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DBP v SPS CASTILLO, G.R. No.

163827August 17, 2011

FACTS:

Corazon Zarate Romero and his brother Gonzalo Zarate co-owned a


property covered, located in Dagupan City,Province of Pangasinan.

It appears that sometime in 1975, Corazon and Gonzalo obtained a loan


from petitioner Development Bank of the Philippines (DBP). As collateral, they
executed a real estate mortgage[ over the subject property in favor of
DBP. On the alleged failure of the two borrowers to pay their amortizations,
DBP foreclosed the real estate mortgage on September 15, 1983. Purportedly,
no redemption was made within one year, and thus, DBP consolidated
ownership over the subject property.

In March 1993, when Corazon passed away, her sole heir, her daughter
respondent Cristina Trinidad Zarate Romero, asserted ownership over the
subject property to the extent of one-half. However, respondent discovered
that the property was already registered as early as June 13, 1989 in the
name of DBP under TCT No. 54142, with TCT No 10070 in the names of her
mother and uncle already cancelled.

Respondent filed before RTC a complaint for reconveyance,


quieting of title and damages with prayer for a temporary restraining order
(TRO) and writ of preliminary injunction to prevent DBP from conducting any
auction sale on the subject property during the pendency of the
case. Respondent claimed that her uncle and DBP conspired in committing
fraudulent acts relative to their true transaction and concealed the same from
her mother, thereby depriving her of her right of redemption.

The RTC, , issued TRO restraining DBP from proceeding with its
scheduled auction of the disputed property.

DBP moved to lift the TRO arguing that it violates Section 2 of PD No.
385 which prohibits the issuance of a restraining order, temporary or
permanent, against government financing institutions like DBP to enjoin any
action taken pursuant to the mandatory foreclosure clause of the decree.

RTC denied DBPs motion to lift the TRO and granted respondents plea
for an injunctive writ.

DBP moved to reconsider the December 14, 1998 Order and at the
same time sought the dismissal of respondents complaint on the sole
ground that the same states no cause of action
RTC denied DBPs motion for reconsideration of the denial of its motion
for the lifting of the TRO. The RTC likewise denied in the same order DBPs
motion to dismiss the complaint, and ordered DBP to file an answer.

DBP moved to reconsider the denial of its motion to dismiss. But even
before the RTC could resolve said motion, DBP filed its Answer on April 5,
1999. A manifestation was later filed by DBP indicating that the answer it filed
was a mere cautionary measure or what is known as an answer ad
cautelam and thus without prejudice to any right of action it may take and
without any waiver of any of the grounds for the dismissal of the complaint
and any favorable resolution or order that a superior court may issue
hereinafter.

On April 20, 1999, the RTC issued an order denying DBPs motion for
reconsideration of its March 8, 1999 Order. The RTC in the same order
emphasized that DBP already filed an answer thereby rendering the motion to
dismiss moot and academic.

CAs RULING

On June 23, 1999, DBP filed a petition for certiorari before the CA but
was dismissed on procedural grounds (filed beyond the sixty (60)-day
reglementary period). e CA noted that as regards the third order, DBP was
notified of the denial of its motion for reconsideration of the December 14,
1998 Order on March 18, 1999 and thus only had until May 17, 1999 to
question the same. The CA further stated that DBPs subsequent filing of its
Answer to the complaint rendered its motion to dismiss moot and academic.

ISSUES:

1. WON the complaint should be dismissed for failure to state a cause of


action
2. WON petition for certiorari was filed out of time

HELD:

1. NO. As to DBPs motion to dismiss the complaint, we agree with the RTC and
CA that the same should be denied, but not for the reason cited by said
courts that it has been rendered moot and academic by DBPs filing of its
answer but because the same lacks merit. Contrary to DBPs submission, a
perusal of the allegations of the complaint clearly reveals
respondents cause of action against DBP. The complaint states.
A cause of action is the act or omission by which a party violates a
right of another. A complaint states a cause of action when it contains three
essential elements: (1) a right in favor of the plaintiff by whatever means and
whatever law it arises; (2) the correlative obligation of the defendant to
respect such right; and (3) the act or omission of the defendant violates the
right of the plaintiff. If any of these elements is absent, the complaint
becomes vulnerable to a motion to dismiss on the ground of failure to state a
cause of action.

Evidently, all the above elements of a cause of action are alleged in the
complaint: (1) the legal right of the respondent over the subject property
foreclosed premised on the fact that she is the sole heir of one of the owners
who is entitled to the right of redemption; (2) the correlative obligation of
defendant DBP, as the foreclosing entity, to respect such right of redemption;
and (3) the act or omission of the defendant in violation of the legal right, i.e.,
the act of DBP and its co-defendant Zarate to cause the ostensible foreclosure
of the subject property and the subsequent execution of a deed of conditional
sale between the defendants even prior to the lapse of redemption period to
deprive respondents mother of her right over the property.

2. YES. The petition for certiorari assailing the orders pertaining to the grant
of the TRO and the writ of injunction were filed out of time. Notice of the
issuance of the TRO was received by DBP on the same day it was
granted, November 24, 1998; thus, the petition for certiorari should have
been filed not later than January 23, 1999. The denial of the motion for
reconsideration of the order granting the writ of injunction, on the other
hand, was received by DBP on March 18, 1999 and thus, it had only until
May 17, 1999 to file the petition for certiorari. DBP, however, filed its
petition only on June 23, 1999.

TACAY VS. RTC TAGUM

FACTS:
These were 2 separate cases originally filed by Godofredo Pineda at the RTC
of Tagum for recovery of possession (acciones publiciana) against 3
defendants, namely: Antonia Noel, Ponciano Panes, and Maximo Tacay.

Pineda was the owner of 790 sqm land evidenced by TCT No. T-46560. The
previous owner of such land has allowed the 3 defendants to use or occupy
the same by mere tolerance. Pineda, having himself the need to use the
property, has demanded the defendants to vacate the property and pay
reasonable rentals therefore, but such were refused.

The complaint was challenged in the Motions to Dismiss filed by each


defendant alleging that it did not specify the amounts of actual, nominal, and
exemplary damages, nor the assessed value of the property, that being bars
the determination of the RTCs jurisdiction in deciding the case.

The Motions to Dismiss were denied by Judge Matas but the claims for
damages in the complaint were expunged for failure to specify the amounts.
The motions to dismiss submitted in Civil Cases Numbered 2211 and 2209
were also denied in separate orders promulgated by Judge Marcial
Fernandez. Thus, ascribing grave abuse of discretion to both Judges Matas
and Fernandez in the rendition of the Orders, the defendants filed a Joint
Petition for certiorari, mandamus, prohibition, and temporary restraining
order against the RTC.

Petitioners Contention:
They re-asserted the proposition that because the complaints had failed to
state the amounts being claimed as actual, moral and nominal damages, the
Trial Courts a quo had not acquired jurisdiction over the three (3) actions in
question-indeed, the respondent Clerk of Court should not have accepted the
complaints which initiated said suits, and (b) it was not proper merely to
expunge the claims for damages and allow "the so-called cause of action for
"reivindicatoria" remain for trial" by itself.

ISSUE:
WoN the Court has not acquired jurisdiction of the case for failure to state the
amounts being claimed as actual, moral, and nominal damages

RULING:

NO.

It is true that the complaints do not state the amounts being claimed as
actual, moral and nominal damages. It is also true, however, that the actions
are not basically for the recovery of sums of money. They are principally
for recovery of possession of real property, in the nature of an accion
publiciana. Determinative of the court's jurisdiction in this type of
actions is the nature thereof, not the amount of the damages
allegedly arising from or connected with the issue of title or
possession, and regardless of the value of the property. Quite
obviously, an action for recovery of possession of real property (such as an
accion plenaria de possesion) or the title thereof, or for partition or
condemnation of, or the foreclosure of a mortgage on, said real property - in
other words, a real action-may be commenced and prosecuted without
an accompanying claim for actual, moral, nominal or exemplary
damages; and such an action would fall within the exclusive, original
jurisdiction of the Regional Trial Court.
LECTURE

Batas Pambansa Bilang 129 provides that Regional Trial Courts shall
exercise exclusive original jurisdiction inter alia over "all civil actions which
involve the title to, or possession of, real property, or any interest therein,
except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts." 14 The rule
applies regardless of the value of the real property involved, whether it be
worth more than P20,000.00 or not, infra. The rule also applies even where
the complaint involving realty also prays for an award of damages; the
amount of those damages would be immaterial to the question of the Court's
jurisdiction. The rule is unlike that in other cases e.g., actions simply for
recovery of money or of personal property, 15 or actions in admiralty and
maritime jurisdiction 16 in which the amount claimed, 17 or the value of the
personal property, is determinative of jurisdiction; i.e., the value of the
personal property or the amount claimed should exceed twenty thousand
pesos (P20,000.00) in order to be cognizable by the Regional Trial Court.

WON Circular No. 7 can be invoked (Manchester Doctrine) - NO

Circular No. 7 dated March 24, 1988, cannot thus be invoked as authority
for the dismissal of the actions at bar. That circular, avowedly inspired by the
doctrine laid down in Manchester Development Corporation v. Court of
appeals, has but limited application to said actions.. Moreover, the rules
therein laid down have since been clarified and amplified by the Court's
subsequent decision in Sun Insurance Office, Ltd. (SIOL) v. Asuncion, et
al.

Circular No. 7 was aimed at the practice of certain parties who omit
from the prayer of their complaints "any specification of the amount
of damages," the omission being "clearly intended for no other
purposes than to evade the payment of the correct filing fees if not
to mislead the docket clerk, in the assessment of the filing fee."

The following rules were therefore set down:

1. All complaints, petitions, answers, and similar pleadings should specify the
amount of damages being prayed for not only in the body of the pleading but
also in the prayer, and said damages shall be considered in the assessment of
the filing fees in any case.

2. Any pleading that fails to comply with this requirement shall not be
accepted nor admitted, or shall otherwise be expunged from the record.
3. The Court acquires jurisdiction over any case only upon the payment of the
prescribed docket fee. An amendment of the complaint or similar pleading will
not thereby vest jurisdiction in the Court, much less the payment of the
docket fee based on the amount sought in the amended pleading.

SUN INSURANCE DOCTRINE

The clarificatory and additional rules laid down in Sun Insurance Office,
Ltd. v. Asuncion, supra, read as follows:

1. It is not simply the filing of the complaint or appropriate initiatory


pleading, but (also) the payment of the prescribed docket fee that
vests a trial court with jurisdiction over the subject-matter or nature
of the action. Where the filing of the initiatory pleading is not
accompanied by payment of the docket fee, the court may allow
payment of the fee within a reasonable time but in no case beyond
the applicable prescriptive or reglementary period.

2. The same rule applies to permissive counterclaims, third-party claims and


similar pleadings, which shall not be considered filed until and unless the
filing fee prescribed therefor is paid. The court may also allow payment of
said fee within a reasonable time but also in no case beyond its applicable
prescriptive or reglementary period.

3. Where the trial court acquires jurisdiction over a claim by the filing of the
appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the pleading, or if
specified, the same has been left for determination by the court, the
additional filing fee therefor shall constitute a lien on the judgment. It shall be
the responsibility of the Clerk of Court or his duly authorized deputy to
enforce said lien and assess and collect the additional fee.

As will be noted, the requirement in Circular No. 7 that complaints, petitions,


answers, and similar pleadings should specify the amount of damages being
prayed for not only in the body of the pleading but also in the prayer, has not
been altered. What has been revised is the rule that subsequent "amendment
of the complaint or similar pleading will not thereby vest jurisdiction in the
Court, much less the payment of the docket fee based on the amount sought
in the amended pleading," the trial court now being authorized to allow
payment of the fee within a reasonable time but in no case beyond the
applicable prescriptive or reglementary period. Moreover, a new rule has
been added, governing awards of claims not specified in the pleading - i.e.,
damages arising after the filing of the complaint or similar pleading-as to
which the additional filing fee therefor shall constitute a lien on the judgment.
Now, under the Rules of Court, docket or filing fees are assessed on the basis
of the "sum claimed," on the one hand, or the "value of the property in
litigation or the value of the estate," on the other. 18 There are, in other words,
as already above intimated, actions or proceedings involving real property, in
which the value of the property is immaterial to the court's jurisdiction,
account thereof being taken merely for assessment of the legal fees; and
there are actions or proceedings, involving personal property or the recovery
of money and/or damages, in which the value of the property or the amount
of the demand is decisive of the trial court's competence (aside from being
the basis for fixing the corresponding docket fees). 19

TACAY DOCTRINE:

Where the action is purely for the recovery of money or damages, the
docket fees are assessed on the basis of the aggregate amount claimed,
exclusive only of interests and costs. In this case, the complaint or similar
pleading should, according to Circular No. 7 of this Court, "specify
the amount of damages being prayed for not only in the body of the
pleading but also in the prayer, and said damages shall be
considered in the assessment of the filing fees in any case."

Two situations may arise.

One is where the complaint or similar pleading sets out a claim purely
for money or damages and there is no precise statement of the
amounts being claimed. In this event the rule is that the pleading will
"not be accepted nor admitted, or shall otherwise be expunged from
the record." In other words, the complaint or pleading may be dismissed, or
the claims as to which the amounts are unspecified may be expunged,
although as aforestated the Court may, on motion, permit amendment of the
complaint and payment of the fees provided the claim has not in the
meantime become time-barred.

The other is where the pleading does specify the amount of every
claim, but the fees paid are insufficient; and here again, the rule now is
that the court may allow a reasonable time for the payment of the
prescribed fees, or the balance thereof, and upon such payment, the
defect is cured and the court may properly take cognizance of the
action, unless in the meantime prescription has set in and
consequently barred the right of action.

Where the action involves real property and a related claim for
damages as well, the legal fees shall be assessed on the basis of both (a) the
value of the property and (b) the total amount of related damages sought.
The Court acquires jurisdiction over the action if the filing of the initiatory
pleading is accompanied by the payment of the requisite fees, or, if the fees
are not paid at the time of the filing of the pleading, as of the time of full
payment of the fees within such reasonable time as the court may grant,
unless, of course, prescription has set in the meantime.

But where-as in the case at bar-the fees prescribed for an action involving
real property have been paid, but the amounts of certain of the related
damages (actual, moral and nominal) being demanded are unspecified, the
action may not be dismissed. The Court undeniably has jurisdiction over the
action involving the real property, acquiring it upon the filing of the complaint
or similar pleading and payment of the prescribed fee. And it is not divested
of that authority by the circumstance that it may not have acquired
jurisdiction over the accompanying claims for damages because of lack of
specification thereof. What should be done is simply to expunge those claims
for damages as to which no amounts are stated, which is what the
respondent Courts did, or allow, on motion, a reasonable time for the
amendment of the complaints so as to allege the precise amount of each item
of damages and accept payment of the requisite fees therefor within the
relevant prescriptive period.

CERVANTES V. CA

Facts:

On March 27, 1989, private respondent PAL issued to herein petitioner


Nicholas Cervantes a round trip ticket for Manila-Honolulu-Los Angeles-
Honolulu-Manila, which is valid until March 27, 1990. On March 23, 1990,
petitioner used it. Upon his arrival in Los Angeles, he immediately booked a
flight to Manila, which was confirmed on April 2. Upon learning that the plane
would make a stop-over in San Francisco, and because he would be there on
April 2, petitioner made arrangements to board in San Francisco. On April 2,
he was not allowed to board due to the expiration of his ticket.

He filed a complaint for damages, and for breach of contract of carriage with
the RTC but was dismissed for lack of merit. CA upheld the dismissal of the
case. Petitioner came to the SC via Petition for Review.

Issues:

(1) Whether or not the act of the PAL agents in confirming subject ticket
extended the period of validity of petitioner's ticket

(2) Whether or not the denial of the award for damages was proper

Held:
(1) From the facts, it can be gleaned that the petitioner was fully aware that
there was a need to send a letter to the legal counsel of PAL for the extension
of the period of validity of his ticket. Under Article 1898 11 of the New Civil
Code, the acts of an agent beyond the scope of his authority do not bind the
principal, unless the latter ratifies the same expressly or impliedly.
Furthermore, when the third person (herein petitioner) knows that the agent
was acting beyond his power or authority, the principal cannot be held liable
for the acts of the agent. If the said third person is aware of such limits of
authority, he is to blame, and is not entitled to recover damages from the
agent, unless the latter undertook to secure the principal's ratification.

(2) An award of damages is improper because petitioner failed to show that


PAL acted in bad faith in refusing to allow him to board its plane in San
Francisco. In awarding moral damages for breach of contract of carriage, the
breach must be wanton and deliberately injurious or the one responsible
acted fraudulently or with malice or bad faith. Petitioner knew there was a
strong possibility that he could not use the subject ticket, so much so that he
bought a back-up ticket to ensure his departure. Should there be a finding of
bad faith, we are of the opinion that it should be on the petitioner. What the
employees of PAL did was one of simple negligence. No injury resulted on the
part of petitioner because he had a back-up ticket should PAL refuse to
accommodate him with the use of subject ticket.

Neither can the claim for exemplary damages be upheld. Such kind of
damages is imposed by way of example or correction for the public good, and
the existence of bad faith is established. The wrongful act must be
accompanied by bad faith, and an award of damages would be allowed only if
the guilty party acted in a wanton, fraudulent, reckless or malevolent manner.
Here, there is no showing that PAL acted in such a manner. An award for
attorney's fees is also improper.

May 4, 2010
ALLAN C. GO, doing business under the name and style "ACG Express Liner,"
Petitioner,
vs.
MORTIMER F. CORDERO, Respondent.

MORTIMER F. CORDERO, Petitioner,


vs.
ALLAN C. GO, doing business under the name and style "ACG Express Liner,"
FELIPE M. LANDICHO and VINCENT D. TECSON, Respondents.
Villarama, Jr. J
SUMMARY: Cordero was an exclusive distributor of a shipping company is
Brisbane. After incurring travel expenses and closing his first deal with a
Cordero, he found out that the latter was directly dealing with the shipping
company for the second transaction, cutting off his commissions. Worse, his
lawyers also connived with the client and the shipping company to take him
out of the picture. He sued them all for conspiring in violating his exclusive
distributorship in bad faith and wanton disregard of his rights. The SC held
that the existence of the contract and knowledge by the alleged interferers
was not disputed. As to the legal justification, it found that while the motive
was to reduce the price of the transaction, the bounds of permissible financial
interest was transgressed, since Go already incurred expenses in closing the
deal, and the lawyers still demanded their cut from him, despite going behind
his back in procuring another deal.

Doctrine: The elements of tort interference are: (1) existence of a valid


contract, (2) knowledge on the part of the third person of the existence of a
contract, and (3) interference of the third person is without legal justification.
As to the third element, to sustain a case for tortuous interference, the
defendant must have acted with malice or must have been driven by purely
impure reasons to injure the plaintiff.

Notes: Without So Ping Bun v. CA and Lagon v. CA, this would have been a
case for tortious interference. The SC had to rely in Article 19, to uphold its
ruling that there was tortious interference. All of this when Article 1314 does
not in itself require malice.

CAST: (lol)
Mortimer F. Cordero Vice-President of Pamana Marketing Corporation
(Pamana)
Tony Robinson an Australian national based in Brisbane, Australia, who is
the Managing Director of Aluminium Fast Ferries Australia (AFFA).
Allan C. Go owner/operator of ACG Express Liner of Cebu City, a single
proprietorship
Felipe Landicho and Vincent Tecson lawyers of Go

FACTS:
1996, Cordero ventured into the business of marketing inter-island
passenger vessels
o After contacting various overseas fast ferry manufacturers from
all over the world, he came to meet Robinson.
June and August 1997, Robinson signed documents appointing
Cordero as the exclusive distributor of AFFA catamaran and
other fast ferry vessels in the Phils
o As exclusive distributor, Cordero offered for sale to prospective
buyers the 25-meter Aluminum Passenger catamaran known as
the SEACAT 25
After negotiations with Gos lawyers, Cordero was able to close a deal
for the purchase of 2 SEACAT 25 as evidenced by the MOA (1997)
o They executed Shipbuilding Contract No. 7825 for one 1 high-
speed catamaran (SEACAT 25) for the price of US$1,465,512.00
o Per agreement between, Cordero shall receive commissions
totaling US$328,742.00, or 22.43% of the purchase price, from
the sale of each vessel
Cordero made 2 trips to the AFFA Shipyard in Australia, and on 1
occasion even accompanied Go and his family and Landicho, to monitor
the progress of the building of the vessel
o He shouldered all the expenses for airfare, food, hotel
accommodations, transportation and entertainment during these
trips
o also spent for long distance telephone calls to Robinson, Go,
Tecson and Landicho
However, Cordero later discovered that Go was dealing directly
with Robinson when he was informed by Dennis Padua of Wartsila
Philippines that Go was canvassing for a second catamaran engine from
their company which provided the ship engine for the first SEACAT 25
o Padua told Cordero that Go instructed him to fax the requested
quotation of the second engine to the Park Royal Hotel in
Brisbane where Go was then staying
o Cordero tried to contact Go and Landicho to confirm the matter
but they were nowhere to be found, while Robinson refused to
answer his calls
o Cordero immediately flew to Brisbane to clarify matters
with Robinson, only to find out that Go and Landicho were
already there in Brisbane negotiating for the second sale
Despite repeated follow-up calls, no explanation was given
by Robinson, Go, Landicho and Tecson who even made
Cordero believe there would be no further sale between
AFFA and ACG Express Liner.
In a handwritten letter, Cordero informed Go that such act of dealing
directly with Robinson violated his exclusive distributorship and
demanded that they respect the same.
o Corderos lawyer, Atty. Tabujara, also wrote ACG Express Liner
assailing the fraudulent actuations and misrepresentations
committed by Go in connivance with his lawyers in breach of
Corderos exclusive distributorship appointment
o Having been apprised of Corderos demand letter, the lawyers of
AFFA and Robinson, faxed a letter to Corderos lawyers asserting
that the appointment of Cordero as AFFAs distributor was
for the purpose of 1 transaction only and that the offer of
exclusive distributorship was already being revoked for
failure of Cordero to return the draft agreement within a
reasonable time.
Cordero later testified that, on the same day, Landicho talked to him
over the telephone and offered to amicably settle the dispute
o Tecson and Landicho offered to convince Go to honor his exclusive
distributorship with AFFA and to purchase all vessels for ACG
Express Liner through him for the next three (3) years.
Landicho set up a meeting with Cordero at Mactan Island Resort Hotel
lobby.
o However, only Landicho and Tecson came
o lawyers proposed that they will convince Go to pay him
US$1,500,000.00 on the condition that they will get a cut of 20%
o so it was agreed that the lawyers will give Cordero a weekly
status report and that the matter will be settled amicably within
3-4 wks
Cordero would give Landicho and Tecson their respective commission,
or cuts from his own commission
o Said amounts were apart from the earlier expenses shouldered by
Cordero for Landichos airline tickets, transportation, food and
hotel accommodations for the trip to Australia.
o However, no such weekly status report was made as it
turned out that they had no intention to do so and were
just buying time as the catamaran vessel was due to arrive
from Australia.
Cordero then filed a complaint with the Bureau of Customs (BOC)
to prohibit the entry of SEACAT 25 from Australia based on
misdeclaration and undervaluation
o an Alert Order was issued by BOC for the vessel which in fact
arrived on July 17, 1998
o Cordero claimed that Go and Robinson had conspired to
undervalue the vessel by around US$500,000.00
Cordero instituted a Civil Case seeking to hold Robinson, Go,
Tecson and Landicho liable jointly and solidarily for conniving
and conspiring together in violating his exclusive
distributorship in bad faith and wanton disregard of his rights,
thus depriving him of his due commissions (balance of unpaid
commission from the sale of the first vessel in the amount of
US$31,522.01 and unpaid commission for the sale of the second vessel
in the amount of US$328,742.00) and causing him actual, moral and
exemplary damages, including P800,000.00 representing expenses for
airplane travel to Australia, telecommunications bills and
entertainment, on account of AFFAs untimely cancellation of the
exclusive distributorship agreement
o Cordero also prayed for the award of moral and exemplary
damages, as well as attorneys fees and litigation expenses.
Cordero presented documentary evidence including photographs of the
meeting with Landicho, Tecson and Atty. Tabujara at Shangri-la,
photographs taken in Brisbane showing Cordero, Go with his family,
Robinson and Landicho, and also various documents, communications,
vouchers and bank transmittals.
Petitioner:
It was Cordero who stopped communicating.
o He was not doing his part in making progress status reports that
Go had to engage the services of Landicho to fly to Australia to
handle matters.
As to the inquiry for a Wartsila ship engine, Cordero misinterpreted this
as indication that Go was buying a second vessel.
The lawyers had no transaction with Cordero.
o As to the supposed meeting, this was due to the malicious
demand of Cordero to be given US$3,000,000 as otherwise he will
expose in the media the alleged undervaluation of the vessel with
the BOC.
In any case, Cordero no longer had cause of action for his commission
for the sale of the second vessel under the 1997 MOA considering the
termination of his authority by AFFAs lawyers on 1998.

RTC QC: in favor of Cordero. (P16,291,352.43) as actual damages with


legal interest from 25 June 1998 until fully paid; P1M as moral damages; P1M
as exemplary damages; P1M as attys fees.

CA: AFFIRMED TC, holding:


Cordero (not Pamana) was appointed by AFFA as the exclusive
distributor in the Phils. as evidenced by the Certification issued by
Robinson, that Robinson and AFFA dealt only with Cordero, and the
commissions were directly paid by Robinson to Cordero.
o That this distributorship was not limited to the sale of one
catamaran
He is entitled to a commission of 22.43%
o However, Cordero is entitled only to commission for the sale of
the first catamaran obtained through his efforts.
Cordero is entitled to damages for the breach of his exclusive
distributorship agreement with AFFA.
o As to the P800,000.00 representing expenses incurred (airfair,
phonebills, entertainment, etc.) by Cordero: no basis for such
award, the same being the logical and necessary consequences in
the field of sales and distribution.
CA reduced the awards to P500,000.00, P300,000.00 and P50,000.00,
respectively.
Appellants were held solidarily liable pursuant to the provisions of
Article 1207 in relation to Articles 19, 20, 21 and 22.

BOTH parties appealed


Petitioner:
Cordero is not the real party-in-interest, it should be Pamana
No breach in the alleged exclusive distributorship agreement.
They are not liable for unpaid commissions (and also damages,
attorneys fees, and litigation expenses) for it was Robinson who
undertook to pay Cordero supposed commissions.
Even so, they should not be held solidarily liable with Robinson and
AFFA
Respondent:
CA should have sustained TCs award of actual damages for his
commission for the second vessel, since there is sufficient evidence to
prove that there was a second sale of a vessel.
o 1997 MOA provides that go was contractually bound to buy two
(2) vessels from AFFA.
o Gos position paper filed before BOC, admits under oath that he
had indeed purchased a second vessel from AFFA.
o Go admitted in their pre-trial brief that they had purchased a
second vessel.
He is entitled to his commissions for the second vessel, since it was his
efforts which actually facilitated and set-up the transaction for Go.
CA should have sustained original amount of consequential damages
awarded by TC considering gos bad faith and fraudulent conduct

ISSUES:
1 WoN Cordero has a cause of action against Go et al (YES)
2 WoN Go can be held liable even if they are not parties to the contract
(YES)
3 WoN Go et als interference was unjustified (YES)
4 WoN Go et als liability with Robinson and AFFA is solidary (YES)
5 WoN awards justified (YES)

HELD: CA AFFIRMED with MODIFICATION: moral and exemplary damages are


reduced to P300,000.00 and P200,000.00, respectively

RATIO:
1 Cordero has cause of action
Cordero is the exclusive distributor and not Pamana (adopted CAs
ratio) AND Cordero has proprietary rights under the agreement that he
may protect.
Yu v. CA: the right to perform an exclusive distributorship agreement and to
reap the profits resulting from such performance are proprietary rights which
a party may protect.
rights granted not be rendered illusory by interposing a person to
obtain goods for which the exclusive distributorship was
conceptualized.
o Cordero was no longer informed and had clearly been cut off from
the transaction until the arrival of the first SEACAT 25
o was not paid the balance of his commission
o Go et al directly dealt with Robinson behind Corderos back
o Worse, AFFA even terminated his exclusive dealership insisting
that his services were engaged for only 1 transaction.
GO et al: this case not similar to Yu v.CA
no conclusive proof that they actually purchased a second SEACAT 25
directly from AFFA
hence there was no violation of the exclusive distributorship agreement
SC: YES, there is NO sufficient evidence of second purchase. BUT this will not
absolve Go et al from liability.
They clearly acted in bad faith in bypassing Cordero.
Cordero incurred losses as he was not paid the balance of his
commission and his exclusive distributorship was revoked.

2. Go et al can still be held liable (despite Gos averments that it was


AFFAs obligation and not theirs)
While it is true that a third person cannot possibly be sued for
breach of contract because only parties can breach contractual
provisions, a contracting party may sue a third person not for
breach but for inducing another to commit such breach.
Art. 1314 Any third person who induces another to violate his contract shall
be liable for damages to the other contracting party.
The elements of tort interference are:
(1) existence of a valid contract;
(2) knowledge on the part of the third person of the existence of a
contract;
(3) interference of the third person is without legal justification.
The presence of the first and second elements is not disputed
o Go et al were clearly aware of the contract between Cordero and
AFFA
o Landicho and Tecson aware of Corderos authority, which can be
gleaned from their act of immediately furnishing him with copies
of bank transmittals everytime Go remits payment to Robinson
o (as to 3rd element, see below)

3. interference unjustified
as enunciated and reiterated in So Ping Bun v. CA:
A duty which the law of torts is concerned with is respect for the
property of others, and a cause of action ex delicto may be predicated
upon an unlawful interference by one person of the enjoyment by the
other of his private property. This may pertain to a situation where a
third person induces a party to renege on or violate his undertaking
under a contract.
General rule: justified interference with the business relations of
another exists where the actors motive is to benefit himself
o It is sufficient if the impetus of his conduct lies in a proper
business interest rather than in wrongful motives
o He acts in self-protection in this case
NOT necessary that the interferers interest outweigh that
of the party whose rights are invaded
NOT necessary that an individual acts under an economic
interest that is substantial, not merely de minimis
Unjustified interference: sole motive is to cause harm to the other
o induce refers to situations where a person causes another to
choose one course of conduct by persuasion or intimidation
o Malice connotes ill will or spite, and speaks not in response to
duty
implies an intention to do ulterior and unjustifiable harm
Malice is bad faith or bad motive

Lack of malice precludes damages. But it does not relieve a person


of the legal liability for entering into contracts and causing breach of
existing ones.
o Gilchrist vs. Cuddy: Not a malicious interferer if there is no malice
and the impulse behind ones conduct lies in a proper business
interest rather than in wrongful motives
o Lagon v. CA: to sustain a case for tortuous interference, the
defendant must have acted with malice or must have been driven
by purely impure reasons to injure the plaintiff (unjustified
interference)
In this case!
act of Go, Landicho and Tecson in inducing Robinson and AFFA to enter
into another contract to obtain a lower price for the second vessel
resulted in AFFAs breach of its contractual obligation to pay in
full the commission due to Cordero and unceremonious termination of
Corderos appointment as exclusive distributor
such act may not be deemed malicious if impelled by a proper business
interest rather than in wrongful motives (Gilchrist)
o however! it was demonstrated that Go et al transgressed
the bounds of permissible financial interest to benefit
themselves at the expense of Cordero
o they furtively went directly to Robinson after Cordero had worked
hard to close the deal for them
o worst, even as Go et al secretly negotiated with Robinson for the
purchase of a second vessel, Landicho and Tecson continued to
demand and receive from Cordero their commission or cut
from Corderos own earned commission from the first sale
lawyers failed to refute the receipts signed by them
o They clearly connived not only in ensuring that Cordero would
have no participation in the second sale, but also that he would
not be paid the balance of his commission
This, despite their knowledge that it was commission
already earned by and due to Cordero
o The failure of Robinson, Go, Tecson and Landicho to act
with fairness, honesty and good faith, to the prejudice of
Cordero, is further proscribed by CC Art. 19
(complemented with 21)

Go et al: There was another contract superseding the 1997 MOA and that
Cordero merely misinterpreted the inquiry on engine price.
SC: allegations unconvincing and a mere afterthought
It appears that the purported second contract stating a lower price of
US$1,150,000.00 (not US$1,465,512.00) was only presented before the
BOC to show that the vessel imported was not undervalued by almost
US$500,000.00

4. solidarily liable
Conformably with NCC 2194, the responsibility of two or more persons
who are liable for the quasi-delict is solidary
Obligations arising from tort are, by their nature, always solidary.

5. moral damages may be recovered (NCC 2219)


Go et al acted in bad faith
Exemplary damages is also in order
o However, RTC and CA awards excessive
o Awards reduced

VILLA V IBANEZ G.R. No. L-4313 March 20, 1951

FACTS:
In pursuance of his appointment by the then Secretary of Justice Ricardo
Nepomuceno , as special counsel to assist the City Fiscal of Manila in the
cases of city government officials or employees he had investigated, Atty.
Abelardo Subido (chief of the division of investigation in the office of the
mayor of the City of Manila), subscribed, swore to and presented an
information against Pedro P. Villa for falsification of a payroll of the division of
veterinary service, Manila health department.

Attorney Subido's authority to file information was thereafter challenged by


the accused but was sustained by Judge Fidel Ibaez. Hence petitioner filed a
complaint for certiorari, which is in reality a petition for prohibition and will be
so regarded.

ISSUE:

WON Atty Subido is disqualified for appointment as special counsel


WON petitioner may question lack of jurisdiction even after he has pleaded to
the informatiom

HELD:

1 YES. Section 1686 of the Revised Administrative Code, as amended by


Section 4 of Commonwealth Act No. 144, reads as follows:

SEC. 189. Additional counsel to assist fiscal. The Secretary of Justice


may appoint any lawyer, being either a subordinate from his office or a
competent person not in the public service, temporarily to assist a fiscal
or prosecuting attorney in the discharge of his duties, and with the
same authority therein as might be exercised by the Attorney General
or Solicitor General.

Appointments by the Secretary of Justice in virtue of the foregoing provisions


of the Revised Administrative Code, as amended, were upheld in Lo Cham vs.
Ocampo et al.,1 44 Official Gazette, 458, and Go Cam et al., vs. Gatmaitan et
al., (47 Official Gazette, 5092)2. But in those cases, the appointees were
officials or employees in one or another of the bureaus or offices under the
Department of Justice, and were rightly considered subordinates in the office
of the Secretary of Justice within the meaning of section 1686, ante.

The case at bar does not come within the rationale of the above
decisions. Attorney Subido is a regular officer or employee in the
Department of Interior, more particularly in the City Mayor's office. For this
reason he belongs to the class of persons disqualified for appointment to the
post of special counsel.
That to be eligible as special counsel to aid a fiscal the appointee must be
either an employee or officer in the Department of Justice is so
manifest from a bare reading of section 1686 of the Revised Administrative
Code as to preclude construction. And the limitation of the range of choice in
the appointment or designation is not without reason.

2 YES
The defendant had pleaded to the information before he filed a motion to
quash, and it is contended that by his plea he waived all objections to the
information. The contention is correct as far as formal objections to the
pleading are concerned. But by clear implication it not by express provision of
section 10 of Rule 113 of the Rules of Court, and by a long line of uniform
decisions, questions of want of jurisdiction may be raised at any stage
of the proceeding. Now, the objection to the respondent's actuations goes
to the very foundations of jurisdiction. It is a valid information signed by a
competent officer which, among other requisites, confers jurisdiction on the
court over the person of the accused and the subject matter of the
accusation. In consonance with this view, an infirmity of the nature noted in
the information cannot be cured by silence, acquiescence, or even by express
consent.

The petition will therefore be granted and the respondent judge ordered to
desist from proceeding with criminal case No. 11963 upon the information
filed by Attorney Abelardo Subido, without costs.

LIBERAL CONSTRUCTION of THE RULES

LLAMAS v. CA

G.R. No. 149588/ AUG. 16, 2010 / NACHURA, J./CRIMPRO-Annulment of


Judgments by CA: Suspension of technical rules, pro hac vice /PSPAMBID

NATURE Petition for Annulment of Judgment and Certiorari, with


Preliminary Injunction

PETITIONERS Francisco R. Llamas and Carmelita C. Llamas

RESPONDENTS Court of Appeals, Branch 66 of the RTC in Makati City and


the People of the Philippines

SUMMARY. Francisco R. Llamas and Carmelita C. Llamas


were convicted of other forms of swindling. Petitioners
assailed the jurisdiction of the court after they have been
convicted, and moved that the proceedings be annulled.
DOCTRINE. The remedy of annulment of judgment cannot
be availed of in criminal cases.

FACTS.

On August 16, 1984, petitioners were charged before the RTC of Makati with
the crime of "other forms of swindling" penalized by Article 316, paragraph
2, of the Revised Penal Code (RPC)
o Francisco R. Llamas and Carmelita C. Llamas sold their property in
Paranaque to Conrado P. Avila, representing it tobe free from all liens
and encumbrances while it was leased to the Rural Bank of Imus.
30 June 1994: RTC found petitioners guilty beyond reasonable doubt
19 February 1999: CA affirmed decision of the trial court, and on 22
December 1999 denied petitioners motion for reconsideration
11 February 2000: Petitioners filed a petition for review, rejected by the SC for
failure to state material dates
28 June 2000: SC denied subsequent motion for reconsideration; judgment of
conviction final and executory
On April 27, 2001, Petitioner Carmelita C. Llamas was arrested by the police
but they failed to arrest petitioner Francisco R. Llamas because he was
nowhere to be found
On July 16, 2001, Francisco moved for the lifting or recall of the warrant of
arrest, raising for the first time the issue that the trial court had no
jurisdiction over the offense charged.
There being no action taken by the trial court on the motion, petitioners
instituted, on September 13, 2001, the instant proceedings for the
annulment of the trial and the appellate courts decisions
The Court initially dismissed on technical grounds the petition in the
September 24, 2001 Resolution, but reinstated the same, on motion for
reconsideration, in the October 22, 2001 Resolution.

ISSUES & RATIO.

1. Whether or not the petitioners can institute an annulment of the


RTC and CA since the courts did not take any action when they (the
petitioners) raised the issue of jurisdiction. NO.
Following Bitanga, this Court cannot allow such recourse, there being no
basis in law or in the rules.
In People v. Bitanga the Court explained that the remedy of annulment
of judgment cannot be availed of in criminal cases:
o Section 1, Rule 47 of the Rules of Court 1, limits the scope of the
remedy of annulment of judgment. The remedy cannot be
resorted to when the RTC judgment being questioned was
rendered in a criminal case.
o The 2000 Revised Rules of Criminal Procedure 2 itself does not
permit such recourse, for it excluded Rule 47 from the
enumeration of the provisions of the 1997 Revised Rules of Civil
Procedure which have suppletory application to criminal cases.

2. WON the RTC had jurisdiction over the criminal case. YES.
Jurisdiction being a matter of substantive law, the established
rule is that the statute in force at the time of the
commencement of the action determines the jurisdiction of the
court. In this case, at the time of the filing of the information,
the applicable law was Batas Pambansa Bilang 129, approved
on August 14, 1981
the established rule is that the statute in force (in this case the statute
was BP 1293) at the time of the commencement of the action
determines the jurisdiction of the court
The penalty for the crime charged in this case is arresto mayor in its
minimum and medium periods, which has a duration of 1 month and 1
day to 4 months, and a fine of not less than the value of the damage
caused and not more than three times such value. Here, the imposable
fine is P12,895.00

1 Section 1. Coverage. This Rule shall govern the annulment by the Court of Appeals of judgments or final orders and resolutions in civil actions of
Regional Trial Courts for which the ordinary remedies of new trial, appeal, petition for relief or other appropriate remedies are no longer available through no
fault of the petitioner.

2 Sec. 18. Rule 124 of the Revised Rules of Criminal ProcedureApplication of certain rules in civil procedure to criminal cases. The provisions of Rules 42,
44 to 46 and 48 to 56 relating to procedure in the Court of Appeals and in the Supreme Court in original and appealed civil cases shall be applied to criminal
cases insofar as they are applicable and not inconsistent with the provisions of this Rule.

3 Section 20. Jurisdiction in criminal cases. Regional Trial Courts shall exercise exclusive original jurisdiction in all criminal cases
not within the exclusive jurisdiction of any court, tribunal or body, except those now falling under the exclusive and concurrent
jurisdiction of the Sandiganbayan which shall hereafter be exclusively taken cognizance of by the latter.x x x x
Section 32. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in criminal cases. Except
in cases falling within the exclusive original jurisdiction of Regional Trial Courts and of the Sandiganbayan, the Metropolitan Trial
Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts shall exercise:
xxx
(2) Exclusive original jurisdiction over all offenses punishable with imprisonment of not exceeding four years and two months, or a
fine of not more than four thousand pesos, or both such fine and imprisonment, regardless of other imposable accessory or other
penalties, including the civil liability arising from such offenses or predicated thereon, irrespective of kind, nature, value, or amount
thereof: Provided, however, That in offenses involving damage to property through criminal negligence they shall have exclusive
original jurisdiction where the imposable fine does not exceed twenty thousand pesos.
The MeTC could not have acquired jurisdiction over the criminal action
because at the time of the filing of the information, its jurisdiction was
limited to offenses punishable with a fine of not more than P4,000.00.

DECISION.

Petition DENIED.

SARMIENTO V. ZARATAN
Facts: Petitioner Gliceria Sarmiento filed an ejectment case against
respondent Emerita Zaratan, in the Metropolitan Trial Court (MeTC) of Quezon
City. On 31 March 2003, the MeTC rendered a decision in favor of petitioner.
( MeTC ordered the defendant to pay plaintiff monthly rentals and to vacate
the premises.)

Respondent filed her notice of appeal. Thereafter, the case was raffled to the
RTC of Quezon City.

In the Notice of Appealed Case, the RTC directed respondent to submit her
memorandum in accordance with the provisions of Section 7(b) of Rule 40 of
the Rules of Court and petitioner to file a reply memorandum within 15 days
from receipt.

Respondents counsel having received the notice on 19 May 2003, he had


until 3 June 2003 within which to file the requisite memorandum. But on 3
June 2003, he filed a Motion for Extension of Time of five days due to his
failure to finish the draft of the said Memorandum. He cited as reasons for the
delay of filing his illness for one week, lack of staff to do the work due to
storm and flood compounded by the grounding of the computers because the
wirings got wet. But the motion remained unacted.

On 9 June 2003, respondent filed her Memorandum. On 19 June 2003, the RTC
dismissed the appeal for failure to submit the required memorandum within
the prescribed period.4

Record shows that defendant-appellant received the Notice of


Appealed Case, through counsel, on May 19, 2003 (Registry Return
Receipt dated May 12, 2003, Record, back of p. 298). Thus, under
Section 7(b), Rule 40 of the 1997 Rules of Civil Procedure, she had
fifteen (15) days or until June 3, 2003 within which to submit a
4
memorandum on appeal. As further appears on record, however, the
required Memorandum was filed by defendant-appellant only on June
9, 2003 (Record, p. 623), or six (6) days beyond the expiration of the
aforesaid fifteen day period.

Aggrieved, respondent filed a Petition for Certiorari in the Court of


Appeals, which was granted the petition of respondent. The appellate court
nullified and set aside Orders of the RTC and ordered the reinstatement of
respondents appeal. Consequently, respondents appeal memorandum was
admitted and the case remanded to the RTC for further proceedings. Hence,
petioner filed a petition for Review on Certiorari under Rule 45 with the SC.

Issue: Whether the lack of notice of hearing in the Motion for Extension of
Time to file Memorandum on Appeal is fatal, such that the filing of the motion
is a worthless piece of paper.

Held:
NO. Petitioner avers that, because of the failure of respondent to include a
Notice of Hearing in her Motion for Extension of Time to file Memorandum on
Appeal in the RTC, the latters motion is a worthless piece of paper with no
legal effect.

It is not disputed that respondent perfected her appeal on 4 April 2003 with
the filing of her Notice of Appeal and payment of the required docket fees.
However, before the expiration of time to file the Memorandum, she
filed a Motion for Extension of Time seeking an additional period of five
days within which to file her Memorandum, which motion lacked the Notice of
Hearing required by Section 4, Rule 15 of the 1997 Rules of Court which
provides:

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.

As may be gleaned above and as held time and again, the notice
requirement in a motion is mandatory. As a rule, a motion without a
Notice of Hearing is considered pro forma and does not affect the
reglementary period for the appeal or the filing of the requisite
pleading.

As a general rule, notice of motion is required where a party has a right to


resist the relief sought by the motion and principles of natural justice demand
that his right be not affected without an opportunity to be heard. The three-
day notice required by law is intended not for the benefit of the movant but to
avoid surprises upon the adverse party and to give the latter time to study
and meet the arguments of the motion. Principles of natural justice demand
that the right of a party should not be affected without giving it an
opportunity to be heard.

The test is the presence of the opportunity to be heard, as well as to


have time to study the motion and meaningfully oppose or controvert the
grounds upon which it is based. Considering the circumstances of the present
case, we believe that procedural due process was substantially
complied with.

There are, indeed, reasons which would warrant the suspension of the
Rules: (a) the existence of special or compelling circumstances, b) the merits
of the case, (c) a cause not entirely attributable to the fault or negligence of
the party favored by the suspension of rules, (d) a lack of any showing that
the review sought is merely frivolous and dilatory, and (e) the other party will
not be unjustly prejudiced thereby. Elements or circumstances (c), (d) and (e)
exist in the present case.

The suspension of the Rules is warranted in this case. The motion in


question does not affect the substantive rights of petitioner as it merely seeks
to extend the period to file Memorandum. The required extension was due to
respondents counsels illness, lack of staff to do the work due to storm
and flood, compounded by the grounding of the computers. There is no claim
likewise that said motion was interposed to delay the appeal. As it appears,
respondent sought extension prior to the expiration of the time to do so and
the memorandum was subsequently filed within the requested extended
period. Under the circumstances, substantial justice requires that we go into
the merits of the case to resolve the issue of who is entitled to the possession
of the land in question.

Further, it has been held that a "motion for extension of time x x x is not a
litigated motion where notice to the adverse party is necessary to afford the
latter an opportunity to resist the application, but an ex parte motion made to
the court in behalf of one or the other of the parties to the action, in the
absence and usually without the knowledge of the other party or parties." As
a general rule, notice of motion is required where a party has a right to resist
the relief sought by the motion and principles of natural justice demand that
his rights be not affected without an opportunity to be heard. It has been said
that "ex parte motions are frequently permissible in procedural matters, and
also in situations and under circumstances of emergency; and an exception to
a rule requiring notice is sometimes made where notice or the resulting delay
might tend to defeat the objective of the motion.

WHEREFORE, the instant petition is hereby DENIED for lack of merit. The
Decision and the Resolution of the Court of Appeals are hereby AFFIRMED. No
costs. SO ORDERED.

ASIAN SPIRIT AIRLINES v SPS BAUTISTA

Facts:

The Spouses Benjamin and Anna Marie Bautista filed a complaint, in behalf of
their son Karl Bautista and Gloria Pomera, against the Asian Spirit Airlines in
the Regional Trial Court of Pasig City for breach of contract and damages.
After trial, the court rendered a decision on March 24, 2003 in favor of the
plaintiffs and against the defendant. Defendants counterclaim is DISMISSED

Defendants filed MR but was dismissed. Defendant appealed. The appellate


court directed the defendant-appellant to file its brief as appellant within
forty-five (45) days from notice thereof. The defendant-appellant received its
copy of the resolution on December 17, 2003. Thus, it had until January 31,
2004 within which to file its brief. However, the defendant-appellant failed to
file its appellants brief. On March 3, 2004, the plaintiffs-appellees filed a
Manifestation and Motion for the dismissal of the appeal of the defendant-
appellant for its failure to file its brief.

On March 10, 2004, the defendant-appellant filed an unverified Motion to


Admit Attached Appellants Brief. The plaintiffs-appellees opposed the
motion. On April 23, 2004, the CA issued a Resolution denying the motion of
the defendant-appellant and granting the motion of the plaintiffs-appellees,
and ordered the appeal of the defendant-appellant dismissed. The defendant-
appellant filed a motion for the reconsideration of the said resolution but on
July 16, 2004, the appellate court denied the said motion for lack of merit.
The defendant-appellant, now the petitioner, filed a petition for review
on certiorari with SC, asserting that the CA gravely erred in STRICTLY
APPLYING THE PROVISIONS OF THE RULES OF COURT ON DISMISSAL OF
APPEAL TO PETITIONERS APPEAL WHICH IS CONTRARY TO THE MANDATED
PRECEPT OF LIBERAL CONSTRUCTION.

ISSUE:

WoN the appeal must be dismissed

WoN the rules must be relaxed

HELD:

1. YES

The petition has no merit.


Under Section 1(e), Rule 50 of the Rules of Court, as amended, an appeal
may be dismissed by the CA on its own motion or that of the appellee for
failure of the appellant to file its brief within the time provided by Section 7,
Rule 44 of the said Rules. The petitioner had until January 31, 2004 within
which to file its brief but failed to do so. The only excuse of the petitioner for
its failure to file its brief was the claim of its counsel in the said Motion for
Leave to Admit, thus:

1. The filing of the Appellants Brief is due on January 31, 2004. The notice
from the Honorable Court was received on December 17, 2003 and because
of the holiday season at that time, the undersigned counsel gave instruction
to his Secretary to file the usual Motion for Time asking for forty-five (45) days
from January 31, 2004 or until March 16, 2004.

2. The undersigned started to prepare the Appellants Brief bearing in mind


the new deadline.

3. It was only when the undersigned received the Manifestation of plaintiffs on


March 5, 2004 that he inquired with his secretary if the Manifestation of
counsel is true and she readily admitted that she failed to prepare and file the
Motion for Time.

The excuse contrived by the petitioners counsel is totally


unacceptable. We note that the motion of the petitioner is unverified.
Neither did the petitioner bother appending to its motion an affidavit of its
counsels secretary containing his/her explanation why he/she failed to file the
said motion for extension if there was such a motion in the first place. The
petitioner did not even bother appending to its Motion to Admit its motion for
extension to file brief which its counsels secretary allegedly failed to file in
the CA. Blaming its counsels unidentified secretary for its abject
failure to file its brief is a common practice for negligent lawyers to
cover up for their own negligence, incompetence, indolence, and
ineptitude. Such excuse is the most hackneyed and habitual subterfuge
employed by litigants who fail to observe the procedural requirements
prescribed by the Rules of Court.[ It bears stressing that it is the duty of
counsel to adopt and strictly maintain a system that insures that all pleadings
should be filed and duly served within the period therefor and, if he fails to do
so, the negligence of his secretary or clerk to file such pleading is imputable
to the said counsel.

2. NO
We agree with the petitioners contention that the rules of procedure may be
relaxed for the most persuasive reasons. But as this Court held in Galang v.
Court of Appeals.

Procedural rules are not to be belittled or dismissed simply because their non-
observance may have resulted in prejudice to a partys substantive rights. Like
all rules, they are required to be followed except only for the most persuasive
of reasons when they may be relaxed to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying with
the procedure prescribed.[16]

In an avuncular case,[17] we emphasized that:

Procedural rules are tools designed to facilitate the adjudication of cases.


Courts and litigants alike are, thus, enjoined to abide strictly by the rules. And
while the Court, in some instances, allows a relaxation in the application of
the rules, this, we stress, was never intended to forge a bastion for erring
litigants to violate the rules with impunity. The liberality in the interpretation
and application of the rules applies only in proper cases and under justifiable
causes and circumstances. While it is true that litigation is not a game of
technicalities, it is equally true that every case must be prosecuted in
accordance with the prescribed procedure to insure an orderly and speedy
administration of justice. The instant case is no exception to this rule.

In the present case, we find no cogent reason to exempt the petitioner


from the effects of its failure to comply with the Rules of Court.
The right to appeal is a statutory right and the party who seeks to avail of
the same must comply with the requirements of the Rules. Failing to do so,
the right to appeal is lost. More so, as in this case, where petitioner not only
neglected to file its brief within the stipulated time but also failed to seek an
extension of time for a cogent ground before the expiration of the time
sought to be extended.[18]
In not a few instances, the Court relaxed the rigid application of the rules
of procedure to afford the parties the opportunity to fully ventilate their cases
on the merits. This is in line with the time-honored principle that cases should
be decided only after giving all parties the chance to argue their causes and
defenses. Technicality and procedural imperfection should, thus, not serve as
basis of decisions. In that way, the ends of justice would be better served.
[19]
For, indeed, the general objective of procedure is to facilitate the
application of justice to the rival claims of contending parties, bearing always
in mind that procedure is not to hinder but to promote the administration of
justice.[20] In this case, however, such liberality in the application of rules
of procedure may not be invoked if it will result in the wanton
disregard of the rules or cause needless delay in the administration
of justice. It is equally settled that, save for the most persuasive of reasons,
strict compliance is enjoined to facilitate the orderly administration of justice.
[21]

PETITION DENIED

OTHER DOCTRINES:

The CA was evidently not satisfied with the explanation by the petitioner.
Its action in this regard is not subject to review, for the Supreme Court cannot
interfere with the discretion of the Court of Appeals.

It is necessary to impress upon litigants and their lawyers the necessity of


a strict compliance with the periods for performing certain acts
incident to the appeal and the transgressions thereof, as a rule, would not
be tolerated; otherwise, those periods could be evaded by subterfuges
and manufactured excuses and would ultimately become inutile. (Don
Lino Gutierrez & Sons, Inc. vs. CA, G.R. No. L-39124, Nov. 15, 1974).

This Honorable Court will be setting a bad example if it accepts the excuse
of the Petitioners counsel that he instructed his secretary to file the motion
for extension who, in turn, forgot to file it. Logic dictates that the Secretary
cannot release the request without the lawyers signature but still the basic
and simple prudence to follow it up by counsel leaves much to be
desired. Every lawyer may soon adopt this reasoning to justify non-filing
of the brief on time.[11]

G.R. No. 153366: November 17, 2010

CEBU BIONIC BUILDERS SUPPLY, INC. and LYDIA SIA, Petitioners, v.


DEVELOPMENT BANK OF THE PHILIPPINES, JOSE TO CHIP, PATRICIO
YAP and ROGER BALILA, Respondents.
FACTS:

Spouses Robles entered into a mortgage contract with the DBP to create the
State Theatre Building in Talisay, Cebu. Upon completion, Rudy Robles
executed a contract of lease in favour of Cebu Bionic Builders Supply.
However, the spouses defaulted on their obligation to pay and DBP
extrajudicially foreclosed the mortgage. DBP sent a letter to Cebu Bionic that
if they were interested in leasing the facilities, they would have to pay DBP.
However, nothing came from these correspondences.

DBP then invited parties to bid on the property. Initially, Cebu Bionic
submitted their interest in bidding, but the price that they gave was
insufficient. DBP then awarded the auction to Respondents To Chip, Yap and
Balila. In response to several demand letters by the Respondents, Cebu Bionic
filed a petition for preliminary injunction, cancellation of deed of sale
and specific performance against DBP with the RTC. Petitioners then
related that, without their knowledge, DBP sold the subject properties to
respondents To Chip, Yap and Balila. The sale was claimed to be simulated
and fictitious, as DBP still received rentals from petitioners until March
1991.By acquiring the subject properties, petitioners contended that DBP was
deemed to have assumed the contract of lease executed between them and
Rudy Robles. They alleged that the original leases clause of the Right of First
Option to Buy should be upheld.

The trial court granted their complaint. The Court of Appeals similarly
upheld the decision of the trial court. Cebu Bionic filed a motion for entry
of judgment, but Respondents filed a motion for reconsideration on the
ground that they relied on the friend of their lawyer to personally file the MR,
but apparently did not. The court granted their MR, and reversed their
judgment before. Thus, the petitioners file the case (petition for review on
certiorari) before the Supreme Court.

ISSUES:

1. OR NOT ONLY QUESTIONS OF LAW AND NOT OF FACT CAN BE RAISED IN


THE INSTANT PETITION BEFORE THIS HON. SUPREME COURT.

Respondents To Chip, Yap and Balila next argue that the instant petition
raises questions of fact, which are not allowed in a petition for review
on certiorari. They, therefore, submit that the factual findings of the
Court of Appeals are binding on this Court.
2.WHETHER OR NOT THE HON. COURT OF APPEALS ERRED IN ADMITTING
RESPONDENTS MOTION FOR RECONSIDERATION DESPITE ITS BEING FILED
OUT OF TIME
Petitioners fault the CA for admitting the Motion for Reconsideration of
its Decision dated February 14, 2001, which was filed by respondents To Chip,
Yap and Balila more than six months after receipt of the said decision. The
motion was eventually granted and the Court of Appeals issued its assailed
Amended Decision, ruling in favor of respondents

HELD:

1. NO.

Section 1, Rule 45 of the Rules of Court categorically states that the petition
filed thereunder shall raise only questions of law, which must be distinctly set
forth. A question of law arises when there is doubt as to what the law is on a
certain state of facts, while there is a question of fact when the doubt arises
as to the truth or falsity of the alleged facts. For a question to be one of law,
the same must not involve an examination of the probative value of the
evidence presented by the litigants or any of them. The resolution of the issue
must rest solely on what the law provides on the given set of
circumstances. Once it is clear that the issue invites a review of the evidence
presented, the question posed is one of fact.

The above rule, however, admits of certain exceptions, one of which is when
the findings of the Court of Appeals are contrary to those of the trial court. As
will be discussed further, this exception is attendant in the case at bar.

2. NO.

Indeed, the appellate courts Decision dated February 14, 2001 would
have ordinarily attained finality for failure of respondents to seasonably file
their Motion for Reconsideration thereon. However, we agree with the Court of
Appeals that the higher interest of substantial justice will be better
served if respondents procedural lapse will be excused.

Verily, we had occasion to apply this liberality in the application of


procedural rules in Barnes v. Padilla[59] where we aptly declared that

The failure of the petitioner to file his motion for reconsideration


within the period fixed by law renders the decision final and
executory. Such failure carries with it the result that no court can
exercise appellate jurisdiction to review the case. Phrased
elsewise, 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.[60]

In this case, what are involved are the property rights of the parties
given that, ultimately, the fundamental issue to be determined is who among
the petitioners and respondents To Chip, Yap and Balila has the better right to
purchase the subject properties. More importantly, the merits of the case
sufficiently called for the suspension of the rules in order to settle
conclusively the rights and obligations of the parties herein.

In essence, the questions that must be resolved are: 1) whether or not there
was a contract of lease between petitioners and DBP; 2) if in the affirmative,
whether or not this contract contained a right of first refusal in favor of
petitioners; and 3) whether or not respondents To Chip, Yap and Balila are
likewise bound by such right of first refusal.

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