the amount
of P150,000.00;

SO ORDERED.”

Petitioner received a copy of the above judgment on August 9, 1996. However it did not interpose
an appeal.
 Upon respondent’s motion, the RTC issued an Order dated October 15, 1996, directing the issuance
of a writ of execution. Thereupon, the judgment was fully executed and satisfied. The Sheriff’s Return
issued by Deputy Sheriff Angel L. Doroni states that:

“Pursuant to the Order of the honorable Court dated October 15, 1996 ordering the undersigned to
implement the dispositive portion of the Decision dated July 8, 1996 rendered on the above-entitled
case, undersigned accordingly implement the same by tendering to respondent Far East
Bank Chequeprovided SEVEN HUNDRED NINETY THOUSAND SIX HUNDRED FIVE PESOS AND FIFTY NINE
CENTAVOS (P790,605.59) ONLY which was received by respondent thru Mr. Brilly Bernardez who
claimed that said amount was only a partial payment and who instructed Mrs. Rosalie Pascual to issue a
receipt thereof. However, pursuant to said dispositive portion of the Decision and on the basis of
petitioner’s Manifestation datedNovember 15, 996 in favor of respondent, the said dispositive portion
of the Decision has been fully paid and satisfied upon receipt by respondent of said Far East
Bank Cheque covering the said amount.

Quezon City, Philippines, November 15, 1996.”

Petitioner refused to acknowledge the full satisfaction of the judgment by default. Thus,
respondent filed two motions, to wit: (1) “Ex-Parte Motion to Require Viking Industrial Corporation
(petitioner) to Cause the Cancellation of the Annotation of Mortgage and to Return (to respondent) the
Transfer Certificate of Title No. 100313” dated November 29, 1996; and (2) “Urgent Ex-Parte Motion to
Enjoin the Ex-officio Sheriff of Quezon City or his Authorized Deputies from Selling at Public Auction the
Subject Property” dated January 3, 1997.
The RTC, this time, presided by Judge Normandie B. Pizarro, denied respondent’s twin motions in
its Order dated February 5, 1997. Ironically, the same Order set aside the judgment by default on the
ground that the RTC did not acquire jurisdiction over petitioner because of improper service of
summons. Summons was served upon “Viking Trading Corporation,” not upon petitioner “Viking
Industrial Corporation.”
Upon respondent’s motion for reconsideration, the RTC overturned its order and reinstated the
judgment by default.[4] The court also granted respondent’s twin motions earlier mentioned. Petitioner
filed a motion for reconsideration but was denied.[5]
Petitioner then filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No.
45643.[6] On June 11, 1998, the Court of Appeals issued its Decision dismissing the petition and held that
Judge Pizarro did not commit grave abuse of discretion inreinstating the judgment by default,
ratiocinating as follows:

“We rule for respondents.

“Concededly, as the trial court had aptly observed, summons and other court processes, before the
amendment in the designation of the corporation’s name from Viking Trading Corporation to that of
Viking Industrial Corporation, were received by agents of Viking TradingCorporation which turned out
to be the same employees working for Viking Industrial Corporation. We quote:

‘It is glaringly clear in this case that summons was served at No. 315 Roosevelt Avenue, San Francisco del
Monte, Quezon City and received by a certain ROSALIE PASCUAL, who appears to be an agent or at least
connected with VIKING INDUSTRIAL CORPORATION. This conclusion is bolstered by another fact that
this ROSALIE PASCUAL was the same person who was instructed by Mr. Brilly Bernardez to prepare a
receipt for the amount tendered by the Deputy Sheriff of this court for the satisfaction of the dispositive
portion of the Decision dated July 8, 1996. Admittedly, Mr. Brilly Bernardez is the President of VIKING
INDUSTRIAL CORPORATION (See Order dated December 20, 1996). The Court likewise notes that the
signature of said ROSALIE PASCUAL, as appearing in the receipt she issued to the Deputy Sheriff of this
Court, appears to be the same signature appearing in some notices and orders issued and sent by this
Court to VIKING TRADING CORPORATION at No. 315 Roosevelt Avenue, San Francisco del Monte,
Quezon City.

That is not all. The initial notice of hearing for the application of temporary restraining order was served
upon respondent VIKING TRADING CORPORATION thru a certain LUZ GRAGASIN at NO. 315 Roosevelt
Avenue, San Francisco del Monte, Quezon City (Ref.: Officer’s Return dated May 24, 1996). However,
the subsequent notice of hearing of the ex-parte motion for execution and Order dated October 8, 1996,
was served upon VIKING INDUSTRIAL CORPORATION at No. 315 Roosevelt Avenue, San Francisco del
Monte, Quezon City again thru LUZ GRAGASIN (Ref.: Return dated October 8, 1996).’ (Order dated 13
June 1997, Annex ‘F’, Rollo at p. 58)

“From all that appear on record and by petitioner’s own admissions, all summons, notices and orders
issued by the trial court were duly served on Viking Trading Corporation and/or
Viking Industrial Corporation with its place of business at No. 315, Roosevelt Avenue, San Francisco
del Monte, Quezon City.

“Furthermore, circumstances indicate a waiver on the part of petitioner Viking of any alleged defect in
the jurisdiction over its person arising from defective or even want of process for its failure to raise
the question of jurisdiction in the trial court at the first opportunity.

“It should be noted that Viking never raised the issue of improper service of summons until the trial
court issued a writ of execution pursuant to its Decision dated July 8, 1996. The issue of jurisdiction
was belatedly raised only when private respondent Luison moved to cause the cancellation of the
annotation of mortgage and for Viking to return the Transfer Certificate of Title No. 100313 to Luison.

“Moreover, even when court notices were in the name of then Viking Trading Corporation, one
Mr. Brilly Bernardez, President of VikingIndustrial Corporation, voluntarily appeared before the
court a quo to represent petitioner Viking Trading Corporation (Hearing of 6 June 1996). As the trial
court declared:

‘x x x VIKING INDUSTRIAL CORPORATION thru its President, Mr. Brilly Bernardez, personally appeared
during the hearing of June 6, 1996, and expressly and unqualifiedly admitted being the respondent in
the present case. That Mr. Brilly Bernardez was not authorized to appear and represent VIKING
INDUSTRIAL CORPORATION is clearly untenable for his appearance before the court was under the color
of authority and he is now estopped from questioning the same. Hence, from this consideration alone,
the voluntary appearance of the President of respondent VIKING INDUSTRIAL CORPORATION may be
considered as equivalent to service (Sec. 23, Rule 14 of the Rules of Court). Thus, the Court may validly
declare the respondent in default for failure to file its answer within the reglementary period.’ (Ibid. at
p. 57)
“Ergo, by seeking affirmative reliefs through the filing of responsive pleadings (i.e., Annexes ‘T’, ‘W’,
‘X’, Rollo) before the trial court, not to mention its various participation in the proceedings in said
court by its President, Brilly Bernardez, and its counsel, Atty. Luciano S. Borja, other than to object to
lack of jurisdiction, petitioner Viking had in effect voluntarily submitted itself to the jurisdiction of the
court.

xxx

“WHEREFORE, the petition is DISMISSED for lack of merit.

“SO ORDERED.”

Undaunted, petitioner filed with this Court a petition for review on certiorari but the same was
dismissed in it’s Resolution datedNovember 16, 1998. Eventually, it issued the corresponding Entry of
Judgment.[7]
Despite having exhausted all judicial remedies - from the RTC to this Court - still, petitioner was
unwilling to yield. It resorted to a second round. On January 21, 1999, it filed with the RTC a motion for
new trial, citing the following as grounds:

“1. That respondent acted in the honest mistake that, before it should file its responsive pleading
thereto, the petition which had been served on it for “Viking Trading Corporation” must first be
corrected to reflect its true corporate name, an issue it had pursued to its end at the appellate courts,
and that by reason of which its rights had been impaired;

2. That the evidence adduced in this court is insufficient to justify said judgment; and

3. That said judgment is against the law.”

Surprisingly, the RTC was convinced. On April 7, 1999, then Presiding

Judge Vivencio S. Baclig granted petitioner’s motion, holding that petitioner’s failure to file an answer to
respondent’s petition was due to its “honest mistake” that it had no legal obligation to answer the
petition erroneously impleading it as Viking Trading Corporation instead of Viking Industrial
Corporation. He set aside the judgment by default and ordered a new trial, thus:

“In its motion for new trial, respondent stressed that its refusal to file its answer is far from being
frivolous as, in fact, it once was shared by no less than this Court; and that, although it failed to win the
approval of the appellate courts, its belief on such legal position and its pertinent reliance thereon,
although erroneous, constitute an honest mistake.

“The Court is persuaded. The natural reaction of any one sued under an erroneous name is to
question and/or ignore that suit. In this case, respondent did precisely what it thought was right
when it decided to ignore the summons. The vehemence and perseverance of the respondent in
pursuing that course of action, spending time and money bringing the issue up to the highest court of
the land, to the mind of the Court, is a clear indication of its honest belief in its cause even if those
efforts ultimately failed. The Court, therefore, finds that respondent’s failure to file its answer or
responsive pleading was on account of an honest mistake which is a valid ground for a new trial
(Section 1 (a), Rule 37, Rules of Court, as amended).”
 Respondent moved for reconsideration, stressing that the judgment by default is already final and
duly executed and, therefore, cannot be set aside. He cited Judge Salvador’s Order dated October 15,
1996 granting his motion for execution as well as the Sheriff’s Return indicating the full satisfaction of
the judgment.
In the Order dated September 13, 1999, Judge Baclig denied respondent’s motion for
reconsideration.
Hence, respondent filed a petition for certiorari and prohibition with the Court of Appeals,
docketed as CA-G.R. SP No. 55253. OnFebruary 29, 2000, the Court of Appeals rendered its Decision
granting the petition and holding that Judge Baclig acted with grave abuse of discretion in granting
petitioner’s motion for new trial considering that it was filed late. Respondent filed a motion for
reconsideration but was denied in an Order dated June 28, 2000.
Hence, the instant petition for review on certiorari.
Petitioner’s main argument is that it received a copy of the judgment by default only on January 9,
1999, thus, it’s motion for new trial filed with the RTC on January 21, 1999 was within the 15-day
reglementary period.
Respondent counters that there is conclusive proof on record that petitioner was served a copy of
the judgment by default on August 9, 1996. Furthermore, the question on when petitioner actually
received a copy of the judgment by default is a question of fact which is not a proper subject of a
petition for review on certiorari.
We rule for respondent.
The core issue in this case is whether petitioner filed its motion for new trial seasonably. Thus, it is
imperative to determine whether it received a copy of the judgment by default only on January 9, 1999.
Succinct and unmistakable is the consistent pronouncement that this Court is not a trier of
facts. And well entrenched is the doctrine that pure questions of fact may not be the proper subject of
appeal by certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, as this mode of
appeal is generally confined to questions of law.[8] Corollarily, a question of law exists when there is
doubt or controversy as to what the law is on a certain state of facts, and there is a question of fact
when the doubt or difference arises as to the truth or falsehood of facts. [9]
Whether petitioner was served a copy of the judgment by default only on January 9, 1999 is clearly
a question of fact. It practically involves the ascertainment of the veracity of the parties’ factual
allegations. Unfortunately, we are not inclined to do that.
As a rule, the findings of fact of the Court of Appeals are final and conclusive and cannot be
reviewed on appeal by this Court as long as they are supported by the records, as in this case.
We quote the Court of Appeals’ incisive findings on the matter, thus:

“Private respondent’s contention that they received only the decision on January 9, 1999 is a lie,
flimsy and frivolous. Way back on October 15, 1997, private respondent went to the Court of Appeals
by way of Petition for Certiorari assailing the decision of the lower court. Common sense dictates,
that one could not have gone to the Court of Appeals without private respondent’s receiving a copy of
the decision of the lower court.
“Also, the judgment of the lower court was executed by the Deputy Sheriff on November 15, 1996. For
one thing, the counsel of the private respondent issued a receipt to the Sheriff acknowledging the
payment made by the petitioner. Said counsel is aware that when execution took place, attached to the
writ is the decision of the court. This simply means that Viking Industrial Corporation respected and
adhered to the judgment of the Court rendered against it. Had it not, private respondent could have
refused succumbing to the full satisfaction of the judgment when the Writ of Execution was
implemented.

“Thus, in our mind, we are not convinced that private respondent did not receive a copy of the
decision. We are more inclined to believe the Presiding Judge who issued the Order dated October
11, 1996.

“The Presiding Judge could not have specifically mentioned the date August 9, 1996, had he not verified
the record as basis in stating the foregoing in the Order. Besides, it clearly appears on record that the
mail was sent thru registered mail on July 1996. Clearly then, the Motion for New Trial was filed out of
time.”

We find no cogent reason why we should review the above findings of the Appellate Court which
are sustained by the records.
At any rate, even if the motion for new trial was filed on time, still, the same should not have been
granted by the RTC. Petitioner claimed that it committed an “honest mistake” in not filing an answer to
respondent’s petition for prohibition and declaratory relief because of its belief that the RTC did not
acquire jurisdiction over it.
We are not persuaded.
Petitioner’s “honest mistake” hardly qualifies as a ground for a new trial. Section 1 of Rule 37 of
the 1997 Rules of Civil Procedure, as amended, provides:

“SECTION 1, Grounds of and period for filing a motion for new trial or reconsideration. -- Within the
period for taking an appeal, the aggrieved party may move the trial court to set aside the judgment or
final order and grant a new trial for one or more of the following causes materially affecting the
substantial rights of said party:

(a) Fraud, accident, mistake or excusable negligence which ordinary prudence could not have guarded
against and by reason of which such aggrieved party has probably been impaired in his rights; or”

Definitely, petitioner’s reliance on “honest mistake” is misplaced. The mistake referred to above is
one which ordinary prudence could not have guarded against. Here, the mistake petitioner committed
is a mistake of law. Its lawyer believed that he should not file an answer because his client is
erroneously impleaded. Had petitioner’s counsel reviewed more closely the 1997 Rules of Civil
Procedure, as amended, particularly Section 4, Rule 10 and Section 1, Rule 16, he would not have
committed a mistake which, unfortunately, binds his client. Those Rules are quoted below:

“SEC. 4. Formal amendments. – A defect in the designation of the parties and other clearly clerical or
typographical errors may be summarily corrected by the court at any stage of the action, at its
initiative or on motion, provided no prejudice is caused thereby to the adverse party.
“SEC. 1. Grounds. – Within the time for but before filing of the answer to the complaint or pleading
asserting a claim, a motion to dismiss may be made on any of the following grounds.

(a) That the court has no jurisdiction over the person of the defending party.”

Clearly, petitioner’s counsel, instead of ignoring respondent’s petition, should have filed a motion
to dismiss on the ground that the court has not acquired jurisdiction over its person as the summons
(with a copy of the petition) served upon it is defective. Definitely, his invocation of “honest mistake” is
misplaced. He could have prevented such mistake if only he is conversant with the Rules.
At any rate, the issue of whether the trial court committed grave abuse of discretion in rendering
judgment by default has been settled by this Court.
What we see in petitioner’s conduct is its obsession to exalt technicality over actuality. It is willing
to close its eyes to reality if only to win its case through a technicality. Hence, in the end, it must suffer
for its obstinacy.
In fine, we hold that petitioner’s motion for new trial is just a last-ditch attempt to revive a lost
case. To grant it will set a precedent allowing a new trial upon a party’s mere acknowledgement that in
failing to file an answer, he committed an “honest mistake.” In effect, there will be no end to
litigation. Interest republicae ut sit finis litium.
WHEREFORE, the petition is hereby DENIED. The challenged Decision and Order of the Court of
Appeals in CA-G.R. SP No. 55253 are AFFIRMED.
Costs against petitioner.
SO ORDERED.
Vitug, (Chairman), Corona, and Carpio-Morales, JJ., concur.

Building Care v. Macaraeg, G.R. No. 198357, December 10, 2012 (Supra.)

G.R. No. 198357 December 10, 2012

BUILDING CARE CORPORATION / LEOPARD SECURITY & INVESTIGATION AGENCY and/or RUPERTO
PROTACIO, Petitioners,
vs.
MYRNA MACARAEG, Respondent.

DECISION

PERALTA, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the
Decision1of the Court of Appeals (CA) promulgated on March 24, 2011, and its Resolution2 dated August
19, 2011, denying petitioner's Motion for Reconsideration be reversed and set aside.
Petitioners are in the business of providing security services to their clients. They hired respondent as a
security guard beginning August 25, 1996, assigning her at Genato Building in Caloocan City. However,
on March 9, 2008, respondent was relieved of her post. She was re-assigned to Bayview Park Hotel from
March 9-13, 2008, but after said period, she was allegedly no longer given any assignment. Thus, on
September 9, 2008, respondent filed a complaint against petitioners for illegal dismissal, underpayment
of salaries, non-payment of separation pay and refund of cash bond. Conciliation and mediation
proceedings failed, so the parties were ordered to submit their respective position papers.3

Respondent claimed that petitioners failed to give her an assignment for more than nine months,
amounting to constructive dismissal, and this compelled her to file the complaint for illegal dismissal. 4

On the other hand, petitioners alleged in their position paper that respondent was relieved from her
post as requested by the client because of her habitual tardiness, persistent borrowing of money from
employees and tenants of the client, and sleeping on the job. Petitioners allegedly directed respondent
to explain why she committed such infractions, but respondent failed to heed such order. Respondent
was nevertheless temporarily assigned to Bayview Park Hotel from March 9-13, 2008, but she also failed
to meet said client's standards and her posting thereat was not extended. 5

Respondent then filed an administrative complaint for illegal dismissal with the PNP-Security Agencies
and Guard Supervision Division on June 18, 2008, but she did not attend the conference hearings for
said case. Petitioners brought to the conference hearings a new assignment order detailing respondent
at the Ateneo de Manila University but, due to her absence, petitioners failed to personally serve
respondent said assignment order. Petitioners then sent respondent a letter ordering her to report to
headquarters for work assignment, but respondent did not comply with said order. Instead, respondent
filed a complaint for illegal dismissal with the Labor Arbiter. 6

On May 13, 2009, the Labor Arbiter rendered a Decision, the dispositive portion of which reads as
follows:

WHEREFORE, judgment is hereby made dismissing the charge of illegal dismissal as wanting in merit but,
as explained above, ordering the Respondents Leopard Security and Investigation Agency and Rupert
Protacio to pay complainant a financial assistance in the amount of P5,000.00.

Other claims are DISMISSED for lack of merit.

SO ORDERED.7

Respondent then filed a Notice of Appeal with the National Labor Relations Commission (NLRC), but in a
Decision dated October 23, 2009, the NLRC dismissed the appeal for having been filed out of time,
thereby declaring that the Labor Arbiter's Decision had become final and executory on June 16, 2009. 8

Respondent elevated the case to the CA via a petition for certiorari, and on March 24, 2011, the CA
promulgated its Decision, the dispositive portion of which reads as follows:

WHEREFORE, the petition for certiorari is GRANTED. The Decision dated October 23, 2009 and
Resolution dated March 2, 2010 rendered by public respondent in NLRC LAC No. 07-001892-09 (NLRC
Case No. NCR-09-12628-08) are REVERSED and SET ASIDE, and in lieu thereof, a new judgment is
ENTERED declaring petitioner to have been illegally dismissed and DIRECTING private respondents to
reinstate petitioner without loss of seniority rights, benefits and privileges; and to pay her backwages
and other monetary benefits during the period of her illegal dismissal up to actual reinstatement.

Public respondent NLRC is DIRECTED to conduct further proceedings, for the sole purpose of
determining the amount of private respondent's monetary liabilities in accordance with this decision.

SO ORDERED.9

Petitioners' motion for reconsideration of the aforequoted Decision was denied per Resolution dated
August 19, 2011. Hence, the present petition, where the main issue for resolution is whether the CA
erred in liberally applying the rules of procedure and ruling that respondent's appeal should be allowed
and resolved on the merits despite having been filed out of time.

The Court cannot sustain the CA's Decision.

It should be emphasized that the resort to a liberal application, or suspension of the application of
procedural rules, must remain as the exception to the well-settled principle that rules must be complied
with for the orderly administration of justice. In Marohomsalic v. Cole, 10 the Court stated:

While procedural rules may be relaxed in the interest of justice, it is well-settled that these are tools
designed to facilitate the adjudication of cases. The relaxation of procedural rules in the interest of
justice was never intended to be a license for erring litigants to violate the rules with impunity. Liberality
in the interpretation and application of the rules can be invoked only in proper cases and under
justifiable causes and circumstances. While litigation is not a game of technicalities, every case must be
prosecuted in accordance with the prescribed procedure to ensure an orderly and speedy
administration of justice.11

The later case of Daikoku Electronics Phils., Inc. v. Raza, 12 further explained that:

To be sure, the relaxation of procedural rules cannot be made without any valid reasons proffered for or
underpinning it. To merit liberality, petitioner must show reasonable cause justifying its non-compliance
with the rules and must convince the Court that the outright dismissal of the petition would defeat the
administration of substantial justice. x x x The desired leniency cannot be accorded absent valid and
compelling reasons for such a procedural lapse. x x x

We must stress that the bare invocation of "the interest of substantial justice" line is not some magic
want that will automatically compel this Court to suspend procedural rules. Procedural rules are not to
be belittled, let alone dismissed simply because their non-observance may have resulted in prejudice to
a party's substantial rights. Utter disregard of the rules cannot be justly rationalized by harping on the
policy of liberal construction.13

In this case, the justifications given by the CA for its liberality by choosing to overlook the belated filing
of the appeal are, the importance of the issue raised, i.e., whether respondent was illegally dismissed;
and the belief that respondent should be "afforded the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities," 14 considering that the belated
filing of respondent's appeal before the NLRC was the fault of respondent's former counsel. Note,
however, that neither respondent nor her former counsel gave any explanation or reason citing
extraordinary circumstances for her lawyer's failure to abide by the rules for filing an appeal.
Respondent merely insisted that she had not been remiss in following up her case with said lawyer.

It is, however, an oft-repeated ruling that the negligence and mistakes of counsel bind the client. A
departure from this rule would bring about never-ending suits, so long as lawyers could allege their own
fault or negligence to support the client’s case and obtain remedies and reliefs already lost by the
operation of law.15 The only exception would be, where the lawyer's gross negligence would result in the
grave injustice of depriving his client of the due process of law. 16 In this case, there was no such
deprivation of due process. Respondent was able to fully present and argue her case before the Labor
Arbiter. She was accorded the opportunity to be heard. Her failure to appeal the Labor Arbiter's Decision
cannot, therefore, be deemed as a deprivation of her right to due process. In Heirs of Teofilo Gaudiano
v. Benemerito,17 the Court ruled, thus:

The perfection of an appeal within the period and in the manner prescribed by law is jurisdictional and
non-compliance with such legal requirements is fatal and has the effect of rendering the judgment final
and executory. The limitation on the period of appeal is not without reason. They must be strictly
followed as they are considered indispensable to forestall or avoid unreasonable delays in the
administration of justice, to ensure an orderly discharge of judicial business, and to put an end to
controversies. x x x

xxxx

The right to appeal is not a natural right or part of due process; it is merely a statutory privilege and may
be exercised only in the manner and in accordance with the provisions of law. Thus, one who seeks to
avail of the right to appeal must strictly comply with the requirements of the rules, and failure to do so
leads to the loss of the right to appeal."18

In Ocampo v. Court of Appeals (Former Second Division),19 the Court declared that:

x x x we cannot condone the practice of parties who, either by their own or their counsel's inadvertence,
have allowed a judgment to become final and executory and, after the same has become immutable,
seek iniquitous ways to assail it. The finality of a decision is a jurisdictional event which cannot be made
to depend on the convenience of the parties. 20

Clearly, allowing an appeal, even if belatedly filed, should never be taken lightly.1âwphi1 The judgment
attains finality by the lapse of the period for taking an appeal without such appeal or motion for
reconsideration being filed.21 In Ocampo v. Court of Appeals (Former Second Division), 22 the Court
reiterated the basic rule that "when a party to an original action fails to question an adverse judgment
or decision by not filing the proper remedy within the period prescribed by law, he loses the right to do
so, and the judgment or decision, as to him, becomes final and binding." 23 The Decision of the Labor
Arbiter, therefore, became final and executory as to respondent when she failed to file a timely appeal
therefrom. The importance of the concept of finality of judgment cannot be gainsaid. As elucidated in
Pasiona, Jr. v. Court of Appeals,24 to wit:

The Court re-emphasizes the doctrine of finality of judgment. In Alcantara v. Ponce, the Court, citing its
much earlier ruling in Arnedo v. Llorente, stressed the importance of said doctrine, to wit:
x x x controlling and irresistible reasons of public policy and of sound practice in the courts demand that
at the risk of occasional error, judgments of courts determining controversies submitted to them should
become final at some definite time fixed by law, or by a rule of practice recognized by law, so as to be
thereafter beyond the control even of the court which rendered them for the purpose of correcting
errors of fact or of law, into which, in the opinion of the court it may have fallen. The very purpose for
which the courts are organized is to put an end to controversy, to decide the questions submitted to the
litigants, and to determine the respective rights of the parties. With the full knowledge that courts are
not infallible, the litigants submit their respective claims for judgment, and they have a right at some
time or other to have final judgment on which they can rely as a final disposition of the issue submitted,
and to know that there is an end to the litigation.

xxxx

It should also be borne in mind that the right of the winning party to enjoy the finality of the resolution
of the case is also an essential part of public policy and the orderly administration of justice. Hence, such
right is just as weighty or equally important as the right of the losing party to appeal or seek
reconsideration within the prescribed period. 25

When the Labor Arbiter's Decision became final, petitioners attained a vested right to said judgment.
They had the right to fully rely on the immutability of said Decision. In Sofio v. Valenzuela, 26 it was amply
stressed that:

The Court will not override the finality and immutability of a judgment based only on the negligence of a
party’s counsel in timely taking all the proper recourses from the judgment. To justify an override, the
counsel’s negligence must not only be gross but must also be shown to have deprived the party the right
to due process.

In sum, the Court cannot countenance relaxation of the rules absent the showing of extraordinary
circumstances to justify the same. In this case, no compelling reasons can be found to convince this
Court that the CA acted correctly by according respondent such liberality.

IN VIEW OF THE FOREGOING, the Petition is GRANTED. The Decision of the Court of Appeals dated
March 24, 2011, and its Resolution dated August 19, 2011 in CA-G.R. SP No. 114822 are hereby SET
ASIDE, and the Decision of the National Labor Relations Commission in NLRC-LAC No. 07-001892-09
(NLRC Case No. NCR-09-12628-08), ruling that the Decision of the Labor Arbiter has become final and
executory, is REINSTATED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
Excusable Negligence

Multi-Trans Agency v. Oriental Assurance, G.R. no. 180817, June 23, 2009

THIRD DIVISION

MULTI-TRANS AGENCY PHILS. G. R. No. 180817

INC.,
Petitioner, Present:

YNARES-SANTIAGO, J.,
Chairperson.
- versus - CHICO-NAZARIO,
VELASCO, JR.,
NACHURA and
PERALTA, JJ.

ORIENTAL ASSURANCE Promulgated:

CORP.,
Respondent. June 23, 2009

x--------------------------------------------------x

DECISION

CHICO-NAZARIO, J.:

Before Us is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, which seeks
the reversal and setting aside of the Decision[1] of the Court of Appeals dated 4 December 2006 in CA-
G.R. CV No. 67581 affirming with modification the decision [2] and order[3] of the Regional Trial Court
(RTC) of Manila, Branch 13, in Civil Case No. 97-84259; and its Resolution[4] dated 10 December 2007
denying petitioner Multi-Trans Agency Phils., Inc.’s (Multi-Trans) Motion for Reconsideration.
 The instant case arose from a complaint for sum of money filed by respondent Oriental Assurance
Corporation (Oriental) against petitioner and Neptune Orient Lines, Ltd. (Neptune) before the RTC of
Manila on 22 July 1997. The case was raffled to Branch 13. The complaint alleged, inter alia, that Multi-
Trans was the operator/ship agent of the vessel “Tokyo Bay” whileNeptune was the operator/ship
agent of the vessel “M/V Neptune Beryl.” Oriental’s predecessor-in-interest – Imrex Enterprises –
imported from England seventy-two (72) boxes and one (1) pal/box of various colors of Opacolor,
contained in one container van which was transported from Southampton to Manila on board the vessel
“Tokyo Bay” as evidenced by Bill of Lading No. MA-19943/02. The shipment was transshipped from
Singapore on board the vessel “M/V Neptune Beryl,” which arrived and docked at the Manila
International Port, Manila, on 29 August 1996. The shipment was insured by respondent against loss
and/or damage forP1,078,012.16 under Marine Insurance Policy No. OAC-M-96/688.

The container van containing the shipment was unloaded from the carrying vessel and stripped of
its contents at the open Container Yard of the Manila North Harbor. Only 72 boxes were found, while
the one pal/box of Opacolor CC 22932 Yellow weighing 500 kilos was not delivered by the carrying
vessel, or was shortlanded, as evidenced by Good Order Cargo Receipt No. 1792 issued by Neptune. The
72 boxes were withdrawn from the Manila North Harbor and delivered to the consignee’s (Imrex
Enterprises’) warehouse at No. 7 Jose Cruz St., Barrio Ugong, Pasig City.

Respondent alleged that the non-delivery or shortlanding of one box of the shipment was due to
the negligence of petitioner and Neptune and/or the captain and crew of the vessels “Tokyo Bay”
and/or “MV Neptune Beryl” in loading, stowing, taking care of, handling and unloading the
shipment. By being negligent, petitioner and Neptune breached their contract of carriage in failing to
deliver one box of the shipment to Imrex Enterprises at the point of destination. Imrex Enterprises filed
a claim with respondent for the value of the one box that was shortlanded. Pursuant to the terms and
conditions of Marine Insurance Policy No. OAC-M-96/688, respondent paid Imrex Enterprises the
amount P256,937.03, for which reason, it claims that it is subrogated into the rights of Imrex Enterprises
to be indemnified by petitioner and Neptune.

Respondent made demands upon petitioner and Neptune to pay, but they refused to satisfy the
former’s claim. As a result, the complaint was filed and both petitioner and Neptune were sued,
because respondent was uncertain from whom it was entitled to relief. It prayed that either or both
petitioner and Neptune be ordered to pay (a) P256,937.03 with legal interest from the date of the filing
of the complaint; (b) P50,000.00 as attorney’s fees; and (c) costs of suit.[5]
 Neptune filed its Answer with Compulsory Counterclaim. [6] It alleged, among other things, that it
was a mere commercial agent of “M/V Neptune Beryl;” and that it had no knowledge of the contents,
quantity, quality, condition and value of the subject shipment, as it was carried on a “Said to Contain”
(or STC) and “Shipper’s Load and Count” basis. It claimed that the dorsal portion of Bill of Lading No.
MA-19943/02 was not produced. It added that the shipment was discharged from the vessel complete
and in good order, and that it exercised the diligence required by law in the handling of and vigilance
over the shipment. It also alleged that no demand was made. It invoked the following defenses: the
complaint stated no cause of action; the plaintiff and subrogor had no privity of contract with Neptune;
plaintiff and Neptune were not the real parties-in-interest; the subject shipment was discharged at the
Port of Manila complete and in good order; its responsibility ceased upon the shipment’s discharge from
the ship’s tackle; the damages, losses and spillages, if any, were due to the inherent nature, vice or
defect of the goods; or the perils, dangers and accidents of the sea; pre-shipment loss or damage; or the
insufficiency of the packing thereof, for which it was not liable; the alleged payment made by plaintiff to
the alleged assured/consignee was not legally due and demandable, so there was consequently no legal
subrogation in favor of the plaintiff; its liability should not exceed the cost insurance freight value of the
loss or damaged shipment or the amount of $500 per package; or in any event, said liability, if any,
should not exceed the limitation of liability provided for in the Bill of Lading; no invoice of loss/damage
was made by the consignee within the time required by law, the Bill of Lading, and the pertinent charter
party; the complaint was barred by prescription and/or laches; plaintiff’s claim was excessive and
unreasonable; the terms and conditions of the relevant Bill of Lading, Carriage of Goods by Sea Act and
existing laws absolved it from any and all liability for the alleged loss/damage; the damage, if any, to the
shipment was due to the negligent acts or omissions committed by the consignee or its representatives,
or to causes for which defendant is not responsible; the shipment was loaded on board the vessel
subject to the terms and conditions of the relevant Bill of Lading; the subject shipment was carried
under “weight, measure, marks and numbers, quality, contents and value unknown,” indicating that the
carrier did not know the exact quantity, quality and weight of the shipment, as it was not given the
opportunity to inspect the same; and the Bill of Lading was issued based on the declaration made by the
shipper; and the vessel (M/V Neptune Beryl) acted as a special carrier, and Neptune was a mere
commercial agent of “M/V Neptune Beryl.”

On the other hand, petitioner, through its counsel Jose Ma. Q. Austria, filed a Motion to
Dismiss[7] on the ground that the complaint did not state a cause of action. It argued that the complaint
stated that petitioner Multi-Trans was the “operator/ship agent of the vessel “Tokyo Bay.” However, in
the Bill of Lading attached to the complaint, petitioner was named agent of Multimodal Transport
Operator and not of the vessel “Tokyo Bay.” Neither can it be the operator of the said vessel, there
being no allegation that said vessel was on a bareboat charter to Transtainer Lines, the principal of
petitioner. It maintains that the evidence presented by plaintiff defeats its own allegations as to the
participation of petitioner in the transaction.

On 8 October 1997, respondent opposed the motion to dismiss. [8] On 23 October 1997,
respondent filed its answer to counterclaim.[9]

In an Order dated 25 October 1997, petitioner’s motion to dismiss was denied. [10]

In an Order dated 20 February 1998, the trial court directed its personnel to transmit immediately
to counsel of petitioner a copy of the Order dated 25 October 1997 it appearing that Multi-Trans was
not sent a copy thereof. For this reason, it declared that petitioner’s period to file an answer had not
yet started to run.[11]

On 15 January 1999, the trial court archived the case, there being no movement in the case. [12]

On 17 February 1999, respondent filed a motion to declare defendant Multi-Trans in default for
failure to file its answer to the complaint.[13]

In its order[14] dated 26 February 1999, the trial court stated that the copy of the Order dated 25
October 1997 was sent to defendant Multi-Trans and not to its counsel. For this reason, the period to
file an Answer had not yet started to run. It directed that a copy of the 25 October 1997 Order be sent
to defendant Multi-Trans’ counsel. A notice of the transmittal of the Order dated25 October 1997 to
Atty. Austria was shown to the trial court without any return.

Per Order dated 27 March 1999, petitioner Multi-Trans was declared in default, there being a
certification from the Post Office of Makati showing that counsel for petitioner received a copy of the
Order dated 25 October 1997 denying its motion to dismiss, and that it had not yet filed an Answer. [15]

The trial court scheduled the pre-trial between respondent and Neptune and required them to
submit their pre-trial briefs.

On 14 April 1999, respondent reiterated its motion to declare petitioner Multi-Trans in

[16]
default. On 15 April 1999, the trial court reiterated its earlier Order of 27 March 1999 declaring
petitioner Multi-Trans in default.[17]
 Respondent Oriental filed its pre-trial brief on 6 May 1999,[18] while Neptune filed its pre-trial
brief on 18 May 1999.[19]

In an Order dated 20 May 1999, respondent Oriental was allowed to present its evidence ex
parte for failure of Neptune and its counsel to appear at pre-trial despite notice.[20]

On 17 June 1999, Oriental presented two witnesses: (1) Erlinda Espiritu and (2) Perfecto
Mojica. It formally offered in evidence Exhibits A to O, inclusive, [21] which the trial court admitted.[22]

On 30 August 1999, the trial court rendered its decision finding petitioner and Neptune solidarily
liable to respondent. The dispositive portion of the decision reads:

WHEREFORE, judgment is rendered ordering defendants Multi-Trans Agency

Phils., Inc. and Neptune Orient Lines Ltd. jointly and severally to pay the plaintiff
Oriental Assurance Corporation the sum of P256,937.03 with legal interest of 6 percent
per annum from the date of filing of the complaint until payment, plus reasonable
attorney’s fees of P30,000, and costs.[23]

On 10 September 1999, Atty. Jose Ma. Austria, with conformity of petitioner, filed a Notice of
Withdrawal of Appearance.[24] The trial court ordered notices be furnished petitioner until a new
counsel appeared.[25]

On 27 September 1999, Melgar Tria & Associates entered its appearance for petitioner Multi-
[26]
Trans. Simultaneously with its entry of appearance, new counsel for petitioner filed a Motion for New
Trial and to Admit Attached Answer.[27] Petitioner prayed that the judgment of the trial court be set
aside and a new trial be granted on the ground of its former counsel’s negligence/incompetence
constituting excusable neglect, and that its Answer to the Complaint be admitted. The following are
contained in the Affidavit of Merit executed by petitioner’s Administration Manager:

4. That I was surprised considering that per last conversation with our lawyer
Atty. Jose Ma. Austria, he informed us that we have been declared in default and that
they have already filed a Motion to Lift Order of default;

5. That upon verification of the records of the case, I found out that our lawyer
Atty. Jose Ma. Austria did not actually file any Motion to Lift Order of Default despite
receipt of the Order of the Court declaring us in default;

6. Furthermore, review of the records of the case, disclosed that the only action
taken by our counsel was to file in our behalf a Motion to Dismiss but the same was
 denied by this Honorable Court on October 25, 1997 and received by Atty. Austria on
February 25, 1998 as evidenced by the Certification coming from the Post Office of
Makati City;

xxxx

9. As can be clearly seen, from the time he received the order of this Court dated
October 25, 1997 denying its Motion to Dismiss, up to the time he received plaintiff’s
motion to declare defendant in default until the time he received the Order of this Court
declaring us in default, our lawyer has not done nothing (sic) either by filing an answer
or a motion to lift the order of default (which he led us to believe that he indeed filed
the same) which is clearly a breach of trust that we have reposed in him;

10. By the negligence of our counsel, we were denied the opportunity to present
evidence and participate in the trial, and thus deprived us the chance to contest the suit
that has been filed against us by the plaintiff;

11. That we have a good and meritorious defense in that our company is just a
mere freight forwarding firm. Likewise our principal in London, John Goods & Sons
(London) Ltd. is also a freight forwarder. While Transtainer Systems (UK) Ltd.,
Multimodal Operators (wherein John Goods & Sons Ltd. is the agent) is a non-operating
vessel cargo consolidator.

12. As can be shown, neither one of us is the owner/operator of the vessel

“Tokyo Bay” wherein the subject cargo was loaded and shipped nor have we any
participation in the filing up, packing, storing of the subject cargo in the container nor in
the loading and shipping of the same in the vessel; x x x. [28]

On 28 September 1999, Neptune filed a Motion for Reconsideration of the decision of the trial
court.[29]

Respondent filed its opposition to the motions for new trial and for reconsideration. [30]

In its Order dated 29 November 1999, the trial court denied the motion for new trial. It declared:

In seeking new trial, defendant Multi-Trans Agency assails its former counsel Atty.
Jose Ma. Austria for not taking any action at all from the time that he received the
denial of his motion to dismiss until the decision was rendered. It cites rulings to the
effect that negligence or incompetence of counsel is a well-recognized ground for new
trial. While this may be true in a number of cases, the factual backdrop therein will
reveal that the parties aggrieved by the inaction of their counsels had not contributed to
the situation in which they found themselves. A party must truly be a victim of its
counsel’s misconduct for it to claim new trial. This is not the case
here. Atty.Austria may have ignored the orders and other papers sent to him, but the
 records will show that defendant was also furnished copies of the same papers. It
cannot pretend to be ignorant of what was going on. In particular, it had received copy
of the Order of March 27, 1999declaring it in default, but from the time it received this
in April until the decision on August 30, 1999 – a period of four months – it did nothing
to regain its standing. Defendant was already alerted to the fact that its counsel was
remiss in his duties. A normally prudent and careful person would have taken pains to
rectify the situation when there was still time to do so. In not making a response until it
was too late, defendant can no longer claim any relief. It is as irresponsible as its lawyer
and unworthy to invoke the higher right of equity to rescue it from the consequences of
its inaction. As provided in Section 1, Rule 37 of the Rules of Court, a party may move to
set aside the judgment and ask for new trial if it can show that its negligence was, at the
least, excusable. The facts show otherwise.

The plaintiff has also presented enough evidence to establish the liability of
defendant for the loss of a part of the cargo. As stated in the decision, the bill of lading
clearly points to the defendant as the shipagent of the vessel in which the cargo was
loaded. The loss of the cargo is deducible from the quantity loaded at the point of
shipment and the quantity discharged at the point of delivery. [31]

The motion for reconsideration filed by Neptune was denied by the trial court in its Order dated 1
December 1999.[32]

Petitioner filed a notice of appeal informing the trial court that it was appealing from the decision
it had rendered and the Order denying the motion for new trial. [33] Neptune also filed a notice of
appeal.[34] With notices of appeal having been filed, the trial court forwarded the records of the case to
the Court of Appeals.[35]

On 4 December 2006, the Court of Appeals promulgated its decision denying the petitioner’s
appeal, while granting that of Orientals. It affirmed with modification the trial court’s decision dated 30
August 1999 and Order dated 29 November 1999 ruling that it was only petitioner that was liable to
respondent.

Petitioner filed a Motion for Reconsideration. [36] Respondent filed a Partial Motion for
Reconsideration, praying that the Court of Appeals’ decision be reversed and set aside, and
that Neptune be held solidarily liable with petitioner.[37] On 10 December 2007, the Court of Appeals
denied both motions.[38]

Petitioner Multi-Trans Agency Phils. Inc. is now before us via a petition for review, praying that the
decision and Order of the Court of Appeals be set aside, and that its Motion for New Trial and to Admit
Answer be granted.[39] Respondent Oriental Assurance Corporation filed its Comment on the petition
filed by Multi-Trans.[40]

Both petitioner and respondent filed their respective memoranda. [41]

Petitioner makes the following assignment of errors:

FIRST

THE HONORABLE COURT OF APPEALS ERRED IN DISREGARDING THE SIGNIFICANT AND

UNCONTROVERTED ACTS OF PETITIONER’S FORMER COUNSEL AMOUNTING TO A
“BETRAYAL” OF HIS CLIENT’S INTEREST AND WHICH ARE SUFFICIENT REASONS FOR A
NEW TRIAL.

SECOND

THE HONORABLE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE AWARD OF

DAMAGES DESPITE LACK/INSUFFICIENT EVIDENCE AND THE FACT THAT PETITIONER IS
NOT THE AGENT OF THE CARRIER.[42]

Petitioner argues that the Court of Appeals erred in holding that its former counsel’s failure to file
an answer and to act after receipt of the declaration of default merely constituted “simple negligence”
binding the petitioner and not entitling it to a new trial. In support of its position, petitioner enumerates
the significant and uncontroverted acts of its counsel amounting to a “betrayal” of its interests. These
are:

1. He failed to file its Answer to the Complaint despite receipt of the Court’s Order
denying his motion to dismiss.

2. He failed to inform his client of the fact of his failure to file its Answer and of the
Court Order declaring them in default and allowing plaintiff to present evidence ex-
parte.

3. He failed to file the Motion to Lift Order of Default to regain his client’s standing in
Court.

4. He misrepresented that he already filed the Motion to Lift Order of Default when
confronted by client when it learned of said Order of default.

5. He never bothered to verify what transpired at the ex-parte hearing and was not able
to file the necessary pleadings to lift order considering that the case was submitted for
decision without petitioner’s evidence.
 6. He miserably failed to inform client of the adverse decision despite receipt and
practically did nothing to protect its client’s interest. [43]

The foregoing acts, petitioner maintains, amply show that its former counsel misrepresented
the true status of the case. On account of these acts which amount to incompetence or negligence, it
has been unduly deprived of its rights to be heard and to present its defense and thus has been deprived
of its day in court, violating its right to due process of law through no fault of its own. It explains that
while it is settled that negligence of counsel binds the client, this rule is not without exception. In cases
where reckless or gross negligence of counsel, like in this case, deprives the client of due process of law,
or when the application would result in outright deprivation of the client’s liberty or property, or where
the interest of justice so requires, relief is accorded to the client who suffered by reason of the lawyer’s
gross or palpable mistake or negligence. Citing Tan v. Court of Appeals,[44] petitioner pleads that
because it is similarly situated with the petitioner therein, the ruling in said case – granting the motion
for new trial after counsel failed to file an answer and the client was declared in default – should be
applied to the case at bar.

Petitioner further disputes the Court of Appeals’ ruling that there is no compelling reason to
relax the rules in its favor, because it is not entirely blameless and should have taken a more active role
in the proceedings of the case against it. It contends that it is not correct to state that it did not do
anything despite being alerted that it was already declared in default.

After going over the records of this case, we find the petition meritorious.

One of the grounds for the granting of a new trial under Section 1 of Rule 37 of the 1997 Revised
Rules of Civil Procedure is excusable negligence.[45] It is settled that the negligence of counsel binds the
client. This is based on the rule that any act performed by a counsel within the scope of his general or
implied authority is regarded as an act of his client. [46] Consequently, the mistake or negligence of
counsel may result in the rendition of an unfavorable judgment against the client. [47] We have, however,
carved out exceptions to this rule; as where the reckless or gross negligence of counsel deprives the
client of due process of law; or where the application of the rule will result in outright deprivation of the
client’s liberty or property; or where the interests of justice so requires and relief ought to be accorded
to the client who suffered by reason of the lawyer’s gross or palpable mistake or negligence. [48] In order
to apply the exceptions rather than the rule, the circumstances obtaining in each case must be looked
into. In cases where one of the exceptions is present, the courts must step in and accord relief to a
client who suffered thereby.[49]
 Gross negligence has been defined as the want or absence of or failure to exercise slight care or
diligence, or the entire absence of care. It examines a thoughtless disregard of consequences without
exerting any effort to avoid them.[50]

In the case before us, we find the negligence of petitioner’s former counsel to be so gross that it
was deprived of its day in court, thus denying it due process. The records show that petitioner was
declared in default for failure of its former counsel to file an answer to the complaint after the motion to
dismiss he filed was denied by the trial court. Atty. Austria did not do anything to protect the interests
of petitioner. He neither opposed the plaintiff’s motion to declare his client in default despite due
notice thereof; nor filed any motion to set aside the order declaring his client in default, also after he
was apprised of the adverse order. He failed to inform his client of the fact that he failed to file an
Answer and of the Court Order declaring it in default and allowing plaintiff to present evidence ex
parte. He even misrepresented that he already filed a Motion to Lift Order of Default when confronted
by his client after the latter learned of said Order of Default. As a result of Atty. Austria’s inaction,
respondent was allowed to present its evidence. Petitioner failed to adduce any evidence to rebut the
allegations contained in the complaint. It was deprived of due process. The gross negligence of
petitioner’s former counsel, coupled with its deprivation of due process, will ultimately result in its
deprivation of property.

For a claim of counsel’s negligence to prosper, nothing short of clear abandonment of the
client’s cause must be shown.[51] In this case, the only pleading filed by petitioner’s former counsel was a
motion to dismiss. After the same had been denied, he did not file anything more until a decision was
rendered by the trial court. This is compounded by the fact that he misrepresented to petitioner that he
had filed the proper motion to set aside the order of default. These acts of petitioner’s counsel amount
to gross negligence.

The Court of Appeals said that petitioner was not entirely blameless, because it failed to take a
more active role in the proceedings. Quoting the trial court, it declared that “Defendant was already
alerted to the fact that its counsel was remiss in his duties. A normally prudent and careful person
would have taken pains to rectify the situation when there was still time to do so. In not making a
response until it was too late, defendant can no longer claim any relief. It is as irresponsible as its
lawyer and unworthy to invoke the higher right of equity to rescue it from the consequences of its
inaction.”
 Under the circumstances of the case, petitioner cannot be blamed for relying on the assurance
of its former counsel. Petitioner cannot be said to have utterly failed to do anything to regain its
standing after being declared in default. After being informed that it was declared in default, it
confronted Atty. Austria of the same and was assured by him that a motion to lift the order of default
had been filed. This, we know, was not true since petitioner never regained its standing, and a decision
was rendered by the trial court in favor of the plaintiff without petitioner having the opportunity to
present its evidence.

In Sarraga, Sr. v. Banco Filipino Savings and Mortgage Bank,[52] we held:

A client may reasonably expect that his counsel will make good his
representations and has the right to expect that his lawyer will protect his interests
during the trial of his case. For the general employment of an attorney to prosecute or
defend a case or proceeding ordinarily vests in a plaintiff’s attorney the implied
authority to take all steps or do all acts necessary or incidental to the regular and
orderly prosecution and management of the suit, and in a defendant’s attorney, the
power to take such steps as he deems necessary to defend the suit and protect the
interests of the defendant.

In Amil v. Court of Appeals,[53] we ruled that trial courts should be liberal in setting aside orders
of default and granting motions for new trial if the defendant appears to have a meritorious
defense. Parties must be given every opportunity to present their side. The issuance of orders of
default should be the exception rather than the rule, to be allowed only in clear cases of obstinate
refusal by the defendant to comply with the orders of the trial court.

In the case under consideration, petitioner appears to have a defense that should be looked into
more closely. Petitioner insists that it is not the agent of the vessel “Tokyo Bay,” the vessel that carried
the subject shipment. As can be seen from the International Bill of Lading[54] issued by John Goods &
Sons (London), and as admitted by petitioner, it is the local agent of John Goods & Sons (London) that is,
in turn, the agent of Transtainer Systems (UK) Ltd., Multimodal Transport Operators. Looking at the
complaint,[55] respondent alleges that petitioner is the operator/shipagent of the vessel
“Tokyo Bay.” Both lower courts ruled that petitioner was liable for being the agent of “Tokyo Bay,” the
vessel in which the cargo was loaded. There appears to be some inconsistency between the allegation
in the complaint and the decisions of the lower courts that was not fully explained. In light of these, it
would be in accord with justice and equity to allow petitioner’s prayer for new trial, so that it can
present its evidence; and for the trial court to determine with certainty where the liability, if any, of
petitioner arises – whether as agent of “Tokyo Bay” or as agent of John Goods & Sons (London).
 Our pronouncement in Apex Mining, Inc. v. Court of Appeals[56] applies to this case:

If the incompetence, ignorance or inexperience of counsel is so great and the

error committed as a result thereof is so serious that the clients, who otherwise has a
good cause, is prejudiced and denied his day in court, the litigation may be reopened to
give the client another chance to present his case. Similarly, when an unsuccessful party
has been prevented from fully and fairly presenting his case as a result of his lawyer’s
professional delinquency or infidelity the litigation may be reopened to allow the party
to present his side. Where counsel is guilty of gross ignorance, negligence and
dereliction of duty, which resulted in the client’s being held liable for damages in a
damage suit, the client is deprived of his day in court and the judgment may be set aside
on such ground.

In view of the foregoing circumstances, higher interests of justice and equity

demand that petitioners be allowed to present evidence on their defense. Petitioners
may not be made to suffer for the lawyer’s mistakes and should be afforded another
opportunity, at least, to introduce evidence on their behalf. To cling to the general rule
in this case is only to condone rather than rectify a serious injustice to a party whose
only fault was to repose his faith and entrust his innocence to his previous lawyers.

What should guide judicial action is that a party be given the fullest opportunity
to establish the merits of his action or defense rather than for him to lose life, liberty,
honor or property on mere technicalities. In cases involving gross or palpable
negligence of counsel the courts must step in and accord relief to a client who has
suffered thereby. This Court will always be disposed to grant relief to parties aggrieved
by perfidy, fraud, reckless inattention and downright incompetence of lawyers, which
has the consequence of depriving their clients, of their day in court.

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Court of
Appeals dated 4 December 2006 in CA-G.R. CV No. 67581 is SET ASIDE.

The case is hereby REMANDED to the Regional Trial Court of Manila, Branch 13, for a new
trial. It is DIRECTED to admit the Answer of petitioner and to receive the latter’s evidence, and rebuttal
and sur-rebuttal evidence if warranted, and to dispose of the case with reasonable dispatch.

The former counsel for petitioner, Jose Ma. Q. Austria, is hereby required to show cause within
ten (10) days from notice why he should not be held administratively liable for his acts and omissions as
aforementioned in this decision.

SO ORDERED.
 MINITA V. CHICO-NAZARIO
Associate Justice

Spouses Que v. Court of Appeals, G.R. No. 150739, August 18, 2005

FIRST DIVISION

SPOUSES BENIGNO QUE G.R. No. 150739

and ERLINDA QUE, and
ADELA URIAN,
Petitioners,
Present:

Davide, Jr., C.J.,

Chairman,
- versus - Quisumbing,
Ynares-Santiago,
Carpio, and
Azcuna, JJ.

COURT OF APPEALS,
HON. FLORENCIO A. RUIZ, JR.,
Presiding Judge, RTC Br. 24,
Cabugao, Ilocos Sur, and Promulgated:
ISABEL COSTALES,
Respondents. August 18, 2005 x-------------------------
------------------------- x

DECISION

CARPIO, J.:

The Case
 This is a petition for review[1] of the Court of Appeals’ Decision[2] dated 26 June 2001 and its
Resolution dated 8 November 2001. The 26 June 2001 Decision dismissed petitioners’ petition while the
8 November 2001 Resolution denied their motion for reconsideration.

The Facts

Since 1960, respondent Isabel Arrieta-Costales (“respondent”) has been occupying as owner a
parcel of land in Sta. Monica, Magsingal, Ilocos Sur measuring 7,033 square meters. Designated as Lot
No. 6023, the property was originally owned by one Lorenzo Cariño (“Lorenzo”) who died in 1960. In
1997, respondent declared the property in her name for taxation purposes.

Petitioner Adela Urian (“Urian”) is Lorenzo’s grandniece, being the adopted daughter of
Lorenzo’s nephew Gonzalo Cariño (“Gonzalo”), son of Lorenzo’s brother Mariano Cariño.

In February 2000, respondent filed a complaint against Urian and petitioners Benigno Que and
Erlinda Que (“spouses Que”)[3] in the Regional Trial Court, Cabugao, Ilocos Sur, Branch 24 (“trial court”)
for “Annulment of Quitclaim[,] Ownership, Possession and Damages” (“Civil Case No. 503-KC”).
Respondent claimed that she is Lorenzo’s granddaughter and as such, she inherited Lot No. 6023 from
him. Respondent sought the annulment of a Deed of Quitclaim[4] dated 17 June 1999 and a handwritten
Acknowledgment[5] dated 2 July 1999, both signed by one Isabel Arrieta (“Arrieta”). Under the Deed of
Quitclaim, Arrieta “renounce[d] all [her] rights, interests, participation, title and possession” over Lot
No. 6023 to the spouses Que while in the Acknowledgment, Arrieta confirmed receiving P30,000 from
Urian. Respondent alleged that she did not sign these documents. Respondent also prayed that the trial
court declare her owner of Lot No. 6023 and order petitioners to pay damages.

When respondent filed her Complaint, the spouses Que had taken possession of Lot No. 6023.
The spouses Que also declared the land in their name for tax purposes.

After petitioners received the complaint with the summonses on 21 March 2000, they hired
the services of one Atty. Ronnie Ranot (“Atty. Ranot”). However, Atty. Ranot failed to file petitioners’
Answer. On 4 May 2000, respondent moved to declare petitioners in default. During the hearing of
respondent’s motion on 18 May 2000, only Urian appeared and manifested that Atty. Ranot was still
preparing the Answer. The trial court found Urian’s manifestation unmeritorious and issued an Order in
open court declaring petitioners in default. In its Order of 15 June 2000, the trial court granted
respondent’s motion to present her evidence ex parte and scheduled the presentation of evidence on
20 June 2000. Respondent presented her evidence accordingly, and the case was submitted for
judgment.

The Trial Court’s Ruling

On 6 September 2000, the trial court rendered judgment in respondent’s favor, the dispositive
portion of which provides:

WHEREFORE, decision is hereby rendered in favor of the plaintiff and against the
defendants, as follows:
 1. Adjudging the plaintiff as the true and absolute owner of Lot 6023, located
at Brgy. Sta. Monica, Magsingal, Ilocos Sur and entitled to the exclusive
possession thereof;

2. Declaring the Deed of Quitclaim and the Acknowledgment Letter/Receipt of

no legal force and effect whatsoever and ordering the de[f]endant [s]pouses
Benigno and Erlinda Que to vacate the land and restore the peaceful
possession thereof to the plaintiff;

3. Ordering the Municipal Assessor of Magsingal, Ilocos Sur to recall/[cancel]

the Tax Declaration in the name of [s]pouses Benigno and Erlinda Que and
to restore the tax declaration in the name of plaintiff Isabel Costales; and

4. Ordering the defendants, jointly and severally to pay plaintiff, P10,000.00 as

and for [a]ttorney’s fees, P50,000.00 as moral damages, P5,000.00 as
exemplary damages and the costs of this suit.[6]

Urian received a copy of the trial court’s Decision on 15 September 2000. The records do not show
when the spouses Que received theirs. On 10 October 2000, petitioners, through a new counsel, Atty.
Benjamin Bateria (“Atty. Bateria”), sought reconsideration or new trial. Petitioners blamed their
previous counsel for the non-filing of their Answer. Petitioners attached to their motion a Deed of
Adjudication With Sale in which Urian, as alleged sole heir of Gonzalo, adjudicated to herself Lot No.
6023 and sold it to the spouses Que. Petitioners claimed that in his last will and testament, Lorenzo
devised Lot No. 6023 to Gonzalo.

The trial court denied petitioners’ motion in its Order of 17 November 2000. The trial court held
that as to Urian, its Decision had become final because although she received a copy of its Decision on
15 September 2000, the motion for reconsideration or new trial was filed only on 10 October 2000. As
to the spouses Que, the trial court held that the motion was pro forma since no affidavit of merit
accompanied the motion. Nor did the trial court find merit in the Deed of Adjudication With Sale. The
trial court noted that during the conciliation proceedings at the Office of the Municipal Mayor of
Magsingal, Ilocos Sur, the spouses Que relied solely on the Acknowledgment and Deed of Quitclaim as
basis for their claim of ownership of Lot No. 6023. [7]
On 18 December 2000, petitioners, represented this time by one Atty. Oliver Cachapero (“Atty.
Cachapero”), filed with the trial court a petition for relief from judgment under Rule 38 of the 1997
Rules of Civil Procedure (“Rules”). Petitioners claimed that their failure to file an Answer and to seek
reconsideration or new trial on time was due to the excusable negligence of their previous counsels.
Petitioners also invoked “mistake and fraud” as they were allegedly under the impression that Atty.
Ranot had prepared and filed “the necessary pleading or that the necessary pleading to vacate the
judgment and secure new trial was prepared xxx and filed xxx.” This time, petitioners submitted a joint
affidavit of merit where they again invoked the Deed of Adjudication With Sale.

In its Order of 27 December 2000, the trial court denied the petition for relief from judgment. The
trial court held that the negligence of their counsels bound petitioners. On the Deed of Adjudication
With Sale, the trial court reiterated its finding in the Order of 17 November 2000 (denying petitioners’
motion for reconsideration or new trial) that it has no merit.[8]

Petitioners filed a petition for certiorari in the Court of Appeals to set aside the trial court’s 27
December 2000 Order. Petitioners contended that: (1) the trial court should have required respondent
to file an Answer to their petition instead of dismissing it outright; (2) their previous counsels’
negligence denied them due process hence they should not be bound by it; and (3) the Deed of
Quitclaim is not incompatible with the Deed of Adjudication With Sale as the former merely
“strengthens” the spouses Que’s ownership of Lot No. 6023.[9]

The Court of Appeals’ Ruling

In its Decision of 26 June 2001, the Court of Appeals denied due course to and dismissed
petitioners’ petition. The Court of Appeals held that the trial court did not err in outrightly dismissing
the petition for relief from judgment for insufficiency in form and substance under Section 4, Rule 38.
The appellate court further held that petitioners filed their petition for relief from judgment beyond the
60-day period under Section 3, Rule 38. The Court of Appeals also noted that the Rules allow a petition
for relief from judgment only when there is no other available remedy and not when litigants, like
petitioners, lose a remedy by negligence.

On petitioners’ claim that their counsels’ negligence should not bind them, the Court of Appeals
held:

The Petitioners heaped vituperation on their counsel for the latter’s ineptitude
and betrayal of Petitioners[’] trust and confidence for not filing the appropriate
pleading to relieve the Petitioners of their having been declared in default. But then,
the Petitioners were not themselves blameless. They were duty-bound to make
periodic inquiries from their counsel o[n] the status of their case and as to whether the
appropriate pleading had already been filed and the resolution of the Respondent
Court, if any, on their pleadings xxx. If the Petitioners failed to do so and, as it turned
out, their counsel failed to prepare and file the appropriate pleading, then the
Petitioners cannot complain. They are bound by their ineptitude as well as their
counsel’s. xxx

It bears stressing that the Respondent Court came out with its Decision only on
September 6, 2000 or after the lapse of more than three (3) months after it issued its
Order [of 18 May 2000] declaring the Petitioners in default. In fine, the Petitioners had
more than ample time to file the appropriate pleadings before the appropriate Court. [10]

Hence, this petition.[11] Petitioners contend that —

(I) Respondent Court of Appeals committed grave abuse of discretion in the

appreciation of facts and failed to appreciate that [the] Petition for Relief from
 judgment arose from a default order taken against petitioners due to [the]
negligence of petitioners[’] counsel; [and]

(II) Respondent Court of Appeals fail[ed] to notice certain relevant facts that will justify
a different conclusion that petitioners should not lose their case and [their]
property through technicality.[12]

In reversal of their earlier stance in the Court of Appeals, petitioners no longer question the
procedure the trial court followed in denying their petition for relief from judgment. Instead, they
now claim that since that petition was an “offshoot” of the trial court’s Order declaring them in
default for their counsel’s negligence, petitioners seek excuse from such negligence to avoid being
deprived of property without due process of law. Petitioners also raise new matters regarding the
merits of the trial court’s Decision of 6 September 2000.[13]

The Issue

The issue is whether the Court of Appeals erred in dismissing petitioners’ petition.

The Court’s Ruling

The petition has no merit.

Petitioners are not Entitled to Relief from Judgment

The Court of Appeals did not err in ruling that petitioners are not entitled to relief from
judgment because their petition was insufficient in form and substance, filed late, and improperly
availed of.

Petitioners Failed to Prove Fraud,

Mistake, or Excusable Negligence

Under Section 1, Rule 38[14] (“Section 1”), the court may grant relief from judgment only
“[w]hen a judgment or final order is entered, or any other proceeding is taken against a party in any
court through fraud, accident, mistake, or excusable negligence xxx.” In their petition for relief from
judgment in the trial court, petitioners contended that judgment was entered against them through
“mistake or fraud” because they were allegedly under the impression that Atty. Ranot had prepared and
filed “the necessary pleading.” This is not the fraud or mistake contemplated under Section 1. As used in
that provision, “mistake” refers to mistake of fact, not of law, which relates to the case. [15] “Fraud,” on
the other hand, must be extrinsic or collateral, that is, the kind which prevented the aggrieved party
from having a trial or presenting his case to the court.[16] Clearly, petitioners’ mistaken assumption that
Atty. Ranot had attended to his professional duties is neither mistake nor fraud.

On the other hand, what petitioners appear to be claiming in this petition is that this Court
should reverse the Court of Appeals and remand the case to the trial court for new trial on the ground
that their previous counsels’ negligence constitutes “excusable negligence” under Section 1.

This claim is similarly without merit.

Under Section 1, the “negligence” must be excusable and generally imputable to the party
because if it is imputable to the counsel, it is binding on the client. [17] To follow a contrary rule and allow
a party to disown his counsel’s conduct would render proceedings indefinite, tentative, and subject to
reopening by the mere subterfuge of replacing counsel. [18] What the aggrieved litigant should do is seek
administrative sanctions against the erring counsel and not ask for the reversal of the court’s ruling. [19]

Petitioners nevertheless seek exemption from the above rule because their counsels’
negligence allegedly deprived them of their day in court and, if the ruling of the Court of Appeals
stands, they will suffer deprivation of property without due process of law.

Admittedly, this Court has relaxed the rule on the binding effect of counsel’s negligence and
allowed a litigant another chance to present his case “(1) where [the] reckless or gross negligence of
counsel deprives the client of due process of law; (2) when [the rule’s] application will result in outright
deprivation of the client’s liberty or property; or (3) where the interests of justice so require.” [20]

None of these exceptions obtains here.

For a claim of counsel’s gross negligence to prosper, nothing short of clear abandonment of the
client’s cause must be shown.[21] Here, what petitioners’ first, second, and third counsels did was fail to
file the Answer, file a belated and defective motion for reconsideration or new trial, and belatedly and
erroneously file a petition for relief from judgment, respectively. While these acts and omissions can
plausibly qualify as simple negligence, they do not amount to gross negligence to justify the annulment
of the proceedings below.

In Legarda v. Court of Appeals,[22] where the Court initially held that the counsel’s failure to file
pleadings at the trial court and later on appeal amounted to gross negligence, the Court, on
respondent’s motion, granted reconsideration and applied the general rule binding the litigant to her
counsel’s negligence. The Court noted that the proceedings which led to the filing of the petition in that
case “were not attended by any irregularity.” The same observation squarely applies here. Neither can
petitioners rely on Boyer-Roxas v. Court of Appeals[23] because there, as here, the Court held that the
petitioners’ counsel was not grossly negligent.

Nor were petitioners denied procedural due process. In essence, procedural due process is
simply the opportunity to be heard.[24] Petitioners were afforded such opportunity. Thus, petitioners
were served a copy of the complaint and the summonses and given 15 days to file their Answer. While
there is no showing from the records when petitioners received their copy of the 18 May 2000 Order
declaring them in default, there is no dispute that Urian was present at the hearing when the trial court
issued that Order in open court. Petitioners were also served a copy of the trial court’s Decision of 6
September 2000 from which they had 15 days to appeal, seek reconsideration, or new trial. Indeed,
petitioners filed a motion for reconsideration or new trial albeit belatedly and without complying with
proper formalities. Plainly, there was no denial of due process to petitioners.

But even assuming that the lapses of petitioners’ counsels amount to gross negligence denying
petitioners their day in court, petitioners’ contention that if we sustain the Court of Appeals they will be
deprived of property is baseless.

The spouses Que anchor their claim of ownership to Lot No. 6023 on the Deed of Adjudication
With Sale Urian executed in their favor and on the Deed of Quitclaim. [25] Urian’s claim of ownership
over Lot No. 6023 is in turn based on Lorenzo’s alleged testamentary disposition devising Lot No.
6023 to her adoptive parent, Gonzalo. As proof of such testamentary disposition, petitioners submitted
an affidavit,[26] dated 20 October 1940, of Lorenzo’s sister Eusebia Cariño (“Eusebia”).
The Court finds Eusebia’s affidavit insufficient to support petitioners’ claims.

Under the Spanish Civil Code, the law governing Lorenzo’s alleged will, all wills must be
executed in writing[27] except when the testator takes part in any military operation or when any
warlike operation is imminent[28] or when the testator[29] is in danger of shipwreck.[30] In such cases, the
testator can execute the will orally in the presence of at least two witnesses. [31] Failure to comply with
these formalities renders the will void. [32] Furthermore, the Code of Civil Procedure requires that wills
must be submitted to the proper court for probate otherwise the same shall not pass either real or
personal property.[33]

Here, petitioners neither presented a copy of Lorenzo’s will nor proved its oral execution under
the circumstances provided in the Spanish Civil Code. Petitioners similarly make no claim that Lorenzo’s
will was allowed in probate. Thus, not only is there no proof that Lorenzo executed a will, there is also
no basis to hold that such will, if indeed executed, passed Lot No. 6023 to Gonzalo. Significantly,
Eusebia did not state in her affidavit that Lorenzo executed a will. What Eusebia stated was that
Lorenzo “instructed” (inbilin) that Lot No. 6023 should be inherited by Gonzalo. This, if any, merely
indicates Lorenzo’s intent to devise that piece of realty to Gonzalo but does not prove his execution of a
will instituting Gonzalo as heir to Lot No. 6023.

On the Deed of Quitclaim, the Court finds no reason to disturb the trial court’s finding that
respondent’s signature in that document was forged.

In contrast, respondent has been in continuous possession of Lot No. 6023 in the concept of
an owner after Lorenzo died in 1960 until the spouses Que removed her from that property shortly
before respondent filed her complaint in February 2000. While it does not appear that respondent had
registered the land in her name, her uninterrupted possession of Lot No. 6023 for nearly 40 years
(beyond the 30-year extraordinary acquisitive prescription[34]), coupled with the performance of acts of
ownership, such as payment of real estate taxes, suffices to prove her ownership by prescription. [35]

The Petition for Relief from Judgment

was Filed Out of Time
 Aside from petitioners’ failure to prove any of the grounds for granting relief from judgment, they
also sought relief belatedly. We quote with approval the Court of Appeals’ ruling:
[T]he “Petition for Relief” filed by the Petitioners with the Respondent Court
was filed beyond the reglementary period provided for in Section 3, Rule 38 of the Rules
of Court, quoted, infra:

“SEC. 3. Time for filing petition; contents and verification. – A

petition provided for in either of the preceding sections of this Rule
must be verified, filed within sixty (60) days after the petitioner learns
of the judgment, final order, or other proceeding to be set aside, and
not more than six (6) months after such judgment or final order was
entered, or such proceeding was taken; and must be accompanied with
affidavits showing the fraud, accident, mistake, or excusable negligence
relied upon, and the facts constituting the petitioner’s good and
substantial cause of action or defense, as the case may be. xxx

As stated in the Order of the Respondent Court, xxx the Petitioner Adela Urian
received a copy of the Decision of the Respondent [Court], on September 15,
2000. Indeed, on the face of the Petition, the Petitioners admitted that the Petitioner
Adela Urian received a copy of the Decision of the Respondent Court on said
date. However, the said Petitioner filed her “Petition for Relief” with the Respondent
Court only on December 18, 2000. By then, the sixty (60)-day period provided for under
the said Rule had already elapsed. Case law has it that the periods provided for by the
Rules are fixed, inextendible and never interrupted and if the Petition is filed beyond the
period provided for by the Rules, the Petition cannot be entertained and must be
dismissed[.]

xxx

While it may be true that the Petitioner Adela Urian filed, on October 12, 2000 a
“Motion for Reconsideration and New Trial”, however, the same did not suspend the
running of the period under Rule 38 of the Rules of Court because it was filed beyond
the period therefor[.] xxx

Insofar as the Petitioners Benigno Que, et al., are concerned, they merely alleged,
in their Petition, that they received a copy of the Decision of the Respondent at a much
later date than September 15, 2000 without, however, specifying the date when they, in
fact, received the Decision of the Respondent Court[.]

xxx

We are not impervious [to] the claim of the Petitioners Benigno Que, in their
“Joint Affidavit of Merit” that they filed their “Petition for Relief from Judgment”
seasonably. But such an allegation is merely a conclusion and not a sufficient showing
that their Petition was filed within the period provided for in Rule 38 of the
Rules.[36] (Emphasis in the original)
Relief from Judgment not Proper

Lastly, as an equitable remedy, a petition for relief from judgment is available only as a last
recourse, when the petitioner has no other remedy.[37] This is not true here because petitioners had at
their disposal other remedies which they in fact availed of, albeit belatedly or defectively, such as when
they filed their motion for reconsideration or new trial in the trial court. As the Court of Appeals held:

[A] “Petition for Relief from Judgment” is not a general utility tool in the
procedural workshop. The relief granted under Rule 38 of the Rules of Court is of
equitable character and is allowed only when there is no other available or adequate
remedy. It is not regarded with favor. The judgment rendered will not be disturbed
where the complainant has or by exercising proper diligence would have had an
adequate remedy at law. If the complainant lost a remedy at law from an adverse
judgment by his xxx negligence, such inequitable conduct precludes him from relief
under Rule 38 of the Rules of Court.[38] xxx

On the New Matters Petitioners Raise

On petitioners’ allegations concerning the merits of the trial court’s Decision of 6 September
2000, petitioners are barred from doing in this appeal what they failed to do in the trial court, that
is, present their case. In any event, none of petitioners’ contentions has merit. [39]

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 26 June 2001 and the
Resolution dated 8 November 2001 of the Court of Appeals.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice
Newly Discovered Evidence

Ybiernas v. Gabaldon, G.R. No. 178925, June 1, 2011

Republic of the Philippines

Supreme Court
Manila

SECOND DIVISION

MANUEL YBIERNAS, VICENTE YBIERNAS, G.R. No. 178925

MARIA CORAZON ANGELES, VIOLETA
YBIERNAS, and VALENTIN YBIERNAS, Present:
Petitioners,
CARPIO, J.,
- versus - Chairperson,
NACHURA,
ESTER TANCO-GABALDON, MANILA BAY PERALTA,
SPINNING MILLS, INC., and THE SHERIFF OF ABAD, and
THEREGIONAL TRIAL COURT OFPASIG CITY, MENDOZA, JJ.
BRANCH 163,
Respondents. Promulgated:

June 1, 2011

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This petition for review on certiorari assails the Court of Appeals (CA) Resolutions [1] dated
January 31, 2007 and July 16, 2007. The assailed Resolutions granted respondents’ motion for new
trial of a case for quieting of title and damages, decided in petitioners’ favor by the trial court in a
summary judgment.
 The facts of the case are, as follows:

Estrella Mapa Vda. de Ybiernas (Estrella) owned a parcel of land located in Talisay, Negros
Occidental, and covered by Transfer Certificate of Title (TCT) No. T-83976. On April 28, 1988,
Estrella executed a Deed of Absolute Sale [2] over the property in favor of her heirs, Dionisio
Ybiernas (Dionisio) and petitioners Manuel Ybiernas, Vicente Ybiernas, and Maria Corazon Angeles.

On June 30, 1989, the Regional Trial Court (RTC), Branch 47, Bacolod City issued an Order in
Cadastral Case No. 10, LRC (G.L.R.O.) Rec. No. 97, Lot 713-C-B, Psd-220027, Talisay Cadastre,
directing the registration and annotation of the Deed of Absolute Sale on the title. Thus, on July 5,
1989, the Deed of Absolute Sale and the said RTC Order were annotated on the title, as follows:

Entry No. 334150; Order; Dionisio M. Ybiernas; Order issued by the RTC of
Negros Occ. to register and annotate the deed of sale on this title without need of
presenting the owner’s duplicate. Date of order-June 30, 1989; Date of prescription-
July 5, 1989 at 10:45 a.m.

Entry No. 334151; Sale; Dionisio Ybiernas, et al; Deed of absolute sale of this
property for the sum of P650,000.00 in favor of Dionisio Ybiernas, Vicente M.
Ybiernas, Manuel M. Ybiernas and Maria Corazon Y. Angeles in undivided equal
share to each; doc. no. 437, page 89, book VI, series of 1988 of the not. reg. of Mr.
Indalecio P. Arriola of Iloilo City. Date of instrument-April 28, 1988; Date of
inscription-July 5, 1989 at 10:45 a.m.[3]

On October 29, 1991, respondents Ester Tanco-Gabaldon and Manila Bay Spinning Mills, Inc.
filed with the RTC of Pasig City a Complaint [4] for sum of money and damages, amounting
to P6,000,000.00, against
Estrella and three other individuals. The Complaint alleged that the defendants were guilty of fraud
when they misrepresented to herein respondents that they own a parcel of land in Quezon City, and
that the title over the said property is free from liens and encumbrances.

Upon respondents’ motion, the Pasig City RTC, in an Order [5] dated November 6, 1991, ordered
the issuance of a writ of preliminary attachment upon filing of a bond. The sheriff issued the
corresponding writ of attachment and levied the subject property. [6] On November 13, 1991, the
notice of attachment was annotated on TCT No. T-83976 as Entry No. 346816.[7]

When Estrella’s heirs learned about the levy, Dionisio filed, on January 14, 1992, an Affidavit of
Third-Party Claim, asserting the transfer of ownership to them. [8] Respondents, however, filed an
indemnity bond; thus, the sheriff refused to lift the levy.

The Pasig City RTC resolved the Complaint for sum of money in favor of respondents, and
Estrella, et al. were ordered to pay P6,000,000.00, plus legal interest and damages. Respondents,
however, elevated the case all the way up to this Court, questioning the interest rate. This Court
eventually denied the appeal in a Minute Resolution dated November 20, 2002, which became final
and executory on April 14, 2003.[9]
 In the meantime, Dionisio died and was succeeded by his heirs, petitioners Valentin Ybiernas
and Violeta Ybiernas.

On November 28, 2001, petitioners filed with the RTC of Bacolod City a Complaint for Quieting
of Title and Damages,[10]claiming that the levy was invalid because the property is not owned by any
of the defendants in the Pasig City RTC case. They averred that the annotation of the RTC Order and
the Deed of Absolute Sale on TCT No. T-83976 serves as notice to the whole world that the property
is no longer owned by Estrella.

In their Answer with Counterclaims,[11] respondents contended that (a) the case constituted an
interference in the proceeding of the Pasig City RTC, a co-equal court; (b) petitioners should have
filed their claims against the indemnity bond filed by respondents; and (c) petitioners were guilty of
forum-shopping, considering that the case actually sought a relief similar to the third-party claim.

During pre-trial, the parties admitted, among others, the “[e]xistence of the Order dated June
30, 1989 by RTC Branch 47,Bacolod City, in Cad. Case No. 10 concerning the same TCT No. T-
83976.”[12]

On July 30, 2004, petitioners filed a motion for summary judgment. The RTC initially denied
the motion in the Order dated December 23, 2004. [13] Upon petitioners’ motion for reconsideration,
the RTC granted the motion for summary judgment in the decision [14] dated December 27, 2005.
The RTC made the following pronouncement:

A consideration of the issues defined by the parties during the pre-trial x x x

shows quite clearly that they are issues that may already be properly resolved now
at this stage of the proceedings in this case, as they, other than the amount of
damages, are quite apparently pure questions of law, the factual antecedents for
these issues having already been admitted by the parties.

As to issue No. 1 [whether ownership has been transferred to petitioners], it is

a fact well-established, as admitted by the parties and shown by the annotation as
Entry No. 334151 on said TCT No. T-8[39]76, that the said Deed of Absolute Sale,
dated April 28, 1988 over the subject property by Estrella Mapa Vda. de Ybiernas in
favor of Dionisio Ybiernas, Vicente Ybiernas, Manuel Ybiernas and Maria Corazon Y.
Angeles, was validly annotated as such Entry No. 334151, inscribed on July 5, 1989,
on said TCT No. T-83976 registered in the name of Estrella M. Ybiernas.

Neither the defendants nor anyone else has challenged the validity of the
judicial proceedings before RTC, Branch 47, BacolodCity, which issued in Cadastral
Case No. 10, the said Order dated June 30, 1989, which directed the registration and
annotation of the said Deed of Absolute Sale dated April 28, 1988 on said TCT No. T-
83976, and which led to the annotation under said Entry No. 334151 on said TCT
No. T-83976.[15]

Thus, the dispositive portion of the December 27, 2005 RTC decision reads:

WHEREFORE, except as to the amount of damages, a summary judgment is

hereby rendered in favor of the plaintiffs and against the defendants, and as prayed
for by the plaintiffs in their complaint:
 1. The levy on attachment made by herein defendant Sheriff of
RTC, Branch 163, Pasig City on said TCT No. T-83976, issued by
the Registrar of Deeds of the Province of Negros Occidental,
covering the Subject Property, is hereby DECLARED INVALID;
and, consequently,

2. Entry No. 346816 on the same TCT No. T-83976 is hereby

CANCELLED and DISSOLVED.

SO ORDERED.[16]

Respondents filed a notice of appeal,[17] and it was granted by the RTC.

While the appeal was pending in the CA, respondents filed a motion for new trial, [18] claiming
that they have discovered on May 9, 2006 that Cadastral Case No. 10 did not exist and the April 28,
1988 Deed of Sale was simulated. Attached to the motion were the affidavit [19] of Atty. Gerely C.
Rico, who conducted the research in Bacolod City in behalf of the law office representing
respondents, and the following certifications:

a. Certification dated 09 May 2006 issued by Ildefonso M. Villanueva, Jr., Clerk of

Court VI of the RTC of Bacolod City, stating that: “no cadastral case
involving Lot 713-C-1-B, Psd-220027, Talisay Cadastre, was filed with this office
sometime on 30 June 1989 and raffled to Branch 47 of this court which was then
presided by Judge Enrique T. Jocson.”[20]

b. Certification dated 09 May 2006 issued by Atty. Mehafee G. Sideno, Clerk of

Court V of the RTC of Bacolod City, Branch 47, stating that: “as per records of
this court, no Cadastral Case No. 10, LRC, GLRO Rec. 97, Lot No. 713-C-1-B, Psd
220027, filed by Dionisio Ybiernas was filed and docketed in this office.” [21]

c. Certification dated 11 July 2006 issued by Estrella M. Domingo, OIC Archives

Division of the National Archives Office, stating that: “no copy is on file with this
Office of a DEED OF SALE allegedly executed by and among ESTRELLA MAPA
VDA. DE YBIERNAS, DIONISIO YBIERNAS, VICENTE M. YBIERNAS, JR., MANUEL
YBIERNAS and MARIA CORAZON ANGELES, ratified on April 28, 1988 before
INDALECIO P. ARRIOLA, a notary public for and within Iloilo City and
acknowledged as Doc. No. 437; Page No. 89; Book No. VI; Series of 1988.”[22]

Respondents argued that they have satisfied all the requisites for the grant of a new trial based
on newly discovered evidence: (1) they
discovered the evidence after the trial court rendered its judgment on
December 27, 2005; (2) they could not have discovered and produced the evidence during the trial
with reasonable diligence; and (3) the evidence was material, not merely cumulative, corroborative,
or impeaching, and was of such weight that, if admitted, would probably change the judgment. On
the second requisite, respondents explained that they could not have discovered the evidence with
reasonable diligence because they relied in good faith on the veracity of the RTC Order dated June
30, 1989, based on the principle that the issuance of a court order, as an act of a public officer,
enjoys the presumption of regularity. On the third requisite, respondents pointed out that, if the
nonexistence of Cadastral Case No. 10 and the invalidity of the Order dated June 30, 1989 were
allowed to be proven by the newly discovered evidence, the action for quieting of title would
probably be dismissed, as respondents’ levy would be declared superior to petitioners’ claim. [23]

In their Comment/Opposition, petitioners argued that (a) the questioned decision was a
partial summary judgment which could not be the subject of a motion for new trial; (b) the
existence of Cadastral Case No. 10 was an admitted fact which could not be questioned in a motion
for new trial; and (c) there was no newly discovered evidence that would warrant a new trial. [24]

The CA did not agree with petitioners. Hence, on January 31, 2007, it granted respondents’
motion for new trial, thus:

WHEREFORE, premises considered, the defendants-appellants having

satisfied all the elements necessary to justify the filing of a Motion for New Trial
which appears to be meritorious and in the higher interest of substantial justice, the
said motion is GRANTED. ACCORDINGLY, let a

new trial of the Quieting of Title case be held and let said case be REMANDED to the
Court a quo for said purpose.

SO ORDERED.[25]

At the outset, the CA noted that the RTC summary judgment was a proper subject of an
appeal because it was a final adjudication on the merits of the case, having completely disposed of
all the issues except as to the amount of damages. The CA concluded that respondents properly
availed of a motion for new trial because such remedy could be availed of at any time after the
appeal from the lower court had been perfected and before the CA loses jurisdiction over the case.
According to the CA, respondents were able to show that they obtained the new evidence only after
the trial of the case and after the summary judgment had been rendered. The CA also held that
respondents never admitted during the pre-trial the existence of Cadastral Case No. 10; they only
admitted the existence of the Order dated June 30, 1989 in Cadastral Case No. 10.

On July 16, 2007, the CA denied petitioners’ motion for reconsideration. [26]

Petitioners subsequently filed this petition for review on certiorari, raising the following
issues:

A.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN RULING THAT

THE QUESTIONED DECISION OF THE RTC IS A PROPER SUBJECT OF AN APPEAL
AND A MOTION FOR NEW TRIAL UNDER RULE 53 OF THE RULES OF COURT.

B.
 WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO
RULE THAT A MOTION FOR NEW TRIAL IS AN IMPROPER REMEDY TO QUESTION
ADMITTED FACTS.

C.

WHETHER OR NOT THE COURT OF APPEALS SERIOUSLY ERRED IN FAILING TO

RULE THAT NO NEWLY DISCOVERED EVIDENCE WAS ADDUCED TO WARRANT A
NEW TRIAL.[27]

Petitioners posit that no appeal could be taken from the trial court’s decision because it did
not completely dispose of all the issues in the case; it failed to settle the issue on damages.
Petitioners categorize the decision as a partial summary judgment, which in Guevarra, et al. v. Hon.
Court of Appeals, et al.,[28] reiterated in GSIS v. Philippine Village Hotel, Inc.,[29] the Court pronounced
as not a final and an appealable judgment, hence, interlocutory and clearly an improper subject of
an appeal. Petitioners theorize then that the appeal could not have been perfected and the CA could
not have acquired jurisdiction over the case, including the motion for new trial. Accordingly, they
conclude that the motion for new trial should have been denied outright for being violative of
Section 1,[30] Rule 53 of the Rules of Court, which provides that the motion for new trial may be filed
after the appeal has been perfected. Petitioners argue that, pursuant to Section 4, Rule 35 of the
Rules of Court, trial should proceed instead to settle the issue on damages. Petitioners point out
that the case cited by the CA in its Decision, Bell Carpets International Trading Corporation v.
Court of Appeals,[31] is not applicable to the case because, unlike in the present case, the trial
court’s ruling completely disposed of all the issues in that case.

In addition, petitioners insist that respondents already admitted the existence of Cadastral
Case No. 10 by its admission of the existence of the Order dated June 30, 1989. They maintain that
respondents cannot admit the existence of an order and yet deny the existence of the proceedings
from which the order emanates. Respondents’ judicial admission that the court Order existed
necessarily carried with it the admission that the cadastral proceedings where the Order was issued
likewise existed. Petitioners aver that respondents are bound by their judicial admission and they
cannot be allowed to present evidence to contradict the same.

Petitioners next argue that the purported newly discovered pieces of evidence have no
probative value. Petitioners say that the certifications are self-serving and inconclusive opinions of
court employees, who did not even indicate the period when they occupied their positions and state
whether they had the authority to issue such certifications and whether they had personal
knowledge of the documents archived during the year that the deed of sale was executed. According
to petitioners, the certifications cannot overcome the presumption of regularity in the issuance of
the Order dated June 30, 1989. At most, the certifications would simply show that the records of
Cadastral Case No. 10 could no longer be found in the records; hence, they would have no bearing
on the result of the case.

Petitioners also emphasize that respondents failed to meet the burden of proving that the
newly discovered pieces of evidence presented comply with the requisites to justify the holding of a
new trial. They contend that respondents could have discovered and presented in court the
certifications during trial had they exercised reasonable diligence.
Petitioners’ arguments are untenable.
 The issue of whether the RTC judgment is a final judgment is indeed crucial. If the judgment
were not final, it would be an improper subject of an appeal. Hence, no appeal would have been
perfected before the CA, and the latter would not have acquired jurisdiction over the entire case,
including the motion for new trial. But more importantly, only a final judgment or order, as opposed
to an interlocutory order, may be the subject of a motion for new trial.

A final judgment or order is one that finally disposes of a case, leaving nothing more for the
court to do in respect thereto, such as an adjudication on the merits which, on the basis of the
evidence presented at the trial, declares categorically what the rights and obligations of the parties
are and which party is in the right, or a judgment or order that dismisses an action on the ground
ofres judicata or prescription, for instance.[32] Just like any other judgment, a summary judgment
that satisfies the requirements of a final judgment will be considered as such.

A summary judgment is granted to settle expeditiously a case if, on motion of either party,
there appears from the pleadings, depositions, admissions, and affidavits that no important issues
of fact are involved, except the amount of damages.[33] The RTC judgment in this case fully
determined the rights and obligations of the parties relative to the case for quieting of title and left
no other issue unresolved, except the amount of damages. Hence, it is a final judgment.
 In leaving out the determination of the amount of damages, the RTC did not remove its
summary judgment from the category of final judgments. In fact, under Section 3, [34] Rule 35 of the
Rules of Court, a summary judgment may not be rendered on the amount of damages, although such
judgment may be rendered on the issue of the right to damages.[35]

In Jugador v. De Vera,[36] the Court distinguished between the determination of the amount of
damages and the issue of the right to damages itself in case of a summary judgment. The Court
elucidated on this point, thus:

[A] summary judgment may be rendered except as to the amount of damages. In

other words, such judgment may be entered on the issue relating to the existence of
the right to damages. Chief Justice Moran pertinently observes that “if there is any
real issue as to the amount of damages, the c[o]urt, after rendering summary
judgment, may proceed to assess the amount recoverable.” [37]

It is therefore reasonable to distinguish the present case from GSIS v. Philippine Village Hotel,
Inc.[38]In that case, the summary judgment specifically stated that “[t]rial on the issu[e] of damages
shall resume.” Evidently, there remained an unresolved issue on the right to damages. Here, the
trial court, in stating that “except as to the amount of damages, a summary judgment is hereby
rendered in favor of the plaintiffs and against the defendants,” had, in effect, resolved all issues,
including the right to
damages in favor of the plaintiffs (petitioners). What remained undetermined was only the amount
of damages.

On the issue of whether respondents are proscribed from presenting evidence that would
disprove the existence of Cadastral Case No. 10, we likewise sustain the CA.

A judicial admission is an admission, verbal or written, made by a party in the course of the
proceedings in the same case, which dispenses with the need for proof with respect to the matter or
fact admitted. It may be contradicted only by a showing that it was made through palpable mistake
or that no such admission was made.[39]

During the pre-trial, respondents categorically admitted the existence of the Order dated June
30, 1989 only. The Court cannot extend such admission to the existence of Cadastral Case No. 10,
considering the circumstances under which the admission was made. In construing an admission,
the court should consider the purpose for which the admission is used and the surrounding
circumstances and statements.[40] Respondents have constantly insisted that, in making the
admission, they relied in good faith on the veracity of the Order which was presented by
petitioners. Moreover, they relied on the presumption that the Order has been issued by Judge
Enrique T. Jocson in the regular performance of his duties. It would therefore be prejudicial and
unfair to respondents if they would be prevented from proving that the Order is in fact spurious by
showing that there was no Cadastral Case No. 10 before the RTC, Branch 47, of Bacolod City.
 Finally, we find that a new trial based on newly discovered evidence is warranted. New trial
is a remedy that seeks to “temper the severity of a judgment or prevent the failure of justice.” Thus,
the Rules allows the courts to grant a new trial when there are errors of law or irregularities
prejudicial to the substantial rights of the accused committed during the trial, or when there exists
newly discovered evidence.[41] The grant or denial of a new trial is, generally speaking, addressed
to the sound discretion of the court which cannot be interfered with unless a clear abuse thereof is
shown.[42]

This Court has repeatedly held that before a new trial may be granted on the ground of
newly discovered evidence, it must be shown (1) that the evidence was discovered after trial; (2)
that such evidence could not have been discovered and produced at the trial even with the exercise
of reasonable diligence; (3) that it is material, not merely cumulative, corroborative, or impeaching;
and (4) the evidence is of such weight that it would probably change the judgment if admitted. If the
alleged newly discovered evidence could have been very well presented during the trial with the
exercise of reasonable diligence, the same cannot be considered newly discovered.[43]

The only contentious element in the case is whether the evidence could have been
discovered with the exercise of reasonable diligence. In Custodio v. Sandiganbayan,[44] the Court
expounded on the due diligence requirement, thus:

The threshold question in resolving a motion for new trial based on

newly discovered evidence is whether the [proffered] evidence is in fact a “newly
discovered evidence which could not have been discovered by due diligence.” The
question of whether evidence is newly discovered has two aspects: a temporal one, i.e.,
when was the evidence discovered, and a predictive one, i.e., when should or could it
have been discovered. It is to the latter that the requirement of due diligence has
relevance. We have held that in order that a particular piece of evidence may be
properly regarded as newly discovered to justify new trial, what is essential is not so
much the time when the evidence offered first sprang into existence nor the time
when it first came to the knowledge of the party now submitting it; what is essential
is that the offering party had exercised reasonable diligence in seeking to locate such
evidence before or during trial but had nonetheless failed to secure it.

The Rules do not give an exact definition of due diligence, and whether the
movant has exercised due diligence depends upon the particular circumstances of
each case. Nonetheless, it has been observed that the phrase is often equated with
“reasonable promptness to avoid prejudice to the defendant.” In other words, the
concept of due diligence has both a time component and a good faith component. The
movant for a new trial must not only act in a timely fashion in gathering evidence in
support of the motion; he must act reasonably and in good faith as well. Due
diligence contemplates that the defendant acts reasonably and in good faith to
obtain the evidence, in light of the totality of the circumstances and the facts known
to him.[45]

As previously stated, respondents relied in good faith on the veracity of the Order dated
June 30, 1989 which petitioners presented in court. It was only practical for them to do so, if only to
expedite the proceedings. Given this circumstance, we hold that respondents exercised reasonable
diligence in obtaining the evidence. The certifications therefore qualify as newly discovered
evidence.
 The question of whether the certifications presented by respondents have any probative
value is left to the judgment and discretion of the trial court which will be hearing the case anew.

WHEREFORE, premises considered, the petition is DENIED. The Court of

Appeals Resolutions dated January 31, 2007 and July 16, 2007 are AFFIRMED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA

Associate Justice

Sec. 2. Contents of motion for new trial or reconsideration and notice thereof

Pangasinan Five Star Bus v. Spouses Barredo, G.R. No. 152714, August 10, 2006

FIRST DIVISION

PANGASINAN FIVE STAR BUS G.R. No. 152714

CO., INC.,

Petitioner,

Present:

PANGANIBAN, C.J., Chairperson,

YNARES-SANTIAGO,

- versus - AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.
SPOUSES LEON & LUISA

BARREDO, Promulgated:

Respondents.

August 10, 2006

x-----------------------------------------------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Review on Certiorari of the Decision[1] of the Court of Appeals
(CA) in CA-G.R. CV No. 60791 affirming, on appeal, the Decision of the Regional Trial Court (RTC) of
Valenzuela City in Civil Case No. 4509-2-94.

At around 10:30 a.m. on April 14, 1994, a Pangasinan Five Star Bus Co., Inc. passenger bus with
plate no. NKP 484 driven by Emilio Credo bumped the rear portion of an owner-type jeep. The driver of
the smaller vehicle, Leon Barredo, Jr., sustained serious injuries and was confined at the The Family
Clinic Hospital for acute lumbosacral strain secondary to vehicular accident. He did not fully recover and
eventually lost his job as a forklift operator with the Barber Dubai Shipping Agencies (PVT) Ltd. where he
had been earning $518.00 a month.[2]

On November 14, 1994, the spouses Leon and Luisa Barredo filed a complaint for damages before
the RTC of Valenzuela City against the bus company and Emilio Credo. The complaint was later
amended.
 After the defendants filed their Answer to the complaint, pre-trial was set on February 6, 13, 15,
22, 27 and 29, 1996, all at 8:30 a.m.[3] Several pre-trial conferences were held to give the parties the
chance to settle the case amicably, to no avail. On May 2, 1996, or after more than a year, the court
terminated pre-trial and set June 27 and July 11, 1996 as trial dates. However, this setting and
subsequent ones were cancelled, as defendants manifested their willingness to settle the case
amicably.[4]

Upon agreement of the parties, the RTC set the trial on April 22, 29 and May 8, 1997.[5] However,
the trial set on April 22, 1997 did not proceed because the defendants and their counsel failed to
appear. On plaintiffs’ motion, the court issued an Order declaring the defendants “as in default” and
allowed the plaintiffs to adduce evidence ex parte before the Acting Branch Clerk of Court.[6] Plaintiffs
presented their evidence ex parte on April 23, 1997, and among the documentary evidence adduced
were the following: the Employment Contract of Leon M. Barredo, Jr.; [7] receipts for costs of the repair
of the vehicle of plaintiffs, hospitalization and medical expenses; and the medical certificate issued to
the plaintiffs from Barredo, Jr. Thereafter, plaintiffs manifested that they were resting their case.

Barely a week thereafter, or on April 30, 1997, the RTC rendered judgment in favor of the
plaintiffs. The dispositive portion reads:

WHEREFORE, judgment is hereby rendered as follows:

1. Ordering the defendants, jointly and solidarily, to pay plaintiffs the sum
of P70,000.00 as actual damages for the repair of the owner-type jeep and medical
expenses;

2. Ordering the defendants, jointly and solidarily, to pay plaintiff Leon Barredo, Jr.
the sum of $36,080.00 in the concept of loss earnings for at least the next five (5) years
of his gainful life;

3. Ordering the defendants to pay the plaintiffs the sum of P100,000.00 as moral
damages;
 4. Ordering the defendants to pay the plaintiffs the sum of P100,000.00 as
exemplary damages;

5. Ordering the defendants to pay the plaintiffs the amount of P1,000.00 as

litigation expenses;

6. Ordering the defendants to pay the plaintiffs the amount of P10,000.00 as

attorney’s fees, plus the costs.

SO ORDERED.[8]

The trial court declared that defendants and their counsel were considered “as in default” for their
failure to appear at the trial on April 22, 1997.”[9]

On May 14, 1997, defendants filed a Motion to Lift the Order of Default alleging therein that,
since the pre-trial had been terminated as early as May 2, 1996, they could no longer be declared as in
default due to their
absence on the April 22, 1997 trial, and that, consequently, the order of the court declaring them as in
default was void. They insisted that they were not notified of the setting on April 22, 1997; besides, their
counsel’s absence was excusable because he was suffering from a recurring fever aggravated by dry
cough.[10]

The defendants further alleged that they had meritorious defenses: it was Leon Barredo, Jr. who
was reckless and negligent, thus causing the accident. In any event, the defendant bus company was not
directly liable to the plaintiffs because it had always exercised due diligence in the selection and
supervision of its employees.

Meantime, defendants received a copy of the decision of the court on May 19, 1997. They filed
an unverified motion for reconsideration thereof, maintaining that the absence of their counsel during
the April 22, 1997 trial was beyond their control. They prayed that the decision of the trial court be set
aside and, in the interest of justice, that they be allowed to cross-examine the witnesses of the plaintiff
and adduce evidence in their behalf.[11] However, defendants failed to append to their motion any
affidavit of merit.

On June 3, 1997, the RTC issued an Order[12] denying defendants’ motions. It declared that,
although defendants were erroneously declared as in default in its April 22, 1997 Order for failure to
appear at the scheduled hearing on said date, the clear import of said Order was to consider defendants
as having waived their right to be present and to allow the plaintiffs to present evidence ex parte. The
RTC clarified that the April 22, 1997 Order merely allowed the plaintiffs to present their evidence in the
absence of defendants. It also pointed out that in its Decision dated April 30, 1997 it stated that “the
plaintiffs were just allowed to present their evidence ex parte in view of the non-appearance of the
defendants and their counsel on said date of hearing.”[13]

The bus company and Credo appealed the decision, as well as the June 3, 1997 Order of the RTC,
to the CA. They alleged that the lower court gravely erred when it declared them as in default at the
initial trial of the case; it acted with apparent bias and partiality, thereby depriving them of due process
of law; and that it gravely erred in deciding the case based solely on the evidence presented by the
Barredo spouses which, however, were not even formally offered. They insisted that the trial court
acted with undue and suspicious haste when it rendered judgment barely a week after they were
declared as in default.[14]

On July 6, 2001, the CA rendered judgment dismissing the appeal, holding that the trial court had
already clarified its April 22, 1997 Order in its June 3, 1997 Order. The minutes of the proceedings
before the Branch Clerk of Court on April 23, 1997 show that the Barredo spouses formally offered their
evidence and rested their case thereafter.[15]

The aggrieved parties filed a motion for reconsideration, which the appellate court denied
on February 19, 2002.

Pangasinan Five Star Bus Co., Inc., now petitioner, forthwith filed the instant petition, seeking the
reversal of the appellate court’s ruling. The following issues are raised:

I COULD THE TRIAL COURT DECLARE DEFENDANTS AS IN DEFAULT WHEN THE

PROCEEDING WHICH DEFENDANTS FAILED TO ATTEND WAS JUST THE INITIAL HEARING
OF THE CASE AND NOT A PRE-TRIAL CONFERENCE.
 II WITH THE ERRONEOUS DECLARATION OF DEFENDANTS AS IN DEFAULT BY THE
TRIAL COURT, COUPLED WITH ITS PRECIPITATE AND HASTY ISSUANCE OF DECISION, DID
DEFENDANTS-PETITIONER LOSE THEIR STANDING IN COURT, SUCH THAT THEY COULD
NO LONGER TAKE PART IN FURTHER PROCEEDINGS IN THE COURT A QUOMUCH LESS
ADDUCE EVIDENCE IN SUPPORT OF THEIR DEFENSES;

[III] WHETHER OR NOT THE JUDGMENT BY DEFAULT ISSUED BY THE TRIAL COURT
SHOULD BE ANNULLED FOR BEING NULL AND VOID THE SAME HAVING BEEN ISSUE (SIC)
THROUGH GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF OR EXCESS OF
JURISDICTION, AND THE CASE REMANDED TO THE TRIAL COURT FOR FURTHER
PROCEEDINGS, FOR RECEPTION OF DEFENDANTS’ EVIDENCE. [16]

Petitioner reiterates its argument in the CA that the RTC erred in declaring it as in default because
the April 22, 1997 setting was for the initial presentation of respondents’ evidence, as plaintiffs therein.
It claims that while the trial court had the discretion to consider it as having forfeited its right to cross-
examine respondents or their witnesses, it retained the right to present evidence in support of its
defense. Petitioner points out that the trial court rendered judgment on April 30, 1997, or barely a week
after it was declared as in default and after respondents presented their evidence before the Branch
Clerk of Court. Petitioner asserts that the trial court’s April 22, 1997 Order declaring it as in default is
void and did not divest it of its standing in court. Petitioner thus prays that the April 22, 1997 Order of
the trial court and its Decision dated April 30, 1997 be declared void, and that the case be remanded to
the trial court for it to adduce evidence.

In their Comment on the petition, respondents aver that petitioner raised factual issues which are
improper in a petition for review on certiorari in this Court; worse, it merely reiterated its arguments in
the CA to support the instant petition. They assert that the decision of the CA is in accord with law and
the evidence on record, and that the decision of the trial court had become final and executory due to
petitioner’s failure to append an affidavit of merit in its May 14, 1997 Motion to Lift the Order of
Default.
They pointed out that respondent Leon Barredo, Jr. had not been able to recover from the injuries he
sustained from the accident and remains bedridden.

We hold that the trial court’s April 22, 1997 Order is partially void in that it erroneously declared
petitioner as in default for its representative’s failure to appear at the scheduled trial.

Under Section 2, Rule 20 of the Rules of Court, [17] a party who fails to appear at a pre-trial
conference may be non-suited or considered as in default. If the defendant is declared as in default, the
court may allow the plaintiff to present his evidence ex partebefore the Branch Clerk of Court, and,
thereafter, render judgment on the basis of the evidence of the plaintiffs. On the other hand, if the
defendant is absent during the initial trial without any justifiable reason therefor, the defendant cannot
be declared as in default for such absence. However, the court may allow the plaintiff to present his
evidence before the Branch Clerk of Court ex parte. By the absence of the defendant, he waives, not
only his right to cross-examine the plaintiff and his witnesses, but also to adduce evidence in his
behalf.[18] However, the court, in the exercise of its judicial discretion, may allow the plaintiff to present
his evidence ex parte before the Branch Clerk of Court without prejudice to the right of the defendant to
present his own evidence after the plaintiff shall have rested his case.

In this case, the pre-trial of the case had already been terminated on May 2, 1996. The court
had set the trial of the case, by agreement of the parties, on April 22, 1997. Only the respondents, as
plaintiffs, appeared at the scheduled trial of the case. The RTC thus erred in declaring the petitioner
(defendant below), as in default for the failure of its representative and counsel to appear at the trial.
This error in the April 22, 1997 Order was even admitted by the trial court in its June 3, 1997 Order.

However, we find that the portion of the April 22, 1997 Order allowing respondents (as
plaintiffs) to present their evidenceex parte before the Branch Clerk of Court is correct.

Contrary to the contention of petitioner, the trial set on April 22, 1997 was for the presentation
of the evidence of the parties. The Order of the court on February 18, 1997 postponed the setting to
April 22, 29 and May 8, 1997. There is no showing in the records that the setting on April 22, 1997 was
only for the reception of the evidence of respondents, and that the setting on April 29, 1997 was for
petitioner and its co-defendant to present their evidence. The trial court did not specifically declare in
its April 22, 1997 Order that petitioner had thereby waived its right to adduce its evidence for failure to
appear during the April 22, 1997 trial date. Indeed, there was no need for the trial court to do so, for
one is deemed to have waived the right to adduce evidence by an unexplained absence. Petitioner’s
unexplained absence raises no other logical conclusion, that is, it was no longer interested to adduce
evidence in its behalf. Petitioner’s claim that its counsel was absent due to “fever aggravated by dry
cough,” even if true, is not excusable. It bears stressing that it was represented by a law firm, and that a
member of such firm could have appeared before the RTC to ask for postponement on that ground. At
the very least, the lawyer handling the case could have informed the Branch Clerk of Court and
requested for the postponement of the hearing of the case. And even assuming that its counsel was
indisposed, petitioner should have seen to it that its representative attended the trial and requested for
such postponement. The absence of petitioner’s representative and counsel at the trial on April 22,
1997 was thus inexcusable.

We note that petitioner even failed to append to its two motions, motion to lift order of default
and motion for reconsideration of the trial court’s decision, the required affidavits to support its claim
that the absence of its representative and its counsel on April 22, 1997 was excusable and that it has
meritorious defenses. While petitioner was not required to append to its motion to set aside the order
of default on the ground that it was improper for the trial court to do so, it was nevertheless required to
append the required affidavits to the motion for reconsideration on the ground of excusable
negligence. The failure of the petitioner to append the requisite affidavits rendered the motion pro
forma and the decision final and executory. As we held in Philippine Commercial and Industrial Bank v.
Judge Rodolfo Ortiz:[19]

Two more points need be dealt with before this opinion is ended.

It is true that when fraud, accident, mistake or excusable negligence is invoked

as ground of a motion for new trial, it should “be proved in the manner provided for
proof of motions,” i.e., by “affidavits or depositions” unless the court should direct that
“the matter be heard wholly or partly on oral testimony or depositions.” It is also
required that “affidavits of merits” be attached to the motion. A motion for new trial
grounded on fraud, accident, mistake or excusable negligence should thus ordinarily be
accompanied by two (2) affidavits: one, setting forth the facts and circumstances alleged
to constitute such fraud, accident, mistake, or excusable negligence; and the other, an
affidavit of merits, setting forth the particular facts claimed to constitute the movant’s
meritorious cause of action or defense. The reason for the first is quite obvious: it is to
enable the court to determine if the movant’s claim of fraud, etc., is not a mere
conclusion but is indeed borne out of the relevant facts. The reason for the second is
equally evident: it would be useless, a waste of time, to set aside the judgment and
reopen the case to allow the movant to adduce evidence when he has no valid cause of
action or meritorious defense.
 Where, therefore, a motion for new trial on the ground of fraud, etc., is
unaccompanied by either or both affidavits, the motion ispro forma a scrap of paper, as
it were, and will not interrupt the running of the period of appeal. x x x[20]

Petitioner even failed to append to its petition a copy of its Answer to the Complaint and
Amended Complaint of the respondents.

Considering the foregoing, the Court finds it unnecessary to still resolve the other issues raised
by petitioner.

WHEREFORE, the petition is DENIED. Costs against the petitioner.

 SO ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

Tan v. Court of Appeals, G.R. No. 130314, September 22, 1998 (Supra.)

FIRST DIVISION

[G.R. No. 130314. September 22, 1998]

ANNIE TAN, petitioner, vs. COURT OF APPEALS and BLOOMBERRY EXPORT MANUFACTURING,
INC.,respondents.

DECISION
PANGANIBAN, J.:

Before a trial court, a motion for reconsideration that does not contain the requisite notice of
hearing does not toll the running of the period of appeal. It is a mere scrap of paper which the trial
court and the opposite party may ignore.

The Case

Petitioner seeks to set aside the August 22, 1997 Decision of the Court of Appeals [1] in CA-GR SP No.
43293, the dispositive portion of which reads:[2]

“WHEREFORE, [i]n view of all the foregoing considerations, the petition for certiorari and prohibition is
granted. The Order dated October 4, 1996, of public respondent is hereby SET ASIDE and public
respondent is ordered to desist from further proceeding with the hearing of the Motion for
Reconsideration. The Decision dated July 18, 1996, of public respondent is declared final and
executory.”
The Facts

Petitioner Annie Tan, doing business under the name and style “AJ & T Trading,” leased a portion of
the ground floor of her building, more specifically described as Stall No. 623, Carvajal Street, Binondo,
Manila, in favor of Bloomberry Export Manufacturing, Inc. The lease was for a period of five years
starting on February 17, 1995 and ending on February 17, 2000, at a monthly rental of P20,000 for the
first three years.[3] For several alleged violations of the lease contract, petitioners filed against private
respondent a complaint for ejectment, docketed as Civil Case No. 148798-CV.[4]As its rental payment
was refused by petitioner, private respondent instituted on July 13, 1995 a case for consignation,
docketed as Civil Case No. 148814-CV.[5]
The two cases were consolidated. In due course, the Metropolitan Trial Court (MTC) of Manila,
Branch I, rendered on February 1, 1996 a Decision[6] which disposed as follows:[7]

“WHEREFORE, in Civil Case No. 148798-CV for [b]reach of [c]ontract, failure to pay rentals on time,
encroachment on the adjacent premises without the consent of [petitioner], [she] failed to substantiate
her case with that degree of proof required by law. For this reason, except for the costs of suit, this
Court hereby orders the dismissal of the complaint of [petitioner]. The counterclaim and damages
sought by [private respondent are] likewise ordered dismissed. The case for consignation in Civil Case
No. 148814-CV has become moot and academic for failure of [petitioner] to appeal the decision of the
Metropolitan [Trial] Court, Branch 15, Manila, allowing the [private respondent] to consign rental
payments to the Court of Manila. Besides, the [c]omplaint for consignation being in conformity with
law, [private respondent] is allowed to continue consigning with this Court all rentals that [may be]
due.”

On appeal, the Regional Trial Court (RTC) of Manila, Branch 2, in its Decision dated July 18, 1996,
affirmed the aforementioned MTC Decision thus:

“WHEREFORE, finding no cogent reasons to disturb the joint decision dated February 1, 1996 of the
Metropolitan Trial Court of Manila, Branch 1, the Court sustains and affirms in toto the said decision.”

Respondent Court related the incidents that ensued, as follows: [8]

“xxx [F]rom the Decision of the [RTC] dated July 18, 1996, [petitioner] filed a Motion for Reconsideration
of the aforesaid decision. The Motion for Reconsideration did not contain any notice of hearing as
required under Section 5, Rule 15 of the Revised Rules of Court.

“On August 23, 1996, [private respondent] filed an ex-parte Motion for Entry of Judgment upon the
ground that said motion for reconsideration is a mere scrap of paper which should not merit the
attention of the [RTC] and in support thereof, cited the case of Traders Royal Bank vs. Court of
Appeals, 208 SCRA 199. [Private respondent] contends that since the Motion for Reconsideration is a
mere scrap of paper aside from being pro forma, said Motion for Reconsideration did not toll the period
of appeal[;] hence, the Decision dated July 18, 1996, had become final and executory.

"On September 3, 1996, [petitioner] filed a Motion to Set for Hearing the Motion for Reconsideration
which was vehemently opposed by [private respondent] on September 23, 1996.
“On October 4, 1996, [the RTC] issued an Order granting the motion to set for hearing [petitioner’s]
Motion for Reconsideration and set[ting] the hearing [for] October 21, 1996, at 8:30 o’clock in the
morning. On October 20, 1996, [private respondent] filed a Motion for Reconsideration of the Order
dated October 4, 1996, which was set for hearing on October 25, 1996.

“On November 11, 1996, [the RTC] issued an Order denying [private respondent’s] Motion for
Reconsideration. Hence, the Petition for Certiorari and Prohibition. xxx.”

In the assailed Decision, Respondent Court of Appeals reversed the trial court’s Order setting for
hearing petitioner’s Motion for Reconsideration.

The Ruling of the Court of Appeals

Respondent Court held that the trial court acted with grave abuse of discretion in setting for
hearing petitioner’s Motion for Reconsideration, notwithstanding the fact that said Motion contained no
notice of hearing.
Citing a litany of cases, it ruled that petitioner’s failure to comply with the mandatory provisions of
Sections 4 and 5, Rule 15 of the Rules of Court, reduced her motion to a mere scrap of paper which did
not merit the attention of the court. Respondent Court also held that those cases in which the Court
allowed a motion for reconsideration that had not been set for hearing -- Galvez v. Court of
Appeals,[9] Tamargo v. Court of Appeals[10] and Que v. Intermediate Appellate Court[11]-- were
inapplicable.
Respondent Court held that the facts in Galvez drastically differ from those in the present
case. Galvez involved a motion to withdraw the information -- not a motion for reconsideration -- that
was filed ex parte before the arraignment of the accused. In that case, the Court held that there was no
imperative need of notice and hearing because, first, the withdrawal of an information rests on the
discretion of the trial court; and, second, the accused was not placed in jeopardy. On the other hand,
the subject of the present controversy is a motion for reconsideration directed against the Decision of
the RTC; thus, the motion affects the period to perfect an appeal.
Que is not applicable, either. In said case, the trial court set the Motion for Reconsideration (MR)
for hearing, which was actually attended by the counsel for the adverse party. This was not so in the
case at bar; petitioner’s MR was set for hearing, because she belatedly moved for it upon the filing of
private respondent’s Motion for Entry of Judgment. Likewise, the present case differs from Tamargo,
wherein the application of the aforesaid mandatory provisions was suspended. The Court did so in
order to give substantial justice to the petitioner and in view of the nature of the issues raised which
were found to be highly meritorious.
Hence, this petition.[12]

The Issue

In her Memorandum,[13] petitioner presents a fairly accurate statement of the main issue to be
resolved:[14]
 “Whether xxx the omission [through] inadvertence of a notice of hearing of a motion for
reconsideration filed with the trial court xxx is a fatal defect which did not stop the running of
the period to appeal[,] thus rendering the assailed decision final [and] executory.”

The Court’s Ruling

The petition is devoid of merit.

Sole Issue:
Omission of Notice of Hearing Fatal

Petitioner admits the categorical and mandatory character of the directives in Sections 4 and 5 of
Rule 15 of the Rules of Court, which read:[15]

“SEC. 4. Hearing of motion.—Except for motions which the court may act upon without prejudicing the
rights of the adverse party, every written motion shall be set for hearing by the applicant.

“Every written motion required to be heard and the notice of the hearing thereof shall be served in such
a manner as to ensure its receipt by the other party at least three (3) days before the date of hearing,
unless the court for good cause sets the hearing on shorter notice.(4a)

“SEC. 5. Notice of hearing.—The notice of hearing shall be addressed to all parties concerned, and shall
specify the time and date of the hearing which must not be later than ten (10) days after the filing of the
motion.(5a)”

In De la Peña v. De la Peña,[16] the Court presented a resume of earlier decisions regarding the
necessity of the notice of hearing in motions for reconsideration:

“In Pojas v. Gozo-Dadole,[17] we had occasion to rule on the issue of whether a motion for
reconsideration without any notice of hearing tolls the running of the prescriptive
period. In Pojas, petitioner received copy of the decision in Civil Case No. 3430 of the Regional Trial
Court of Tagbilaran on 15 April 1986. The decision being adverse to him petitioner filed a motion for
reconsideration. For failing to mention the date when the motion was to be resolved as required in Sec.
5, Rule 15, of the Rules of Court, the motion for reconsideration was denied. A second motion for
reconsideration met the same fate. On 2 July 1986 petitioner filed a notice of appeal but the same was
denied for being filed out of time as ‘the motion for reconsideration which the Court ruled as pro
forma did not stop the running of the 15-day period to appeal.’[18]

“In resolving the issue of whether there was grave abuse of discretion in denying petitioner’s notice of
appeal, this Court ruled—

‘Section 4 of Rule 15 of the Rules of Court requires that notice of motion be served by the movant on all
parties concerned at least three (3) days before its hearing. Section 5 of the same Rule provides that the
notice shall be directed to the parties concerned, and shall state the time and place for the hearing of
the motion. A motion which does not meet the requirements of Section 4 and 5 of Rule 15 of the Rules
of Court is considered a worthless piece of paper which the clerk has no right to receive and the court
has no authority to act upon. Service of copy of a motion containing notice of the time and place of
hearing of said motion is a mandatory requirement and the failure of the movant to comply with said
requirements renders his motion fatally defective.’[19]

“In New Japan Motors, Inc. v. Perucho,[20] defendant filed a motion for reconsideration which did not
contain any notice of hearing. In a petition for certiorari, we affirmed the lower court in ruling that a
motion for reconsideration that did not contain a notice of hearing was a useless scrap of paper. We
held further—

‘Under Sections 4 and 5 of Rule 15 of the Rules of Court, xxx a motion is required to be accompanied by
a notice of hearing which must be served by the applicant on all parties concerned at least three (3) days
before the hearing thereof. Section 6 of the same rule commands that “(n)o motion shall be acted upon
by the Court, without proof of service of the notice thereof xxx.” It is therefore patent that the motion
for reconsideration in question is fatally defective for it did not contain any notice of hearing. We have
already consistently held in a number of cases that the requirements of Sections 4, 5 and 6 of Rules 15
of the Rules of Court are mandatory and that failure to comply with the same is fatal to movant’s
cause.[21]

“In Sembrano v. Ramirez,[22] we declared that—

‘(A) motion without notice of hearing is a mere scrap of paper. It does not toll the running of the period
of appeal. This requirement of notice of hearing equally applies to a motion for
reconsideration. Without such notice, the motion is pro forma. And a pro forma motion for
reconsideration does not suspend the running of the period to appeal.’

“In In re Almacen,[23] defendant lost his case in the lower court. His counsel then filed a motion for
reconsideration but did not notify the adverse counsel of the time and place of hearing of said
motion. The Court of Appeals dismissed the motion for the reason that ‘the motion for reconsideration
dated July 5, 1966 does not contain a notice of time and place of hearing thereof and is, therefore a
useless piece of paper which did not interrupt the running of the period to appeal, and, consequently,
the appeal was perfected out of time.’ When the case was brought to us, we reminded counsel for the
defendant that –

‘As a law practitioner who was admitted to the bar as far back as 1941, Atty. Almacen knew – or ought
to have known – that [for] a motion for reconsideration to stay the running of the period of appeal, the
movant must not only serve a copy of the motion upon the adverse party x x x but also notify the
adverse party of the time and place of hearing x x x.’

“Also, in Manila Surety and Fidelity Co., Inc. v. Bath Construction and Company, [24] we ruled--

‘The written notice referred to evidently is that prescribed for motions in general by Rule 15, Sections 4
and 5 (formerly Rule 26), which provide that such notice shall state the time and place of hearing and
shall be served upon all the parties concerned at least three days in advance. And according to Section 6
of the same Rule no motion shall be acted upon by the court without proof of such notice. Indeed, it
has been held that in such a case the motion is nothing but a useless piece of paper. The reason is
obvious; unless the movant sets the time and place of hearing the court would have no way to
determine whether that party agrees to or objects to the motion, and if he objects, to hear him on his
objection, since the Rules themselves do not fix any period within [which] he may file his reply or
opposition.'[25]

“In fine, the abovecited cases confirm that the requirements laid down in Sec. 5 of Rule 15 of the Rules
of Court that the notice shall be directed to the parties concerned, and shall state the time and place for
the hearing of the motion, are mandatory. If not religiously complied with, they render the motion pro
forma. As such the motion is a useless piece of paper that will not toll the running of the prescriptive
period.”

For failing to attach a notice of hearing to the Motion for Reconsideration, petitioner proffers the
following excuses: (1) her former counsel’s messenger, due to an honest mistake, inadvertently omitted
the fourth page of the motion containing the crucial Notice of Hearing; and (2) because of the pressure
of work, her former counsel was unable to follow up such motion until the day said counsel requested
the setting of a hearing.[26]
We are not in the least convinced. First, it is unfair to place the blame for such omission on the
messenger. The burden of preparing a complete pleading falls on counsel’s shoulders, not on the
messenger’s. The counsel is ultimately responsible for the acts or omissions of his agents. Hence, the
messenger’s conduct can neither justify the counsel’s mistake nor warrant a departure from the
mandate of the aforesaid procedural rules.
Second, it is incredible that the fourth page containing the Notice of Hearing was left behind due to
honest mistake. In fact, there was no such page. Petitioner’s claim is belied by the following pertinent
portions of the subject Motion for Reconsideration:[27]

“WHEREFORE, premises considered, it is respectfully prayed that the Honorable Court cause a further
REVIEW and RECONSIDERATION of its decision on the above-captioned consolidated cases.

Quezon City for Manila, August 12, 1996.

(Sgd.)ANGELINA ARANDIA-VILLANUEVA
Counsel for Plaintiff-Appellant
39-L T. Morato Avenue, Quezon City
IBP No. 407450 6-26-96
PTR No. 227013 1-5-96 Manila

Copy furnished:
Atty. Arnel Zaragoza Dolendo
Counsel for Defendant
Rm 408, 413 First United Bldg.
Escolta, Manila”

The normal practice is to note, at the end of the pleading, that a copy was furnished to the adverse
party. Thus, petitioner’s motion ended exactly at the bottom of the third page as evidenced by the
“copy-furnished” notation. It is safe to conclude that there was no accidental or excusable neglect in
not including a fourth page in this case. In other words, petitioner’s counsel simply failed to include a
notice of hearing.
Finally, the fact that petitioner’s former counsel calendared the motion for hearing for August 23,
1996[28] belies the excuse that an alleged fourth page had been left behind. In the first place, if a notice
of hearing had been included in the Motion for Reconsideration, there would have been no need for
petitioner to file the Motion to set the time and date of hearing. What is clear is that said counsel filed
the latter Motion, only after private respondent had submitted its Motion for Entry of Judgment [29] --
with copy furnished petitioner’s counsel[30]-- on the ground that petitioner’s Motion for Reconsideration
was a mere scrap of paper that did not stop the period for appeal.
Petitioner pleads for liberal construction of the rule on notice of hearing,
citing Tamargo, Galvez and Que. In rebuttal, we adopt by reference the CA’s excellent disquisition, cited
earlier, on why these cases are inapplicable.
Petitioner further alleges that, first, the nonadmission of her Motion for Reconsideration would
result in a miscarriage of justice, as the main case (ejectment), which was tried under summary
procedure, had been unnecessarily prolonged; and, second, the tenant lessee would be occupying the
premises without paying rentals. She also relies on People v. Leviste,[31] in which the Court held:

“While it is true that any motion that does not comply with the requirements of Rule 15, Rules of Court
should not be accepted for filing and, if filed, is not entitled to judicial cognizance, the Supreme Court
has likewise held that where rigid application of the rule will result in manifest failure or miscarriage of
justice, technicalities may be disregarded in order to resolve the case.”

Liberal construction of this rule has been allowed by this Court in the following cases: (1) where a
rigid application will result in a manifest failure or miscarriage of justice,[32] especially if a party
successfully shows that the alleged defect in the questioned final and executory judgment is not
apparent on its face or from the recitals contained therein; [33] (2) where the interest of substantial
justice will be served;[34] (3) where the resolution of the motion is addressed solely to the sound and
judicious discretion of the court;[35] and (4) where the injustice to the adverse party is not
commensurate with the degree of his thoughtlessness in not complying with the procedure
prescribed.[36] Petitioner has failed to demonstrate that the case at bar falls under any of these
exceptions.
Finally, petitioner claims that she will be deprived of property without due process, as private
respondent has accumulated P348,800 in unpaid rentals and accrued interests.
We disagree. Petitioner can obtain proper payment of rentals through a motion for execution in
the case below. The MTC may have dismissed her ejectment case, but it did not exculpate private
respondent from its liabilities. Petitioner is, therefore, not being deprived of her property without due
process.
Indeed, there is no miscarriage of justice to speak of. Having failed to observe very elementary
rules of procedure which are mandatory, petitioner caused her own predicament. To exculpate her
from the compulsory coverage of such rules is to undermine the stability of the judicial process, as the
bench and bar will be confounded by such irritating uncertainties as when to obey and when to ignore
the Rules. We have to draw the line somewhere.[37]
WHEREFORE, the petition is hereby DENIED and the assailed Decision is AFFIRMED. Costs against
the petitioner.
 SO ORDERED.
Davide, Jr. (Chairman), Bellosillo, Vitug and Quisumbing, JJ., concur.

Sec. 3. Action upon motion for new trial or reconsideration

Sec. 4. Resolution of motion

Sec. 5. Second motion for new trial

See: Sec. 8, Rule 15

Cleofas v. St. Peter Memorial Park, G.R. No. 84905, February 1, 2000

SECOND DIVISION

[G.R. No. 84905. February 1, 2000]

REGINO CLEOFAS and LUCIA DELA CRUZ, petitioners, vs. ST. PETER MEMORIAL PARK INC., BASILISA
ROQUE, FRANCISCO BAUTISTA, ARACELI WIJANGCO-DEL ROSARIO, BANCO FILIPINO, and REGISTER OF
DEEDS OF RIZAL and REGISTER OF DEEDS OF QUEZON CITY respondents.

DECISION

BUENA, J.: HTML

This case dates back to 1973. It has dragged on for 26 years and has reached this Court three times. We
now write finis to this controversy.
The property subject of the present controversy is Lot No. 719 of the Piedad Estate situated in the
Municipality of Caloocan, Rizal, containing an area of 215,264 square meters. It forms part of the land
covered by Original Certificate of Title No. 614 of the Registry of Deeds of Rizal, in the name of the
Government of the Philippines.

On March 20, 1909, the Director of Lands, as administrator of the Piedad Estate, executed a contract in
favor of Antonio Cleofas, (predecessor-in-interest of herein petitioners) known as Sales Certificate No.
923. Antonio Cleofas took possession of the lot and occupied the same until his death sometime in 1945.
Antonio's title was burned in a fire sometime in 1933. Subsequently, when petitioners tried to
reconstitute the lost certificate, they discovered that the lot was already registered in the name of
herein respondent Memorial Park. Hence, they filed on October 31, 1970 a suit against respondents for
annulment of certificate of title and recovery of possession before then Court of First Instance of Rizal
which was docketed as Civil Case No. Q-15001. In their complaint, petitioners prayed, among others,
that they be declared the rightful owners of Lot No. 719, that the title of their predecessor, Antonio
Cleofas, be reconstituted and that all certificates of title over said lot issued in the names of the
respondents be declared null and void.[1]

Respondent Memorial Park, filed its answer alleging inter alia: that while Lot No. 719 was originally sold
to Antonio Cleofas by the government, Cleofas subsequently assigned his rights to a certain Aniceto
Martin and Trino Narciso, in whose favor Transfer Certificate of Title No. 21893 was issued on June 17,
1932; that Martin and Narciso in turn conveyed the property to Nazario Roque on May 11, 1937
resulting in the issuance of TCT No. 32258; and that Nazario’s transfer certificate of title was cancelled
and the property was passed on to his heirs, Carmen and Basilisa Roque from whom respondent St.
Peter Memorial Park purchased the lot.[2]

After trial, the lower court, on May 2, 1973, rendered judgment in favor of herein petitioners and
against respondents, the decretal portion of which reads:CODES

"IN VIEW OF ALL THE FOREGOING, it is hereby declared that the plaintiffs are the
rightful owners of Lot 719 of the Piedad Estate and are entitled to possession of the
same; that Transfer Certificate of Title No. 21893 issued by the defendant Register of
Deeds of Rizal is declared null and void, and the following Transfer Certificates of Title
Nos. 32258 issued by defendant Register of Deeds of Rizal cancelling TCT No. 21893;
12360 issued by defendants Register of Deeds of Quezon City, cancelling TCT No. 32258;
74978 in the name of defendant Araceli Wijangco del Rosario issued by defendant
Register of Deeds of Quezon City and a transfer from TCT No. 12360; 98115, 130328 and
131768 in the name of defendant Basilisa Roque-Bautista and in the name of defendant
corporation which are all mortgaged to the defendant Bank, and all issued by defendant
Register of Deeds of Quezon City; are hereby declared null and void and are deemed
cancelled and of no effect. The plaintiffs' petition for reconstitution of their lost title
having been consolidated with this case, the same is hereby granted, and the Register of
Deeds of Quezon City is directed to reconstitute plaintiffs' title on Lot 719. Piedad
Estate, based on all available records and other data appearing in said registry of
property.

It is further ordered that as prayed for the defendant corporation St. Peter Memorial
Park, Inc., and the defendants Francisco M. Bautista and Basilisa Roque pay jointly and
 severally to the plaintiffs the amount of P40,000.00 as damages and the amount of
P10,000.00 as Attorney's fees; plus costs.

SO ORDERED."[3] yacats

On June 30, 1973, respondents Memorial Park and Banco Filipino filed a joint motion for new trial on the
ground of newly discovered evidence consisting of documents to show that the title issued to Antonio
Cleofas refers to lot 640 and not lot 719 of the Piedad Estate. The motion for new trial was denied by
the trial court on February 5, 1974. Aggrieved, respondents filed with this Court a petition
for certiorari and prohibition to set aside the trial court's order denying their motion. The petition was
docketed as G.R. No. L-38280.[4]

On March 21, 1975, this Court granted respondents' motion and remanded the case to the Court of First
Instance for new trial. At the new trial, respondents introduced new evidence to show that Antonio
Cleofas is the awardee of Lot 640 of the Piedad Estate as evidenced by Deed No. 18562 dated August 10,
1929, as well as TCT No. 15694 covering the same lot. It is their theory that Sheet 15 of Original
Certificate of Title No. 614 which is the basis of petitioners' title over the subject lot, referred to Lot No.
640 and not to Lot 719.

On March 19, 1977, the Court of First Instance of Rizal, Branch IV, Quezon City, then presided by Judge
Ricardo P. Tensuan, rendered a decision, the dispositive portion of which reads [5]: olanski

"IN VIEW OF ALL THE FOREGOING, the Decision dated May 2, 1973 is hereby revived and
reinstated, and it is hereby declared that the (1) plaintiffs are the rightful owners of Lot
719 of the Piedad Estate and are entitled to possession of the same; that Transfer
Certificate of Title No. 21893 issued by the defendant Register of Deeds of Rizal is
declared null and void, and the following Transfer Certificate of Title Nos. 32258 issued
by defendant Register of Deeds of Rizal cancelling TCT Nos. 21893; 12360 issued by
defendant Register of Deeds of Quezon City, cancelling TCT Nos. 32258; 74978 in the
name of the defendant Araceli Wijangco del Rosario issued by defendant Register of
Deeds of Quezon City and a transfer from T.C.T Nos. 12360, 98115, 130328 and 131768
in the name of defendant Basilisa Roque-Bautista and in the name of defendant
corporation which are all mortgaged to the defendant Bank, and all issued by defendant
Register of Deeds of Quezon City; are hereby declared null and void and are deemed
cancelled and of no effect. The plaintiff's petition for reconstitution of their lost title
having been consolidated with this case, the same is hereby granted and the Register of
Deeds of Quezon City is directed to reconstitute plaintiffs' title on Lot 719, Piedad
Estate, based on all available records and other data appearing in said registry of
property.

(2) It is further ordered that as prayed for, the defendant corporation St. Peter
Memorial Park, Inc., pay to the plaintiffs the amount of P40,000.00 as damages and the
amount of P10,000.00 as attorney's fees; plus costs.

SO ORDERED."
The trial court found the Deed of Assignment in favor of Martin and Narciso, predecessors of herein
respondent St. Peter Memorial Park, spurious. The trial court dwelled on the fact that the Assignment of
Certificate of Sale No. 923[6] executed by Antonio Cleofas in favor of Martin and Narciso, Deed No.
25874[7] executed by the Director of Lands in favor or Martin and Narciso conveying lot 719 to the latter
and the deed of sale executed by Martin and Narciso in favor of Nazario Roque were all in the
possession of respondent St. Peters and not with the proper custodians or repositories thereof and that
the alleged assignment bears only a thumbmark of Antonio Cleofas although there is proof of his
competence to sign the same.[8]

Again, respondents elevated the case to this Court and on July 30, 1979, we rendered a decision
affirming the trial court's decision, portions of which is hereunder quoted:

"The deed of assignment in question of Lot No. 719, although more than thirty years
old, was not produced from a custody in which it would naturally be found if genuine. It
was found in the custody of the St. Peter Memorial Park, Inc., not in the folder of Bureau
of Lands for Lot No. 719. If, as contended by the petitioners the said deed of assignment
was the basis of the sale of Lot No. 719 by the Bureau of Lands in favor of Aniceto
Martin and Trino Narciso, the deed of assignment should have been placed in the folder
of the Bureau of Lands for Lot No. 719. No reason was given why the deed of
assignment of Lot No. 719 in favor of Aniceto Martin and Trino Narciso was produced
from the possession of St. Peter Memorial Park, Inc. haideem

"Moreover, the deed of assignment was principally signed by one Ruperto Cleofas who
was not a co-owner of Lot No. 719. Antonio Cleofas, who was the sole owner of said lot,
was only a co-assignor. Although he could write his name, Antonio Cleofas did not sign
the deed of assignment. There appears only a thumb mark over the typewritten name
of Antonio Cleofas. These suspicious circumstances were not explained by the
petitioners. The deed of assignment cannot be presumed genuine and authentic under
Sec. 22, Rule 132 of the Revised Rules of Court. It was not produced from a custody in
which it would naturally be found if genuine and it is blemished by circumstances of
suspicion.

"The fact that petitioner, St. Peter Memorial Park, Inc., was in possession of the deed of
assignment of Lot No. 719 which the trial court found to be spurious is a badge of bad
faith."[9]

Again, respondents St. Peter Memorial Park and Banco Filipino moved to reconsider the aforesaid
decision. During the pendency of the motion, respondent filed a Supplemental Motion for
Reconsideration praying alternatively, (1) that the motion be considered in the light of the additional
documentary evidence which they ask the Court to take judicial notice of; or (2) if this Court is not
inclined to do so on procedural or technical grounds, that the case be remanded to the trial court for
new trial in order to afford them the opportunity to present newly discovered evidence. In their prayer
for another new trial, respondents have manifested that in view of the adverse finding as to the
genuineness of the deed of assignment, they continued their search for evidence to bolster their
contention that the deed of assignment of Sale Certificate No. 923 was a genuine document properly
filed in a government office and confirmed by entries in the records of the same. [10]
On March 28, 1983, this Court set aside its decision of July 30,1979 and remanded the case to the trial
court of Quezon City for new trial. In granting the second motion for new trial, this Court
ratiocinated:[11] kirsten

"It is neither a valid objection that the petitioners had previously been afforded the
opportunity to present evidence which they failed to do during the trial. A second new
trial is expressly authorized by the Rules if 'based on a ground not existing nor avoidable
when the first motion was made' (Sec. 4, Rule 37, Rules of Court). As pointed out above,
the circumstances surrounding the discovery of the evidence which the petitioners
desire to present are adequate justification for the failure to make them available
during the original trial, or in the new trial previously allowed.

x x x.......x x x.......x x x

"The evidentiary worth of the evidence proffered by the petitioners may not be brushed
aside by a simplistic and sweeping appraisal that 'they do not promise to change the
results.' Undeniably, if it is true that copies of Exhibits '1' and '2' had actually been filed
in the proper government office, but were only misplaced or misfiled therein, there
would be little doubt as to the authenticity of the copies in the possession of the
petitioners which had been presented in court as Exhibits '1' and '2'. Such a finding
would meet squarely the pronouncement that Exhibits '1' and '2' are spurious. It would
also serve to dissipate the doubts as to their genuineness arising from the fact that
Exhibit ‘1’ was executed not by Antonio Cleofas alone, and that it was thumbmarked
and not signed by him.

"The peculiar circumstances surrounding the discovery of the evidence that the
petitioners seek to present; their significance and materiality in arriving at a true
appraisal of the matters involved in this case which, as had been previously observed by
Us, is one that 'involves public interest' affecting as it does many memorial lot buyers
and the integrity of the torrens systems (63 SCRA 190); and the considerable value of
the property herein litigated, behooves Us to proceed cautiously and with
circumspection in the determination of the true merits of the controversy, regardless of
technicalities and procedural niceties, with the primordial end in view of rendering
justice to whomsoever it may be due."

In the second new trial, respondents presented photocopies of OCT No. 543 of the Tala Estate which
contain an entry of the sale by Antonio Cleofas in favor of Narciso and Martin covering lot no. 719 of the
Piedad Estate and the Notarial Register of Notary Public Jose Ma. Delgado, showing entries of the deed
of sale executed by the Director of Lands in favor of Trino Narciso and Aniceto Martin over lot 719. [12]

On the basis of the new evidence presented by respondents, the trial court on November 20, 1985
rendered judgment dismissing petitioners' complaint. [13]The trial court opined that the deed of
assignment was not found in the possession of the person in which it would naturally be found because
the deed of conveyance was misrecorded in a memorandum sheet of OCT No. 543 of the Tala Estate.

Petitioners appealed to the Court of Appeals which was docketed as CA-G.R. No.12901. On September 2,
1988, the court rendered judgment[14]affirming in toto the trial court's decision. The Court of Appeals
anchored its ruling on the doctrine that a title which emanated from a spurious source may be the root
of a valid title.

Petitioners now challenge the court's decision before this Court arguing that the Court of Appeals
gravely abused its discretion when it disregarded pertinent and material facts of the case and went
beyond the issues raised. They assert that the doctrine relied upon by the Court of Appeals is not
applicable to the case at bar because in the three trials held, the only point raised is the spurious
character of the alleged deed of assignment.

While we have in many cases recognized and applied the aforementioned doctrine, we cannot, given
the facts of the case, apply the said doctrine. Rather, we will delve on the determination of the
authenticity of the deed of assignment in relation to the additional evidence presented by respondents
during the second new trial.

We have scrutinized the evidence presented and we are convinced that the deed of assignment
executed by Antonio Cleofas in favor of Narciso and Trino, is authentic. Thus, we are reconsidering our
ruling in St. Peter Memorial Park, Inc. vs. Cleofas, (92 SCRA 407) where we held that the deed of
assignment is a spurious document which may not be accorded any evidentiary value. Jksm

It must be recalled that the decision of then Court of First Instance in May 1977 finding the Assignment
of Sales Certificate No. 923 spurious, relied on the fact that said assignment and Deed of Conveyance
No. 25874 were in the possession of respondent St. Peter Memorial Park, and were not in the custody of
the government offices where they should ordinarily be. [15] This was sufficiently refuted by herein
respondents during the second new trial where they presented evidence showing that the said
assignment and Deed No. 25874 were properly filed in the Bureau of Land and confirmed by Risalina
Concepcion, Chief of the Archives Division, Bureau of Records Management, and Norberto Vasquez, Jr.,
Deputy Register of Deeds, District III, Caloocan City. Respondents' failure to present evidence to show
that the said documents were properly recorded in the books of the Register of Deeds can be attributed
to the fact that there was a misrecording of the transactions on OCT No. 543 of the Tala Estate instead
of OCT No. 614. When Aniceto Martin, who was also a grantee of two lots of the Tala Estate, presented
the deed of assignment of lot 719, this was recorded in a sheet pertaining to OCT No. 543 instead of
being inscribed in a sheet pertaining to OCT 614 covering the Piedad Estate.

Moreover, we believe that respondent St. Peter Memorial's possession of the documents is reasonable
considering that it is the vendee of the subject lot. In other words, it is reasonably expected that
respondent, as successor-in-interest of the assignees Trino and Narciso, and the purchaser of the subject
lot, be found in the possession of the documents.

The custody to be shown for the purpose of making a document evidence without proof of execution is
not necessarily that of the person strictly entitled to the possession of the said document. It is enough
that if the person in whose custody the document is found is so connected with the document that he
may reasonably be supposed to be in possession of it without fraud. [16] Thus, documents are said to be
in proper custody where they are in the place in which, and under the care of the person with whom,
they would naturally be, as, for instance, where they are found among the family papers of the persons
entitled thereto, or where they are found in the hands of an agent of the parties beneficially
interested.[17] Chief
Additionally, the fact that the deed of assignment contain only a thumb mark of Antonio Cleofas is not
indicative of the document's spuriousness. Petitioners failed to present evidence to prove that the
thumb mark appearing in the deed of assignment is not that of Antonio Cleofas. Petitioners merely
relied on the fact that in the Sales Certificate No. 923, Antonio Cleofas signed his name. Thus, we agree
with the trial court's observation that:

"x x x, absent any evidence that the thumbmark purporting to be Antonio Cleofas' in the
Assignment of Certificate of Sale (Exh. '1') is not really his, the presumption of law that
the transfer transaction evidenced thereby was fair and regular must stand, more so
when the document was acknowledged before a notary public and was, furthermore,
the basis of several acts of public officers."[18]

It is important to stress too that the deed of assignment was duly notarized by Notary Public Vicente
Garcia on July 15, 1921.[19] Also, Deed No. 25874 issued and executed by the Director of Lands on behalf
of the government, granting and conveying lot no. 719 to Trino and Martin was notarized by Notary
Public Jose Ma. Delgado.[20] Having been notarized, the documents have in their favor the presumption
of regularity, and to contradict the same, there must be evidence that is clear, convincing and more than
merely preponderant.[21] Petitioners failed to rebut said presumption, hence the presumption stands.

Finally, petitioners' failure or neglect for an unreasonable and unexplained length of time to assert their
right over the property warrants a presumption that they have abandoned their right or declined to
assert it.[22] Esm

Petitioners admit that they were in possession of the land only until 1945. From that time until the filing
of the complaint, petitioners never questioned respondents' possession. They have waited for more
than 25 years before questioning respondents' title. Their long inaction and passivity in asserting their
rights over the disputed property precludes them from recovering the same by laches. [23]

WHEREFORE, the decision of the Court of Appeals in CA - G.R. No. 12901 is AFFIRMED. Costs against
petitioners.

SO ORDERED. BUENA

Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.

Casalla v. People, G.R. No. 138855, October 29, 2002

SECOND DIVISION
 [G.R. No. 138855. October 29, 2002]

LAMBERTO CASALLA, petitioner, vs. PEOPLE OF THE PHILIPPINES, and MILAGROS S.

ESTEVANES,respondents.

RESOLUTION
QUISUMBING, J.:

This petition for review on certiorari assails the decision [1] dated November 17, 1998, and the
resolution[2] dated May 25, 1999 of the Court of Appeals in CA-G.R. SP No. 37031, denying petitioner’s
appeal as well as motion for reconsideration for lack of merit.
The facts, as summarized by the Court of Appeals from the records, are as follows:

The facts, as disclosed by the record, show that petitioner Lamberto Casalla issued two (2) Bank of
Commerce checks in payment of the obligation of his wife, TERESITA CASALLA, to private respondent
MILAGROS SANTOS-ESTEVANES, in order to avert a court litigation. The two (2) checks, however, were
dishonored by the drawee bank for reason of insufficiency of funds.

Subsequently, private respondent filed two (2) criminal complaints against petitioner for violation of the
Bouncing Checks Law (BP 22). The cases were docketed as Criminal Case Nos. 11844 and 11845 and
raffled to Branch 68 of the Metropolitan Trial Court (MTC) of Pasig City.

On September 22, 1994, the MTC of Pasig City rendered a decision convicting the accused (petitioner
herein) of the crime charged on two (2) counts.

Aggrieved by the decision of the trial court, petitioner interposed an appeal to the Regional Trial Court
(RTC) of Pasig City, which was raffled to Branch 261 thereof presided upon by public respondent judge.

On January 18, 1995, the court a quo rendered its decision affirming the judgment of the lower court
with the modification that appropriate subsidiary imprisonment be imposed on the accused in case of
insolvency (Annex "H", Petition; pp. 24-28, ibid.).

Dissatisfied with the decision of the court a quo, petitioner filed a motion for reconsideration on
February 8, 1995 (Annex "I", Petition; pp. 29-30, ibid.).

In an Order dated February 9, 1995, the lower court denied the motion for reconsideration on account
of the absence of a notice of hearing and because the issues raised therein have already been passed
upon in its decision (Annex "J", Petition; p. 31, ibid.).

On February 22, 1995, petitioner filed a second motion for reconsideration (Annex "K", Petition; pp. 32-
33, ibid.).

On February 24, 1995, private respondent filed with the RTC a motion for the issuance of a writ of
execution (Annex "L", Petition; pp. 34-36, ibid.).
Opposition to the motion for the issuance of a writ of execution was filed by petitioner on March 3,
1995 (Annex “M”, Petition; pp. 37-38, ibid.).

In an Order dated March 13, 1995, the court a quo denied petitioner’s second motion for
reconsideration and granted the motion for the issuance of a writ of execution (Annex “A”, Petition; p.
14, ibid.).

On March 21, 1995, a writ of execution was issued by the court directing public respondent Deputy
Sheriff Jose R. Santos to cause the execution of the judgment (Annex “B”, Petition; p. 15, ibid.).[3]

Petitioner interposed an appeal via a petition for review with prayer for preliminary injunction
and/or temporary restraining order. On November 17, 1998, the appellate court promulgated its
decision denying the appeal for lack of merit. [4]
In its decision, the Court of Appeals noted that the petition before it did not contain a statement of
material dates showing the timeliness of the petition. It also maintained that the petition was filed out
of time, because the motion to reconsider the decision of the trial court did not contain a notice of
hearing. Hence, being a mere scrap of paper, it did not interrupt the period for filing the petition before
the appellate court, and the period had lapsed before the petition was filed. It also ruled that
petitioner’s second motion was not only a prohibited pleading but it was also filed out of
time. Petitioner’s motion for reconsideration before the Court of Appeals was denied. [5] Hence, the
present petition, raising the following errors:
I

THAT THE REQUIREMENT ON NOTICE OF HEARING DOES NOT APPLY IN PETITIONER’S MOTION FOR
RECONSIDERATION.

II

THAT THE REGIONAL TRIAL COURT HAS NO AUTHORITY TO ISSUE A WRIT OF EXECUTION. [6]

Petitioner argues that the requirement of a notice of hearing does not apply to the motion for
reconsideration he filed before Branch 261 of the Regional Trial Court of Pasig City, as said court was
acting only in its appellate jurisdiction, the proceedings therein being summary in nature. He further
asserts that said trial court gravely abused its discretion when it issued the writ of execution, because it
was the court of origin, the Metropolitan Trial Court of Pasig City, Branch 68, which had the authority to
issue the writ.
For our resolution now is whether or not the Court of Appeals erred in denying the petition for
review and the subsequent motion for reconsideration.
Petitioner received a copy of the decision of the Regional Trial Court on February 1, 1995. From
that date, he had 15 days, or until February 16, 1995, to file a motion for reconsideration. On February
8, 1995, petitioner did file a motion for reconsideration of the trial court’s decision. The motion,
however, lacked a notice of hearing.
We have ruled in a number of cases that the requirements laid down in the Rules of Court, that the
notice of hearing shall be directed to the parties concerned and shall state the time and place for the
hearing of the motion, are mandatory. If not religiously complied with, they render the motion pro
forma. As such the motion is a useless piece of paper that will not toll the running of the prescriptive
period.[7]
Under the present rules, the notice of hearing is expressly made a requirement.[8] In the instant
case, it is undisputed that the motion for reconsideration filed by petitioner with the Regional Trial Court
did not contain any notice of hearing. It was therefore pro forma; hence, it did not suspend the running
of the prescriptive period.[9] This defect was not cured by the filing of a second motion for
reconsideration, which is prohibited under the rules.[10]
Petitioner claims that the requirement of a notice of hearing did not apply to the motion for
reconsideration he filed before the Regional Trial Court, since it was acting only in its appellate
jurisdiction. This is error, as the Rules of Court apply to all courts, except as otherwise provided by the
Supreme Court.[11] Regional Trial Courts are not precluded from conducting hearings on matters on
which the parties need to be heard, even in the exercise of their appellate jurisdiction.
Additionally, to assail the RTC’s issuance of a writ of execution, petitioner filed a petition for review
under Rule 45 with the Court of Appeals. This was improper. What it should have filed was a petition
for certiorari under Rule 65 of the 1997 Rules of Civil Procedure. Under the Rules, no appeal may be
taken from an order denying a motion for new trial or reconsideration and an order of
execution. Instead, where the judgment or final order may not be appealed, the appropriate recourse is
a special civil action under Rule 65.[12] Thus, the appellate court did not err in denying said petition for
review.
WHEREFORE, the instant petition is DENIED for lack of merit. The decision dated November 17,
1998 and the resolution dated May 25, 1999, of the Court of Appeals in CA-G.R. SP No. 37031 are
AFFIRMED. Costs against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, and Austria-Martinez, JJ., concur.
Callejo, Sr., J., no part. Concurred in Decision subject of petition.

University of the East v. UE Employees’ Assoc., G.R. No. 179593, September 14, 2011

Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION
UNIVERSITY OF THE EAST, G.R. No. 179593

Petitioner,

Present:

VELASCO, JR. J., Chairperson,

PERALTA,

- versus - ABAD,

MENDOZA, and

SERENO,* JJ.

UNIVERSITY OF THE EAST EMPLOYEES’ Promulgated:

ASSOCIATION,

Respondent.
September 14, 2011

x -------------------------------------------------------------------------------------x

DECISION

MENDOZA, J.:

Before the Court is a petition for review under Rule 45 of the Rules of Court assailing the February
26, 2007 Decision[1]and September 5, 2007 Resolution[2] of the Court of Appeals (CA), in CA-G.R. SP No.
90740, which set aside the February 28, 2005 Decision and May 31, 2005 Resolution of the National
Labor Relations Commission (NLRC) in NLRC-NCR-00-04-05015-99. The dispositive portion of the CA
decision reads:
 WHEREFORE, the instant petition is GRANTED. The Decision dated 28 February
2005 and Resolution dated 31 May 2005 rendered by the NLRC are SET ASIDE. The final
resolutions dated 29 April 2004 and 24 August 2004 hereby REMAIN in effect.

SO ORDERED.[3]

Facts of the Case

Petitioner University of the East (UE) is an educational institution duly organized and existing
under Philippine laws. On the other hand, respondent University of the East Employees’
Association (UEEA) is a duly registered labor union of the rank-and-file employees of UE.

It appears from the records that prior to school year (SY) 1983-1984, the 70% incremental
proceeds from tuition fee increases as mandated by Presidential Decree No. 451 (P.D. No. 451), as
amended, was distributed by UE in proportion to the average number of academic and non-academic
personnel. The distribution scheme became the subject of an Agreement [4] dated October 18,
1983 signed by the management, faculty association and respondent. [5] Starting SY 1994-1995, however,
the 70% incremental proceeds from the tuition fee increase was distributed by UE to its covered
employees based on a new formula of percentage of salary.

Not in conformity, UEEA, thru its president Ernesto C. Verceles (Verceles), sent a letter[6] dated
December 22, 1994 to then UE President, Dr. Rosalina S. Cajucom (Dr. Cajucom), questioning the
manner of distribution of the employees’ share in the 1994-1995 tuition fee increase. The letter reads:

Dear President Cajucom:

This is with reference to the recent distribution of the employees’ share in the
1994-95 tuition fee increase.

We understand that the University unilaterally instituted a partial distribution of

FIVE PERCENT (5%) only of the basic wage of employees, faculty members and
administration personnel.

This, to our mind, is quite irregular and unfair in view of the following
considerations:

1.) We have all along instituted the practice of having a Tripartite Meeting
where the three (3) sectors involved, i.e. management, faculty and employees’
representatives go over the incremental proceeds that have been realized and come to
an agreement on the distribution of the share whether partial or total in nature;
 2.) The accepted and traditional practice was that for every ₱1.00 per share
of faculty members based on the “full load equivalent,” management personnel and
rank-and-file employees receive ₱100.00 a month;

3.) Using as a basis 5% of the wages of University personnel entitled thereto

besides being a departure from past practices, creates that unfair situation where those
who have higher salaries receive more to the prejudice of low salaried employees and
faculty members;

4.) There is an existing Tripartite Agreement, with a xerox copy attached

hereto as ANNEX “A,” clearly specifying the agreed manner of distribution. Even [if] the
May 17, 1994 letter to UE President Rosa[lina] Cajucom by then Secretary of Education,
Culture and Sports Armand V. Fabella, states under the third paragraph thereof that ‘the
discretion is vested upon the school authorities xxx,” but, in the same breath, the
Secretary qualifies the distribution or manner of remittance thereof with the phrase
“(except where it forms part of a collective bargaining agreement but accrues to school
personnel in any case) xxx.” In this light, Article XX Section 5 of our past and current
CBAs provide succinctly that:

“The UNIVERSITY agrees to continue the implementation of all

benefits hitherto enjoyed by the employees not embodied herein and are
the subject of communication between the UNIVERSITY and the
ASSOCIATION provided they are not inconsistent with the provisions of the
Agreement or of the Labor Code. All other existing clauses, covenants,
provisions or agreements shall remain in force.”

We, therefore, urge the University to rectify the aforementioned erroneous,

unfair and irregular distribution instituted last December 13, 1994.

We believe that you may have been misled by your staff in so arriving at such
objectionable manner of distributing our tuition fee shares. We therefore hope that in
the spirit of the season, the University thru your good self would institute the necessary
correction, thereby affording our lower salaried employees and faculty members the
means to have a more meaningful Christmas celebration.

xxx

On February 23, 1995, UEEA sent another letter[7] to the UE President reiterating its earlier
objection to the distribution scheme of the 70% incremental proceeds from the tuition fee increase and
requested a tripartite conference among management, faculty, administration, and rank-and-file
representatives to address the issue.

On June 19, 1995, a tripartite meeting was held among the representatives of management,
faculty union and UEEA. In the said meeting, it was agreed that the distribution of the incremental
proceeds would now be based on percentage of salary, and not anymore on the average number of
personnel. The Minutes[8] of the June 19, 1995 meeting was signed and attested to by UEEA officers
who attended.

On April 27, 1999, UEEA filed a complaint before the NLRC for non-payment/underpayment of
the rank-and-file employees’ share of the tuition fee increases against UE pursuant to P.D. No. 451, as
amended, and Republic Act (R.A.) No. 6728 otherwise known as Government Assistance to Students and
Teachers in Private Education Act.

In its position paper,[9] UEEA alleged that starting SY 1994-1995, UE had been withholding from
the rank-and-file employees a sizeable portion of their share in the tuition fee increases as mandated by
P.D. No. 451, as amended. It asserted that before SY 1994-1995, shares of tuition fee increases were
distributed proportionately among the management, faculty and rank-and-file employees based on
equal sharing or on a share-and-share alike basis. In SY 1994-1995, however, UE arbitrarily and
unilaterally distributed the tuition fee increase proceeds through percentage based on salaries, thereby
reducing the shares of the rank-and-file employees, while increasing those of the management
personnel.

In its reply, [10] UE denied that the implementation of the new scheme in the distribution of the
70% incremental proceeds derived from tuition fee increases starting SY 1994-1995 was made arbitrarily
and/or unilaterally. It explained that the distribution scheme was only implemented after inquiry from
the Department of Education, Culture and Sports (DECS) regarding the provision of R.A. No. 6728. DECS
explained that the law was silent on the manner of the distribution of the 70% incremental proceeds
and stated that discretion in the distribution was vested in the school authorities. What the law clearly
required was that the incremental proceeds from the tuition fee increases should be allocated for the
payment of salaries/wages, allowances and other benefits of the teaching and non-teaching personnel
except the administrators who were principal stockholders of the school. Thus, UE insisted that it may
distribute the entire 70% incremental proceeds for an across-the-board salary increase, or for merit
increase, or for allowances and other employment benefits.

Furthermore, UE pointed out that the new distribution scheme was implemented after a
tripartite meeting was held on June 19, 1995 among the representatives of the management, UE Faculty
Association (UEFA) and the UEEA, wherein it was agreed that for SY 1994-1995, the distribution of the
incremental increase would be 9.96% of the salaries of the employees as of May 31, 1994. In fact, copies
of the minutes of the meeting were distributed and signed by the participants. Hence, UEEA was
estopped from questioning the distribution scheme when it accepted the benefits.

Lastly, UE asserted that the claim of the UEEA was already barred since it was filed three (3)
years from the time its supposed cause of action accrued.
 On September 4, 2002, Labor Arbiter Francisco A. Robles (LA) rendered a decision[11] favoring
UEEA, the fallo of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering the

respondent University of the East, to pay the members of University of the East
Employees Association (UEEA) the amount of TWENTY-FIVE MILLION SEVEN HUNDRED
FORTY-NINE THOUSAND NINE HUNDRED NINETY-FIVE PESOS AND 40/100
(₱25,749,995.40) representing the portions of the tuition fee increases for the school
year 1994-1995 and up to May 31, 2002 which were denied/withheld and/or lost by the
members of the aforesaid Union as a result of the disputed distribution scheme based
on percentage of salary which was arbitrarily and unilaterally adopted and implemented
by the respondent. Furthermore, the respondent is hereby directed to submit to this
Office a report to show compliance to the order herein stated.

SO ORDERED.[12]
The LA ruled that the equal sharing distribution scheme in relation to the incremental proceeds
from the tuition fee increases had been adopted as a matter of policy by UE since 1983 and was made
part of its collective bargaining agreement with the UEEA. In addition, the LA noted that the existence of
the said policy or practice in the university was made part of the tripartite agreement dated October 18,
1983, among UE, UEFA and UEEA. There was no evidence on record that the said agreement was
superseded by another agreement between UE and UEEA. Furthermore, UE’s reliance on the letter-
reply of then DECS Secretary Armand V. Fabella was misplaced as the law imposed a limitation on the
extent of the discretionary authority given to the school officials such as when the disposition had been
agreed upon in a collective bargaining agreement. The LA concluded that UE was legally bound to keep
and maintain the established practice of distributing equally among its employees the incremental
proceeds from the tuition fee increases particularly in light of the aforesaid tripartite agreement
dated October 18, 1983 and the provisions of Article XX, Section 5 of the UE-UEEA collective bargaining
agreement.

Undaunted, UE interposed an appeal before the NLRC. The NLRC, in its April 29,
2004 Resolution,[13] dismissed the appeal and sustained the LA decision. UE filed a motion for
reconsideration but it was denied in a resolution[14] dated August 24, 2004 with a warning that no
further motion for reconsideration shall be entertained.

Nonetheless, on September 20, 2004, UE filed a motion for leave to file and admit a second
motion for reconsideration, incorporating therein its second motion for reconsideration. UE alleged that
the NLRC resolution was not valid for failure to pass upon and consider the new and vital issues raised in
its motion for reconsideration and for failure to comply with the prescribed form for NLRC resolutions
pursuant to Section 13, Rule VII, NLRC New Rules of Procedure.[15]
 On February 28, 2005, the NLRC gave due course to the second motion for reconsideration,
reversed its earlier ruling and declared valid the distribution of the 70% incremental proceeds from
tuition fee increases based on the percentage of salary of the covered employees.[16] Consequently,
UEEA filed a motion for reconsideration[17] but it was denied in the NLRC Resolution[18]dated May 31,
2005.

Aggrieved, UEEA filed a petition before the CA. The appellate court granted the petition and set
aside the questioned decision and resolution of the NLRC.[19] The CA declared that since the second
motion for reconsideration was a prohibited pleading, it did not interrupt the running of the
reglementary period. Therefore, the NLRC Resolution dated August 24, 2004became final and executory
after ten (10) days from receipt of the copy thereof by the parties. Accordingly, the said resolution had
attained finality and could no longer be modified in any respect, even if the modification was meant to
correct what was perceived to be an erroneous conclusion of fact or law.

UE filed a motion for reconsideration of the CA decision but it was denied in a

resolution[20] dated September 5, 2007. Hence, this appeal, anchored on the following:

GROUNDS:

WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT DECLARED THAT

PETITIONER’S SECOND MOTION FOR RECONSIDERATION IS A PROHIBITED PLEADING.

II

WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT HELD THAT THERE
ARE “[NO] EXTRAORDINARY PERSUASIVE REASONS” IN THE INSTANT CASE
WARRANTING THE ALLOWANCE OF A SECOND MOTION FOR RECONSIDERATION.

III

WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE
ISSUANCE OF THE ENTRY OF JUDGMENT DATED OCTOBER 15, 2004 IS NOT
PREMATURE.

IV

WHETHER OR NOT THE COURT OF APPEALS ERRED WHEN IT

FOUND PETITIONER UNIVERSITY’S MOTION FOR RECONSIDERATION A “PRO FORMA”
MOTION.
 The issues for resolution are: (1) whether or not UE’s second motion for
reconsideration (MR) before the NLRC is a prohibited pleading; and (2) whether or not the change in the
scheme of distribution of the incremental proceeds from tuition fee increase is a diminution of benefit.

UE argues that the CA erred in holding that the second MR was a prohibited pleading. It asserts
that while a second MR is generally a prohibited pleading, it may be allowed in meritorious cases.
Section 14 of the NLRC rules cannot be construed as to prevent the NLRC from relieving itself from
patent errors in order to render justice. UE stresses that the technical rules of procedure are not meant
to frustrate but to facilitate justice.[21]

UE further contends that the Court in resolving the issue on the second MR should not be too
dogmatic in its ruling. It persuades the Court to adopt a complete and holistic view, taking into
consideration the peculiar circumstances of the case as well as the provisions on the liberal
interpretation of the rules and the inherent power of the NLRC to amend and reverse its findings and
conclusions as may be necessary to render justice.[22]

Petitioner further contends that there exist extraordinary persuasive reasons warranting the
allowance of the second MR. First, it argues that the complaint is a money claim arising from employer-
employee relationship; hence, it prescribes in three (3) years. Since the complaint was filed only on April
27, 1999, more than three (3) years from the alleged violation in 1994, prescription has set
in. Second, UE maintains that the distribution of tuition fee increase based on percentage of salary was
not arbitrary and/or unilateral because the new distribution scheme was taken up and agreed upon in
the tripartite meeting held on June 19, 1995 and was adopted only after consultation with the DECS
Secretary Armand Fabella. Third, the faculty union, UE Faculty Association (UEFA), a party to the
Agreement dated October 18, 1983, did not complain against the new distribution scheme.Lastly, the
new distribution scheme is in accordance with law. UE claims that the law and jurisprudence are clear
that a private educational institution has the discretion on the disposition of the 70% incremental
proceeds from tuition fee increase, with the only condition imposed that the proceeds should go to the
salaries, wages and allowances and other benefits of teachers and non-teaching personnel.[23]
Indeed, a second MR as a rule, is generally a prohibited pleading. [24] The Court, however, does
not discount instances when it may authorize the suspension of the rules of procedure so as to allow the
resolution of a second motion for reconsideration, in cases of extraordinarily persuasive reasons [25] such
as when the decision is a patent nullity.[26]

Time and again, the Court has upheld the theory that the rules of procedure are designed to
secure and not to override substantial justice. [27] These are mere tools to expedite the decision or
resolution of cases, hence, their strict and rigid application which would result in technicalities that tend
to frustrate rather than promote substantial justice must be avoided. [28]
 On the second issue, after a careful review of the records and the arguments of the parties, the
Court finds the position of the petitioner meritorious.

The Court agrees with petitioner UE that the change in the distribution of the 70% incremental
proceeds from tuition fee increase from equal sharing to percentage of salaries is not a diminution of
benefits. Its distribution to covered employees based on equal sharing scheme cannot be considered to
have ripened into a company practice that the respondents have a right to demand.

Generally, employees have a vested right over existing benefits voluntarily granted to them by
their employer, thus, said benefits cannot be reduced, diminished, discontinued or eliminated by the
latter.[29] This principle against diminution of benefits, however, is applicable only if the grant or benefit
is founded on an express policy or has ripened into a practice over a long period of time which is
consistent and deliberate.[30] It does not contemplate the continuous grant of unauthorized or irregular
compensation but it presupposes that a company practice, policy and tradition favourable to the
employees has been clearly established; and that the payments made by the company pursuant to it
have ripened into benefits enjoyed by them.[31] The test or rationale of this rule on long practice requires
an indubitable showing that the employer agreed to continue giving the benefitsknowing fully well that
said employees are not covered by the law requiring payment thereof. [32] In sum, the benefit must be
characterized by regularity, voluntary and deliberate intent of the employer to grant the benefits over a
significant period of time.[33]

In the case at bench, contrary to UEEA’s claim, the distribution of the 70% incremental proceeds
based on equal sharing scheme cannot be held to have ripened into a company practice that the
respondents have a right to demand. Jurisprudence is replete with the rule specifying a minimum
number of years within which a company practice must be exercised in order to constitute
voluntary company practice.[34] Even if UE had been continuously distributing the 70% incremental
proceeds based on equal sharing scheme to all its covered employees, the same could not have ripened
into a vested right because such grant would not have been characterized by a deliberate and voluntary
act on the part of the petitioner.

As pronounced by the Court in the case of Globe Mackay Cable and Radio Corporation v.
[35]
NLRC, the grant by an employer of benefits through an erroneous application of the law due to
absence of clear administrative guidelines is not considered a voluntary act which cannot be unilaterally
discontinued. Here, no vested rights accrued to respondents. R.A. No. 6728 simply mandates that the
70% incremental proceeds arising from tuition fee increases should go to the payment of salaries,
wages, allowances, and other benefits of the teaching and non-teaching personnel except
administrators who are principal stockholders of the school.[36] As to the manner of its distribution,
however, the law is silent. The letter[37] of then DECS Secretary Armand Fabella, correctly stated that the
discretion on what distribution scheme to adopt is vested upon the school authorities. In fact, the school
can distribute the entire 70% for an across-the-board salary increase, for merit increase and/or for
allowances or other benefits. The only limitations provided are [1] the benefit must accrue to specific
individual school personnel; and [2] the benefit once given for a specific year cannot be revoked for that
same year.

Neither can UEEA claim that the change in the distribution scheme from equal sharing to
percentage of salary was done peremptorily. Verceles wrote two (2) letters dated December 22,
1994[38] and February 23, 1995,[39] to then UE President, Dr. Cajucom, questioning the change in the
distribution scheme from equal sharing to percentage of salary and requesting a tripartite meeting to
settle the issue.

Consequently, a tripartite meeting was held on June 19, 1995. The said meeting was attended by
the representatives of the management, UEFA and UEEA. From the minutes of the meeting, the tuition
fee incremental proceeds for SY 1994-95 and the manner of its distribution based on percentage of the
salaries of the covered employees were discussed and UEEA representatives, namely, Salvador Blancia
and Miguel Teaño, did not object. They even later signed the minutes of the meeting to signify their
conformity to it.

It was likewise erroneous for UEEA to rely on the October 18, 1983 Agreement[40] which
provides:

The University of the East, represented by its Chairman of the Board and Chief
Executive Officer, the UE Faculty Association (UEFA), represented by its President, and
the UE Employees Association (UEEA), represented by its President , all assisted by their
respective panels, hereby mutually agree:

1. That in determining the allocation of the 60% incremental proceeds from

the approved increase in school fees effective school year 1982-83 among the three
sectors (faculty, rank-and-file, and management personnel), the formula used in
previous years shall be followed – namely, the allocation shall be in proportion to the
average number of academic and non-academic personnel in the service as of the start
of the first and second semesters of the school year 1982-83;

2. That the proposal of the UEEA, whereby the number of academic

personnel is to be determined by using the “full load equivalent”, shall be adopted in
allocating the 60% incremental proceeds from the approved increase in school fees
effective school year 1983-84.

Manila, October 18, 1983.

Clearly, the said agreement only pertains to the distribution of incremental proceeds for SY
1982-83. Besides, such agreement is deemed superseded by another agreement taken up during
tripartite meeting held on June 19, 1995.
 The Court agrees with UE and holds that UEEA’s right to question the distribution of the
incremental proceeds for SY 1994-1995 has already prescribed. Article 291 of the Labor Code provides
that money claims arising from an employer-employee relationship must be filed within three (3) years
from the time the cause of action accrued. In the present case, the cause of action accrued when the
distribution of the incremental proceeds based on percentage of salary of the covered employees was
discussed in the tripartite meeting held on June 19, 1995. UEEA did not question the manner of its
distribution and only on April 27, 1999 did it file an action based therein. Hence, prescription had set in.

WHEREFORE, the petition is GRANTED. The Decision and Resolution of the Court of Appeals in
CA-G.R. SP No. 90740 are REVERSED and SET ASIDE. The Decision of the National Labor Relations
Commission dated February 28, 2005 isREINSTATED.

SO ORDERED.

JOSE CATRAL MENDOZA

Associate Justice

McBurnie v. Guanzon, G.R. Nos. 178034, 178117, 186984-85, October 17, 2013

G.R. Nos. 178034 & 178117 G R. Nos. 186984-85 October 17, 2013

ANDREW JAMES MCBURNIE, Petitioner,

vs.
EULALIO GANZON, EGI-MANAGERS, INC. and E. GANZON, INC., Respondents.

RESOLUTION

REYES, J.:

For resolution are the –

(1) third motion for reconsideration1 filed by Eulalio Ganzon (Ganzon), EGI-Managers, Inc. (EGI)
and E. Ganzon, Inc. (respondents) on March 27, 2012, seeking a reconsideration of the Court’s
Decision2 dated September 18, 2009 that ordered the dismissal of their appeal to the National
Labor Relations Commission (NLRC) for failure to post additional appeal bond in the amount
of P54,083,910.00; and

(2) motion for reconsideration3 filed by petitioner Andrew James McBurnie (McBurnie) on
September 26, 2012, assailing the Court en banc’s Resolution 4 dated September 4, 2012 that (1)
 accepted the case from the Court’s Third Division and (2) enjoined the implementation of the
Labor Arbiter’s (LA) decision finding him to be illegally dismissed by the respondents.

Antecedent Facts

The Decision dated September 18, 2009 provides the following antecedent facts and proceedings –

On October 4, 2002, McBurnie, an Australian national, instituted a complaint for illegal dismissal and
other monetary claims against the respondents. McBurnie claimed that on May 11, 1999, he signed a
five-year employment agreement5 with the company EGI as an Executive Vice-President who shall
oversee the management of the company’s hotels and resorts within the Philippines. He performed
work for the company until sometime in November 1999, when he figured in an accident that compelled
him to go back to Australia while recuperating from his injuries. While in Australia, he was informed by
respondent Ganzon that his services were no longer needed because their intended project would no
longer push through.

The respondents opposed the complaint, contending that their agreement with McBurnie was to jointly
invest in and establish a company for the management of hotels. They did not intend to create an
employer-employee relationship, and the execution of the employment contract that was being invoked
by McBurnie was solely for the purpose of allowing McBurnie to obtain an alien work permit in the
Philippines. At the time McBurnie left for Australia for his medical treatment, he had not yet obtained a
work permit.

In a Decision6 dated September 30, 2004, the LA declared McBurnie as having been illegally dismissed
from employment, and thus entitled to receive from the respondents the following amounts: (a)
US$985,162.00 as salary and benefits for the unexpired term of their employment contract,
(b) P2,000,000.00 as moral and exemplary damages, and (c) attorney’s fees equivalent to 10% of the
total monetary award.

Feeling aggrieved, the respondents appealed the LA’s Decision to the NLRC. 7 On November 5, 2004, they
filed their Memorandum of Appeal8 and Motion to Reduce Bond9, and posted an appeal bond in the
amount ofP100,000.00. The respondents contended in their Motion to Reduce Bond, inter alia, that the
monetary awards of the LA were null and excessive, allegedly with the intention of rendering them
incapable of posting the necessary appeal bond. They claimed that an award of "more than P60 Million
Pesos to a single foreigner who had no work permit and who left the country for good one month after
the purported commencement of his employment" was a patent nullity. 10 Furthermore, they claimed
that because of their business losses that may be attributed to an economic crisis, they lacked the
capacity to pay the bond of almost P60 Million, or even the millions of pesos in premium required for
such bond.

On March 31, 2005, the NLRC denied11 the motion to reduce bond, explaining that "in cases involving
monetary award, an employer seeking to appeal the [LA’s] decision to the Commission is unconditionally
required by Art. 223, Labor Code to post bond in the amount equivalent to the monetary award x x
x."12 Thus, the NLRC required from the respondents the posting of an additional bond in the amount
of P54,083,910.00.
When their motion for reconsideration was denied, 13 the respondents decided to elevate the matter to
the Court of Appeals (CA) via the Petition for Certiorari and Prohibition (With Extremely Urgent Prayer
for the Issuance of a Preliminary Injunction and/or Temporary Restraining Order)14 docketed as CA-G.R.
SP No. 90845.

In the meantime, in view of the respondents’ failure to post the required additional bond, the NLRC
dismissed their appeal in a Resolution15 dated March 8, 2006. The respondents’ motion for
reconsideration was denied on June 30, 2006.16 This prompted the respondents to file with the CA the
Petition for Certiorari (With Urgent Prayers for the Immediate Issuance of a Temporary Restraining
Order and a Writ of Preliminary Injunction)17docketed as CA-G.R. SP No. 95916, which was later
consolidated with CA-G.R. SP No. 90845.

CA-G.R. SP Nos. 90845 and 95916

On February 16, 2007, the CA issued a Resolution 18 granting the respondents’ application for a writ of
preliminary injunction. It directed the NLRC, McBurnie, and all persons acting for and under their
authority to refrain from causing the execution and enforcement of the LA’s decision in favor of
McBurnie, conditioned upon the respondents’ posting of a bond in the amount of P10,000,000.00.
McBurnie sought reconsideration of the issuance of the writ of preliminary injunction, but this was
denied by the CA in its Resolution19 dated May 29, 2007.

McBurnie then filed with the Court a Petition for Review on Certiorari20 docketed as G.R. Nos. 178034
and 178117, assailing the CA Resolutions that granted the respondents’ application for the injunctive
writ. On July 4, 2007, the Court denied the petition on the ground of McBurnie’s failure to comply with
the 2004 Rules on Notarial Practice and to sufficiently show that the CA committed any reversible
error.21 A motion for reconsideration was denied with finality in a Resolution 22 dated October 8, 2007.

Unyielding, McBurnie filed a Motion for Leave (1) To File Supplemental Motion for Reconsideration and
(2) To Admit the Attached Supplemental Motion for Reconsideration, 23 which was treated by the Court
as a second motion for reconsideration, a prohibited pleading under Section 2, Rule 56 of the Rules of
Court. Thus, the motion for leave was denied by the Court in a Resolution 24 dated November 26, 2007.
The Court’s Resolution dated July 4, 2007 then became final and executory on November 13, 2007;
accordingly, entry of judgment was made in G.R. Nos. 178034 and 178117. 25

In the meantime, the CA ruled on the merits of CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 and
rendered its Decision26 dated October 27, 2008, allowing the respondents’ motion to reduce appeal
bond and directing the NLRC to give due course to their appeal. The dispositive portion of the CA
Decision reads:

WHEREFORE, in view of the foregoing, the petition for certiorari and prohibition docketed as CA GR SP
No. 90845 and the petition for certiorari docketed as CA GR SP No. 95916 are GRANTED. Petitioners’
Motion to Reduce Appeal Bond is GRANTED. Petitioners are hereby DIRECTED to post appeal bond in the
amount ofP10,000,000.00. The NLRC is hereby DIRECTED to give due course to petitioners’ appeal in CA
GR SP No. 95916 which is ordered remanded to the NLRC for further proceedings.

SO ORDERED.27
On the issue28 of the NLRC’s denial of the respondents’ motion to reduce appeal bond, the CA ruled that
the NLRC committed grave abuse of discretion in immediately denying the motion without fixing an
appeal bond in an amount that was reasonable, as it denied the respondents of their right to appeal
from the decision of the LA.29The CA explained that "(w)hile Art. 223 of the Labor Code requiring bond
equivalent to the monetary award is explicit, Section 6, Rule VI of the NLRC Rules of Procedure, as
amended, recognized as exception a motion to reduce bond upon meritorious grounds and upon
posting of a bond in a reasonable amount in relation to the monetary award." 30

On the issue31 of the NLRC’s dismissal of the appeal on the ground of the respondents’ failure to post
the additional appeal bond, the CA also found grave abuse of discretion on the part of the NLRC,
explaining that an appeal bond in the amount of P54,083,910.00 was prohibitive and excessive.
Moreover, the appellate court cited the pendency of the petition for certiorari over the denial of the
motion to reduce bond, which should have prevented the NLRC from immediately dismissing the
respondents’ appeal.32

Undeterred, McBurnie filed a motion for reconsideration. At the same time, the respondents moved
that the appeal be resolved on the merits by the CA. On March 3, 2009, the CA issued a
Resolution33 denying both motions. McBurnie then filed with the Court the Petition for Review on
Certiorari34 docketed as G.R. Nos. 186984-85.

In the meantime, the NLRC, acting on the CA’s order of remand, accepted the appeal from the LA’s
decision, and in its Decision35 dated November 17, 2009, reversed and set aside the Decision of the LA,
and entered a new one dismissing McBurnie’s complaint. It explained that based on records, McBurnie
was never an employee of any of the respondents, but a potential investor in a project that included
said respondents, barring a claim of dismissal, much less, an illegal dismissal. Granting that there was a
contract of employment executed by the parties, McBurnie failed to obtain a work permit which would
have allowed him to work for any of the respondents.36 In the absence of such permit, the employment
agreement was void and thus, could not be the source of any right or obligation.

Court Decision dated September 18, 2009

On September 18, 2009, the Third Division of this Court rendered its Decision37 which reversed the CA
Decision dated October 27, 2008 and Resolution dated March 3, 2009. The dispositive portion reads:

WHEREFORE, the petition is GRANTED. The Decision of the Court of Appeals in CA-G.R. SP Nos. 90845
and 95916 dated October 27, 2008 granting respondents’ Motion to Reduce Appeal Bond and ordering
the National Labor Relations Commission to give due course to respondents’ appeal, and its March 3,
2009 Resolution denying petitioner’s motion for reconsideration, are REVERSED and SET ASIDE. The
March 8, 2006 and June 30, 2006 Resolutions of the National Labor Relations Commission in NLRC NCR
CA NO. 042913-05 dismissing respondents’ appeal for failure to perfect an appeal and denying their
motion for reconsideration, respectively, are REINSTATED and AFFIRMED.

SO ORDERED.38

The Court explained that the respondents’ failure to post a bond equivalent in amount to the LA’s
monetary award was fatal to the appeal.39 Although an appeal bond may be reduced upon motion by an
employer, the following conditions must first be satisfied: (1) the motion to reduce bond shall be based
on meritorious grounds; and (2) a reasonable amount in relation to the monetary award is posted by the
appellant. Unless the NLRC grants the motion to reduce the cash bond within the 10-day reglementary
period to perfect an appeal from a judgment of the LA, the employer is mandated to post the cash or
surety bond securing the full amount within the said 10-day period.40 The respondents’ initial appeal
bond of P100,000.00 was grossly inadequate compared to the LA’s monetary award.

The respondents’ first motion for reconsideration41 was denied by the Court for lack of merit via a
Resolution42dated December 14, 2009.

Meanwhile, on the basis of the Court’s Decision, McBurnie filed with the NLRC a motion for
reconsideration with motion to recall and expunge from the records the NLRC Decision dated November
17, 2009.43 The motion was granted by the NLRC in its Decision44 dated January 14, 2010.45

Undaunted by the denial of their first motion for reconsideration of the Decision dated September 18,
2009, the respondents filed with the Court a Motion for Leave to Submit Attached Second Motion for
Reconsideration46 and Second Motion for Reconsideration,47 which motion for leave was granted in a
Resolution48 dated March 15, 2010. McBurnie was allowed to submit his comment on the second
motion, and the respondents, their reply to the comment. On January 25, 2012, however, the Court
issued a Resolution49 denying the second motion "for lack of merit," "considering that a second motion
for reconsideration is a prohibited pleading x x x."50

The Court’s Decision dated September 18, 2009 became final and executory on March 14, 2012. Thus,
entry of judgment51 was made in due course, as follows:

ENTRY OF JUDGMENT

This is to certify that on September 18, 2009 a decision rendered in the above-entitled cases was filed in
this Office, the dispositive part of which reads as follows:

xxxx

and that the same has, on March 14, 2012 become final and executory and is hereby recorded in the
Book of Entries of Judgments.52

The Entry of Judgment indicated that the same was made for the Court’s Decision rendered in G.R. Nos.
186984-85.

On March 27, 2012, the respondents filed a Motion for Leave to File Attached Third Motion for
Reconsideration, with an attached Motion for Reconsideration (on the Honorable Court’s 25 January
2012 Resolution) with Motion to Refer These Cases to the Honorable Court En Banc. 53 The third motion
for reconsideration is founded on the following grounds:

I.

THE PREVIOUS 15 MARCH 2010 RESOLUTION OF THE HONORABLE COURT ACTUALLY GRANTED
RESPONDENTS’ "MOTION FOR LEAVE TO SUBMIT A SECOND MOTION FOR RECONSIDERATION."
HENCE, RESPONDENTS RESPECTFULLY CONTEND THAT THE SUBSEQUENT 25 JANUARY 2012
RESOLUTION CANNOT DENY THE " SECOND MOTION FOR RECONSIDERATION " ON THE GROUND THAT
IT IS A PROHIBITED PLEADING. MOREOVER, IT IS RESPECTFULLY CONTENDED THAT THERE ARE VERY
PECULIAR CIRCUMSTANCES AND NUMEROUS IMPORTANT ISSUES IN THESE CASES THAT CLEARLY
JUSTIFY GIVING DUE COURSE TO RESPONDENTS’ "SECOND MOTION FOR RECONSIDERATION," WHICH
ARE:

II.

THE 10 MILLION PESOS BOND WHICH WAS POSTED IN COMPLIANCE WITH THE OCTOBER 27, 2008
DECISION OF THE COURT OF APPEALS IS A SUBSTANTIAL AND SPECIAL MERITORIOUS CIRCUMSTANCE
TO MERIT RECONSIDERATION OF THIS APPEAL.

III.

THE HONORABLE COURT HAS HELD IN NUMEROUS LABOR CASES THAT WITH RESPECT TO ARTICLE 223
OF THE LABOR CODE, THE REQUIREMENTS OF THE LAW SHOULD BE GIVEN A LIBERAL INTERPRETATION,
ESPECIALLY IF THERE ARE SPECIAL MERITORIOUS CIRCUMSTANCES AND ISSUES.

IV. THE LA’S JUDGMENT WAS PATENTLY VOID SINCE IT AWARDS MORE THAN P60 MILLION PESOS TO A
SINGLE FOREIGNER WHO HAD NO WORK PERMIT, AND NO WORKING VISA.

V.

PETITIONER MCBURNIE DID NOT IMPLEAD THE NATIONAL LABOR RELATIONS COMMISSION (NLRC) IN
HIS APPEAL HEREIN, MAKING THE APPEAL INEFFECTIVE AGAINST THE NLRC.

VI.

NLRC HAS DISMISSED THE COMPLAINT OF PETITIONER MCBURNIE IN ITS NOVEMBER 17, 2009 DECISION.

VII.

THE HONORABLE COURT’S 18 SEPTEMBER 2009 DECISION WAS TAINTED WITH VERY SERIOUS
IRREGULARITIES.

VIII.

GR NOS. 178034 AND 178117 HAVE BEEN INADVERTENTLY INCLUDED IN THIS CASE.

IX.

THE HONORABLE COURT DID NOT DULY RULE UPON THE OTHER VERY MERITORIOUS ARGUMENTS OF
THE RESPONDENTS WHICH ARE AS FOLLOWS:

(A) PETITIONER NEVER ATTENDED ANY OF ALL 14 HEARINGS BEFORE THE [LA] (WHEN 2
MISSED HEARINGS MEAN DISMISSAL).
 (B) PETITIONER REFERRED TO HIMSELF AS A "VICTIM" OF LEISURE EXPERTS, INC., BUT
NOT OF ANY OF THE RESPONDENTS.

(C) PETITIONER’S POSITIVE LETTER TO RESPONDENT MR. EULALIO GANZON CLEARLY

SHOWS THAT HE WAS NOT ILLEGALLY DISMISSED NOR EVEN DISMISSED BY ANY OF THE
RESPONDENTS AND PETITIONER EVEN PROMISED TO PAY HIS DEBTS FOR ADVANCES
MADE BY RESPONDENTS.

(D) PETITIONER WAS NEVER EMPLOYED BY ANY OF THE RESPONDENTS. PETITIONER

PRESENTED WORK FOR CORONADO BEACH RESORT WHICH IS [NEITHER] OWNED NOR
CONNECTED WITH ANY OF THE RESPONDENTS.

(E) THE [LA] CONCLUDED THAT PETITIONER WAS DISMISSED EVEN IF THERE WAS
ABSOLUTELY NO EVIDENCE AT ALL PRESENTED THAT PETITIONER WAS DISMISSED BY
THE RESPONDENTS.

(F) PETITIONER LEFT THE PHILIPPINES FOR AUSTRALIA JUST 2 MONTHS AFTER THE
START OF THE ALLEGED EMPLOYMENT AGREEMENT, AND HAS STILL NOT RETURNED TO
THE PHILIPPINES AS CONFIRMED BY THE BUREAU OF IMMIGRATION.

(G) PETITIONER COULD NOT HAVE SIGNED AND PERSONALLY APPEARED BEFORE THE
NLRC ADMINISTERING OFFICER AS INDICATED IN THE COMPLAINT SHEET SINCE HE LEFT
THE COUNTRY 3 YEARS BEFORE THE COMPLAINT WAS FILED AND HE NEVER CAME
BACK.54

On September 4, 2012, the Court en banc55 issued a Resolution56 accepting the case from the Third
Division. It also issued a temporary restraining order (TRO) enjoining the implementation of the LA’s
Decision dated September 30, 2004. This prompted McBurnie’s filing of a Motion for
Reconsideration,57 where he invoked the fact that the Court’s Decision dated September 18, 2009 had
become final and executory, with an entry of judgment already made by the Court.

Our Ruling

In light of pertinent law and jurisprudence, and upon taking a second hard look of the parties’
arguments and the records of the case, the Court has ascertained that a reconsideration of this Court’s
Decision dated September 18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012,
along with the lifting of the entry of judgment in G.R. No. 186984-85, is in order.

The Court’s acceptance of the

third motion for reconsideration

At the outset, the Court emphasizes that second and subsequent motions for reconsideration are, as a
general rule, prohibited. Section 2, Rule 52 of the Rules of Court provides that "no second motion for
reconsideration of a judgment or final resolution by the same party shall be entertained." The rule rests
on the basic tenet of immutability of judgments. "At some point, a decision becomes final and executory
and, consequently, all litigations must come to an end."58
The general rule, however, against second and subsequent motions for reconsideration admits of
settled exceptions. For one, the present Internal Rules of the Supreme Court, particularly Section 3, Rule
15 thereof, provides:

Sec. 3. Second motion for reconsideration. ― The Court shall not entertain a second motion for
reconsideration, and any exception to this rule can only be granted in the higher interest of justice by
the Court en banc upon a vote of at least two-thirds of its actual membership. There is reconsideration
"in the higher interest of justice" when the assailed decision is not only legally erroneous, but is likewise
patently unjust and potentially capable of causing unwarranted and irremediable injury or damage to
the parties. A second motion for reconsideration can only be entertained before the ruling sought to be
reconsidered becomes final by operation of law or by the Court’s declaration.

x x x x (Emphasis ours)

In a line of cases, the Court has then entertained and granted second motions for reconsideration "in
the higher interest of substantial justice," as allowed under the Internal Rules when the assailed decision
is "legally erroneous," "patently unjust" and "potentially capable of causing unwarranted and
irremediable injury or damage to the parties." In Tirazona v. Philippine EDS Techno-Service, Inc. (PET,
Inc.),59 we also explained that a second motion for reconsideration may be allowed in instances of
"extraordinarily persuasive reasons and only after an express leave shall have been obtained." 60 In Apo
Fruits Corporation v. Land Bank of the Philippines,61 we allowed a second motion for reconsideration as
the issue involved therein was a matter of public interest, as it pertained to the proper application of a
basic constitutionally-guaranteed right in the government’s implementation of its agrarian reform
program. In San Miguel Corporation v. NLRC,62 the Court set aside the decisions of the LA and the NLRC
that favored claimants-security guards upon the Court’s review of San Miguel Corporation’s second
motion for reconsideration. In Vir-Jen Shipping and Marine Services, Inc. v. NLRC, et al., 63 the Court en
banc reversed on a third motion for reconsideration the ruling of the Court’s Division on therein private
respondents’ claim for wages and monetary benefits.

It is also recognized that in some instances, the prudent action towards a just resolution of a case is for
the Court to suspend rules of procedure, for "the power of this Court to suspend its own rules or to
except a particular case from its operations whenever the purposes of justice require it, cannot be
questioned."64 In De Guzman v. Sandiganbayan,65 the Court, thus, explained:

The rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice.
Their strict and rigid application, which would result in technicalities that tend to frustrate rather than
promote substantial justice, must always be avoided. Even the Rules of Court envision this liberality. This
power to suspend or even disregard the rules can be so pervasive and encompassing so as to alter even
that which this Court itself has already declared to be final, as we are now compelled to do in this case. x
x x.

xxxx

The Rules of Court was conceived and promulgated to set forth guidelines in the dispensation of justice
but not to bind and chain the hand that dispenses it, for otherwise, courts will be mere slaves to or
robots of technical rules, shorn of judicial discretion. That is precisely why courts in rendering real justice
have always been, as they in fact ought to be, conscientiously guided by the norm that when on the
balance, technicalities take a backseat against substantive rights, and not the other way around. Truly
then, technicalities, in the appropriate language of Justice Makalintal, "should give way to the realities of
the situation." x x x.66 (Citations omitted)

Consistent with the foregoing precepts, the Court has then reconsidered even decisions that have
attained finality, finding it more appropriate to lift entries of judgments already made in these cases. In
Navarro v. Executive Secretary,67 we reiterated the pronouncement in De Guzman that the power to
suspend or even disregard rules of procedure can be so pervasive and compelling as to alter even that
which this Court itself has already declared final. The Court then recalled in Navarro an entry of
judgment after it had determined the validity and constitutionality of Republic Act No. 9355, explaining
that:

Verily, the Court had, on several occasions, sanctioned the recall of entries of judgment in light of
attendant extraordinary circumstances. The power to suspend or even disregard rules of procedure can
be so pervasive and compelling as to alter even that which this Court itself had already declared final. In
this case, the compelling concern is not only to afford the movants-intervenors the right to be heard
since they would be adversely affected by the judgment in this case despite not being original parties
thereto, but also to arrive at the correct interpretation of the provisions of the [Local Government Code
(LGC)] with respect to the creation of local government units. x x x. 68 (Citations omitted)

In Munoz v. CA,69 the Court resolved to recall an entry of judgment to prevent a miscarriage of justice.
This justification was likewise applied in Tan Tiac Chiong v. Hon. Cosico,70 wherein the Court held that:

The recall of entries of judgments, albeit rare, is not a novelty. In Muñoz v. CA , where the case was
elevated to this Court and a first and second motion for reconsideration had been denied with finality ,
the Court, in the interest of substantial justice, recalled the Entry of Judgment as well as the letter of
transmittal of the records to the Court of Appeals. 71 (Citation omitted)

In Barnes v. Judge Padilla,72 we ruled:

A final and executory judgment can no longer be attacked by any of the parties or be modified, directly
or indirectly, even by the highest court of the land.

However, this Court has relaxed this rule in order to serve substantial justice considering (a) matters of
life, liberty, honor or property, (b) the existence of special or compelling circumstances, (c) the merits of
the case, (d) a cause not entirely attributable to the fault or negligence of the party favored by the
suspension of the rules, (e) a lack of any showing that the review sought is merely frivolous and dilatory,
and (f) the other party will not be unjustly prejudiced thereby. 73 (Citations omitted)

As we shall explain, the instant case also qualifies as an exception to, first, the proscription against
second and subsequent motions for reconsideration, and second, the rule on immutability of judgments;
a reconsideration of the Decision dated September 18, 2009, along with the Resolutions dated
December 14, 2009 and January 25, 2012, is justified by the higher interest of substantial justice.

To begin with, the Court agrees with the respondents that the Court’s prior resolve to grant , and not
just merely note, in a Resolution dated March 15, 2010 the respondents’ motion for leave to submit
their second motion for reconsideration already warranted a resolution and discussion of the motion for
reconsideration on its merits. Instead of doing this, however, the Court issued on January 25, 2012 a
Resolution74 denying the motion to reconsider for lack of merit, merely citing that it was a "prohibited
pleading under Section 2, Rule 52 in relation to Section 4, Rule 56 of the 1997 Rules of Civil Procedure,
as amended."75 In League of Cities of the Philippines (LCP) v. Commission on Elections,76 we reiterated a
ruling that when a motion for leave to file and admit a second motion for reconsideration is granted by
the Court, the Court therefore allows the filing of the second motion for reconsideration. In such a case,
the second motion for reconsideration is no longer a prohibited pleading. Similarly in this case, there
was then no reason for the Court to still consider the respondents’ second motion for reconsideration as
a prohibited pleading, and deny it plainly on such ground. The Court intends to remedy such error
through this resolution.

More importantly, the Court finds it appropriate to accept the pending motion for reconsideration and
resolve it on the merits in order to rectify its prior disposition of the main issues in the petition. Upon
review, the Court is constrained to rule differently on the petitions. We have determined the grave error
in affirming the NLRC’s rulings, promoting results that are patently unjust for the respondents, as we
consider the facts of the case, pertinent law, jurisprudence, and the degree of the injury and damage to
the respondents that will inevitably result from the implementation of the Court’s Decision dated
September 18, 2009.

The rule on appeal bonds

We emphasize that the crucial issue in this case concerns the sufficiency of the appeal bond that was
posted by the respondents. The present rule on the matter is Section 6, Rule VI of the 2011 NLRC Rules
of Procedure, which was substantially the same provision in effect at the time of the respondents’
appeal to the NLRC, and which reads:

RULE VI
APPEALS

Sec. 6. BOND. – In case the decision of the Labor Arbiter or the Regional Director involves a monetary
award, an appeal by the employer may be perfected only upon the posting of a cash or surety bond. The
appeal bond shall either be in cash or surety in an amount equivalent to the monetary award, exclusive
of damages and attorney’s fees.

xxxx

No motion to reduce bond shall be entertained except on meritorious grounds and upon the posting of
a bond in a reasonable amount in relation to the monetary award.

The filing of the motion to reduce bond without compliance with the requisites in the preceding
paragraph shall not stop the running of the period to perfect an appeal. (Emphasis supplied)

While the CA, in this case, allowed an appeal bond in the reduced amount of P10,000,000.00 and then
ordered the case’s remand to the NLRC, this Court’s Decision dated September 18, 2009 provides
otherwise, as it reads in part:
The posting of a bond is indispensable to the perfection of an appeal in cases involving monetary awards
from the decision of the Labor Arbiter. The lawmakers clearly intended to make the bond a mandatory
requisite for the perfection of an appeal by the employer as inferred from the provision that an appeal
by the employer may be perfected "only upon the posting of a cash or surety bond." The word "only"
makes it clear that the posting of a cash or surety bond by the employer is the essential and exclusive
means by which an employer’s appeal may be perfected. x x x.

Moreover, the filing of the bond is not only mandatory but a jurisdictional requirement as well, that
must be complied with in order to confer jurisdiction upon the NLRC. Non-compliance therewith renders
the decision of the Labor Arbiter final and executory. This requirement is intended to assure the workers
that if they prevail in the case, they will receive the money judgment in their favor upon the dismissal of
the employer’s appeal. It is intended to discourage employers from using an appeal to delay or evade
their obligation to satisfy their employees’ just and lawful claims.

xxxx

Thus, it behooves the Court to give utmost regard to the legislative and administrative intent to strictly
require the employer to post a cash or surety bond securing the full amount of the monetary award
within the 10[-]day reglementary period. Nothing in the Labor Code or the NLRC Rules of Procedure
authorizes the posting of a bond that is less than the monetary award in the judgment, or would deem
such insufficient posting as sufficient to perfect the appeal.

While the bond may be reduced upon motion by the employer, this is subject to the conditions that (1)
the motion to reduce the bond shall be based on meritorious grounds; and (2) a reasonable amount in
relation to the monetary award is posted by the appellant, otherwise the filing of the motion to reduce
bond shall not stop the running of the period to perfect an appeal. The qualification effectively requires
that unless the NLRC grants the reduction of the cash bond within the 10-day reglementary period, the
employer is still expected to post the cash or surety bond securing the full amount within the said 10-
day period. If the NLRC does eventually grant the motion for reduction after the reglementary period
has elapsed, the correct relief would be to reduce the cash or surety bond already posted by the
employer within the 10-day period.77 (Emphasis supplied; underscoring ours)

To begin with, the Court rectifies its prior pronouncement – the unqualified statement that even an
appellant who seeks a reduction of an appeal bond before the NLRC is expected to post a cash or surety
bond securing the full amount of the judgment award within the 10-day reglementary period to perfect
the appeal.

The suspension of the period to

perfect the appeal upon the filing of
a motion to reduce bond

To clarify, the prevailing jurisprudence on the matter provides that the filing of a motion to reduce bond,
coupled with compliance with the two conditions emphasized in Garcia v. KJ Commercial 78 for the grant
of such motion, namely, (1) a meritorious ground, and (2) posting of a bond in a reasonable amount,
shall suffice to suspend the running of the period to perfect an appeal from the labor arbiter’s decision
to the NLRC.79 To require the full amount of the bond within the 10-day reglementary period would only
render nugatory the legal provisions which allow an appellant to seek a reduction of the bond. Thus, we
explained in Garcia:

The filing of a motion to reduce bond and compliance with the two conditions stop the running of the
period to perfect an appeal. x x x

xxxx

The NLRC has full discretion to grant or deny the motion to reduce bond, and it may rule on the motion
beyond the 10-day period within which to perfect an appeal. Obviously, at the time of the filing of the
motion to reduce bond and posting of a bond in a reasonable amount, there is no assurance whether
the appellant’s motion is indeed based on "meritorious ground" and whether the bond he or she posted
is of a "reasonable amount." Thus, the appellant always runs the risk of failing to perfect an appeal.

x x x In order to give full effect to the provisions on motion to reduce bond, the appellant must be
allowed to wait for the ruling of the NLRC on the motion even beyond the 10-day period to perfect an
appeal. If the NLRC grants the motion and rules that there is indeed meritorious ground and that the
amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC denies the motion,
the appellant may still file a motion for reconsideration as provided under Section 15, Rule VII of the
Rules. If the NLRC grants the motion for reconsideration and rules that there is indeed meritorious
ground and that the amount of the bond posted is reasonable, then the appeal is perfected. If the NLRC
denies the motion, then the decision of the labor arbiter becomes final and executory.

xxxx

In any case, the rule that the filing of a motion to reduce bond shall not stop the running of the period to
perfect an appeal is not absolute. The Court may relax the rule. In Intertranz Container Lines, Inc. v.
Bautista, the Court held:

"Jurisprudence tells us that in labor cases, an appeal from a decision involving a monetary award may be
perfected only upon the posting of cash or surety bond. The Court, however, has relaxed this
requirement under certain exceptional circumstances in order to resolve controversies on their merits.
These circumstances include: (1) fundamental consideration of substantial justice; (2) prevention of
miscarriage of justice or of unjust enrichment; and (3) special circumstances of the case combined with
its legal merits, and the amount and the issue involved."80 (Citations omitted and emphasis ours)

A serious error of the NLRC was its outright denial of the motion to reduce the bond, without even
considering the respondents’ arguments and totally unmindful of the rules and jurisprudence that allow
the bond’s reduction. Instead of resolving the motion to reduce the bond on its merits, the NLRC
insisted on an amount that was equivalent to the monetary award, merely explaining:

We are constrained to deny respondents’ motion for reduction. As held by the Supreme Court in a
recent case, in cases involving monetary award, an employer seeking to appeal the Labor Arbiter’s
decision to the Commission is unconditionally required by Art. 223, Labor Code to post bond in the
amount equivalent to the monetary award (Calabash Garments vs. NLRC, G.R. No. 110827, August 8,
1996). x x x81 (Emphasis ours)
When the respondents sought to reconsider, the NLRC still refused to fully decide on the motion. It
refused to at least make a preliminary determination of the merits of the appeal, as it held:

We are constrained to dismiss respondents’ Motion for Reconsideration. Respondents’ contention that
the appeal bond is excessive and based on a decision which is a patent nullity involves the merits of the
case. x x x82

Prevailing rules and jurisprudence

allow the reduction of appeal bonds.

By such haste of the NLRC in peremptorily denying the respondents’ motion without considering the
respondents’ arguments, it effectively denied the respondents of their opportunity to seek a reduction
of the bond even when the same is allowed under the rules and settled jurisprudence. It was equivalent
to the NLRC’s refusal to exercise its discretion, as it refused to determine and rule on a showing of
meritorious grounds and the reasonableness of the bond tendered under the circumstances. 83 Time and
again, the Court has cautioned the NLRC to give Article 223 of the Labor Code, particularly the provisions
requiring bonds in appeals involving monetary awards, a liberal interpretation in line with the desired
objective of resolving controversies on the merits. 84 The NLRC’s failure to take action on the motion to
reduce the bond in the manner prescribed by law and jurisprudence then cannot be countenanced.
Although an appeal by parties from decisions that are adverse to their interests is neither a natural right
nor a part of due process, it is an essential part of our judicial system. Courts should proceed with
caution so as not to deprive a party of the right to appeal, but rather, ensure that every party has the
amplest opportunity for the proper and just disposition of their cause, free from the constraints of
technicalities.85 Considering the mandate of labor tribunals, the principle equally applies to them.

Given the circumstances of the case, the Court’s affirmance in the Decision dated September 18, 2009 of
the NLRC’s strict application of the rule on appeal bonds then demands a re-examination. Again, the
emerging trend in our jurisprudence is to afford every party-litigant the amplest opportunity for the
proper and just determination of his cause, free from the constraints of technicalities. 86 Section 2, Rule I
of the NLRC Rules of Procedure also provides the policy that "the Rules shall be liberally construed to
carry out the objectives of the Constitution, the Labor Code of the Philippines and other relevant
legislations, and to assist the parties in obtaining just, expeditious and inexpensive resolution and
settlement of labor disputes."87

In accordance with the foregoing, although the general rule provides that an appeal in labor cases from
a decision involving a monetary award may be perfected only upon the posting of a cash or surety bond,
the Court has relaxed this requirement under certain exceptional circumstances in order to resolve
controversies on their merits. These circumstances include: (1) the fundamental consideration of
substantial justice; (2) the prevention of miscarriage of justice or of unjust enrichment; and (3) special
circumstances of the case combined with its legal merits, and the amount and the issue
involved.88 Guidelines that are applicable in the reduction of appeal bonds were also explained in Nicol
v. Footjoy Industrial Corporation.89 The bond requirement in appeals involving monetary awards has
been and may be relaxed in meritorious cases, including instances in which (1) there was substantial
compliance with the Rules, (2) surrounding facts and circumstances constitute meritorious grounds to
reduce the bond, (3) a liberal interpretation of the requirement of an appeal bond would serve the
desired objective of resolving controversies on the merits, or (4) the appellants, at the very least,
exhibited their willingness and/or good faith by posting a partial bond during the reglementary period. 90
In Blancaflor v. NLRC,91 the Court also emphasized that while Article 223 92 of the Labor Code, as
amended by Republic Act No. 6715, which requires a cash or surety bond in an amount equivalent to the
monetary award in the judgment appealed from may be considered a jurisdictional requirement for the
perfection of an appeal, nevertheless, adhering to the principle that substantial justice is better served
by allowing the appeal on the merits to be threshed out by the NLRC, the foregoing requirement of the
law should be given a liberal interpretation.

As the Court, nonetheless, remains firm on the importance of appeal bonds in appeals from monetary
awards of LAs, we stress that the NLRC, pursuant to Section 6, Rule VI of the NLRC Rules of Procedure,
shall only accept motions to reduce bond that are coupled with the posting of a bond in a reasonable
amount. Time and again, we have explained that the bond requirement imposed upon appellants in
labor cases is intended to ensure the satisfaction of awards that are made in favor of appellees, in the
event that their claims are eventually sustained by the courts. 93 On the part of the appellants, its posting
may also signify their good faith and willingness to recognize the final outcome of their appeal.

At the time of a motion to reduce appeal bond’s filing, the question of what constitutes "a reasonable
amount of bond" that must accompany the motion may be subject to differing interpretations of
litigants. The judgment of the NLRC which has the discretion under the law to determine such amount
cannot as yet be invoked by litigants until after their motions to reduce appeal bond are accepted.

Given these limitations, it is not uncommon for a party to unduly forfeit his opportunity to seek a
reduction of the required bond and thus, to appeal, when the NLRC eventually disagrees with the party’s
assessment. These have also resulted in the filing of numerous petitions against the NLRC, citing an
alleged grave abuse of discretion on the part of the labor tribunal for its finding on the sufficiency or
insufficiency of posted appeal bonds.

It is in this light that the Court finds it necessary to set a parameter for the litigants’ and the NLRC’s
guidance on the amount of bond that shall hereafter be filed with a motion for a bond’s reduction. To
ensure that the provisions of Section 6, Rule VI of the NLRC Rules of Procedure that give parties the
chance to seek a reduction of the appeal bond are effectively carried out, without however defeating
the benefits of the bond requirement in favor of a winning litigant, all motions to reduce bond that are
to be filed with the NLRC shall be accompanied by the posting of a cash or surety bond equivalent to
10% of the monetary award that is subject of the appeal, which shall provisionally be deemed the
reasonable amount of the bond in the meantime that an appellant’s motion is pending resolution by the
Commission. In conformity with the NLRC Rules, the monetary award, for the purpose of computing the
necessary appeal bond, shall exclude damages and attorney’s fees. 94 Only after the posting of a bond in
the required percentage shall an appellant’s period to perfect an appeal under the NLRC Rules be
deemed suspended.

The foregoing shall not be misconstrued to unduly hinder the NLRC’s exercise of its discretion, given that
the percentage of bond that is set by this guideline shall be merely provisional. The NLRC retains its
authority and duty to resolve the motion and determine the final amount of bond that shall be posted
by the appellant, still in accordance with the standards of "meritorious grounds" and "reasonable
amount". Should the NLRC, after considering the motion’s merit, determine that a greater amount or
the full amount of the bond needs to be posted by the appellant, then the party shall comply
accordingly. The appellant shall be given a period of 10 days from notice of the NLRC order within which
to perfect the appeal by posting the required appeal bond.
Meritorious ground as a condition
for the reduction of the appeal bond

In all cases, the reduction of the appeal bond shall be justified by meritorious grounds and accompanied
by the posting of the required appeal bond in a reasonable amount.

The requirement on the existence of a "meritorious ground" delves on the worth of the parties’
arguments, taking into account their respective rights and the circumstances that attend the case. The
condition was emphasized in University Plans Incorporated v. Solano, 95 wherein the Court held that
while the NLRC’s Revised Rules of Procedure "allows the [NLRC] to reduce the amount of the bond, the
exercise of the authority is not a matter of right on the part of the movant, but lies within the sound
discretion of the NLRC upon a showing of meritorious grounds." 96 By jurisprudence, the merit referred
to may pertain to an appellant’s lack of financial capability to pay the full amount of the bond, 97 the
merits of the main appeal such as when there is a valid claim that there was no illegal dismissal to justify
the award,98 the absence of an employer-employee relationship,99 prescription of claims,100 and other
similarly valid issues that are raised in the appeal. 101 For the purpose of determining a "meritorious
ground", the NLRC is not precluded from receiving evidence, or from making a preliminary
determination of the merits of the appellant’s contentions.102

In this case, the NLRC then should have considered the respondents’ arguments in the memorandum on
appeal that was filed with the motion to reduce the requisite appeal bond. Although a consideration of
said arguments at that point would have been merely preliminary and should not in any way bind the
eventual outcome of the appeal, it was apparent that the respondents’ defenses came with an
indication of merit that deserved a full review of the decision of the LA. The CA, by its Resolution dated
February 16, 2007, even found justified the issuance of a preliminary injunction to enjoin the immediate
execution of the LA’s decision, and this Court, a temporary restraining order on September 4, 2012.

Significantly, following the CA’s remand of the case to the NLRC, the latter even rendered a Decision that
contained findings that are inconsistent with McBurnie’s claims. The NLRC reversed and set aside the
decision of the LA, and entered a new one dismissing McBurnie’s complaint. It explained that McBurnie
was not an employee of the respondents; thus, they could not have dismissed him from employment.
The purported employment contract of the respondents with the petitioner was qualified by the
conditions set forth in a letter dated May 11, 1999, which reads:

May 11, 1999

MR. ANDREW MCBURNIE

Re: Employment Contract

Dear Andrew,

It is understood that this Contract is made subject to the understanding that it is effective only when the
project financing for our Baguio Hotel project pushed through.

The agreement with EGI Managers, Inc. is made now to support your need to facilitate your work permit
with the Department of Labor in view of the expiration of your contract with Pan Pacific.
Regards,

Sgd. Eulalio Ganzon (p. 203, Records)103

For the NLRC, the employment agreement could not have given rise to an employer-employee
relationship by reason of legal impossibility. The two conditions that form part of their agreement,
namely, the successful completion of the project financing for the hotel project in Baguio City and
McBurnie’s acquisition of an Alien Employment Permit, remained unsatisfied. 104 The NLRC concluded
that McBurnie was instead a potential investor in a project that included Ganzon, but the said project
failed to pursue due to lack of funds. Any work performed by McBurnie in relation to the project was
merely preliminary to the business venture and part of his "due diligence" study before pursuing the
project, "done at his own instance, not in furtherance of the employment contract but for his own
investment purposes."105 Lastly, the alleged employment of the petitioner would have been void for
being contrary to law, since it is undisputed that McBurnie did not have any work permit. The NLRC
declared:

Absent an employment permit, any employment relationship that McBurnie contemplated with the
respondents was void for being contrary to law. A void or inexistent contract, in turn, has no force and
effect from the beginning as if it had never been entered into. Thus, without an Alien Employment
Permit, the "Employment Agreement" is void and could not be the source of a right or obligation. In
support thereof, the DOLE issued a certification that McBurnie has neither applied nor been issued an
Alien Employment Permit (p. 204, Records).106

McBurnie moved to reconsider, citing the Court’s Decision of September 18, 2009 that reversed and set
aside the CA’s Decision authorizing the remand. Although the NLRC granted the motion on the said
ground via a Decision107 that set aside the NLRC’s Decision dated November 17, 2009, the findings of the
NLRC in the November 17, 2009 decision merit consideration, especially since the findings made therein
are supported by the case records.

In addition to the apparent merit of the respondents’ appeal, the Court finds the reduction of the appeal
bond justified by the substantial amount of the LA’s monetary award. Given its considerable amount, we
find reason in the respondents’ claim that to require an appeal bond in such amount could only deprive
them of the right to appeal, even force them out of business and affect the livelihood of their
employees.108 In Rosewood Processing, Inc. v. NLRC,109 we emphasized: "Where a decision may be made
to rest on informed judgment rather than rigid rules, the equities of the case must be accorded their
due weight because labor determinations should not be ‘secundum rationem but also secundum
caritatem.’"110

What constitutes a reasonable

amount in the determination of the
final amount of appeal bond

As regards the requirement on the posting of a bond in a "reasonable amount," the Court holds that the
final determination thereof by the NLRC shall be based primarily on the merits of the motion and the
main appeal.
Although the NLRC Rules of Procedure, particularly Section 6 of Rule VI thereof, provides that the bond
to be posted shall be "in a reasonable amount in relation to the monetary award ," the merit of the
motion shall always take precedence in the determination. Settled is the rule that procedural rules were
conceived, and should thus be applied in a manner that would only aid the attainment of justice. If a
stringent application of the rules would hinder rather than serve the demands of substantial justice, the
former must yield to the latter.111

Thus, in Nicol where the appellant posted a bond of P10,000,000.00 upon an appeal from the LA’s award
ofP51,956,314.00, the Court, instead of ruling right away on the reasonableness of the bond’s amount
solely on the basis of the judgment award, found it appropriate to remand the case to the NLRC, which
should first determine the merits of the motion. In University Plans, 112 the Court also reversed the
outright dismissal of an appeal where the bond posted in a judgment award of more
than P30,000,000.00 was P30,000.00. The Court then directed the NLRC to first determine the merit, or
lack of merit, of the motion to reduce the bond, after the appellant therein claimed that it was under
receivership and thus, could not dispose of its assets within a short notice. Clearly, the rule on the
posting of an appeal bond should not be allowed to defeat the substantive rights of the parties. 113

Notably, in the present case, following the CA’s rendition of its Decision which allowed a reduced appeal
bond, the respondents have posted a bond in the amount of P10,000,000.00. In Rosewood, the Court
deemed the posting of a surety bond of P50,000.00, coupled with a motion to reduce the appeal bond,
as substantial compliance with the legal requirements for an appeal from a P789,154.39 monetary
award "considering the clear merits which appear, res ipsa loquitor, in the appeal from the LA’s
Decision, and the petitioner’s substantial compliance with rules governing appeals." 114 The foregoing
jurisprudence strongly indicate that in determining the reasonable amount of appeal bonds, the Court
primarily considers the merits of the motions and appeals.

Given the circumstances in this case and the merits of the respondents’ arguments before the NLRC, the
Court holds that the respondents had posted a bond in a "reasonable amount", and had thus complied
with the requirements for the perfection of an appeal from the LA’s decision. The CA was correct in
ruling that:

In the case of Nueva Ecija I Electric Cooperative, Inc. (NEECO I) Employees Association, President Rodolfo
Jimenez, and members, Reynaldo Fajardo, et al. vs. NLRC, Nueva Ecija I Electric Cooperative, Inc. (NEECO
I) and Patricio de la Peña (GR No. 116066, January 24, 2000), the Supreme Court recognized that: "the
NLRC, in its Resolution No. 11-01-91 dated November 7, 1991 deleted the phrase "exclusive of moral
and exemplary damages as well as attorney’s fees in the determination of the amount of bond, and
provided a safeguard against the imposition of excessive bonds by providing that "(T)he Commission
may in meritorious cases and upon motion of the appellant, reduce the amount of the bond."

In the case of Cosico, Jr. vs. NLRC, 272 SCRA 583, it was held:

"The unreasonable and excessive amount of bond would be oppressive and unjust and would have the
effect of depriving a party of his right to appeal."

xxxx
In dismissing outright the motion to reduce bond filed by petitioners, NLRC abused its discretion. It
should have fixed an appeal bond in a reasonable amount. Said dismissal deprived petitioners of their
right to appeal the Labor Arbiter’s decision.

xxxx

NLRC Rules allow reduction of appeal bond on meritorious grounds (Sec. 6, Rule VI, NLRC Rules of
Procedure). This Court finds the appeal bond in the amount of P54,083,910.00 prohibitive and excessive,
which constitutes a meritorious ground to allow a motion for reduction thereof. 115

The foregoing declaration of the Court requiring a bond in a reasonable amount, taking into account the
merits of the motion and the appeal, is consistent with the oft-repeated principle that letter-perfect
rules must yield to the broader interest of substantial justice.116

The effect of a denial of the appeal

to the NLRC

In finding merit in the respondents’ motion for reconsideration, we also take into account the
unwarranted results that will arise from an implementation of the Court’s Decision dated September 18,
2009. We emphasize, moreover, that although a remand and an order upon the NLRC to give due course
to the appeal would have been the usual course after a finding that the conditions for the reduction of
an appeal bond were duly satisfied by the respondents, given such results, the Court finds it necessary
to modify the CA’s order of remand, and instead rule on the dismissal of the complaint against the
respondents.

Without the reversal of the Court’s Decision and the dismissal of the complaint against the respondents,
McBurnie would be allowed to claim benefits under our labor laws despite his failure to comply with a
settled requirement for foreign nationals.

Considering that McBurnie, an Australian, alleged illegal dismissal and sought to claim under our labor
laws, it was necessary for him to establish, first and foremost, that he was qualified and duly authorized
to obtain employment within our jurisdiction. A requirement for foreigners who intend to work within
the country is an employment permit, as provided under Article 40, Title II of the Labor Code which
reads:

Art. 40. Employment permit for non-resident aliens. Any alien seeking admission to the Philippines for
employment purposes and any domestic or foreign employer who desires to engage an alien for
employment in the Philippines shall obtain an employment permit from the Department of Labor.

In WPP Marketing Communications, Inc. v. Galera,117 we held that a foreign national’s failure to seek an
employment permit prior to employment poses a serious problem in seeking relief from the
Court.118 Thus, although the respondent therein appeared to have been illegally dismissed from
employment, we explained:

This is Galera’s dilemma: Galera worked in the Philippines without proper work permit but now wants to
claim employee’s benefits under Philippine labor laws.
xxxx

The law and the rules are consistent in stating that the employment permit must be acquired prior to
employment. The Labor Code states: "Any alien seeking admission to the Philippines for employment
purposes and any domestic or foreign employer who desires to engage an alien for employment in the
Philippines shall obtain an employment permit from the Department of Labor." Section 4, Rule XIV, Book
I of the Implementing Rules and Regulations provides:

"Employment permit required for entry. – No alien seeking employment, whether as a resident or non-
resident, may enter the Philippines without first securing an employment permit from the Ministry. If an
alien enters the country under a non-working visa and wishes to be employed thereafter, he may be
allowed to be employed upon presentation of a duly approved employment permit."

Galera cannot come to this Court with unclean hands. To grant Galera’s prayer is to sanction the
violation of the Philippine labor laws requiring aliens to secure work permits before their employment.
We hold that the status quo must prevail in the present case and we leave the parties where they are.
This ruling, however, does not bar Galera from seeking relief from other jurisdictions. 119 (Citations
omitted and underscoring ours)

Clearly, this circumstance on the failure of McBurnie to obtain an employment permit, by itself,
necessitates the dismissal of his labor complaint.

Furthermore, as has been previously discussed, the NLRC has ruled in its Decision dated November 17,
2009 on the issue of illegal dismissal. It declared that McBurnie was never an employee of any of the
respondents.120 It explained:

All these facts and circumstances prove that McBurnie was never an employee of Eulalio Ganzon or the
respondent companies, but a potential investor in a project with a group including Eulalio Ganzon and
Martinez but said project did not take off because of lack of funds.

McBurnie further claims that in conformity with the provision of the employment contract pertaining to
the obligation of the respondents to provide housing, respondents assigned him Condo Unit # 812 of the
Makati Cinema Square Condominium owned by the respondents. He was also allowed to use a Hyundai
car. If it were true that the contract of employment was for working visa purposes only, why did the
respondents perform their obligations to him?

There is no question that respondents assigned him Condo Unit # 812 of the MCS, but this was not free
of charge. If it were true that it is part of the compensation package as employee, then McBurnie would
not be obligated to pay anything, but clearly, he admitted in his letter that he had to pay all the
expenses incurred in the apartment.

Assuming for the sake of argument that the employment contract is valid between them, record shows
that McBurnie worked from September 1, 1999 until he met an accident on the last week of October.
During the period of employment, the respondents must have paid his salaries in the sum of
US$26,000.00, more or less.
However, McBurnie failed to present a single evidence that [the respondents] paid his salaries like
payslip, check or cash vouchers duly signed by him or any document showing proof of receipt of his
compensation from the respondents or activity in furtherance of the employment contract. Granting
again that there was a valid contract of employment, it is undisputed that on November 1, 1999,
McBurnie left for Australia and never came back. x x x. 121 (Emphasis supplied)

Although the NLRC’s Decision dated November 17, 2009 was set aside in a Decision dated January 14,
2010, the Court’s resolve to now reconsider its Decision dated September 18, 2009 and to affirm the
CA’s Decision and Resolution in the respondents’ favor effectively restores the NLRC’s basis for
rendering the Decision dated November 17, 2009.

More importantly, the NLRC’s findings on the contractual relations between McBurnie and the
respondents are supported by the records.

First, before a case for illegal dismissal can prosper, an employer-employee relationship must first be
established.122 Although an employment agreement forms part of the case records, respondent Ganzon
signed it with the notation "per my note."123 The respondents have sufficiently explained that the note
refers to the letter124 dated May 11, 1999 which embodied certain conditions for the employment’s
effectivity. As we have previously explained, however, the said conditions, particularly on the successful
completion of the project financing for the hotel project in Baguio City and McBurnie’s acquisition of an
Alien Employment Permit, failed to materialize. Such defense of the respondents, which was duly
considered by the NLRC in its Decision dated November 17, 2009, was not sufficiently rebutted by
McBurnie.

Second, McBurnie failed to present any employment permit which would have authorized him to obtain
employment in the Philippines. This circumstance negates McBurnie’s claim that he had been
performing work for the respondents by virtue of an employer-employee relationship. The absence of
the employment permit instead bolsters the claim that the supposed employment of McBurnie was
merely simulated, or did not ensue due to the non-fulfillment of the conditions that were set forth in the
letter of May 11, 1999.

Third, besides the employment agreement, McBurnie failed to present other competent evidence to
prove his claim of an employer-employee relationship. Given the parties’ conflicting claims on their true
intention in executing the agreement, it was necessary to resort to the established criteria for the
determination of an employer-employee relationship, namely: (1) the selection and engagement of the
employee; (2) the payment of wages; (3) the power of dismissal; and (4) the power to control the
employee’s conduct.125 The rule of thumb remains: the onus probandi falls on the claimant to establish
or substantiate the claim by the requisite quantum of evidence. Whoever claims entitlement to the
benefits provided by law should establish his or her right thereto. 126McBurnie failed in this
regard.1âwphi1 As previously observed by the NLRC, McBurnie even failed to show through any
document such as payslips or vouchers that his salaries during the time that he allegedly worked for the
respondents were paid by the company. In the absence of an employer-employee relationship between
McBurnie and the respondents, McBurnie could not successfully claim that he was dismissed, much less
illegally dismissed, by the latter. Even granting that there was such an employer-employee relationship,
the records are barren of any document showing that its termination was by the respondents’ dismissal
of McBurnie.
Given these circumstances, it would be a circuitous exercise for the Court to remand the case to the
NLRC, more so in the absence of any showing that the NLRC should now rule differently on the case’s
merits. In Medline Management, Inc. v. Roslinda,127 the Court ruled that when there is enough basis on
which the Court may render a proper evaluation of the merits of the case, the Court may dispense with
the time-consuming procedure of remanding a case to a labor tribunal in order "to prevent delays in the
disposition of the case," "to serve the ends of justice" and when a remand "would serve no purpose save
to further delay its disposition contrary to the spirit of fair play." 128 In Real v. Sangu Philippines,
Inc.,129 we again ruled:

With the foregoing, it is clear that the CA erred in affirming the decision of the NLRC which dismissed
petitioner’s complaint for lack of jurisdiction. In cases such as this, the Court normally remands the case
to the NLRC and directs it to properly dispose of the case on the merits. "However, when there is
enough basis on which a proper evaluation of the merits of petitioner’s case may be had, the Court may
dispense with the time-consuming procedure of remand in order to prevent further delays in the
disposition of the case." "It is already an accepted rule of procedure for us to strive to settle the entire
controversy in a single proceeding, leaving no root or branch to bear the seeds of litigation. If, based on
the records, the pleadings, and other evidence, the dispute can be resolved by us, we will do so to serve
the ends of justice instead of remanding the case to the lower court for further proceedings." x x
x.130 (Citations omitted)

It bears mentioning that although the Court resolves to grant the respondents’ motion for
reconsideration, the other grounds raised in the motion, especially as they pertain to insinuations on
irregularities in the Court, deserve no merit for being founded on baseless conclusions. Furthermore, the
Court finds it unnecessary to discuss the other grounds that are raised in the motion, considering the
grounds that already justify the dismissal of McBurnie’s complaint.

All these considered, the Court also affirms its Resolution dated September 4, 2012; accordingly,
McBurnie’s motion for reconsideration thereof is denied.

WHEREFORE, in light of the foregoing, the Court rules as follows:

(a) The motion for reconsideration filed on September 26, 2012 by petitioner Andrew James
McBurnie is DENIED;

(b) The motion for reconsideration filed on March 27, 2012 by respondents Eulalio Ganzon, EGI-
Managers, Inc. and E. Ganzon, Inc. is GRANTED.

(c) The Entry of Judgment issued in G.R. Nos. 186984-85 is LIFTED. This Court’s Decision dated
September 18, 2009 and Resolutions dated December 14, 2009 and January 25, 2012 are SET
ASIDE. The Court of Appeals Decision dated October 27, 2008 and Resolution dated March 3,
2009 in CA-G.R. SP No. 90845 and CA-G.R. SP No. 95916 are AFFIRMED WITH MODIFICATION. In
lieu of a remand of the case to the National Labor Relations Commission, the complaint for
illegal dismissal filed by petitioner Andrew James McBurnie against respondents Eulalio Ganzon,
EGI-Managers, Inc. and E. Ganzon, Inc. is DISMISSED.
Furthermore, on the matter of the filing and acceptance of motions to reduce appeal bond, as provided
in Section 6, Rule VI of the 2011 NLRC Rules of Procedure, the Court hereby RESOLVES that henceforth,
the following guidelines shall be observed:

(a) The filing o a motion to reduce appeal bond shall be entertained by the NLRC subject to the
following conditions: (1) there is meritorious ground; and (2) a bond in a reasonable amount is
posted;

(b) For purposes o compliance with condition no. (2), a motion shall be accompanied by the
posting o a provisional cash or surety bond equivalent to ten percent (10,) of the monetary
award subject o the appeal, exclusive o damages and attorney's fees;

(c) Compliance with the foregoing conditions shall suffice to suspend the running o the 1 0-day
reglementary period to perfect an appeal from the labor arbiter's decision to the NLRC;

(d) The NLRC retains its authority and duty to resolve the motion to reduce bond and determine
the final amount o bond that shall be posted by the appellant, still in accordance with the
standards o meritorious grounds and reasonable amount; and

(e) In the event that the NLRC denies the motion to reduce bond, or requires a bond that
exceeds the amount o the provisional bond, the appellant shall be given a fresh period o ten 1 0)
days from notice o the NLRC order within which to perfect the appeal by posting the required
appeal bond.

SO ORDERED.

BIENVENIDO L. REYES
Associate Justice

Sec. 6. Effect of granting of motion for new trial

Sec. 7. Partial new trial or reconsideration

Sec. 8. Effect of order for partial new trial

Sec. 9. Remedy against order denying a motion for new trial or

reconsideration

Jose v. Javellana, G.R. No. 158239, January 25, 2012 (Supra.)

Republic of the Philippines

Supreme Court
Manila

FIRST DIVISION

PRISCILLA ALMA JOSE, G.R. No. 158239

Petitioner,
Present:

CORONA, C.J., Chairperson,

LEONARDO-DE CASTRO,
- versus - BERSAMIN,
*
ABAD, and
VILLARAMA, JR., JJ.

Promulgated:
RAMON C. JAVELLANA,
ET AL., January 25, 2012
Respondents.
x-----------------------------------------------------------------------------------------x

DECISION

BERSAMIN, J.:

The denial of a motion for reconsideration of an order granting the defending party’s motion to
dismiss is not an interlocutory but a final order because it puts an end to the particular matter involved,
or settles definitely the matter therein disposed of, as to leave nothing for the trial court to do other
than to execute the order.[1] Accordingly, the claiming party has a fresh period of 15 days from notice of
the denial within which to appeal the denial.[2]

Antecedents

On September 8, 1979, Margarita Marquez Alma Jose (Margarita) sold for consideration
of P160,000.00 to respondent Ramon Javellana by deed of conditional sale two parcels of land with
areas of 3,675 and 20,936 square meters located in Barangay Mallis, Guiguinto, Bulacan. They agreed
that Javellana would pay P80,000.00 upon the execution of the deed and the balance ofP80,000.00 upon
the registration of the parcels of land under the Torrens System (the registration being undertaken by
Margarita within a reasonable period of time); and that should Margarita become incapacitated, her son
and attorney-in-fact, Juvenal M. Alma Jose (Juvenal), and her daughter, petitioner Priscilla M. Alma Jose,
would receive the payment of the balance and proceed with the application for registration. [3]

After Margarita died and with Juvenal having predeceased Margarita without issue, the vendor’s
undertaking fell on the shoulders of Priscilla, being Margarita’s sole surviving heir. However, Priscilla did
not comply with the undertaking to cause the registration of the properties under the Torrens System,
and, instead, began to improve the properties by dumping filling materials therein with the intention of
converting the parcels of land into a residential or industrial subdivision.[4] Faced with Priscilla’s refusal
to comply, Javellana commenced on February 10, 1997 an action for specific performance, injunction,
and damages against her in the Regional Trial Court in Malolos, Bulacan (RTC), docketed as Civil Case No.
79-M-97 entitled Ramon C. Javellana, represented by Atty. Guillermo G. Blanco v. Priscilla Alma Jose.

In Civil Case No. 79-M-97, Javellana averred that upon the execution of the deed of conditional
sale, he had paid the initial amount of P80,000.00 and had taken possession of the parcels of land; that
he had paid the balance of the purchase price to Juvenal on different dates upon Juvenal’s
representation that Margarita had needed funds for the expenses of registration and payment of real
estate tax; and that in 1996, Priscilla had called to inquire about the mortgage constituted on the parcels
of land; and that he had told her then that the parcels of land had not been mortgaged but had been
sold to him.[5]

Javellana prayed for the issuance of a temporary restraining order or writ of preliminary
injunction to restrain Priscilla from dumping filling materials in the parcels of land; and that Priscilla be
ordered to institute registration proceedings and then to execute a final deed of sale in his favor. [6]
 Priscilla filed a motion to dismiss, stating that the complaint was already barred by prescription;
and that the complaint did not state a cause of action. [7]

The RTC initially denied Priscilla’s motion to dismiss on February 4, 1998. [8] However, upon her
motion for reconsideration, the RTC reversed itself on June 24, 1999 and granted the motion to dismiss,
opining that Javellana had no cause of action against her due to her not being bound to comply with the
terms of the deed of conditional sale for not being a party thereto; that there was no evidence showing
the payment of the balance; that he had never demanded the registration of the land from Margarita or
Juvenal, or brought a suit for specific performance against Margarita or Juvenal; and that his claim of
paying the balance was not credible.[9]

Javellana moved for reconsideration, contending that the presentation of evidence of full
payment was not necessary at that stage of the proceedings; and that in resolving a motion to dismiss
on the ground of failure to state a cause of action, the facts alleged in the complaint were hypothetically
admitted and only the allegations in the complaint should be considered in resolving the
motion.[10] Nonetheless, he attached to the motion for reconsideration the receipts showing the
payments made to Juvenal.[11] Moreover, he maintained that Priscilla could no longer succeed to any
rights respecting the parcels of land because he had meanwhile acquired absolute ownership of them;
and that the only thing that she, as sole heir, had inherited from Margarita was the obligation to register
them under the Torrens System.[12]

On June 21, 2000, the RTC denied the motion for reconsideration for lack of any reason to
disturb the order of June 24, 1999.[13]

Accordingly, Javellana filed a notice of appeal from the June 21, 2000 order, [14] which the RTC
gave due course to, and the records were elevated to the Court of Appeals (CA).

In his appeal (C.A.-G.R. CV No. 68259), Javellana submitted the following as errors of the
[15]
RTC, to wit:

I
THE TRIAL COURT GRIEVOUSLY ERRED IN NOT CONSIDERING THE FACT THAT PLAINTIFF-
APELLANT HAD LONG COMPLIED WITH THE FULL PAYMENT OF THE CONSIDERATION OF
THE SALE OF THE SUBJECT PROPERTY AND HAD IMMEDIATELY TAKEN ACTUAL AND
PHYSICAL POSSESSION OF SAID PROPERTY UPON THE SIGNING OF THE CONDITIONAL
DEED OF SALE;

II
 THE TRIAL COURT OBVIOUSLY ERRED IN MAKING TWO CONFLICTING INTERPRETATIONS
OF THE PROVISION OF THE CIVIL [CODE], PARTICULARLY ARTICLE 1911, IN THE LIGHT OF
THE TERMS OF THE CONDITIONAL DEED OF SALE;

III
THE TRIAL COURT ERRED IN HOLDING THAT DEFENDANT-APPELLEE BEING NOT A PARTY
TO THE CONDITIONAL DEED OF SALE EXECUTED BY HER MOTHER IN FAVOR OF
PLAINTFF-
APPELLANT IS NOT BOUND THEREBY AND CAN NOT BE COMPELLED TO DO THE ACT
REQUIRED IN THE SAID DEED OF CONDITIONAL SALE;

IV
THE TRIAL COURT ERRED IN DISMISSING THE AMENDED COMPLAINT WITHOUT
HEARING THE CASE ON THE MERITS.

Priscilla countered that the June 21, 2000 order was not appealable; that the appeal was not
perfected on time; and that Javellana was guilty of forum shopping. [16]

It appears that pending the appeal, Javellana also filed a petition for certiorari in the CA to assail
the June 24, 1999 and June 21, 2000 orders dismissing his complaint (C.A.-G.R. SP No. 60455). On August
6, 2001, however, the CA dismissed the petition for certiorari,[17] finding that the RTC did not commit
grave abuse of discretion in issuing the orders, and holding that it only committed, at most, an error of
judgment correctible by appeal in issuing the challenged orders.

On November 20, 2002, the CA promulgated its decision in C.A.-G.R. CV No. 68259,[18] reversing
and setting aside the dismissal of Civil Case No. 79-M-97, and remanding the records to the RTC “for
further proceedings in accordance with law.”[19]The CA explained that the complaint sufficiently stated a
cause of action; that Priscilla, as sole heir, succeeded to the rights and obligations of Margarita with
respect to the parcels of land; that Margarita’s undertaking under the contract was not a purely
personal obligation but was transmissible to Priscilla, who was consequently bound to comply with the
obligation; that the action had not yet prescribed due to its being actually one for quieting of title that
was imprescriptible brought by Javellana who had actual possession of the properties; and that based
on the
complaint, Javellana had been in actual possession since 1979, and the cloud on his title had come about
only when Priscilla had started dumping filling materials on the premises. [20]

On May 9, 2003, the CA denied the motion for reconsideration, [21] stating that it decided to give
due course to the appeal even if filed out of time because Javellana had no intention to delay the
proceedings, as in fact he did not even seek an extension of time to file his appellant’s brief; that current
jurisprudence afforded litigants the amplest opportunity to present their cases free from the constraints
of technicalities, such that even if an appeal was filed out of time, the appellate court was given the
discretion to nonetheless allow the appeal for justifiable reasons.

Issues

Priscilla then brought this appeal, averring that the CA thereby erred in not outrightly dismissing
Javellana’s appeal because: (a) the June 21, 2000 RTC order was not appealable; (b) the notice of appeal
had been filed belatedly by three days; and (c) Javellana was guilty of forum shopping for filing in the CA
a petition for certiorari to assail the orders of the RTC that were the subject matter of his appeal
pending in the CA. She posited that, even if the CA’s decision to entertain the appeal was affirmed, the
RTC’s dismissal of the complaint should nonetheless be upheld because the complaint stated no cause
of action, and the action had already prescribed.

On his part, Javellana countered that the errors being assigned by Priscilla involved questions of
fact not proper for the Court to review through petition for review on certiorari; that the June 21, 2000
RTC order, being a final order, was appealable; that his appeal was perfected on time; and that he was
not guilty of forum shopping because at the time he filed the

petition for certiorari the CA had not yet rendered a decision in C.A.-G.R.
CV No. 68259, and because the issue of ownership raised in C.A.-G.R. CV No. 68259 was different from
the issue of grave abuse of discretion raised in C.A.-G.R. SP No. 60455.

Ruling

The petition for review has no merit.

I
Denial of the motion for reconsideration of the
order of dismissal was a final order and appealable

Priscilla submits that the order of June 21, 2000 was not the proper subject of an appeal
considering that Section 1 of Rule 41 of the Rules of Court provides that no appeal may be taken from an
order denying a motion for reconsideration.
 Priscilla’s submission is erroneous and cannot be sustained.

First of all, the denial of Javellana’s motion for reconsideration left nothing more to be done by the
RTC because it confirmed the dismissal of Civil Case No. 79-M-97. It was clearly a final order, not an
interlocutory one. The Court has distinguished between final and interlocutory orders in Pahila-Garrido
v. Tortogo,[22] thuswise:

The distinction between a final order and an interlocutory order is well known.
The first disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing more to be done except to enforce by execution
what the court has determined, but the latter does not completely dispose of the case
but leaves something else to be decided upon. An interlocutory order deals with
preliminary matters and the trial on the merits is yet to be held and the judgment
rendered. The test to ascertain whether or not an order or a judgment is

interlocutory or final is: does the order or judgment leave something to be done in the
trial court with respect to the merits of the case? If it does, the order or judgment is
interlocutory; otherwise, it is final.

And, secondly, whether an order is final or interlocutory determines whether appeal is the
correct remedy or not. A final order is appealable, to accord with the final judgment rule enunciated in
Section 1, Rule 41 of the Rules of Court to the effect that “appeal may be taken from a judgment or final
order that completely disposes of the case, or of a particular matter therein when declared by these
Rules to be appealable;”[23] but the remedy from an interlocutory one is not an appeal but a special civil
action for certiorari. The explanation for the differentiation of remedies given in Pahila-Garrido v.
Tortogo is apt:

xxx The reason for disallowing an appeal from an interlocutory order is to avoid
multiplicity of appeals in a single action, which necessarily suspends the hearing and
decision on the merits of the action during the pendency of the appeals. Permitting
multiple appeals will necessarily delay the trial on the merits of the case for a
considerable length of time, and will compel the adverse party to incur unnecessary
expenses, for one of the parties may interpose as many appeals as there are incidental
questions raised by him and as there are interlocutory orders rendered or issued by the
lower court. An interlocutory order may be the subject of an appeal, but only after a
judgment has been rendered, with the ground for appealing the order being included in
the appeal of the judgment itself.

The remedy against an interlocutory order not subject of an appeal is an

appropriate special civil action under Rule 65, provided that the interlocutory order is
 rendered without or in excess of jurisdiction or with grave abuse of discretion. Then
is certiorari under Rule 65 allowed to be resorted to.

Indeed, the Court has held that an appeal from an order denying a motion for reconsideration of a
final order or judgment is effectively an appeal from the final order or judgment itself; and has expressly
clarified that the prohibition against appealing an order denying a motion for

reconsideration referred only to a denial of a motion for reconsideration of an interlocutory order.[24]

II
Appeal was made on time pursuant to Neypes v. CA

Priscilla insists that Javellana filed his notice of appeal out of time. She points out that he
received a copy of the June 24, 1999 order on July 9, 1999, and filed his motion for reconsideration on
July 21, 1999 (or after the lapse of 12 days); that the RTC denied his motion for reconsideration through
the order of June 21, 2000, a copy of which he received on July 13, 2000; that he had only three days
from July 13, 2000, or until July 16, 2000, within which to perfect an appeal; and that having filed his
notice of appeal on July 19, 2000, his appeal should have been dismissed for being tardy by three days
beyond the expiration of the reglementary period.

Section 3 of Rule 41 of the Rules of Court provides:

Section 3. Period of ordinary appeal. — The appeal shall be taken within fifteen
(15) days from notice of the judgment or final order appealed from. Where a record on
appeal is required, the appellant shall file a notice of appeal and a record on appeal
within thirty (30) days from notice of the judgment or final order.

The period of appeal shall be interrupted by a timely motion for new trial or
reconsideration. No motion for extension of time to file a motion for new trial or
reconsideration shall be allowed. (n)

Under the rule, Javellana had only the balance of three days from July 13, 2000, or until July 16,
2000, within which to perfect an appeal due to the timely filing of his motion for reconsideration
interrupting the running of the period of appeal. As such, his filing of the notice of appeal only on July
19, 2000 did not perfect his appeal on time, as Priscilla insists.
The seemingly correct insistence of Priscilla cannot be upheld, however, considering that the
Court meanwhile adopted thefresh period rule in Neypes v. Court of Appeals,[25] by which an aggrieved
party desirous of appealing an adverse judgment or final order is allowed a fresh period of 15 days
within which to file the notice of appeal in the RTC reckoned from receipt of the order denying a motion
for a new trial or motion for reconsideration, to wit:

The Supreme Court may promulgate procedural rules in all courts. It has the sole
prerogative to amend, repeal or even establish new rules for a more simplified and
inexpensive process, and the speedy disposition of cases. In the rules governing appeals
to it and to the Court of Appeals, particularly Rules 42, 43 and 45, the Court allows
extensions of time, based on justifiable and compelling reasons, for parties to file their
appeals. These extensions may consist of 15 days or more.

To standardize the appeal periods provided in the Rules and to afford litigants fair
opportunity to appeal their cases, the Court deems it practical to allow a fresh period of
15 days within which to file the notice of appeal in the Regional Trial Court, counted
from receipt of the order dismissing a motion for a new trial or motion for
reconsideration.

Henceforth, this “fresh period rule” shall also apply to Rule 40 governing appeals
from the Municipal Trial Courts to the Regional Trial Courts; Rule 42 on petitions for
review from the Regional Trial Courts to the Court of Appeals; Rule 43 on appeals from
quasi-judicial agencies to the Court of Appeals and Rule 45 governing appeals by
certiorari to the Supreme Court. The new rule aims to regiment or make the appeal
period uniform, to be counted from receipt of the order denying the motion for new
trial, motion for reconsideration (whether full or partial) or any final order or
resolution.[26]

The fresh period rule may be applied to this case, for the Court has already retroactively
extended the fresh period rule to “actions pending and undetermined at the time of their passage and
this will not violate any right of a person who may feel that he is adversely affected, inasmuch as there
are no vested rights in rules of procedure.”[27] According to De los Santos v. Vda. de Mangubat:[28]

Procedural law refers to the adjective law which prescribes rules and forms of
procedure in order that courts may be able to administer justice. Procedural laws do not
come within the legal conception of a retroactive law, or the general rule against the
retroactive operation of statues ― they may be given retroactive effect on actions
pending and undetermined at the time of their passage and this will not violate any
right of a person who may feel that he is adversely affected, insomuch as there are no
vested rights in rules of procedure.

The “fresh period rule” is a procedural law as it prescribes a fresh period of 15

days within which an appeal may be made in the event that the motion for
reconsideration is denied by the lower court. Following the rule on retroactivity of
procedural laws, the "fresh period rule" should be applied to pending actions, such as
the present case.
 Also, to deny herein petitioners the benefit of the “fresh period rule” will amount
to injustice, if not absurdity, since the subject notice of judgment and final order were
issued two years later or in the year 2000, as compared to the notice of judgment and
final order inNeypes which were issued in 1998. It will be incongruous and illogical that
parties receiving notices of judgment and final orders issued in the year 1998 will enjoy
the benefit of the “fresh period rule” while those later rulings of the lower courts such
as in the instant case, will not.[29]

Consequently, we rule that Javellana’s notice of appeal was timely filed pursuant to the fresh
period rule.

III
No forum shopping was committed

Priscilla claims that Javellana engaged in forum shopping by filing a notice of appeal and a
petition for certiorari against the same orders. As earlier noted, he denies that his doing so violated the
policy against forum shopping.

The Court expounded on the nature and purpose of forum shopping in In Re: Reconstitution of
Transfer Certificates of Title Nos. 303168 and 303169 and Issuance of Owner’s Duplicate Certificates of
Title In Lieu of Those Lost, Rolando Edward G. Lim, Petitioner:[30]

Forum shopping is the act of a party litigant against whom an adverse judgment
has been rendered in one forum seeking and possibly getting a favorable opinion in
another forum, other than by appeal or the special civil action of certiorari, or the
institution of two or more actions or proceedings grounded on the same cause or
supposition that one or the other court would make a favorable disposition. Forum
shopping happens when, in the two or more pending cases, there is identity of parties,
identity of rights or causes of action, and identity of reliefs sought. Where the elements
of litis pendentia are present, and where a final judgment in one case will amount to res
judicata in the other, there is forum shopping. For litis pendentia to be a ground for the
dismissal of an action, there must be: (a) identity of the parties or at least such as to
represent the same interest in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same acts; and (c) the identity in the two
cases should be such that the judgment which may be rendered in one would,
regardless of which party is successful, amount to res judicata in the other.

For forum shopping to exist, both actions must involve the same transaction,
same essential facts and circumstances and must raise identical causes of action, subject
matter and issues. Clearly, it does not exist where different orders were questioned, two
distinct causes of action and issues were raised, and two objectives were sought.
 Should Javellana’s present appeal now be held barred by his filing of the petition for certiorari in
the CA when his appeal in that court was yet pending?

We are aware that in Young v. Sy,[31] in which the petitioner filed a notice of appeal to elevate
the orders concerning the dismissal of her case due to non-suit to the CA and a petition for certiorari in
the CA assailing the same orders four months later, the Court ruled that the successive filings of the
notice of appeal and the petition for certiorari to attain the same objective of nullifying the trial court’s
dismissal orders constituted forum shopping that warranted the dismissal of both cases. The Court said:

Ineluctably, the petitioner, by filing an ordinary appeal and a petition

for certiorari with the CA, engaged in forum shopping. When the petitioner
commenced the appeal, only four months had elapsed prior to her filing with the CA
the Petition for Certiorariunder Rule 65 and which eventually came up to this Court by
way of the instant Petition (re: Non-Suit). The elements of litis pendentia are present
between the two suits. As the CA, through its Thirteenth Division, correctly noted, both
suits are founded on exactly the same facts and refer to the same subject matter—
the RTC Orders which dismissed Civil Case No. SP-5703 (2000) for

failure to prosecute. In both cases, the petitioner is seeking the reversal of the RTC
orders. The parties, the rights asserted, the issues professed, and the reliefs prayed for,
are all the same. It is evident that the judgment of one forum may amount to res
judicata in the other.
xxxx
The remedies of appeal and certiorari under Rule 65 are mutually exclusive and
not alternative or cumulative. This is a firm judicial policy. The petitioner cannot hedge
her case by wagering two or more appeals, and, in the event that the ordinary appeal
lags significantly behind the others, she cannot post facto validate this circumstance as a
demonstration that the ordinary appeal had not been speedy or adequate enough, in
order to justify the recourse to Rule 65. This practice, if adopted, would sanction the
filing of multiple suits in multiple fora, where each one, as the petitioner couches it,
becomes a “precautionary measure” for the rest, thereby increasing the chances of a
favorable decision. This is the very evil that the proscription on forum shopping seeks to
put right. In Guaranteed Hotels, Inc. v. Baltao, the Court stated that the grave evil
sought to be avoided by the rule against forum shopping is the rendition by two
competent tribunals of two separate and contradictory decisions. Unscrupulous party
litigants, taking advantage of a variety of competent tribunals, may repeatedly try their
luck in several different fora until a favorable result is reached. To avoid the resultant
confusion, the Court adheres strictly to the rules against forum shopping, and any
violation of these rules results in the dismissal of the case. [32]
 The same result was reached in Zosa v. Estrella,[33] which likewise involved the successive filing
of a notice of appeal and a petition for certiorari to challenge the same orders, with the Court upholding
the CA’s dismissals of the appeal and the petition forcertiorari through separate decisions.

Yet, the outcome in Young v. Sy and Zosa v. Estrella is unjust here even if the orders of the RTC
being challenged through appeal and the petition for certiorari were the same. The unjustness exists
because the appeal and the petition for certiorari actually sought different objectives. In his appeal in
C.A.-G.R. CV No. 68259, Javellana aimed to undo the RTC’s erroneous dismissal of Civil Case No. 79-M-97
to clear the way for his judicial demand for specific performance to be tried and determined in due
course by the RTC; but his petition for certiorari had the ostensible objective “to prevent (Priscilla) from
developing the subject property and from proceeding with the ejectment case until his appeal is finally
resolved,” as the CA explicitly determined in its decision in C.A.-G.R. SP No. 60455.[34]

Nor were the dangers that the adoption of the judicial policy against forum shopping designed
to prevent or to eliminate attendant. The first danger, i.e., the multiplicity of suits upon one and the
same cause of action, would not materialize considering that the appeal was a continuity of Civil Case
No. 79-M-97, whereas C.A.-G.R. SP No. 60455 dealt with an independent ground of alleged grave abuse
of discretion amounting to lack or excess of jurisdiction on the part of the RTC. The second danger, i.e.,
the unethical malpractice of shopping for a friendly court or judge to ensure a favorable ruling or
judgment after not getting it in the appeal, would not arise because the CA had not yet decided C.A.-
G.R. CV No. 68259 as of the filing of the petition for certiorari.

Instead, we see the situation of resorting to two inconsistent remedial approaches to be the
result of the tactical misjudgment by Javellana’s counsel on the efficacy of the appeal to stave off his
caretaker’s eviction from the parcels of land and to prevent the development of them into a residential
or commercial subdivision pending the appeal. In the petition for certiorari, Javellana explicitly averred
that his appeal was “inadequate and not speedy to prevent private respondent Alma Jose and her
transferee/assignee xxx from developing and disposing of the subject property to other parties to the
total deprivation of petitioner’s rights of possession and ownership over the subject property,” and that
the dismissal by the RTC had “emboldened private respondents to fully develop the property and for
respondent Alma Jose to file an ejectment case against petitioner’s overseer xxx.” [35] Thereby, it became
far-fetched that Javellana brought the petition for certiorari in violation of the policy against forum
shopping.

WHEREFORE, the Court DENIES the petition for review on certiorari; AFFIRMS the decision
promulgated on November 20, 2002; and ORDERS the petitioner to pay the costs of suit.
 SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice

RULE 38- RELIEF FROM JUDGMENTS, ORDERS, OR OTHER PROCEEDINGS

Sec. 1. Petition for relief from judgment, order, or other proceedings

Samonte v. Naguiat, G.R. No. 165544, October 2, 2009

THIRD DIVISION

ROMEO SAMONTE, G.R. No. 165544

Petitioner,
Present:

YNARES-SANTIAGO, J.,
- versus - Chairperson,
CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.

Promulgated:
S.F. NAGUIAT, INC.,
Respondents. October 2, 2009

x----------------------------------------------------------------------------------------x
DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari filed by Romeo Samonte which seeks to set
aside the Decision[1] dated March 26, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 70213,
dismissing his petition for certiorari of the Order[2] dated December 21, 2001 of the Regional Trial Court
(RTC), Malolos, Bulacan, in Civil Case No. 585-M-2000, denying his petition for relief from
judgment. Also assailed is the CA Resolution[3] dated September 28, 2004, denying petitioner’s motion
for reconsideration.
The antecedent facts, as narrated by the Court of Appeals, are as follows:

Petitioner Romeo Samonte is the President and General Manager of S.B.

Commercial Traders, Inc. (SB Traders, for brevity), a corporation engaged in the
business of retailing motor oils and lubricants. It (sic) purchases Mobil products on
credit basis from one of Mobil Oil Philippines' authorized dealers in Bulacan, herein
private respondent S.F. Naguiat, Inc., with an express agreement to pay within a period
of 60 days from date of delivery.

On September 4, 2000, the private respondent filed a complaint for collection of

sum of money against SB Traders and the petitioner with Branch 9 of the Regional Trial
Court (RTC) of Malolos, Bulacan. The private respondent alleged that SB Traders
incurred an obligation to pay the total sum of P1,105,143.27 arising from the sale of
Mobil Oil products. It further averred that SB Traders was merely an alter ego of the
petitioner and that it was operating for his sole benefit.. Therefore, the petitioner and
SB Traders must be held solidarily liable for the subject amount.
The petitioner filed an answer denying all the material averments of the
complaint, As special and affirmative defenses, he claimed that he was not acting in his
personal capacity and was merely acting for and in behalf of SB Traders; that SB Traders
never denied its obligation to pay for the purchases it made with the private
respondent but was merely requesting for more time to settle its accounts; and that to
effect payment for the subject amount, it had already issued postdated checks
of P25,000.00 per month covering the period from June to December 1999 to the
private respondent.

Despite due notice, the petitioner and his counsel failed to appear at the
scheduled pre-trial conference on April 20, 2001. Hence, trial ensued where the public
respondent allowed the ex parte presentation of the private respondent's evidence
before the Branch Clerk of Court.
 On May 25, 2001, the public respondent rendered judgment in favor of the
private respondent, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered ordering

defendants S.B. Commercial Traders, Inc. and Romeo G. Samonte to pay, jointly and
severally, unto plaintiff S.F. Naguiat, Incorporated the following
amounts: P1,105,143.27 as prayed for in the complaint representing the value of the oil
products reflected in the Invoices marked as Exhibits 'B' to ' O' and 'O-1'-and 'P', with
interest thereon at the rate of 18% per annum from the filing of the complaint on
September 4, 2000 until the same shall have been paid in full; P10,000.00 as exemplary
damages; and 20% of the entire amount due and demandable from the defendants as
and for attorney's fees, plus the costs of the suit.

SO ORDERED.

The petitioner failed to appeal the said decision. Thereafter, on motion by the
private respondent, the public respondent ordered the issuance of a writ of execution
on July 30, 2001.

On August 22, 2001, the petitioner filed a petition for relief from judgment on the
ground that the public respondent made serious and prejudicial mistakes in appreciating
the evidence presented. He argued that a corporation had a personality separate and
distinct from that of its officers and therefore, he cannot be held solidarily liable for
obligations contracted by corporation. The petition was opposed by the private
respondent.

On December 21, 2001, the public respondent issued the first assailed order
denying the petitioner's petition for relief from judgment for lack of merit. The petitioner
moved for reconsideration of the said order but the same was denied in the second
assailed order dated February 12, 2002 on the grounds that the motion failed to comply
with the mandatory requirements of sections 4 and 5 of Rule 15 of the 1997 Rules of Civil
procedure and that it failed to raise an issue which would warrant a modification or
reversal of the order dated December 21, 2001.[4]

Petitioner filed with the CA a petition for certiorari with prayer for the issuance of a temporary
restraining order and/or writ of preliminary injunction reiterating the grounds stated in his petition for
relief from judgment filed with the RTC. Respondent filed its Comment. The parties subsequently filed
their respective memoranda.

On March 26, 2004, the CA issued its assailed Decision dismissing the petition.
 In so ruling, the CA found that the records showed that petitioner failed to file a motion for
reconsideration or an appeal from the RTC Decision dated May 25, 2001 causing the said decision to
become final and executory; that when petitioner filed the petition for relief from judgment, petitioner
did not offer any reason for his failure to appeal; there was no assertion that the RTC decision was
entered against him through fraud, accident, mistake or excusable negligence. The CA noted that the
petition was not accompanied by an affidavit of merit showing the fraud, accident, mistake or excusable
negligence relied upon and the facts constituting petitioner's good and substantial defense as required
by law. It also agreed with the RTC's observation that petitioner did not assail the proceedings
conducted below, but merely questioned the validity of the dispositive portion of the RTC decision, thus,
the petition for relief from judgment was fatally flawed and should have been dismissed outright.

The CA added that notwithstanding such defect, the RTC proceeded with hearing the petition
perhaps as an act of grace giving petitioner one last chance to protect his interest and present evidence
in support of his arguments, but petitioner opted to dispense with the presentation of evidence in
support of the said petition; that petitioner could not claim that he was denied his day in court or claim
that the RTC committed grave abuse of discretion. The CA then said that once a judgment becomes
final, executory and unappealable, the prevailing party shall not be deprived of the fruits of victory by
some subterfuge devised by the losing party.

Petitioner's motion for reconsideration was denied in a Resolution dated September 28, 2004.

Petitioner is now before the Court raising the following grounds:

The Honorable Court committed an irreversible error in dismissing herein

Petitioner's Petition for Certiorari and subsequently thereafter, in denying his Motion for
Reconsideration thereto for lack of merit.

The Honorable Court gravely erred in strictly applying the rules of procedure at the
expense of substantial justice.

The Honorable Court committed an irreversible error in not ruling on the merits of
the case.[5]

The petition has no merit.

The Court of Appeals did not err in ruling that no grave abuse of discretion was committed by the
RTC in dismissing the petition for relief from judgment filed by petitioner therewith.
 Sections 1 and 3 of Rule 38 of the Rules of Court provide the requirements for a petition for relief
from judgment, thus:

SEC. 1. Petition for relief from judgment, order, or other proceedings. – When
a judgment or final order is entered, or any other proceeding is thereafter taken against a
party in any court through fraud, accident, mistake, or excusable negligence, he may file
a petition in such court and in the same case praying that the judgment, order or
proceeding be set aside.

SEC. 3. Time for filing of petition; contents and verification.— A petition for
in either of the preceding sections of this rule must be verified, filed within sixty (60) days
after the petitioner learns of the judgment, order, or other proceeding to be set aside,
and not more than six (6) months after such judgment or order was entered, or such
proceeding was taken; and must be accompanied with affidavits showing the fraud,
accident, mistake, or excusable negligence relied upon, and the facts constituting the
petitioner's good and substantial cause of action or defense, as the case may be.

Relief from judgment under Rule 38 of the Rules of Court is a remedy provided by law to any
person against whom a decision or order is entered into through fraud, accident, mistake or excusable
negligence. The relief provided for is of equitable character, allowed only in exceptional cases as where
there is no other available or adequate remedy.[6] When a party has another remedy available to him,
which may either be a motion for new trial or appeal from an adverse decision of the lower court, and
he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or
taking the appeal, he cannot avail himself of the relief provided in Rule 38. The rule is that relief will not
be granted to a party who seeks avoidance from the effects of the judgment when the loss of the
remedy at law was due to his own negligence or a mistaken mode of procedure, otherwise the petition
for relief will be tantamount to reviving the right of appeal which has already been lost either because
of inexcusable negligence or due to a mistake in the mode of procedure by counsel. [7]

In his Petition for Relief from Judgment filed before the RTC, petitioner alleged that the petition
was filed on the ground that the RTC made serious and prejudicial mistakes in appreciating the
evidence presented. He then proceeded to discuss the errors of judgment committed by the RTC in
rendering its decision.

The mistake contemplated by Rule 38 of the Rules of Court pertains generally to mistake of fact,
not of law, which relates to the case.[8] The word “mistake” which grants relief from judgment, does not
apply and was never intended to apply to a judicial error which the court might have committed in the
trial.[9] Such error may be corrected by means of an appeal.

The arguments raised by petitioner in his petition for relief from judgment, i.e., he cannot be held
civilly liable for obligations he, as corporate president thereof, has incurred in behalf of the corporation
which is vested with a personality separate and distinct from its officers and stockholders; and that he
cannot be held jointly and solidarily liable for the obligations, are proper issues which petitioner could
have raised in a motion for reconsideration which he did not. The RTC, in its Order denying the petition
for relief, ruled:

Going by the tenor of the aforequoted Rule, it is the sense of this Court that the
petition under consideration cannot prosper, given the grounds therefor which should
have been raised, more appropriately, in a simple motion for reconsideration. It must be
noted that the petitioner does not assail the proceedings conducted by this Court which
culminated in the rendition of the judgment and issuance of the writ of execution rather;
he
 questions only the validity of the dispositive portion of the decision, an issue which, as
already adverted to, should have been ventilated via a motion for reconsideration. [10]

In fact, the alleged errors committed by the RTC could also be corrected by means of an appeal
from the RTC decision. Petitioner did not also file an appeal causing the RTC decision to become final
and executory and the subsequent issuance of a writ of execution. Notably, petitioner never made any
allegation in his petition for relief from judgment that the RTC decision was entered against him through
fraud, accident, mistake, or excusable negligence. The petition for relief did not also show any reason for
petitioner's failure to file an appeal after the receipt of the RTC decision which the CA correctly observed
in its assailed decision.

Petitioner’s claim that Section 1, Rule 38 of the Rules of Court does not require that petitioner
should state the reason why he did not avail of the remedy of appeal deserves scant consideration.
His failure to avail of the remedy of appeal within the reglementary period despite receipt of the RTC
decision rendered the same final and executory. He cannot be allowed to assail the RTC decision which
had become final in a petition for relief from judgment when there was no allegations of fraud, accident,
mistake, or excusable negligence which prevented him from interposing an appeal. Such appeal could
have corrected what he believed to be an erroneous judicial decision. To reiterate, petition for relief is
an equitable remedy that is allowed only in exceptional cases where there is no other available or
adequate remedy[11] which is not present in petitioner’s case. Thus, petitioner's resort to a petition for
relief under Rule 38 was not proper and the CA correctly ruled that the RTC did not commit grave abuse
of discretion in denying the petition for relief from judgment.

Petitioner argues that the CA erred in finding that an affidavit of merit is an essential
requirement in filing a petition for relief from judgment and that without said affidavit the same would
be denied.

The Court does not agree.

Section 3, Rule 38 of the Rules of Court requires that the petition must be accompanied with
affidavits of merits showing the fraud, accident, mistake, or excusable negligence relied upon by
petitioner and the facts constituting the petitioner's good and substantial cause of action or defense as
the case maybe. While a petition for relief without a separate affidavit of merit is sufficient where facts
constituting petitioner’s substantial cause of action or defense, as the case may be, are alleged in a
verified petition since the oath elevates the petition to the same category as a separate affidavit, [12] the
petition for relief filed by petitioner was not even verified. Thus, the CA did not err in no longer
considering the merits of the case.

Petitioner now contends that the CA should have considered that it was petitioner's former
counsel who has the implied authority to determine what procedural steps to take which in his
judgment will best serve the interest of his client; that petitioner, being not knowledgeable of the laws,
ought not to be blamed by the incompetence, ignorance and inexperience of his counsel; and that rules
of procedure should give way for a liberal construction if the same will hinder, impede or sacrifice the
demands of substantial justice.

There is no rule more settled than that a client is bound by his counsel’s conduct, negligence and
mistake in handling the case.[13] To allow a party to disown his counsel’s conduct would render
proceedings indefinite, tentative, and subject to reopening by the mere subterfuge of replacing
counsel.[14] Petitioner failed to show that his counsel’s negligence was so gross and palpable as to call
for the exercise of this Court’s equity jurisdiction. While it is true that rules of procedure are not cast in
stone, it is equally true that strict compliance with the Rules is indispensable for the prevention of
needless delays and for the orderly and expeditious dispatch of judicial business.[15]

In Saint Louis University v. Cordero,[16] the Court said:

Thus, while regretful that the petitioners may have had meritorious defenses
against the trial court’s 17 December 1998 Order, we must likewise weigh such defenses
against the need to halt an abuse of the flexibility of procedural rules. Additionally, it
should be pointed out that in petitions for relief from judgment, orders, or other
proceedings; relief from denial of appeals; or annulment of judgments, final orders and
resolutions, where meritorious defenses must be adduced, they must accompany the
grounds cited therein, whether it is fraud, accident, mistake, excusable negligence,
extrinsic fraud or lack of jurisdiction. Where, as here, there is neither excusable nor gross
negligence amounting to a denial of due process, meritorious defenses cannot alone be
considered.

It has long been recognized that strict compliance with the Rules of Court is
indispensable for the prevention of needless delays and for the orderly and expeditious
dispatch of judicial business. For the Court to allow the reopening or remand of the case
after such a display of indifference to the requirements of the Rules of Court would put a
strain on the orderly administration of justice.[17]

WHEREFORE, the petition is DENIED. The Decision dated March 26, 2004 and the Resolution
dated September 28, 2004 of the Court of Appeals in CA-G.R. SP No. 70213 are AFFIRMED.
 SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

Ex. of “other proceedings”- order of writ of execution, order dismissing an

appeal

Francisco v. Puno, G.R. No. L-55694, October 23, 1981

G.R. No. L-55694 October 23, 1981

ADALIA B. FRANCISCO, ZENAIDA FRANCISCO, ESTER FRANCISCO, ADELUISA FRANCISCO and ELIZABETH
FRANCISCO, petitioners,
vs.
HON. BENIGNO M. PUNO, as Presiding Judge, Court of First Instance of Quezon, Branch II, Lucena City
and JOSEFINA D. LAGAR respondents.

BARREDO, J.:

Petition for certiorari impugning the resolution of respondent judge of October 8, 1980 granting private
respondent's petition for relief from the judgment rendered by the same respondent judge on January
8, 1980 in Civil Case No. 8480 of the Court of First Instance of Quezon which dismissed private
respondent's complaint for reconveyance of a parcel of land and damages. That decision was rendered
notwithstanding the absence of petitioners at the pre-trial by reason of which they were declared in
default. It was based alone on the testimony of private respondent Josefina D. Lagar and the documents
she presented.

On August 29, 1979, private respondent filed with respondent judge a complaint for reconveyance of a
parcel of land and damages alleging inter alia that respondent's father caused the land in question titled
in his name alone as "widower", after her mother's death, in spite of the property being conjugal, and
then sold it to the predecessor in interest of petitioners from whom they bought the same.
After the defendants, herein petitioners had filed their answer, wherein they alleged lack of personality
of plaintiff to sue, prescription and that they are buyers in good faith, the case was set for pre-trial, but
petitioners failed to appear thereat. Taking advantage of such absence, private respondent's counsel
move that they be declared in default and that private respondent, with the assistance of her counsel,
Atty. Pacifico M. Monje, be allowed to present their evidence. The motion was granted and after
presenting her evidence, counsel rested her case. On the same date, respondent judge rendered
judgment finding the evidence insufficient to sustain the cause of action alleged and therefore
dismissing the complaint. That was on January 8, 1980. On February 15, 1980, respondent's counsel was
served with copy of the decision. (See Annex G of the petition.)

On February 16, 1980, private respondent filed, thru a new counsel, Atty. Bienvenido A. Mapaye, a
motion for new trial and/or reconsideration alleging that the insufficiency of her evidence was due to
the fault of her counsel who presented the same without her being fully prepared. In other words, she
claimed, she had newly discovered evidence that could prove her cause of action. It is relevant to note
that said motion was signed and sworn to by private respondent herself together with her counsel.

Acting on the said motion for new trial and/or reconsideration, on April 28, 1980, respondent judge
denied the same for having been filed out of time. Indeed, from January 15, 1980, when respondent's
counsel was served with the decision, to February 16, 1980, when the motion was filed, more than 30
days had already elapsed (32 days to be exact).

Persisting in her effort to pursue her claim, under date of May 7, 1980, private respondent filed, thru
another new counsel, Atty. Ricardo Rosales, Jr., a petition for relief, purportedly under Rule 38, claiming:

1. She filed civil case 8480 for Reconveyance and Damages against defendants Luis
Francisco, et al., on August 29, 1979.

2. The main trust in petitioner's action against defendant was her unlawful deprivation
of one-half of the property covered by TCT No. 2720 and denominated as Lot 4864 of
the cadastral survey of Lucena, as said parcel belongs to the conjugal partnership of
Dionisio Lagar and Gaudencia Daelo, plaintiff-petitioner's immediate predecessor-in-
interest.

3. Gaudencia Daelo having predeceased her husband, petitioner contends that one-half
of the property belongs to her mother and therefore should rightfully by inherited by
her after her mother's death, but failed however, to inherit any part thereof, because
her father sold the entire parcel to the defendant Luis Francisco.

4. On January 8, 1980, a pre-trial hearing was scheduled, where defendants were

declared as if in default thereafter an order of default was issued and plaintiff adduced
evidence ex-parte.

5. On the same date, January 8, 1980, a decision was rendered dismissing the case after
plaintiff took the witness stand, who through excusable neglect was not able to
expound on very vital points and inadvertently failed to introduce in support of her
theory.
 6. Because plaintiff-petitioner was under the belief that the scheduled hearing was one
where no testimony is yet to be taken, coupled by the fact that she was not prepared to
testify, and that it was her first time to take the witness stand, she did not fully
comprehend the questions propounded to her.

7. Plaintiff-petitioner filed a Motion for Reconsideration and/or new trial but was denied
in its order dated April 28, 1980, which petitioner received on May 5,1980.

8. If plaintiff-petitioner will be allowed to introduce evidence in her possession, which

by excusable neglect and/or mistake were not introduced, the same will necessarily
alter and, or change the decision in her favor, attached is her affidavit of merits.

9. Evidence in support of her claim that it is a conjugal property consist of a deed of sale
executed by Manual Zaballero and Germana Ona in favor of the conjugal partnership of
Dionisio Lagar and Gaudencia Daello (Doc. No. 412; Page No. 55; Book No. 11; Series of
1948 of Notary Public Francisco Mendioro xerox copy thereof is attached herewith as
Annex "A".

10. The deed of sale ratified by Notary Public Ramon Ingente (Doc. No. 68; Page No. 7;
Book No. VI; Series of 1955 executed by Dionisio Lagar should refer only to one-half
(1/2) and therefore is annulable in so far as the other half of the property is Concerned.

11. That the petition wherein Dionisio Lagar sought [4) change his civil status was not
known personally to the plaintiff-petitioner and/or not understood by her, otherwise
she could have made reservations in that petition eventually protecting her right insofar
as one-half (1/2) of the property is concerned.

12. Plaintiff-petitioner has a valid substantial cause of action consisting of evidence

enumerated above, which by excusable negligence or error was not presented
otherwise, the decision will be in favor of the plaintiff herein petitioner. (Petition for
Relief of Judgment, pp. 50-52, Record

Answering the petition for relief, petitioners maintained that aside from the fact that no excusable
negligence has been alleged, for, on the contrary, there was an evident effort oil respondent's part to
take advantage of the absence and default of petitioners when respondent presented her evidence, the
petition for relief was filed out of time in the light of Section 3 of Rule 38, which provides that such a
petition should be " filed within sixty (60) days after the petitioner learns of the judgment, order or
proceeding to be set aside, and not more than six (6) months after such judgment or order was entered
or such proceeding was taken."

In his resolution of October 8, 1980 now under question, respondent judge ruled that:

Defendants' claim that plaintiff is presumed to have learned of the judgment of January
8, 1980, either on January 15, 1980 when Atty. Monje received a copy thereof or on
February 15, 1980, when plaintiff signed the Motion for Reconsideration and/or New
Trial prepared by Atty. Mapaye, in either case, the petition for relief of May 8, 1980 by
Atty. Rosales was resorted to beyond the 60-day period prescribed under Section 3, Rule
 38 of the Rules of Court; from January 15 to May 8 is a period of 114 days and from
February 15 to May 8 is a period of 84 days; in either case, the filing of the petition for
relief is beyond 60 days from the time plaintiff is presumed to have learned of said
decision of January 8, although, in either or both events, the filing thereof is admittedly
within 6 months from the issuance of said decision; on the other hand, the plaintiff
stated that she did not actually learn of the decision of January 8, until she received a
copy thereof on March 17, 1980 (p. 67 of Record or Exh. "G") and that she was not
informed of the contents of the motion for new trial and/or reconsideration on
February 15, 1980 when she was made to sign it (TSN, pp. 20-21, July 28, 1980).

Q From where did you secure that copy of the decision?

A I went to the court myself and secured a copy of the decision. (TSN, p.
16-id).

xxx xxx xxx

Q And you are sure of the fact that you only became aware of the
decision in the month of March, 1980?

A Yes. sir, (TSN, p. 20, Id).

In the light of the circumstances obtaining in this case, it is the opinion of the Court that
it is the date when plaintiff actually learned of the decision from which she seeks relief
that should be considered in computing the period of 60 days prescribed under Sec. 3,
Rule 38 of the Rules of Court for purposes of determining the timeliness of the said
petition for relief; this opinion finds support inCayetano vs. Ceguerra et al., No. L-18831,
13 SCRA, where the Supreme Court, in effect, held that the date of 'actual knowledge'
(and not the presumed date of receipt or knowledge) of the decision, order or judgment
from which relief is sought shall be the date which should be considered in determining
the timeliness of the filing of a petition for relief; in that case, the Supreme Court said:

It is conceded that defendants received a first registry notice on January

13, 1961, but they did not claim the letter, thereby giving rise to the
presumption that five (5) days after receipt of the first notice, the
defendants were deemed to have received the letter. This Court,
however, cannot justly attribute upon defendants actual knowledge of
the decision, because there is no showing that the registry notice itself
contained any indication that the registered letter was a copy of the
decision, or that the registry notice referred to the case being
ventilated. We cannot exact a strict accounting of the rules from
ordinary mortals, like the defendants. (Resolution, pp. 67-68, Record.)

We cannot agree, for two reasons. First, according to Chief Justice Moran:

The relief provided for by this rule is not regarded with favor and the judgment would
not be avoided where the party complaining "has, or by exercising proper diligence
 would have had, an adequate remedy at law, or by proceedings in the original action, by
motion, petition, or the like to open, vacate, modify or otherwise obtain relief against,
the judgment." (Fajardo v. Judge Bayona, etc., et al., 52 O.G. 1937; See Alquesa v.
Cavoda L-16735, Oct. 31, 1961, citing 49 C.J.S. 695.) The remedy allowed by this rule is
an act of grace, as it were, designed to give the aggrieved party another and last chance.
Being in the position of one who begs, such party's privilege is not to impose conditions,
haggle or dilly-dally, but to grab what is offered him. (Palomares, et al. v. Jimenez, et al.,
L-4513, Jan. 31, 1952.) (Page 226, Moran, Comments on the Rules of Court, Vol. 2, 1979
Edition.)

In other words, where, as in this case, another remedy is available, as, in fact, private respondent had
filed a motion for new trial and/or reconsideration alleging practically the same main ground of the
petition for relief under discussion, which was denied, what respondent should have done was to take
to a higher court such denial. A party who has filed a timely motion for new trial cannot file a petition
for relief after his motion has been denied. These two remedies are exclusive of each other. It is only in
appropriate cases where a party aggrieved by a judgment has not been able to file a motion for new trial
that a petition for relief can be filed.

Second, it is beyond doubt that the petition for relief of private respondent was filed out of time. We
cannot sanction respondent court's view that the period should be computed only from March 17, 1980
when she claims self-servingly that she first knew of the judgment because, as stated above, she signed
and even swore to the truth of the allegations in her motion for new trial filed by Atty. Mapaye on
February 16, 1980 or a month earlier. To give way to her accusations of incompetence against the
lawyer who handled her case at the pre-trial, which resulted in a decision adverse to her despite the
absence of petitioners, and charge again later that her new counsel did not inform her properly of the
import of her motion for new trial and/or reconsideration is to strain the quality of mercy beyond the
breaking point and could be an unwarranted slur on the members of the bar. That, however, Atty.
Mapaye cud not pursue the proper course after his motion for new trial was denied is, of course,
unfortunate, but We are unaware of the circumstances of such failure and how much of it could be
attributed to respondent herself, hence We cannot say definitely Chat it was counsel's fault,

In any event, We hold that notice to counsel of the decision is notice to the party for purposes of Section
3 of Rule 38. The principle that notice to the party, when he is represented by a counsel of record, is not
valid is applicable here in the reverse for the very same reason that it is the lawyer who is supposed Lo
know the next procedural steps or what ought to be done in law henceforth for the protection of the
rights of the client, and not the latter.

Under the circumstances, We hold that respondent judge acted beyond his jurisdiction in taking
cognizance of private respondent's petition for relief and, therefore, all his actuations in connection
therewith are null and void, with the result that his decision of January 8, 1980 should be allowed to
stand, the same having become final and executory.

ACCORDINGLY, judgment is hereby rendered setting aside the resolution of respondent judge of
October 8, 1980 and reinstating his decision of January 8, 1980 in Civil Case No. 8480 of his court, which
latter decision may now be executed, the same being already final and executory. No costs.

Aquino, Concepcion, Jr., Abad Santos and De Castro, JJ., concur.

Redeña v. Court of Appeals, G.R. No. 146611, February 6, 2007 (Supra.)

FIRST DIVISION

TANCREDO REDEÑA, G.R. No. 146611

Petitioner,

Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,

- versus – CORONA,

AZCUNA, and

GARCIA, JJ.

HON. COURT OF APPEALS and LEOCADIO REDEÑA, Promulgated:

Respondents.

February 6, 2007

x------------------------------------------------------------------------------------------x

DECISION
GARCIA, J.:

In this special civil action for certiorari under Rule 65 of the 1997 Rules of Civil Procedure,
petitioner Tancredo Redeña(Tancredo, hereafter) seeks the annulment and setting aside
[1]
of the Resolution dated April 28, 2000 of the Court of Appeals inCA-G.R. CV No. 59641, as reiterated
in its Resolution[2] of November 16, 2000, denying the petitioner’s motion for reconsideration.

The present controversy sprung from an action for partition filed by petitioner Tancredo against
his older half-brother, herein private respondent Leocadio Redeña (Leocadio, for brevity) before the
then Court of First Instance (now Regional Trial Court [RTC]) of San Pablo City, Laguna, and thereat
docketed as Civil Case No. S-241 which was subsequently inherited by Branch 33 of the RTC, Siniloan,
Laguna.

The basic complaint for partition alleges that plaintiff Tancredo and defendant Leocadio are both
sons of one Maximo Redeña: Tancredo, by Maximo’s marriage to Magdalena Fernandez, and Leocadio,
by Maximo’s previous marriage to Emerenciana Redeña. The complaint further alleged that the parties’
common father, Maximo, left several pieces of realty, to wit: a residential lot at M. Calim Street, Famy,
Laguna; a riceland at Poroza, Famy, Laguna; and another parcel of land at Maate, also in Famy, Laguna.

In a decision[3] dated August 20, 1997, the trial court, based on the evidence presented, confined
the partition to only the property actually pertaining to the estate of the parties’ deceased father and
co-owned by them, namely, the parcel of land at Maate, and accordingly rendered judgment as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering the

defendant [now respondent Leocadio] to partition only the property located at Maate,
Famy, Laguna after plaintiff’s [Tancredo’s] reimbursement of the expenses incurred by
the defendant in relation to the said lot. However, partition cannot be effected with
regard to properties located at M. Calim Street, Famy, Laguna and the property located
 at Poroza, Famy, Laguna, as the same belong to the defendant. No pronouncement as
to costs.

SO ORDERED. (Words in brackets supplied)

On December 11, 1997, petitioner filed with the trial court a Notice of Appeal.[4] The court gave
due course to the notice and directed the elevation of the records of the case to the CA whereat
petitioner’s appeal was docketed as CA-G.R.CV No. 59641.

On September 28, 1998, the CA issued a resolution directing petitioner, as appellant, to file his
appellant’s brief. Evidently, the period for filing the brief was even extended by the CA.

On March 9, 1999, there being no appellant’s brief filed within the extended period, the CA
issued a resolution[5]considering the appeal abandoned and accordingly dismissing the same. The
dismissal resolution reads:

For failure of plaintiff-appellant [now petitioner] to file the required brief within
the extended period, the instant appeal is hereby considered ABANDONED and
accordingly DISMISSED, pursuant to Section 1(e), Rule 50, 1997 Rules of Civil Procedure.

On November 8, 1999 or eight (8) months after the CA issued the above resolution, petitioner
filed a motion for reconsideration[6] thereof. In a resolution[7] of November 25, 1999, the CA denied the
motion.

Then, on December 28, 1999, in the same CA-G.R. CV No. 59641, petitioner filed a Petition for
Relief bearing dateDecember 27, 1999, anchored on Section 2, [9] Rule 38 of the 1997 Rules of Civil
[8]

Procedure. In that pleading, petitioner prays the CA to set aside its dismissal resolution of March 9,
1999, supra, reinstate his appeal and grant him a fresh period of forty-five (45) days from notice within
which to file his appellant’s brief.

In the herein assailed Resolution[10] dated April 28, 2000, the CA denied the
aforementioned Petition for Relief, thus:

WHEREFORE, the petition for relief dated 27 December 1999 is hereby DENIED.

SO ORDERED.

Explains the CA in said resolution:

Petition for relief is not among the remedies available in the Court of
Appeals. In fact, authorities in remedial law (noted authors Regalado, Herrera, and
Feria) are one in their commentaries that these petitions are filed with the trial
courts. Not one of them has advanced an opinion or comment that this equitable relief
can be obtained in the Court of Appeals. Under Rule 47, an annulment of judgment or
final orders and resolutions may be filed before this court based on the ground of
extrinsic fraud which seems to be the premise of the petition. Perhaps it is worth
looking into by the petitioner if the factual basis of the present petition for relief may
qualify as an extrinsic fraud, under Rule 47.

Petitioner’s motion for reconsideration of the above-mentioned resolution was likewise denied
by the CA in its equally challenged Resolution[11] of November 16, 2000, wherein the appellate court
further wrote:
 Under the 1964 Rules of Court, there was only one court where a petition for
relief may be filed – the Court of First Instance, now the Regional Trial Court. Section 1
thereof governs a petition to Court of First Instance for relief from judgment of inferior
court while Section 2 thereof governs petition to Court of First Instance for relief from
judgment or other proceeding thereof. The 1997 Rules of Civil Procedure has altered
the said precept. Now, it must be filed before the Municipal Trial Courts or
Metropolitan Trial Courts for judgments or final orders or other proceedings taken in
said courts, and in the same case. And for judgment, order, or other proceedings in the
Regional Trial Court, it must be filed in the same Regional Trial Court which rendered the
judgment or final order, or other proceedings taken and in the same case. In other
words, under the present rule, such a petition may be filed in the same court which
rendered the judgment or final order, or proceedings taken and in the same case. This
is in accordance with uniform procedure rule for Municipal and Regional Trial Courts.

The above construction to limit the term “any court” to Municipal Trial Court
and Regional Trial Court – and not to include the Court of Appeals – finds support in
Section 7 of the Rules which states:

Sec. 7. Procedure where the denial of an appeal is set aside. –

Where the denial of an appeal is set aside, the lower court shall be
required to give due course to the appeal and to elevate the record of
the appealed case as if a timely and proper appeal had been made.

Significantly, there is no specific provision in both the 1964 and 1997 Rules of
Court making the petition under Rule 38, applicable in the Court of Appeals. The
procedure in the Court of Appeals from Rule 44 to Rule 55 with the exception of Rule 45
which pertains to the Supreme Court, identifies the remedies available before said court
such as annulment of judgment or final orders and resolution (Rule 47); motion for
reconsideration (Rule 52); and, new trial, (Rule 53). Nowhere is petition for relief under
Rule 38 mentioned.
 But even as the CA stood firm on its stand that a petition for relief from denial of appeal is not
among the remedies available before the CA itself, the appellate court, in the same Resolution
of November 16, 2000, left the final determination of the question to this Court, thus:

Parenthetically, the main question presented herein is novel in that there is yet
no definite and definitive jurisprudence from the Supreme Court. Perhaps, the case will
clarify this gray area in our adjective law for guidance of the Bench and Bar. The issue
should be elevated to that Tribunal.

Presently, petitioner is now before this Court via the instant recourse on his submission that the
CA committed grave abuse of discretion when it -

XXX RULED THAT A PETITION FOR RELIEF IS NOT AN AVAILABLE REMEDY IN THE COURT
OF APPEALS.

II

XXX REFUSED TO GRANT THE PETITION DESPITE A CLEAR SHOWING THAT (A)
PETITIONER, BY REASON OF FRAUD AND MISTAKE, WAS PREVENTED FROM
PROSECUTING HIS APPEAL, AND (B) PETITIONER HAS A GOOD AND SUBSTANTIAL CAUSE
OF ACTION AGAINST PRIVATE RESPONDENT.

We DISMISS.
 In Hagonoy Market Vendor Association v. Municipality of Hagonoy, Bulacan, G.R. No.
137621, February 6, 2002, then Associate Justice, now Chief Justice Reynato S. Puno, reminded us that

Laws are of two (2) kinds: substantive and procedural. Substantive laws, insofar
as their provisions are unambiguous, are rigorously applied to resolve legal issues on the
merits. In contrast, courts generally frown upon an uncompromising application of
procedural laws so as not to subvert substantial justice. Nonetheless, it is not totally
uncommon for courts to decide cases based on a rigid application of the so-called
technical rules of procedure as these rules exist for the orderly administration of justice.

From the petition, it is clear that this Court is called upon to relax the application of procedural
rules, or suspend them altogether, in favor of petitioner’s substantial rights. There is no doubt as to the
power of this Court to do that. In a fairly recent case, we reiterated:

The Court has often stressed that rules of procedure are merely tools designed
to facilitate the attainment of justice. They were conceived and promulgated to
effectively aid the court in the dispensation of justice. Courts are not slaves to or robots
of technical rules, shorn of judicial discretion. In rendering justice, courts have always
been, as they ought to be, conscientiously guided by the norm that on the balance,
technicalities take a backseat against substantive rights, and not the other way around.
Thus, if the application of the Rules would tend to frustrate rather than promote justice,
it is always within our power to suspend the rules or except a particular case from its
operation.[12]

The Rules itself expressly states in Section 2 of Rule 1 that the rules shall be liberally construed
in order to promote their object and to assist the parties in obtaining just, speedy and inexpensive
determination of every action and proceeding. Courts, therefore, not only have the power but the duty
to construe and apply technical rules liberally in favor of substantive law and substantial
justice. Furthermore, this Court, unlike courts below, has the power not only to liberally construe the
rules, but also to suspend them, in favor of substantive law or substantial rights. Such power inherently
belongs to this Court, which is expressly vested with rule-making power by no less than the
Constitution.[13]
 It is equally settled, however, that this Court’s power to liberally construe and even to suspend
the rules, presupposes the existence of substantial rights in favor of which, the strict application of
technical rules must concede. The facts are borne out by the records pertaining to petitioner’s
purported undivided share in the property at M. Calim Street, Famy, Laguna, and the property in Poroza
clearly showed that these two properties had been subject of an agreement (Exh. “1”) whereby
petitioner recognized respondent’s rights to said properties. This fact binds this Court, there being
nothing on record with the trial court as to the herein alleged fraud against the petitioner. Upon
thorough deliberation of the supposed substantial rights claimed by the petitioner with the court below,
the Court finds no cogent basis to favorably rule on the merits of the appeal even if it may be given due
course which is indispensable to justify this Court in considering this case as an exception to the rules.

The present case will have to be decided in accordance with existing rules of procedure. We
apply the settled principle that petition for relief under Rule 38 of the Rules of Court is of equitable
character, allowed only in exceptional cases as when there is no other available or adequate
remedy.[14] Hence, a petition for relief may not be availed of where a party has another adequate
remedy available to him, which is either a motion for new trial or appeal from the adverse decision of
the lower court, and he is not prevented from filing such motion or taking the appeal. The rule is that
relief will not be granted to a party who seeks to be relieved from the effect of the judgment when the
loss of the remedy at law is due to his own negligence, or a mistaken mode of procedure; otherwise, the
petition for relief will be tantamount to reviving the right of appeal which has already been lost either
because of inexcusable negligence or due to a mistake in the mode of procedure taken by counsel. [15]

Under Section 2 of Rule 38, supra, of the Rules of Court, a party prevented from taking an
appeal from a judgment or final order of a court by reason of fraud, accident, mistake or excusable
negligence, may file in the same court and in the same case a petition for relief praying that his appeal
be given due course. This presupposes, of course, that no appeal was taken precisely because of any of
the aforestated reasons which prevented him from appealing his case. Hence, a petition for relief under
Rule 38 cannot be availed of in the CA, the latter being a court of appellate jurisdiction. For sure, under
the present Rules, petitions for relief from a judgment, final order or other proceeding rendered or
taken should be filed in and resolved by the court in the same case from which the petition arose. Thus,
petition for relief from a judgment, final order or proceeding involved in a case tried by a municipal trial
court shall be filed in and decided by the same court in the same case, just like the procedure followed
in the present Regional Trial Court.[16]

Here, the record shows that petitioner in fact filed a Notice of Appeal with the trial court, which
the latter granted in its order of December 11, 1997 and ordered the elevation of the records to the CA.
In turn, the CA, in its resolution of September 28, 1998, required the petitioner, thru his former counsel,
Atty. Geminiano Almeda, to file his appellant’s brief. But petitioner failed to comply. Consequently, in
its resolution of March 9, 1999, the CA considered the appellant’s appeal as ABANDONED and
DISMISSED the same.

Additionally, after the dismissal of his appeal, petitioner filed with the CA a motion for
reconsideration of the dismissal resolution. Unfortunately, however, the motion was filed very much
late on November 8, 1999. Expectedly, in its resolution[17] ofNovember 25, 1999, the CA denied the
motion for reconsideration, to wit:

The last day to file a motion for reconsideration was on 06 April 1999 and as
of 18 October 1999 no such motion was ever filed; in fact on 19 October 1999 the court
resolved that an entry of judgment may now be issued. The motion for reconsideration,
however, pleas for leniency on account of his former lawyer’s inefficiency and
negligence in that he failed to appeal the case. This is not well taken.

His former lawyer’s lack of fidelity and devotion to his client in the discharge of
his duty of perfecting the appeal on time without demonstrating fraud, accident,
mistake or excusable negligence cannot be a basis for judicial relief. The client has to
bear the adverse consequences of the inexcusable mistake or negligence of his counsel
or of the latter’s employee and may not be heard to complain that the result of the
litigation might have been different had he proceeded differently (Inocando v.
Inocando, 100 Phil. 266)

WHEREFORE, the motion is hereby DENIED.

 Petitioner presents himself as a mere farmer seeking the Court’s leniency to the point of
disregarding the rules on reglementary period for filing pleadings. But he fails to point out any
circumstance which might lead the Court to conclude that his station in life had in any way placed his
half-brother in a more advantageous position. As we see it, petitioner failed to show diligence in
pursuing his cause. His condition as a farmer, by itself alone, does not excuse or exempt him from being
vigilant on his right. He cannot lay the blame solely on his former lawyer. It is settled that clients are
bound by the mistakes, negligence and omission of their counsel. [18] While, exceptionally, a client may
be excused from the failure of his counsel, the circumstances obtaining in this case do not convince the
Court to take exception.

In seeking exemption from the above rule, petitioner claims that he will
suffer deprivation of property without due process of law on account of the gross negligence of his
previous counsel. To him, the negligence of his former counsel was so gross that it practically resulted to
fraud because he was allegedly placed under the impression that the counsel had prepared and filed his
appellant’s brief. He thus prays the Court reverse the CA and remand the main case to the court of
origin for new trial.

Admittedly, this Court has relaxed the rule on the binding effect of counsel’s negligence and
allowed a litigant another chance to present his case (1) where the reckless or gross negligence of
counsel deprives the client of due process of law; (2) when application of the rule will result in outright
deprivation of the client’s liberty or property; or (3) where the interests of justice so require. [19] None of
these exceptions obtains here.

For a claim of counsel’s gross negligence to prosper, nothing short of clear abandonment of the
client’s cause must be shown. Here, petitioner’s counsel failed to file the appellant’s brief. While this
omission can plausibly qualify as simple negligence, it does not amount to gross negligence to justify the
annulment of the proceedings below.

In Legarda v. Court of Appeals,[20] where the Court initially held that the counsel’s failure to file
pleadings at the trial court and later on appeal amounted to gross negligence, the Court, on motion of
the respondent therein, granted reconsideration and applied the general rule binding the litigant to her
counsel’s negligence. In said case, the Court noted that the proceedings which led to the filing of the
petition “were not attended by any irregularity.” The same observation squarely applies here.

To recapitulate, petitioner is not entitled to relief under Rule 38, Section 2 of the Rules of Court.
He was not prevented from filing his notice of appeal by fraud, accident, mistake or excusable
negligence, as in fact he filed one. The relief afforded by Rule 38 will not be granted to a party who seeks
to be relieved from the effects of the judgment when the loss of the remedy of law was due to his own
negligence, or a mistaken mode of procedure for that matter; otherwise, the petition for relief will be
tantamount to reviving the right of appeal which has already been lost, either because of inexcusable
negligence or due to a mistake of procedure by counsel.[21] The Rules allow a petition for relief only
when there is no other available remedy, and not when litigants, like the petitioner, lose a remedy by
negligence.

On a final note, the extraordinary writ of certiorari may be issued only where it is clearly
shown that there is patent and gross abuse of discretion as to amount to
an evasion of positive duty or to virtual refusal to perform a duty enjoined by law, or to act at all in
contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason
of passion or personal hostility.[22] The Court finds no such abuse of discretion in this case.

WHEREFORE, the instant petition is DISMISSED and the assailed resolutions of the CA
are AFFIRMED.

No pronouncement as to costs.

SO ORDERED.
CANCIO C. GARCIA

Associate Justice

Spouses Dela Cruz v. Spouses Andres, G.R. No. 161864, April 27, 2007

SECOND DIVISION

SPS. ROLANDO DELA CRUZ and TERESITA DELA G.R. No. 161864
CRUZ,

Petitioners,
Present:

QUISUMBING, J., Chairperson,

CARPIO,

- versus - CARPIO MORALES,

TINGA, and

VELASCO, JR., JJ.

SPS. FELICIANO ANDRES and ERLINDA AUSTRIA, Promulgated:

and the DIRECTOR OF LANDS,

Respondents.
April 27, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

RESOLUTION

QUISUMBING, J.:

This petition for review on certiorari assails the Resolutions dated October 21, 2003[1] and January
21, 2004[2] of the Court of Appeals in CA-G.R. SP No. 67966, which dismissed the petition for relief from
judgment instituted by petitioners and denied their motion for reconsideration, respectively.

The petition stemmed from the following factual antecedents:

Spouses Rolando Dela Cruz and Teresita Dela Cruz filed a complaint for annulment of title and/or
reconveyance with damages against spouses Feliciano Andres and Erlinda Austria and the Director of Lands
on July 28, 1993. The case was docketed as Civil Case No. 523 and assigned to the Municipal Circuit Trial
Court (MCTC) of Laur and Gabaldon in Laur, Nueva Ecija.

The MCTC ordered the Director of Lands to cancel Original Certificate of Title No. 11859 insofar as
the 410 square meters owned and occupied by petitioners were concerned. On appeal,
the Regional Trial Court of Palayan City, Branch 40, reversed and set aside the decision of the MCTC.

On December 4, 2001, petitioners, assisted by Atty. Rafael E. Villarosa, filed with the Court of
Appeals a petition for review docketed as CA-G.R. SP No. 67966.[3] The appellate court dismissed the
petition since the Certification of Non-Forum Shopping was signed by Atty. Villarosa instead of
petitioners in violation of Section 5, Rule 7 of the 1997 Rules of Civil Procedure. [4] Petitioners moved for
reconsideration but it was denied.

Thereafter, Atty. Villarosa withdrew his appearance. On March 20, 2002, petitioners, assisted by
Atty. Guillermo M. Hernandez, Jr., requested for an extension of time to file their petition before this
Court. Later, they abandoned the motion and the case was declared closed and terminated.

On May 6, 2002, petitioners filed with the Court of Appeals a petition for relief from
judgment praying that the dismissal of their petition for review be set aside since the gross negligence of
their previous counsel did not bind them.[5] The appellate court, however, denied their petition. It ruled
that petitioners were bound by the action of their counsel as well as by his mistake or negligence. It
added that petitioners could not belatedly complain on petition or appeal about their counsel’s
incompetence since they could have easily dismissed him at the initial or trial stage if they were not
satisfied with his performance. Since petitioners slept on their rights, they had no one to blame but
themselves.
 With the denial of their motion for reconsideration, petitioners came to this Court raising the
following issues:
I.

WHETHER OR NOT THE FILING OF A PETITION [FOR] RELIEF FROM JUDGMENT

PURSUANT TO RULE 38 OF THE 1997 RULES OF CIVIL PROCEDURE IS AVAILABLE WHEN
THE CASE IS ALREADY PENDING WITH THE COURT OF APPEALS AND/OR WITH THIS
HONORABLE COURT;

II.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN NOT
FINDING THAT THE PETITIONERS’ PREVIOUS COUNSEL’S ACTS ARE TO BE CONSIDERED
AS GROSS NEGLIGENCE;

III.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN

FINDING THAT THE PETITIONERS HAVE ALLEGEDLY SLEPT ON THEIR RIGHT TO
COMPLAIN ABOUT THE INCOMPETENCE OF THEIR PREVIOUS COUNSEL AND TO DISMISS
SUCH COUNSEL; AND

IV.

WHETHER OR NOT THE COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION IN NOT
CONSIDERING THE CASE ON THE MERITS.[6]

The threshold issue before us is: Can petitioners avail of a petition for relief under Rule 38 of
the 1997 Rules of Civil Procedure from a judgment of the Court of Appeals due to their counsel’s
negligence when he signed the Certification of Non-Forum Shopping?

Petitioners plead that they be spared the consequences of their procedural lapse since it was
caused by their counsel’s gross negligence in ignoring a well-established rule that it is the party himself
who should verify and certify the pleading.

Respondents, on the other hand, maintain that petitioners’ counsel was not negligent and in fact did
his best since he filed the petition for review on time.

After considering the submission of the parties, we deny the petition for lack of merit.

A petition for relief from judgment under Rule 38 of the 1997 Rules of Civil Procedure is an
equitable remedy that is allowed only in exceptional cases when there is no other available or adequate
remedy.[7] It may be availed of only after a judgment, final order or other proceeding was taken against
the petitioner in any court through fraud, accident, mistake, or excusable negligence.[8]
 While the law uses the phrase “any court,” it refers only to Municipal/Metropolitan and Regional
Trial Courts.[9] The procedure in the Court of Appeals and this Court are governed by separate provisions
of the Rules of Court and may, from time to time, be supplemented by additional rules promulgated by
this Court through resolutions or circulars. As it stands, neither the Rules of Court nor the Revised Internal
Rules of the Court of Appeals allows the remedy of petition for relief in the Court of Appeals.[10]

Moreover, under Section 1(b), Rule 41 of the 1997 Rules of Civil Procedure, the denial of a
petition for relief from judgment is subject only to a special civil action for certiorari under Rule 65. In
seeking to reverse the appellate court’s decision denying their petition for relief from judgment by a
petition for review on certiorari under Rule 45, petitioners have availed of the wrong remedy twice. [11]

Nevertheless, even if this Court were to delve into the merits of this petition, the same must still
be denied. What petitioners’ counsel did in this case was to attach an improper Certification of Non-
Forum Shopping to their petition for review with the appellate court. While this omission can plausibly
qualify as simple negligence, it does not amount to gross negligence to justify the annulment of the
proceedings below.

For a claim of counsel’s gross negligence to prosper, nothing short of clear abandonment of the
client’s cause must be shown.[12] The negligence of counsel must be so gross that the client is deprived
of his day in court, the result of which is that he is deprived of his property without due process of
law. Thus, where a party was given the opportunity to defend his interests in due course, he cannot be
said to have been denied due process of law, for this opportunity to be heard is the very essence of due
process.[13] Here, the case underwent a full-blown trial. Both parties were adequately heard, and all
issues were ventilated before the decision was promulgated.

It should be pointed out that in petitions for relief from judgment, meritorious defenses must be
accompanied by the ground relied upon, whether it is fraud, accident, mistake, excusable negligence,
extrinsic fraud or lack of jurisdiction.[14] In the instant case, there being neither excusable nor gross
negligence amounting to a denial of due process, meritorious defenses cannot alone be considered.

While it is true that rules of procedure are not cast in stone, it is equally true that strict
compliance with the Rules is indispensable for the prevention of needless delays and for the orderly and
expeditious dispatch of judicial business.[15] Utter disregard of the rules cannot justly be rationalized by
harking on the policy of liberal construction.[16]

WHEREFORE, the instant petition is DENIED for lack of merit. The assailed Resolutions
dated October 21, 2003 andJanuary 21, 2004 of the Court of Appeals in CA-G.R. SP
No. 67966, are AFFIRMED.

Costs against petitioners.

SO ORDERED.
 LEONARDO A. QUISUMBING

Associate Justice

Sec. 2. Petition for relief from denial of appeal

Redeña v. Court of Appeals, G.R. No. 146611, February 6, 2007 supra

See: Section 7, Rule 38

Sec. 3. Time for filing petition; contents and verification

Madarang v. Spouses Morales, G.R. No. 199283, June 9, 2014

G.R. No. 199283 June 9, 2014

JULIET VITUG MADARANG and ROMEO BARTOLOME, represented by his attorneys-in-fact and acting
in their personal capacities, RODOLFO and RUBY BARTOLOME, Petitioners,
vs.
SPOUSES JESUS D. MORALES and CAROLINA N. MORALES, Respondents.

DECISION

LEONEN, J.:
A petition for relief from judgment is an equitable relief granted only under exceptional
circumstances.1 To set aside a judgment through a petition for relief, parties must file the petition within
60 days from notice of the judgment and within six (6) months after the judgment or final order was
entered; otherwise, the petition shall be dismissed outright.

If the petition for relief is filed on the ground of excusable negligence of counsel, parties must show that
their counsel’s negligence could not have been prevented using ordinary diligence and prudence. 2 The
mere allegation that there is excusable negligence simply because counsel was 80 years old is a
prejudicial slur to senior citizens. It is based on an unwarranted stereotype of people in their advanced
years. It is as empty as the bigotry that supports it.

This is a petition3 for review on certiorari of the Court of Appeals’ resolutions dated July 27, 2011 4 and
November 10, 20115 in CA-G.R. SP No. 120251. The Court of Appeals dismissed petitioners Juliet Vitug
Madarang, Romeo Bartolome, Rodolfo Bartolome, and Ruby Anne Bartolome’s 6 petition for certiorari
for failure to file a motion for reconsideration of the order7 denying their petition for relief from
judgment.

The facts as established by the pleadings of the parties are as follows:

On January 9, 2001, Spouses Jesus D. Morales and Carolina N. Morales filed with the Regional Trial Court
of Quezon City a complaint8 for judicial foreclosure of a house and lot located in Bago Bantay, Quezon
City.

The Spouses Morales alleged that on March 23, 1993, Spouses Nicanor and Luciana Bartolome
loanedP500,000.00 from them. The Spouses Bartolome agreed to pay within two months with interest
of five percent (5%) per month. To secure their loan, the Spouses Bartolome mortgaged 9 the Bago
Bantay property to the Spouses Morales.

The period to pay lapsed without the Spouses Bartolome having paid their loan. After demand, the
Spouses Bartolome only paid part of the loaned amount.

In the meantime, the Spouses Bartolome died. The Spouses Morales, thus, filed a complaint for judicial
foreclosure of the Bago Bantay property against Juliet Vitug Madarang, Romeo Bartolome, and the
Spouses Rodolfo and Ruby Anne Bartolome.

The Spouses Morales sued Madarang as the latter allegedly represented herself as Lita Bartolome and
convinced the Spouses Morales to lend money to the Spouses Bartolome. 10

Romeo and Rodolfo Bartolome were sued in their capacities as legitimate heirs of the Spouses
Bartolome. Ruby Anne Bartolome is Rodolfo Bartolome’s wife.

In their answer,11 defendants assailed the authenticity of the deed of real estate mortgage covering the
Bago Bantay property, specifically, the Spouses Bartolome’s signatures on the instrument. They added
that the complaint was already barred since it had been dismissed in another branch of the Regional
Trial Court of Quezon City for failure to comply with an order of the trial court.
In its decision12 dated December 22, 2009, the trial court ordered defendants to pay the Spouses
MoralesP500,000.00 plus 7% interest per month and costs of suit within 90 days but not more than 120
days from entry of judgment. Should defendants fail to pay, the Bago Bantay property shall be sold at
public auction to satisfy the judgment.

Defendants received a copy of the trial court’s decision on January 29, 2010.

On February 8, 2010, defendants filed their motion for reconsideration of the trial court’s decision. They
amended their motion for reconsideration and filed a request for a Philippine National Police
handwriting expert to examine the authenticity of the Spouses Bartolome’s alleged signatures on the
deed of real estate mortgage.

According to the trial court, the motion for reconsideration and its amendment were pro forma as
defendants failed to specify the findings and conclusions in the decision that were not supported by the
evidence or contrary to law.

As to the request for a handwriting expert, the trial court ruled that the "reasons given therein [were]
not well taken."13

Thus, in its order14 dated May 25, 2010, the trial court denied the motion for reconsideration, its
amendment, and the request for a handwriting expert.

Defendants received a copy of the May 25, 2010 order on June 24, 2010.

On August 11, 2010, defendants filed a notice of appeal. In its order 15 dated August 13, 2010, the trial
court denied due course the notice of appeal for having been filed out of time. According to the trial
court, defendants, through their counsel, Atty. Arturo F. Tugonon, received a copy of the order denying
the motion for reconsideration on June 24, 2010. This is evidenced by the registry return receipt on file
with the court. Consequently, they had 15 days from June 24, 2010, or until July 9, 2010, to appeal the
trial court’s decision. However, they filed their notice of appeal only on August 11, 2010, which was
beyond the 15-day period to appeal.

On September 24, 2010,defendants filed a petition for relief from judgment, 16 blaming their 80-year-old
lawyer who failed to file the notice of appeal within the reglementary period. They argued that Atty.
Tugonon’s failure to appeal within the reglementary period was a mistake and an excusable negligence
due to their former lawyer’s old age:

15. Undersigned Petitioner’s counsel is already eighty (80) years of age and the lapses and failure of
their counsel to take appropriate steps immediately for the protection of his client is a mistake and an
excusable negligence due to the latter’s age and should not be attributable to undersigned
defendants.17

In its order18 dated April 27, 2011, the trial court denied the petition for relief from judgment. The trial
court held that the petition for relief was filed beyond 60 days from the finality of the trial court’s
decision, contrary to Section 3, Rule 38 of the 1997 Rules of Civil Procedure.
On July 13, 2011, Madarang, Romeo, and Rodolfo and Ruby Anne Bartolome filed the petition for
certiorari19 with the Court of Appeals. In its resolution20 dated July 27, 2011, the appellate court denied
outright the petition for certiorari. The Court of Appeals found that petitioners did not file a motion for
reconsideration of the order denying the petition for relief from judgment, a prerequisite for filing a
petition for certiorari.

Petitioners filed a motion for reconsideration that the Court of Appeals denied in its resolution 21 dated
November 10, 2011. Petitioners filed the petition 22 for review on certiorari with this court. They argue
that they need not file a motion for reconsideration of the order denying their petition for relief from
judgment because the questions they raised in the petition for relief were pure questions of law. They
cite Progressive Development Corporation, Inc. v. Court of Appeals 23 as authority.

Petitioners add that the trial court erred in denying their notice of appeal. They personally received a
copy of the decision only on August 11, 2011. They argue that the period to file on appeal must be
counted from August 11, 2011, not on the day their "ailing counsel" 24 received a copy of the decision.

A comment25 was filed on the petition for review on certiorari by respondents Spouses Morales. They
argue that the trial court did not err in declaring pro forma petitioners’ motion for reconsideration of
the trial court’s decision.

Respondents contend that the Court of Appeals did not err in denying the petition for certiorari since
petitioners failed to file a motion for reconsideration of the order denying their petition for relief from
judgment.

The issues for our resolution are the following:

I. Whether the failure of petitioners’ former counsel to file the notice of appeal within the
reglementary period is excusable negligence; and

II. Whether the Court of Appeals erred in dismissing outright petitioners’ petition for certiorari
for failure to file a motion for reconsideration of the order denying the petition for relief from
judgment.

The petition lacks merit.

A petition for relief from judgment must

be filed within 60 days after petitioner
learns of the judgment, final order, or
proceeding and within six (6) months
from entry of judgment or final order

This court agrees that the petition for relief from judgment was filed out of time. However, the trial
court erred in counting the 60-day period to file a petition for relief from the date of finality of the trial
court’s decision. Rule 38, Section 3 of the 1997 Rules of Civil Procedure is clear that the 60-day period
must be counted after petitioner learns of the judgment or final order. The period counted from the
finality of judgment or final order is the six-month period. Section 3, Rule 38 of the 1997 Rules of Civil
Procedure states:

Sec. 3. Time for filing petition; contents and verification.– A petition provided for in either of the
preceding sections of this Rule must be verified, filed within sixty (60) days after petitioner learns of the
judgment, final order, or other proceeding to be set aside, and not more than six (6) months after such
judgment or final order was entered, or such proceeding was taken; and must be accompanied with
affidavits, showing the fraud, accident, mistake or excusable negligence relied upon and the facts
constituting the petitioner’s good and substantial cause of action or defense, as the case may be.
(Emphasis supplied)

The double period required under Section 3, Rule 38 is jurisdictional and should be strictly complied
with.26 A petition for relief from judgment filed beyond the reglementary period is dismissed outright.
This is because a petition for relief from judgment is an exception to the public policy of immutability of
final judgments.27

In Gesulgon v. National Labor Relations Commission, 28 the Labor Arbiter ordered Mariscor Corporation
to reinstate Edwin Gesulgon as chief cook on board one of its vessels. Mariscor Corporation had notice
of the decision on March 27, 1987, but it did not appeal the Labor Arbiter’s decision. Since decisions of
Labor Arbiters become final 10 calendar days from receipt of the decision, the decision became final on
April 6, 1987.

On February 28, 1989, Mariscor Corporation filed a motion to set aside judgment with the National
Labor Relations Commission. The Commission treated the motion as a petition for relief from judgment
and granted the petition for relief from judgment. It remanded the case to the Labor Arbiter for further
proceedings.

This court set aside the order granting the petition for relief from judgment for having been filed beyond
the double period required under Section 3, Rule 38 of the 1997 Rules of Civil Procedure. This court
explained:

A party filing a petition for relief from judgment must strictly comply with two (2) reglementary periods:
(a) the petition must be filed within sixty (60) days from knowledge of the judgment, order or other
proceeding to be set aside; and (b) within a fixed period of six (6) months from entry of such judgment,
order or other proceeding. Strict compliance with these periods is required because provision for a
petition for relief from judgment is a final act of liberality on the part of the State, which remedy cannot
be allowed to erode any further the fundamental principle that a judgment, order or proceeding must,
at some definite time, attain finality in order at last to put an end to litigation. In Turqueza v. Hernando,
this Court stressed once more that:

. . . the doctrine of finality of judgments is grounded on fundamental considerations of public policy and
sound practice that at the risk of occasional error, the judgments of courts must become final at some
definite date fixed by law. The law gives an exception or ‘last chance’ of a timely petition for relief from
judgment within the reglementary period (within 60 days from knowledge and 6 months from entry of
judgment) under Rule 38, supra, but such grave period must be taken as ‘absolutely fixed, in extendible,
never interruptedand cannot be subjected to any condition or contingency. Because the period fixed is
itself devised to meet a condition or contingency (fraud, accident, mistake or excusable neglect), the
equitable remedy is an act of grace, as it were, designed to give the aggrieved party another and last
chance’ and failure to avail of such last chance within the grace period fixed by the statute or Rules of
Court is fatal . . . .29 (Emphasis in the original)

In Spouses Reyes v. Court of Appeals and Voluntad,30 the Regional Trial Court of Bulacan rendered a
decision against the Spouses Reyes’ predecessors-in-interest. The decision became final on December 8,
1995. The Spouses Reyes had notice of the decision on May 30, 1997 when they received a Court of
Appeals order directing them to comment on the petition for certiorari filed by respondents heirs of
Voluntad. Attached to the Court of Appeals’ order was a copy of the trial court’s decision.

On June 21, 2000, the Spouses Reyes filed a petition for relief from judgment against the Regional Trial
Court of Bulacan’s decision. This court affirmed the dismissal of the petition for relief from judgment for
having been filed out of time and said:

It should be noted that the 60-day period from knowledge of the decision, and the 6-month period from
entry of judgment, are both inextendible and uninterruptible. We have also time and again held that
because relief from a final and executory judgment is really more of an exception than a rule due to its
equitable character and nature, strict compliance with these periods, which are definitely jurisdictional,
must always be observed.31 (Emphasis in the original)

In this case, petitioners, through counsel, received a copy of the trial court’s decision on January 29,
2010. They filed a motion for reconsideration and an amended motion for reconsideration, which
similarly alleged the following:

The defendants, by the undersigned counsel, to this Honorable Court, respectfully allege:

1. That on January 29, 2010, they received the decision in the above entitled case rendered by this
Honorable Court, dated December 22, 2009;

2. That with due respect to the Honorable Court, the decision is contrary to law & to the defendants[’]
evidence presented in court. Hence, this urgent motion.

WHEREFORE, it is most respectfully prayed of this Honorable Court, that the decision sought to be
reversed be reconsidered and another one be rendered in favor of the defendants. 32

Although petitioners filed a motion for reconsideration and amended motion for reconsideration, these
motions were pro forma for not specifying the findings or conclusions in the decision that were not
supported by the evidence or contrary to law.33 Their motion for reconsideration did not toll the 15-day
period to appeal.34

Petitioners cannot argue that the period to appeal should be counted from August 11, 2011, the day
petitioners personally received a copy of the trial court’s decision. Notice of judgment on the counsel of
record is notice to the client.35 Since petitioners’ counsel received a copy of the decision on January 29,
2010, the period to appeal shall be counted from that date.
Thus, the decision became final 15 days after January 29, 2010, or on February 13, 2010. Petitioners had
six (6) months from February 13, 2010, or until August 12, 2010, to file a petition for relief from
judgment.

Since petitioners filed their petition for relief from judgment on September 24, 2010, the petition for
relief from judgment was filed beyond six (6) months from finality of judgment. The trial court should
have denied the petition for relief from judgment on this ground.

II

Failure of petitioners’ former counsel to

file the notice of appeal within the
reglementary period is not excusable
negligence

Even if we assume that petitioners filed their petition for relief from judgment within the reglementary
period, petitioners failed to prove that their former counsel’s failure to file a timely notice of appeal was
due to a mistake or excusable negligence.

Under Section 1, Rule 38 of the 1997 Rules of Civil Procedure, a petition for relief from judgment may be
filed on the ground of fraud, accident, mistake, or excusable negligence:

Section 1. Petition for relief from judgment, order, or other proceedings.

When a judgment or final order is entered, or any other proceeding is thereafter taken against a party in
any court through fraud, accident, mistake, or excusable negligence, he may file a petition in such court
and in the same case praying that the judgment, order or proceeding be set aside.

A petition for relief from judgment is an equitable remedy and is allowed only in exceptional cases. 36 It is
not available if other remedies exist, such as a motion for new trial or appeal. 37

To set aside a judgment through a petition for relief, the negligence must be so gross "that ordinary
diligence and prudence could not have guarded against."38 This is to prevent parties from "reviv[ing] the
right to appeal [already] lost through inexcusable negligence." 39

Petitioners argue that their former counsel’s failure to file a notice of appeal within the reglementary
period was "a mistake and an excusable negligence due to [their former counsel’s] age." 40 This argument
stereotypes and demeans senior citizens. It asks this court to assume that a person with advanced age is
prone to incompetence. This cannot be done.

There is also no showing that the negligence could have been prevented through ordinary diligence and
prudence. As such, petitioners are bound by their counsel’s negligence.41

Petitioners had until July 9, 2010 to file a notice of appeal, considering that their former counsel
received a copy of the order denying their motion for reconsideration of the trial court’s decision on
June 24, 2010.42 Since petitioners filed their notice of appeal only on August 11, 2010,43 the trial court
correctly denied the notice of appeal for having been filed out of time.
III

The Court of Appeals correctly denied the

petition for certiorari for petitioners’
failure to file a motion for reconsideration
of the order denying the petition for relief
from judgment

In its resolution dated July 27, 2011, the Court of Appeals denied petitioners’ petition for certiorari for
failure to file a motion for reconsideration of the order denying the petition for relief from judgment.
We agree with the appellate court.

Section 1, Rule 65 of the 1997 Rules of Civil Procedure requires that no appeal or any plain, speedy, and
adequate remedy in the ordinary course of law is available to a party before a petition for certiorari is
filed. This section provides:

Section 1. Petition for certiorari.

When any tribunal, board or officer exercising judicial or quasi judicial functions has acted without or in
excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of
jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of
law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or modifying the proceedings of such
tribunal, board or officer, and granting such incidental reliefs as law and justice may require. (Emphasis
supplied) In Metro Transit Organization, Inc. v. PIGLAS NFWU-KMU,44 this court ruled that a motion for
reconsideration is the plain, speedy, and adequate remedy in the ordinary course of law alluded to in
Section 1, Rule 65 of the 1997 Rules of Civil Procedure. 45 A motion for reconsideration is required before
a petition for certiorari is filed "to grant [the court which rendered the assailed judgment or order]an
opportunity . . . to correct any actual or perceived error attributed to it by the re-examination of the
legal and factual circumstances of the case."46

In this case, a motion for reconsideration of the order denying the petition for relief from judgment is
the plain, speedy, and adequate remedy in the ordinary course of law. Petitioners failed to avail
themselves of this remedy. Thus, the Court of Appeals correctly dismissed petitioners’ petition for
certiorari.

Contrary to petitioners’ claim, the questions they raised in their petition for relief from judgment were
not pure questions of law.1âwphi1 They raise the authenticity of the Spouses Bartolome’s signatures on
the deed of real estate mortgage and the allegedly excusable negligence of their counsel.

These are questions of fact which put at issue the truth of the facts alleged in the petition for relief from
judgment.47 Petitioners cannot cite Progressive Development Corporation, Inc. v. Court of
Appeals48 where this court held that "[t]he filing of the motion for reconsideration before availing of the
remedy of certiorari is not sine qua non when the issues raised is one purely of law."49

All told, the Court of Appeals committed no reversible error in denying petitioners’ petition for
certiorari. The Regional Trial Court’s decision dated December 22, 2009 is final and executory.
WHEREFORE, the petition for review on certiorari is DENIED. The Court of Appeals’ resolutions dated
July 27, 2011 and November 10, 2011 in CA-G.R. SP No. 120251 are AFFIRMED.

SO ORDERED.

MARVIC MARIO VICTOR F. LEONEN

Associate Justice

Sec. 4. Order to file an answer

Sec. 5. Preliminary injunction pending proceedings

Mayuga v. Court of Appeals, G.R. No. 123899, August 30, 1996

SECOND DIVISION

[G.R. No. 123899. August 30, 1996]

ROSALINDA MAYUGA, Spouses ARNEL BUGAYONG and NENA BUGAYONG, LITA CHUA, Spouses
BENJAMIN SANTOS and PURITA SANTOS, Spouses SANTIAGO and GLORIA REYES, SOLEDAD
LABRADOR, EMILIA CERVANTES, Spouses ERNESTO LABRADOR and LEONORA LABRADOR and
RESTITUTO VALBUENA, petitioners, vs. COURT OF APPEALS, HON. ROSMARI D. CARANDANG,
and RPN REALTY, INC., respondents.

DECISION
PUNO, J.:

Petitioners seek to annul and set aside the decision of the Court of Appeals [1] affirming the decision
of the Regional Trial Court[2] which ordered their eviction and demolition of their houses on a parcel of
land located at Granate Street, Sta. Ana, Manila.
This petition originated from an action for recovery of possession filed in January 1993 by private
respondent RPN Realty, Inc. against petitioners before the Regional Trial Court, Branch 12,
Manila. Private respondent alleged it purchased that parcel of land in Granate Street, Sta. Ana,
Manila for which Transfer Certificates of Title Nos. 207569 and 207570 were issued in its name in
1992; that the land was then occupied by petitioners who constructed houses thereon without
authority from its predecessors-in-interest; and that petitioners refused to vacate the property despite
its demands.
On March 22, 1993, petitioners filed their Answer which denied private respondent's ownership of
the land. They claimed that they and their predecessors-in-interest, who were bona-fide tenants of the
former owner, have been in possession of the land for sixty (60) years and have been paying monthly
rent since then; that the land has been declared by the National Housing Authority (NHA) as within the
Urban Land Reform Zone of the government; and that a census had already been conducted and they
have been given their NHA tag identification numbers.
Pre-trial was held on May 17, 1993 where private respondent submitted and marked its
documentary evidence.
On August 3, 1993, private respondent amended its Complaint to correct the names of some of the
occupants of the land. Petitioners adopted their previous Answer as their Answer to the amended
Complaint.
Trial ensued and private respondent presented its evidence consisting of documents earlier marked
at the pre-trial. Petitioners presented one witness, Restituto Bantay, who testified as to the fact of their
possession of the property.
In a Decision dated January 10, 1995, the trial court ordered petitioners to vacate the land, turn
over its possession to private respondent and pay attorney's fees, thus:

"WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants, ordering each
of the latter to vacate, at their expense, the premises of the properties covered by Transfer Certificates
of Title Nos. 207569 and 207570; to remove their houses therefrom and clean the premises of all
construction and debris; or to reimburse the plaintiff the costs of demolition of their improvements,
eviction and the evacuation of the defendants from the premises should this be necessary; to pay
plaintiff attorney's fees in the sum of P10,000.00 and to pay the costs of the suit.

SO ORDERED."[3]

No appeal was taken from this Decision which became final and executory. On March 21, 1993, the
trial court issued a writ of execution.
On April 27, 1995, petitioners, represented by new counsel, filed a "Motion for Relief from
Judgment" alleging that they had no knowledge of the court's decision because their former counsel
transferred his law office and neglected to inform them thereof; that they learned of the decision only
on March 30, 1995 after receiving notices to vacate the property. Private respondents opposed the
motion.
On August 9, 1995, private respondents moved for the issuance of a special order of demolition.
On November 16, 1995, the trial court denied petitioners' "Motion for Relief from Judgment." On
December 1, 1995, petitioners filed a notice of appeal from the order denying the motion.
On December 1, 1995, private respondent also filed a "Motion for the Declaration of Defendants as
Non-Underprivileged and Homeless Citizens in Connection with Pending Motion for Demolition, with
Advance Offer of Testimony and Exhibits, and Issuance of Alias Writ of Execution." [4] Private respondent
alleged that petitioners were squatters with sufficient income for legitimate housing, hence, the
demolition of their houses on the land need not comply with the procedure in Republic Act No. 7279,
the Urban Development and Housing Act of 1992. In support of this motion, private respondent
submitted documents consisting of affidavits, certificates and photographs of petitioners' houses on the
subject property. In the same motion, private respondent prayed for the issuance of an alias writ of
execution and order of demolition. Petitioners opposed the motion.
In an order dated January 3, 1996, the trial court granted private respondent's motion, declared
petitioners as professional squatters and exempted private respondent from complying with the
eviction procedure in R.A. No. 7279. The court also issued an alias writ of execution and demolition, to
wit:

WHEREFORE, this court having found that defendants are not under-privileged and homeless citizens
but rather professional squatters who occupy the premises without the express consent of the owner,
with enough income for legitimate housing, plaintiff is not duty-bound to strictly comply with the
procedure for their eviction and the demolition of their houses as outlined under Section 28 (c) of R.A.
7279.

Let an alias Writ of Execution issue directing all defendants as well as any and other persons claiming
rights under them to vacate and surrender possession of the premises to plaintiff. Further, all
defendants as well as all other persons claiming rights under them are hereby ordered to remove their
respective houses and other improvements from the subject property within fifteen (15) days from
notice. Upon their failure to do as ordered after said 15-day period, the sheriff of this court is hereby
directed to cause the removal/demolition of all such houses, buildings, improvements introduced on the
subject property and place plaintiff in possession thereof. In the implementation of this order, the
sheriff is hereby authorized to secure adequate police assistance to ensure peaceful and orderly
enforcement of the decision.

SO ORDERED."[5]

Forthwith, petitioners filed a petition for mandamus and certiorari with the Court of Appeals
questioning the January 3, 1996 order and the alleged denial of their appeal from the order denying
relief from judgment.[6] The Court of Appeals issued a temporary restraining order enjoining the
enforcement of the subject execution and demolition order.
On February 27, 1996, however, the Court of Appeals dismissed the petition and affirmed the trial
court. Hence, this recourse.
Petitioners contend:

"I

THE COURT OF APPEALS PALPABLY ERRED IN HOLDING THAT RESPONDENT COURT DID NOT DISMISS
THE APPEAL OF PETITIONERS FROM THE ORDER DATED NOVEMBER 16, 1995 DENYING THE MOTION
FOR RELIEF FROM JUDGMENT.

II
THE COURT OF APPEALS PALPABLY ERRED IN AFFIRMING THE DECISION OF RESPONDENT COURT WHEN
THE SAME WAS NOT BEFORE IT.

III

THE COURT OF APPEALS PALPABLY ERRED IN NOT HOLDING THAT MANDAMUS WILL LIE TO COMPEL
RESPONDENT COURT TO GIVE DUE COURSE TO THE APPEAL FROM THE ORDER DATED NOVEMBER 16,
1995 DENYING THE MOTION FOR RELIEF FROM JUDGMENT.

IV

THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE RESPONDENT COURT IS ACTING WITHOUT
OR IN EXCESS OF JURISDICTION IN ISSUING THE ORDER DATED JANUARY 3, 1996 AUTHORIZING THE
ISSUANCE OF AN ALIAS WRIT OF EXECUTION AND SPECIAL ORDER OF DEMOLITION." [7]

Petitioners claim that the Court of Appeals erred in ruling on the merits of the case when the
action before it was not an appeal but a special civil action for mandamus and certiorari. They contend
that the respondent court could not have affirmed the trial court's judgment on the merits because the
records of the case were not elevated on appeal. The petition for mandamus was allegedly filed to
compel the trial court to allow the appeal from the order denying relief from judgment, and
for certiorari to annul the January 3, 1996 order issuing the alias writ of execution and demolition.[8]
The Rules provide that if a petition for relief from judgment is filed and denied, the order of the
trial court denying the same may be appealed to the Court of Appeals.[9] The appeal is taken by the mere
filing of a notice of appeal with the court that rendered the judgment or order within fifteen (15) days
from notice of said judgment or order.[10] The appeal is perfected upon the expiration of the last day to
appeal by any party,[11] after which the trial court shall order the elevation of the records of the case to
the appellate court.[12] Refusal to do so is remediable by mandamus.[13]
In the case at bar, petitioners timely filed their notice of appeal on the third day after receipt of the
order denying relief.[14] They complain that their appeal was denied by the trial court in the order of
January 3, 1996.
Petitioners' stance is incorrect.
Mandamus will lie to compel a judge or other public officer to perform a duty specifically enjoined
by law once it is shown that the judge or public officer has unlawfully neglected the performance
thereof.[15] A court neglects the performance of its duties only when after demand has been made upon
it, it refuses to perform the same.[16] Petitioners have not shown that the trial court refused to accept
the notice of appeal, much less denied said notice. The order of the trial court dated January 3, 1996
merely granted private respondent's "Motion for the Declaration of Defendants as Non-underprivileged
x x x and for the Issuance of an alias Writ of Execution." There is nothing in it that expressly or
impliedly denied petitioners' appeal from the Order denying relief from judgment. To be sure, the
notice of appeal at bar is not even subject to the approval of the trial court because it was deemed
perfected after the fifteenth day, i.e., the last day to appeal by both petitioners and private
respondent. Likewise, petitioners have not alleged that the trial court neglected to order the
transmittal of the records to the Court of Appeals. We hold that petitioners have failed to prove their
cause of action for mandamus, hence, the petition was correctly dismissed by the Court of Appeals.[17]
 To abbreviate proceedings, the Court of Appeals treated the petition as the appeal itself from the
order denying relief from judgment. It correctly found that the failure of petitioners' former counsel to
notify them of the adverse decision to enable them to appeal therefrom constitutes inexcusable
negligence and is not a ground for relief from judgment. This is in accord with our case law that notice
sent to counsel of record is binding upon the client and the neglect or failure of counsel to inform them
of an adverse judgment resulting in the loss of their right to appeal will not justify setting aside a
judgment that is valid and regular on its face.[18] We have also held that relief will not be granted to a
party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was
due to his own negligence.[19]
Since petitioners' ground for relief is not well-taken, it follows that the trial court's judgment on
the merits stands. Contrary to petitioners' allegations, the Court of Appeals did not rule on the merits
of the case. The appellate court merely confirmed the existence of the judgment on the merits[20] and,
in keeping with the Rules and jurisprudence, made the pronouncement that said judgment had long
become final and executory.[21]
The Court of Appeals therefore committed no error in affirming the order granting the issuance of
the alias writ of execution. We reject petitioners' contention that the filing of their petition for relief
and the subsequent appeal from the order denying relief stayed the execution proceedings before the
trial court.[22]
Execution proceedings are not automatically stayed by the filing of a petition for relief from
judgment. To stay execution, a writ of preliminary injunction should be obtained in accordance with
Section 5 of Rule 38 which reads as follows:

"Sec. 5. Preliminary injunction pending proceedings.-- The court in which the petition is filed, or a judge
thereof, may grant such preliminary injunction as may be necessary for the preservation of the rights
of the parties pending the proceedings, upon the filing by the petitioner of a bond to the adverse party,
conditioned that if the petition is dismissed or the petitioner fails on the trial of the case upon its merits,
he will pay the adverse party all damages and costs that may be awarded to him by reason of the
issuance of such injunction or the other proceedings following the petition; but such injunction shall not
operate to discharge or extinguish any lien which the adverse party may have acquired upon the
property of the petitioner."[23]

Indeed, the filing of a petition for relief from judgment presupposes that the judgment sought to
be set aside is already final and executory. [24] Unless restrained, it is the ministerial duty of the trial court
to issue the writ of execution.[25]
Neither are execution proceedings stayed by the perfection of the appeal from the order denying
relief from judgment. In ordinary appeals, perfection of an appeal under Section 9 of Rule 41 divests the
trial court of jurisdiction over its judgment and execution proceedings because the judgment has not yet
attained finality.[26] An appeal from an order denying relief from judgment under Rule 38 is
different. Here, the judgment is already final and executory and as aforestated, the only way by which
execution could be suspended is by the issuance of a writ of preliminary injunction. [27] No injunction was
secured by petitioners.
IN VIEW WHEREOF, the petition is denied and the decision of the Court of Appeals in CA-G.R. SP
No. 39497 is affirmed. Costs against petitioners.
SO ORDERED.
 Regalado (Chairman), Mendoza, and Torres, Jr., JJ., concur.
Romero, J., on leave.

Sec. 6. Proceedings after answer is filed

Miraflor v. Hon. Carpio-Morales, G.R. No. L-77568, December 14, 1988

G.R. No. L-77568 December 14, 1988

MELISANDE MIRAFLOR, petitioner,

vs.
HON. CONCHITA CARPIO-MORALES, Presiding Judge, Regional Trial Court, Branch CX, Pasay City,
Metro Manila, and SPS. CRISOSTOMO RAGURO & DEMETRIA RAGURO, respondents.

Wenceslao C. Barcelona for petitioner.

R.P. Dimayacyac & Associates for respondents.

PARAS, J.:

This is a petition for:

1. Certiorari, seeking to annul the following:

a) Order dated September 3, 1986, 1 of the Honorable Respondent Judge setting aside its final and
partially executed decision dated June 30, 1986 and at the same time granting due course to private
respondents' petition for relief from Judgment.

b) Order dated January 22, 1987 2 of public respondent Judge Conchita Carpio-Morales granting private
respondents' "Manifestation with Urgent Ex-Parte Motion To Order Pasay City Sheriff and Petitioner
(Plaintiff) to return to private respondents the proceeds of the sale of the levied upon personal
properties which had been sold already at public auction."

2. Prohibition, seeking to command respondents to desist from further proceeding in the petition for
relief from judgment, against petitioner (plaintiff);
3. Preliminary injunction: To enjoin respondents from further proceeding with Order (Annex "B" hereof)
requiring plaintiff (petitioner) to turn over to defendants Two Thousand Five Hundred Pesos (P2,500.00)
representing the proceeds of the sale of levied upon properties sold at public auction.

4. A restraining order, to restrain respondents from further proceeding with this case against petitioner
(plaintiff) preparatory to the determination of the propriety of the Writ of Preliminary Injunction is
sought in this petition.

The antecedent facts giving rise to this Petition are briefly narrated by petitioner as follows:

1. On March 20, 1986, petitioner-plaintiff filed a Complaint against private respondents and Carmelita
Visaya and her spouse in Civil Case No. 5855-P before the Regional Trial Court, Branch CX, Pasay City,
Metro Manila for Acquisition of Possession with Damages.

2. On April 15, 1986, copies of the Complaint together with corresponding summonses were served
upon respondents-defendants.

3. On June 2, 1986, an Order was issued, declaring defendants (respondents) in default for failure to
answer the complaint within the reglementary period provided for by law.

4. On June 23, 1986, petitioner-plaintiff was allowed to present his evidence ex parte.

5. On June 30, 1986, a decision was rendered by the Honorable Court in favor of petitioner-plaintiff.

6. On July 3, 1986, upon motion of petitioner-plaintiff, an Order was issued granting the issuance of a
Writ of Execution pending appeal.

7. On July 7, 1986, respondents-defendants filed a "Manifestation with Urgent Motion to Set Aside
Decision and Writ of Execution" which was denied by the Court on the same day it was filed.

8. On July 10, 1986, the levied upon properties of defendants-respondents were sold at public auction;
and a Certificate of Sale was issued to the highest bidder.

9. On July 21, 1986, respondents-defendants filed an "Urgent Motion for Relief from Judgment"
pursuant to Rule 38, of the Rules of Court without being accompanied by affidavits showing fraud, or
accident, or mistake or excusable negligence relied on as grounds for Petition for Relief as mandated by
Section 3, Rule 38 of the Rules of Court.

10. On July 23, 1986, despite in sufficiency in form and substance of the Petition to justify the reliefs
prayed for, an Order was issued requiring petitioner-plaintiff to file an answer to said petition.

11. On August 4, 1986, petitioner-plaintiff filed her answer in compliance with the aforesaid Order.

12. On September 3, 1986, without conducting the necessary hearing as required under Section 6, Rule
38, of the Revised Rules of Court, the respondent court issued its assailed Order (Annex "A") granting
respondents-defendants' Urgent Motion for Relief from Judgment and at the same time set aside its
decision dated June 30, 1986.
13. On September 18, 1986, Atty. Enrique Almario, former counsel of plaintiff-petitioner filed a Notice
for Relief as counsel which was approved on September 22, 1986.

14. On December 15, 1986, the services of Atty. Wenceslao C. Barcelona were engaged. He immediately
filed a Motion for Reconsideration and/or to set aside Court's Order dated September 3, 1986.

15. On January 22, 1986, an Order(Annex "B")was issued denying the said Motion to Set Aside the Order
of September 3, 1986, and in the same breath ordering plaintiff-petitioner to turn over the proceeds of
the auction sale to defendants-respondents, hence, this petition.

The issues now raised before Us are the following:

Whether or not a Judge can set aside his own decision which has already been final and
partially executed.

II

Whether or not a Petition for Relief from Judgment filed under Rule 38, of the Rules of
Court, can be granted motu propio without the necessity of a proper hearing as
mandated by Section 6, Rule 38 of the same Rule.

III

Whether or not Respondent Judge can legally order outright plaintiff-petitioner to turn
over the proceeds of the sale of the levied upon property sold at public auction to the
defendants-respondents without the necessity of a proper hearing on the merits.

The issues revolve on the question of finality of the judgment of the trial court. A careful perusal of the
records of the case shows that private respondents received a copy of the decision, dated June 30, 1986
on July 2, 1986. On July 7, 1986, or five (5) days later, respondents filed their "Urgent Motion To Set
Aside the Order of Default on July 7, 1986, (instead of filing a Motion for Reconsideration or a Notice of
Appeal) which was denied outright on the same day by the respondent court. The last day therefore for
perfecting their appeal fell on July 17, 1986. That private respondents were faily aware of the fact that
the decision had already became final and executory on July 17, 1986, was manifested by the fact of
their filing on July 21, 1986 a Petition for Relief from Judgment, a remedy resorted to by party litigants
under Rule 38 of the Rules of Court, when an appeal is no longer available because the decision has
already became final and executory. Thus the court may set aside its own judgment which had become
final, when it can be sufficiently shown after due process that such judgment was entered against a
party through fraud, accident, mistake or excusable negligence, by the filing by a party of a petition in
such court and in the same cause praying that the judgment, order or proceeding be set aside (Sec. 2,
Rule 30, Rules of Court). Said petition must be filed within sixty (60) days after the petitioner learns of
the said judgment or Order but not more than six (6) months after such judgment was entered; and
must be accompanied with affidavits showing the fraud, accident, mistake or excusable negligence
relied upon, and the facts constituting the petitioner's good and substantial cause of action or defense,
as the case may be (Sec. 3, Rule 38).
The Petition for Relief was. definitely filed within the reglementary period but it was wanting in form
and substance, as it lacked the required affidavit or affidavits of merit showing fraud, accident, mistake
or excusable negligence. This fact is clearly confirmed by the respondent court in its Order (Annex "A")
granting said petition, when it miserably tried to justify the same by invoking justice, fairness and trial on
the merits instead on account of fraud, accident, mistake or excusable negligence. But even assuming
that the Petition for Relief was sufficient in form and substance, the respondent Judge should have
conducted the necessary hearing to determine the truth of the allegation contained in the petition as
required by Sec. 6 of Rule 38 which reads:

Sec. 6. Proceedings after the answer is filed.—Once the answer is filed, or the time for
its filing has expired, the court shall hear the petition and if after such hearing, the court
finds that the allegations thereof are not true, the petition shall be dismissed; but if it
finds said allegations to be true, it shall order the judgment, order or other proceeding
complained of to be set aside, upon such terms as may be just, and thereafter the case
shall stand as if the judgment, order or other proceeding set aside had never been
issued or taken.

The respondent Judge therefore committed an error in motu propio, granting the Petition for Relief of
private respondents and outrightly setting aside her decision and ordering plaintiff to turn over the
proceeds of the sale at public auction of the levied upon property to the private respondents on the
basis of said petition alone without the benefit of hearing as mandated by the Rules.

WHEREFORE, premises considered, finding the petition meritorious, We hereby GRANT the same, and
declare the assailed Orders of respondent Judge, dated September 3, 1986 and January 22, 1987 as
NULL and VOID.

SO ORDERED.

Melencio-Herrera (Chairperson), Padilla, Sarmiento and Regalado, JJ., concur.

Sec. 7. Procedure where the denial of an appeal is set aside