REPUBLIC OF THE PHILIPPINES (DEPARTMENT OF ENVIRONMENT AND

NATURAL RESOURCES),Petitioner,
vs.
TECHNOLOGICAL ADVOCATES FOR AGRO-FOREST PROGRAMS
ASSOCIATION, INC. (TAFPA, INC.),Respondent.

DECISION

PERALTA, J.:

This is a Petition for Review on Certiorari assailing the Decision1 dated September 9,
2004 of the Court of Appeals (CA) in CA-G.R. SP No. 76176 denying the petition for
Annulment of Judgment filed by the Republic of the Philippines, Department of
Environment and Natural Resources (DENR).

The factual and procedural antecedents are as follows:

On November 27, 1995, respondent Technological Advocates for Agro-Forest Programs

Association, Inc. (TAFPA) and DENR, Regional Office (RO) No. IX, represented by its
then Regional Executive Director (RED), Cipriano B. Paet, entered into a contract 2 for
community organizing activities, social investigation, and information education
campaign at the San Isidro Tinago Reforestation Sub-Project in Sergio Osmeña, Sr.,
Zamboanga del Norte.

Respondent later submitted to the Office of the RED its Accomplishment Reports and
Requests for Billing on July 8, 1998 for accomplishments covering the 4th, 5th, and 6th
Quarters and on June 7, 1999 for the 7th Quarter.3

After evaluation and validation by the Composite Inspection Committee (CIC) of the 4th,
5th, 6th, and 7th Accomplishment Reports, the CIC recommended the payment of the
sum of ₱802,350.64 to respondent.4

However, in a letter5 dated September 8, 1999, RED Antonio M. Mendoza informed

respondent that by reason of the latter’s delay in the submission of its reports, it owed
the DENR, Region 9, Zamboanga City, the amount of ₱1,192,611.00 as penalty for
delay deductible from its collectibles of ₱802,350.64. Thus, respondent was still liable to
the DENR in the sum of ₱390,260.36.

Respondent sought reconsideration of the position of RED Mendoza regarding its

claims in a letter6 dated October 9, 1999. The letter was later referred to the Legal
Division, DENR, Region 9, Zamboanga City, for legal interpretation of the provisions of
the contract entered into by the parties.

On November 22, 1999, Atty. Orlando V. Kong issued a Memorandum 7 clarifying that
the "delay" contemplated in the contract that would warrant the imposition of the
stipulated penalty referred to the "failure to undertake the primary community organizing
activities such as community planning workshops, assemblies, meetings/seminars,
social development, and technical trainings, consultations with community members
and leaders and not to the non-submission of reports."

However, instead of paying respondent’s claims, the matter was referred to the Program
Director, National Forestation Development Office (NFDO), DENR, seeking its position
on whether to impose penalty on the billings of respondent. On December 1, 1999, the
Program Director issued a memorandum8 stating that the regional office was correct in
its position to impose the contract’s penalty clause. He further stated that the only
recourse of the respondent would be to petition the proper court for the equitable
reduction of the penalty imposed by the contract. RED Mendoza forthwith informed
respondent of the Program Director’s position.

On December 15, 1999, respondent filed with the RTC, Zamboanga City, a special civil
action for Mandamus with Prayer for Damages, docketed as SPL. CIVIL ACTION No.
459, praying that after notice and hearing, a writ be issued commanding the RED of the
DENR to pay respondent ₱802,350.64, representing the latter’s unpaid claims,
₱50,000.00 as moral damages, ₱25,000.00 by way of attorney’s fees and legal interest
on the principal sum demanded. The RTC subsequently treated the case as one for
specific performance rather than an action for mandamus, since the allegations in the
complaint clearly reflected that respondent’s cause of action was based on a contract.

Meanwhile, on January 18, 2000, Atty. Vidzfar A. Julie (Atty. Julie), entered his
appearance as counsel for DENR.9

After the DENR filed its answer, the case was set for pre-trial. Respondent then filed a
motion for judgment on the pleadings. The DENR through counsel, was furnished a
copy of the motion, but filed no opposition or comment.

On June 8, 2000, the Office of the Solicitor General (OSG) deputized Atty. Julie as
special counsel to assist the Solicitor General in the subject case. Atty. Julie was further
directed to advise the OSG from time to time of the progress of the case and furnish the
said Office with all copies of orders, pleadings, and motions.10

On December 1, 2000, the RTC issued an Order granting the motion for judgment on
the pleadings. The DENR was furnished a copy of the order, but it did not seek
reconsideration thereof.111avv phi1

On March 16, 2001, the RTC rendered a Decision12 in favor of the respondent and
against the petitioner. The dispositive portion of the which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of petitioner

TAFPA Inc., represented by its president Danilo A. delos Santos against the respondent
DENR Regional Office No. IX, Zamboanga City represented by its Regional Executive
Director, ordering the latter to pay the former, as follows:
 (1) Unpaid claim under the contract in the amount of ₱802,350.64 plus legal
interest on the principal sum due from the time of the billing for the
accomplishments under the contract on June 7, 1999 up to the time the said sum
is fully paid;

(2) Attorney’s fees in the amount of ₱20,000.00; and

(3) Costs of suit.

The claim for moral damages is hereby dismissed for lack of evidence.

SO ORDERED.13

In ruling in favor of the respondent, the RTC opined that the language of the contract
entered into by the parties was clear that the penalty clause applied only to delay in the
full completion of the contracted services, and not to non-submission or delayed
submission of the corresponding report. The court also held that it was incumbent upon
petitioner to comply with its obligation in good faith by paying what was due the
respondent.14

On May 22, 2001, petitioner, through its deputized counsel, filed a Motion for
Reconsideration,15 but it was denied on September 18, 2001.16

On February 19, 2002, the RTC made an Entry of Final Judgment 17 stating, among
other things, that the decision dated March 16, 2001 had, on January 31, 2002, become
final and executory, there being no appeal filed by any party before any appellate court.
Respondent thus filed an urgent motion for execution with the RTC which was granted
on March 14, 2002.18

Subsequently, the OSG filed a Manifestation and Motion 19 asking the RTC to set aside
the March 16, 2001 Decision on the ground of lack of due process. On May 20, 2002,
the RTC issued an Order20 denying the motion.

Undeterred, the OSG filed a Notice of Appeal21 dated July 23, 2002, before the RTC
raising the following issues: (1) whether or not plaintiff has a cause of action against
defendant; and (2) whether or not plaintiff is entitled to be paid his money claim against
defendant.22

On December 27, 2002, the RTC issued an Order23 disapproving the motion, the
dispositive portion of which reads:

WHEREFORE, premises considered, the Notice of Appeal is hereby DISAPPROVED.

Likewise, the Motion to Set Aside Writ of Execution is hereby DENIED.

Respondent incumbent Regional Executive Director of the DENR, R-9, Zamboanga City
is hereby ordered to request from the National Treasury for the release of the subject
cash allocation within thirty (30) days from receipt hereof so that the respondent’s
obligation in favor of petitioner can be paid as decreed on the Decision of May 16, 2001.

SO ORDERED.

The RTC ratiocinated that both the decision dated March 16, 2001 and May 20, 2002
order had already become final and executory. There is no provision in the Rules of
Court which allows the filing of a pleading for the dismissal of the case after judgment
has become final and executory and for which a writ of execution has been issued. The
court added that the grounds invoked and discussed for the dismissal of the case were
neither related to the pending incidents nor were previously raised before the court.
Instead of addressing the issues, petitioner sought the dismissal of the case on the
ground of lack of cause of action and failure to exhaust administrative remedies.24

Aggrieved, petitioner sought recourse before the CA via a petition for Annulment of
Judgment25 under Rule 47 of the Rules of Court, seeking the annulment of the decision
of the RTC dated March 16, 2001, based on the following grounds: (1) That the action
lies within the jurisdiction of the [Commission on Audit] COA and not before the courts;
(2) That private respondent did not exhaust administrative remedies against petitioner,
hence, no cause of action against petitioner; and (3) Respondent is not entitled to be
paid its money claim against petitioner.26

On September 9, 2004, the CA rendered a Decision27 denying the petition. The decretal
portion of the which reads as follows:

WHEREFORE, the instant petition is hereby DENIED due course for lack of merit and
assailed decision of the lower court is hereby AFFIRMED. No costs.

SO ORDERED.28

In denying the petition, the CA opined that the RTC acquired jurisdiction over
respondent’s cause of action. The CA added that the rule on due process was not
violated as petitioner was given all the opportunity to participate in the proceedings
before the RTC, which it in fact did, and was duly notified of all court processes, orders,
and decision. As for petitioner’s claim of non-exhaustion of administrative remedies, the
CA concluded that the DENR was estopped from raising the defense, considering that
when the DENR denied respondent’s claim, it informed the latter that its only recourse
was to petition the proper court for it to equitably reduce the penalty based on the
contract. The CA also affirmed the RTC’s conclusion that prior resort to the COA is
directed only when the money claim is against government funds that have not yet been
appropriated by law.

Hence, the petition assigning the following errors:

i
The Court of Appeals erred on a question of law in upholding the finality of the trial
court’s judgment on the ground that notice to the deputized counsel is notice to the
OSG.

ii

the Court of Appeals erred on a question of law in affirming the denial of petit[i]oner’s
right to due process by upholding the trial court’s order for the release of funds in favor
of respondent.

iii

the Court of Appeals erred on a question of law in ruling against petitioner which was
not even a party to the case for mandamus filed by respondent before the trial court.

Petitioner argues that the CA erred in dismissing the petition for annulment of judgment
on the ground that notice to the deputized counsel was notice to the OSG. Petitioner
maintains that the lawyer deputized and designated as "special attorney-OSG" is a
mere representative of the OSG, and the latter retains supervision and control over the
deputized counsel. The OSG continues to be the principal counsel and, as such, the
Solicitor General is the party entitled to be furnished copies of the orders, notices, and
decisions. The deputized attorney has no legal authority to decide whether or not an
appeal should be made. As a consequence, copies of orders and decisions served on
the deputized counsel, acting as agent or representative of the Solicitor General, are not
binding until they are actually received by the latter.

The petition is devoid of merit.

An action to annul a final judgment is an extraordinary remedy, which is not to be

granted indiscriminately by the court. It is a recourse equitable in character and allowed
only in exceptional cases. The reason for the restriction is to prevent this extraordinary
action from being used by a losing party to make a complete farce of a duly
promulgated decision that has long become final and executory.29

Under Section 2, Rule 47 of the Rules of Civil Procedure, the only grounds for
annulment of judgment are extrinsic fraud and lack of jurisdiction. Lack of jurisdiction as
a ground for annulment of judgment refers to either lack of jurisdiction over the person
of the defending party or over the subject matter of the claim.30 It is absence of, or no,
jurisdiction; that is, the court should not have taken cognizance of the petition because
the law does not vest it with jurisdiction over the subject matter.

It should be stressed that in a petition for annulment of judgment based on lack of

jurisdiction, petitioner must show not merely an abuse of jurisdictional discretion, but an
absolute lack of jurisdiction.31 In the present case, the CA has put to rest the issue of
whether the RTC had jurisdiction over respondent’s cause of action. The CA was
correct when it concluded that:
In the present case, the action a quo is one for mandamus and, under Section 21 of
Batas Pambansa Bilang 129, as amended, the Regional Trial Court exercises original
jurisdiction in the issuance of the writs of certiorari, prohibition, mandamus, quo
warranto, habeas corpus, and injunction which may be enforced in any part of their
regions. The court a quo after evaluating the allegations in the initiatory pleading
concluded that the action is one for specific performance and proceeded to hear it as
such. In doing so, the said court retained jurisdiction. The same law grants the Regional
Trial Courts exclusive original jurisdiction over all cases in which the subject of the
litigation is incapable of pecuniary estimation and all cases in which the demand
exceeds ₱100,000.00, to which the action a quo belongs.32

In this recourse, petitioner is no longer questioning the jurisdiction of the RTC based on
the above arguments. Petitioner now questions the propriety of the notice sent to the
deputized counsel of the OSG, arguing that notice to its deputized counsel is not notice
to the OSG. Hence, absent such notice, the decision of the RTC did not become final
and executory. Moreover, the failure of the RTC to serve the OSG copies of legal
notices, orders, and judicial processes constitutes lack of due process. This Court
disagrees.

What petitioner is seeking is for this Court to nullify the decision and orders of the RTC
via the present petition after petitioner has effectively lost its right to question the said
decision and orders, the same having become final and executory. As aptly found by
the RTC in its Order33 dated May 20, 2002:

Section 35 of the Revised Administrative Code specifically enjoins the Office of the
Solicitor General to represent the Government, its agencies and instrumentalities and its
officials and agents in any litigation proceedings investigation or matters requiring the
services of a lawyer. But there is no law or rule which imposes upon the court to furnish
the said Office with judicial processes as a matter of course, except in specific cases
among others, such as land registration and naturalization cases (NPC v. NLRC, 272,
SCRA 704) and petition for change of name, (Rule 103, Rules of Court).

Be that as it may, the records of the case show summons was properly served upon
respondent DENR, Region 9 Regional Executive Director through its legal officers, who
entered their appearance as counsel for respondent. Respondent assisted by counsel,
participated in the proceedings in the above-entitled case as evidenced by the fact that
through counsel he filed motion/manifestation, pre-trial brief, motion for reconsideration
and other similar pleadings before this Court. He appeared, through counsel during the
pre-trial conference of the case and was subsequently served with copy of the pre-trial
conference of the case and was subsequently served with copy of the pre-trial order.
Respondent interposed no objection to petitioner’s motion for judgment on the
pleadings, nor questioned the Court’s order of December 1, 2000, granting petitioner’s
motion. Thus, as held by the Supreme Court, it is not for a party to participate in the
proceedings, submit the case for the decision and accept the judgment if it is favorable
to him, but attack it for any reason when it is adverse. (Ruby Industrial Corporation v.
Court of Appeals, 284 SCRA 445.)
The records further show movant OSG was officially notified with judicial process of this
Court on March 12, 2000 when respondent OIC Regional Executive Director Maximo
Dichoso, forwarded copy of the pre-trial order and the records of the case, and at the
same time, asked for proper representation in behalf of the of the DENR. (Annex "A"
Petitioner’s Opposition.) Only July 23, 2001, movant OSG through Assistant Solicitor
General Amy C. Lazaro-Javier wrote respondent Maximo O. Dichoso in connection with
the latter’s request to elevate the case to the Court of Appeals, to furnish her a copy of
the Court’s resolution immediately in case the motion for reconsideration of the Decision
is denied by the Court. (Annex "E", Petitioner’s Opposition). On July 23, 2001, Regional
Executive Director Teotimo M. Redulla of the DENR, Region 9, wrote Assistant Solicitor
General Lazaro-Javier, informing her of the Order of the Court, denying the Motion for
Reconsideration and reiterating the respondent’s request to have the case elevated to
the Court of Appeals (Annex "F", Petitioner’s Opposition).

This was buttressed by the CA’s conclusion that:

We find petitioner’s allegations bereft of any factual support. Records show that on June
8, 200 Assistant Solicitor General Mariano M. Martinez deputized Atty. Vidzfar A. Julie,
Legal Division, DENR, Zamboanga City, as special counsel to assist the Solicitor
General in the subject case. He then instructed Atty. Julie to advise the OSG from time
to time on the progress of the case and to furnish them with all copies of orders,
pleadings and motions. In view of Atty. Julie’s deputization and his being counsel on
record in the case, notices to her are notices to the OSG. x x x x

xxxx

Records further show, as noted by the court a quo, that the Office of the Solicitor
General was served with judicial process of the court on March 12, 2000 when
respondent OIC Regional Executive Director Maximo Dichoso forwarded to it a copy of
the pre-trial order and the records of the case, and at the same time, asked for proper
representation in behalf of the DENR. On July 23, 2001, the OSG, through Assistant
Solicitor General Amy C. Lazaro-Javier wrote respondent Maximo O. Dichoso in
connection with the latter’s request to elevate the case to the Court of Appeals, directing
him to furnish her a copy of the court’s resolution immediately in case the motion for
reconsideration of the Decision was denied by the court. On July 23, 2001 RED Redulla
of DENR, Region IX, wrote assistant Solicitor General Lazaro-Javier, informing her of
the Order of the Court denying the motion for reconsideration and reiterating the
respondent’s request to have the case elevated to the Court of Appeals. 34

Verily, it was Atty. Julie who entered his appearance as counsel for DENR on January
18, 2000 and, as such, was the counsel on record. It was only later or on June 8, 2000
that the OSG, through Assistant Solicitor General Mariano M. Martinez, informed Atty.
Julie that the latter had been deputized to assist the Solicitor General in the case
pending before the RTC. As such, being the counsel on record, Atty. Julie had the
authority to represent the petitioner, and it was but logical that notices of court
processes sent to him were sufficient to bind petitioner. Thus, the CA correctly
concluded that petitioner’s right to due process was not violated.

Moreover, in Republic v.
Soriano,35http://sc.judiciary.gov.ph/jurisprudence/2009/july2009/151973.htm - _ftn We
ruled that:

The petitioner’s contention that service of the questioned Orders to deputized special
attorneys of the OSG would not bind the OSG so that the Orders did not attain their
finality when the Motion was filed, does not have a leg to stand on. It is a well-settled
principle that the acts of the authorized Deputy bind the principal counsel. Thus, service
on the Deputy is service to the OSG.

Moreover, the records will disclose that Atty. Fidel Evangelista, who is a deputized
attorney, was the one who appeared for the petitioner in the lower court. It is not only
lawful, but also in accordance with the normal and standard practice that notices be
sent to said special Attorney to avoid delays and complications. Precisely, the OSG has
no time and manpower to handle all the cases of multifarious government entities such
that deputization is authorized by law to cope with such contingencies.

Since Atty. Julie had the authority to represent the DENR before the RTC, notices of
decision, orders, and other court processes to him as counsel on record and the duly
deputized counsel of the OSG were sufficient to bind petitioner, and both the counsel
and the OSG’s failure to appeal the decision and to avail themselves of the other
remedies provided by the Rules was likewise binding upon petitioner.

Respondent should not suffer for petitioner’s failure to avail itself of the appropriate
remedies provided for by law and the Rules. After a decision is declared final and
executory, vested rights are acquired by the winning party. Just as a losing party has
the right to appeal within the prescribed period, the winning party has the correlative
right to enjoy the finality of the decision on the case.36 Whether through inadvertence or
negligence of its deputized counsel or the OSG itself, the decision has already become
final and executory. To conclude otherwise would run counter to the basic principle of
fair play. Besides, there would be no end to litigations if the parties who have
unsuccessfully availed themselves of any of the appropriate remedies or lost them
through their fault or inadvertence could have unfavorable decisions annulled by simply
bringing an action for annulment of judgment.

As regards petitioner’s remaining arguments, suffice it to say that this is not an appeal
from the decision and orders of the RTC, which to reiterate has become final and
executory; the correctness of the judgment is therefore not in issue. Accordingly, there
is no need to address the errors allegedly committed by the trial court in issuing the
assailed orders.
WHEREFORE, premises considered, the petition is DENIED. The Decision dated
September 9, 2004 of the Court of Appeals (CA) in CA-G.R. SP No. 76176 is
AFFIRMED.

SO ORDERED.

MADRIGAL TRANSPORT, INC., petitioner,

vs.
LAPANDAY HOLDINGS CORPORATION; MACONDRAY AND COMPANY, INC.; and
LUIS P. LORENZO JR.,respondents.

DECISION

PANGANIBAN, J.:

The special civil action for certiorari and appeal are two different remedies that are
mutually exclusive; they are not alternative or successive. Where appeal is
available, certiorari will not prosper, even if the ground therefor is grave abuse of
discretion. Basic is the rule that certiorari is not a substitute for the lapsed remedy of
appeal.

The Case

Before us is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the
February 28, 2002 Decision2and the November 5, 2002 Resolution3 of the Court of
Appeals (CA) in CA-GR SP No. 54861. The challenged Decision disposed as follows:

"WHEREFORE, in consideration of the foregoing premises, private respondents

Lapanday and Lorenzo, Jr.’s Motion for Reconsideration dated 10 February 2000
is GRANTED. Accordingly, the Resolution dated 10 January 2000 is
RECONSIDERED and SET ASIDE, thereby dismissing the Petition
for Certiorari dated 10 September 1999."4

The assailed Resolution denied reconsideration.

The Facts

The pertinent facts are undisputed. On February 9, 1998, Petitioner Madrigal Transport,
Inc. ("Madrigal") filed a Petition for Voluntary Insolvency before the Regional Trial Court
(RTC) of Manila, Branch 49.5 Subsequently, on February 21, 1998, petitioner filed a
Complaint for damages against Respondents Lapanday Holdings Corporation
("Lapanday"), Macondray and Company, Inc. ("Macondray"), and Luis P. Lorenzo Jr.
before the RTC of Manila, Branch 36.6

In the latter action, Madrigal alleged (1) that it had entered into a joint venture
agreement with Lapanday for the primary purpose of operating vessels to service the
shipping requirements of Del Monte Philippines, Inc.;7 (2) that it had done so on the
strength of the representations of Lorenzo, in his capacity either as chairman of the
board or as president of Del Monte, Lapanday and Macondray; (3) that Macondray had
thereafter been appointed -- allegedly upon the insistence of Lapanday -- as broker, for
the purpose of securing charter hire contracts from Del Monte; (4) that pursuant to the
joint venture agreement, Madrigal had purchased a vessel by obtaining a P10,000,000
bank loan; and (5) that contrary to their representations and guarantees and despite
demands, Lapanday and Lorenzo had allegedly been unable to deliver those Del Monte
charter hire contracts.8

On February 23, 1998, the insolvency court (RTC Branch 49) declared petitioner
insolvent.9 On March 30, 1998 and April 6, 1998, Respondents Lapanday, Lorenzo and
Macondray filed their respective Motions to Dismiss the case pending before the RTC
Branch 36.10

On December 16, 1998, Branch 36 granted the Motion, for failure of the Complaint to
state a cause of action. Applying Sections 32 and 33 of the Insolvency Law, 11 the trial
court opined that upon the filing by Madrigal of a Petition for Voluntary Insolvency, the
latter lost the right to institute the Complaint for Damages. The RTC ruled that the
exclusive right to prosecute the actions belonged to the court-appointed assignee.12

On January 26, 1999, petitioner filed a Motion for Reconsideration, 13 which was later
denied on July 26, 1999.14Subsequently, petitioner filed a Petition for Certiorari with the
Court of Appeals, seeking to set aside the December 16, 1998 and the July 26, 1999
Orders of the trial court.15 On September 29, 1999, the CA issued a Resolution requiring
petitioner to explain why its Petition should not be dismissed outright, on the ground that
the questioned Orders should have been elevated by ordinary appeal. 16

On January 10, 2000, the appellate court ruled that since the main issue in the instant
case was purely legal, the Petition could be treated as one for review as an exception to
the general rule that certiorari was not proper when appeal was available.17 Respondents
Lapanday and Lorenzo challenged this ruling through a Motion for Reconsideration
dated February 10, 2000.18 The CA heard the Motion for Reconsideration in oral
arguments on April 7, 2000.19

Ruling of the Court of Appeals

On February 28, 2002, the appellate court issued the assailed Decision granting
Respondents Lapanday and Lorenzo’s Motion for Reconsideration and dismissing
Madrigal’s Petition for Certiorari. The CA opined that an order granting a motion to
dismiss was final and thus the proper subject of an appeal, not certiorari.20

Furthermore, even if the Petition could be treated as an appeal, it would still have to be
dismissed for lack of jurisdiction, according to the CA.21 The appellate court held that the
issues raised by petitioner involved pure questions of law that should be brought to the
Supreme Court, pursuant to Section 2 of Rule 50 and Section 2(c) of Rule 41 of the
Rules of Court.22

Hence, this Petition.23

The Issues

In its Statement of Issues, petitioner contends:

"I

The Honorable Court of Appeals committed egregious error by ruling that the
order of the lower court which granted private respondents’ Motions to Dismiss
are not proper subjects of a Petition for Certiorari under Rule 65.

‘A. Section 5, Rule 16 does not apply in the present case since the
grounds for dismissal [were] petitioner’s purported lack of capacity to sue
and its failure to state a cause of action against private respondents, and
not any of the three (3) grounds provided under said provision,
namely, res judicata, extinction of the claim, and Statute of Frauds.

‘B. Section 1 of Rule 41, which is the applicable provision in petitioner’s

case, expressly proscribes the taking of an appeal from an order denying
a motion for reconsideration or one which dismisses an action without
prejudice, instead, the proper remedy is a special civil action under Rule
65.

‘C. A petition for certiorari under Rule 65 was correctly resorted to by

petitioner from the dismissal order of the lower court, which had clearly
acted with grave abuse of discretion amounting to lack of jurisdiction.

"II

The Honorable Court of Appeals committed serious error in ruling that it had no
jurisdiction to entertain the Petition for Certiorari filed by petitioner before it.

‘A. Section 2, Rule 50 nor Section 2(c) and Section 2(c), Rule 41 find no
application in the present case, since said rule contemplates of a case
where an appeal is the proper remedy, and not where the appropriate
 remedy is a petition for certiorari where questions of facts and laws may
be reviewed by the court a quo.

‘B. The court a quo erroneously concluded that it has no jurisdiction over
the subject matter of the petition based on the wrong premise that an
appeal from the lower court’s dismissal order is the proper remedy by
applying Section 2, Rule 50 and Section 2(c), Rule 41 of the Rules of
Court."24

The Court’s Ruling

The Petition is unmeritorious.

First Issue:
Remedy Against Dismissal of Complaint

The resolution of this case hinges on the proper remedy: an appeal or a petition
for certiorari. Petitioner claims that it correctly questioned the trial court’s Order through
its Petition for Certiorari. Respondents insist that an ordinary appeal was the proper
remedy. We agree with respondents.

Appeal

Under Rule 41, Rules of Court, an 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
the Rules of Court to be appealable.25 The manner of appealing an RTC judgment or
final order is also provided in Rule 41 as follows:

Section 2. Modes of appeal. —

(a) Ordinary appeal. — The appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its original jurisdiction shall be taken by
filing a notice of appeal with the court which rendered the judgment or final order
appealed from and serving a copy thereof upon the adverse party. No record on
appeal shall be required except in special proceedings and other cases of
multiple or separate appeals where the law or these Rules so require. In such
cases, the record on appeal shall be filed and served in like manner.

(b) Petition for review. — The appeal to the Court of Appeals in cases decided by
the Regional Trial Court in the exercise of its appellate jurisdiction shall be by
petition for review in accordance with Rule 42.

(c) Appeal by certiorari. — In all cases where only questions of law are raised or
involved, the appeal shall be to the Supreme Court by petition for review
on certiorari in accordance with Rule 45.26
An order or a judgment is deemed final when it finally disposes of a pending action, so
that nothing more can be done with it in the trial court. In other words, the order or
judgment ends the litigation in the lower court. Au contraire, an interlocutory order does
not dispose of the case completely, but leaves something to be done as regards the
merits of the latter.27

Petition for Certiorari

A petition for certiorari is governed by Rule 65, which reads:

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 its or
his 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.

The petition shall be accompanied by a certified true copy of the judgment, order
or resolution subject thereof, copies of all pleadings and documents relevant and
pertinent thereto, and a sworn certification of non-forum shopping as provided in
the third paragraph of Section 3, Rule 46.28

A writ of certiorari may be issued only for the correction of errors of jurisdiction or grave
abuse of discretion amounting to lack or excess of jurisdiction. The writ cannot be used
for any other purpose, as its function is limited to keeping the inferior court within the
bounds of its jurisdiction.29

For certiorari to prosper, the following requisites must concur: (1) the writ is directed
against a tribunal, a board or any officer exercising judicial or quasi-judicial functions;
(2) such tribunal, board or officer has acted without or in excess of jurisdiction, or with
grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there is no
appeal or any plain, speedy and adequate remedy in the ordinary course of law.30

"Without jurisdiction" means that the court acted with absolute lack of authority. 31 There
is "excess of jurisdiction" when the court transcends its power or acts without any
statutory authority.32 "Grave abuse of discretion" implies such capricious and whimsical
exercise of judgment as to be equivalent to lack or excess of jurisdiction; in other words,
power is exercised in an arbitrary or despotic manner by reason of passion, prejudice,
or personal hostility; and such exercise is so patent or so gross as to amount to an
evasion of a positive duty or to a virtual refusal either to perform the duty enjoined or to
act at all in contemplation of law.33

Appeal and Certiorari Distinguished

Between an appeal and a petition for certiorari, there are substantial distinctions which
shall be explained below.

As to the Purpose. Certiorari is a remedy designed for the correction of errors of

jurisdiction, not errors of judgment.34 In Pure Foods Corporation v. NLRC, we explained
the simple reason for the rule in this light:

"When a court exercises its jurisdiction, an error committed while so engaged

does not deprive it of the jurisdiction being exercised when the error is
committed. If it did, every error committed by a court would deprive it of its
jurisdiction and every erroneous judgment would be a void judgment. This cannot
be allowed. The administration of justice would not survive such a rule.
Consequently, an error of judgment that the court may commit in the exercise of
its jurisdiction is not correct[a]ble through the original civil action of certiorari."35

The supervisory jurisdiction of a court over the issuance of a writ of certiorari cannot be
exercised for the purpose of reviewing the intrinsic correctness of a judgment of the
lower court -- on the basis either of the law or the facts of the case, or of the wisdom or
legal soundness of the decision.36 Even if the findings of the court are incorrect, as long
as it has jurisdiction over the case, such correction is normally beyond the province
of certiorari.37 Where the error is not one of jurisdiction, but of an error of law or fact -- a
mistake of judgment -- appeal is the remedy. 38

As to the Manner of Filing. Over an appeal, the CA exercises its appellate jurisdiction
and power of review. Over a certiorari, the higher court uses its original jurisdiction in
accordance with its power of control and supervision over the proceedings of lower
courts. 39 An appeal is thus a continuation of the original suit, while a petition
for certiorari is an original and independent action that was not part of the trial that had
resulted in the rendition of the judgment or order complained of.40 The parties to an
appeal are the original parties to the action. In contrast, the parties to a petition
for certiorari are the aggrieved party (who thereby becomes the petitioner) against the
lower court or quasi-judicial agency, and the prevailing parties (the public and the
private respondents, respectively).41

As to the Subject Matter. Only judgments or final orders and those that the Rules of
Court so declare are appealable.42 Since the issue is jurisdiction, an original action
for certiorari may be directed against an interlocutory order of the lower court prior to an
appeal from the judgment; or where there is no appeal or any plain, speedy or adequate
remedy.43

As to the Period of Filing. Ordinary appeals should be filed within fifteen days from the
notice of judgment or final order appealed from.44 Where a record on appeal is required,
the appellant must file a notice of appeal and a record on appeal within thirty days from
the said notice of judgment or final order.45 A petition for review should be filed and
served within fifteen days from the notice of denial of the decision, or of the petitioner’s
timely filed motion for new trial or motion for reconsideration.46 In an appeal by certiorari,
the petition should be filed also within fifteen days from the notice of judgment or final
order, or of the denial of the petitioner’s motion for new trial or motion for
reconsideration.47

On the other hand, a petition for certiorari should be filed not later than sixty days from
the notice of judgment, order, or resolution.48 If a motion for new trial or motion for
reconsideration was timely filed, the period shall be counted from the denial of the
motion.49

As to the Need for a Motion for Reconsideration. A motion for reconsideration is

generally required prior to the filing of a petition for certiorari, in order to afford the
tribunal an opportunity to correct the alleged errors. Note also that this motion is a plain
and adequate remedy expressly available under the law.50 Such motion is not required
before appealing a judgment or final order.51

Certiorari Not the Proper Remedy if Appeal Is Available

Where appeal is available to the aggrieved party, the action for certiorari will not be
entertained. Remedies of appeal (including petitions for review) and certiorari are
mutually exclusive, not alternative or successive.52 Hence, certiorariis not and cannot be
a substitute for an appeal, especially if one’s own negligence or error in one’s choice of
remedy occasioned such loss or lapse.53 One of the requisites of certiorari is that there
be no available appeal or any plain, speedy and adequate remedy. 54 Where an appeal is
available, certiorari will not prosper, even if the ground therefor is grave abuse of
discretion.

Second Issue:
CA Jurisdiction

Petitioner was ascribing errors of judgment, not jurisdiction, in its Petition

for Certiorari filed with the Court of Appeals. The issue raised there was the trial court’s
alleged error in dismissing the Complaint for lack of cause of action. Petitioner argues
that it could still institute the Complaint, even if it had filed a Petition for Insolvency
earlier.55As petitioner was challenging the trial court’s interpretation of the law -- posing a
question of law -- the issue involved an error of judgment, not of jurisdiction. An error of
judgment committed by a court in the exercise of its legitimate jurisdiction is not
necessarily equivalent to "grave abuse of discretion."56

The instant case falls squarely with Barangay Blue Ridge "A" of QC v. Court of
Appeals.57 In that case, the trial court granted the Motion to Dismiss on the ground of
failure to state a cause of action. After the Motion for Reconsideration was denied,
petitioner filed a Petition for Certiorari with the CA. The appellate court denied the
Petition on the ground that the proper remedy was appeal. Holding that an error of
judgment should be reviewed through an ordinary appeal, this Court upheld the CA.

The Dismissal -- a Final Order

An order of dismissal, whether correct or not, is a final order.58 It is not interlocutory
because the proceedings are terminated; it leaves nothing more to be done by the lower
court. Therefore the remedy of the plaintiff is to appeal the order.59

Petitioner avers that Section 5 of Rule 1660 bars the filing of an appeal when the
dismissal is based on lack of cause of action. It adds that Section 5 limits the remedy of
appeal only to dismissals grounded on prior judgments or on the statute of limitations, or
to claims that have been extinguished or are unenforceable. We find this interpretation
absurd.

The provision is clear. Dismissals on the aforesaid grounds constitute res

judicata. However, such dismissals are still subject to a timely appeal. For those based
on other grounds, the complaint can be refiled. Section 5, therefore, confirms that an
appeal is the remedy for the dismissal of an action.

Citing Sections 1(a) and 1(h), Rule 41,61 petitioner further claims that it was prohibited
from filing an appeal. Section 1(a) of the said Rule prohibits the filing of an appeal from
an order denying a motion for reconsideration, because the remedy is to appeal the
main decision as petitioner could have done. In fact, under Section 9, Rule 37, the
remedy against an order denying a motion for reconsideration is to appeal the judgment
or final order. Section 1(h) does not apply, because the trial court’s Order did not
dismiss the action without prejudice.62

Exception to the Rule Not Established by Petitioner

We are not unaware of instances when this Court has granted certiorari despite the
availability of appeal.63 Where the exigencies of the case are such that the ordinary
methods of appeal may not prove adequate -- either in point of promptness or
completeness, so that a partial if not a total failure of justice could result -- a writ
of certiorari may still be issued.64 Petitioner cites some of these exceptions to justify the
remedy it has undertaken with the appellate court,65 but these are not applicable to the
present factual milieu.

Even assuming that the Order of the RTC was erroneous, its error did not constitute
grave abuse of discretion. Petitioner asserts that the trial court should not have
dismissed the Complaint or should have at least allowed the substitution of the assignee
in petitioner’s stead.66 These alleged errors of judgment, however, do not constitute a
despotic, capricious, or whimsical exercise of power. On the contrary, petitioner availed
of certiorari because the 15-day period within which to file an appeal had already
lapsed. Basic is the rule that certiorari is not a substitute for the lapsed remedy of
appeal.

As previously stressed, appeal -- not certiorari -- was the correct remedy to elevate the
RTC’s Order granting the Motion to Dismiss. The appeal, which would have involved a
pure question of law, should have been filed with the Supreme Court pursuant to
Section 2 (c) of Rule 41 and Section 2 of Rule 50,67 Rules of Court.
WHEREFORE, this Petition is DENIED, and the challenged Decision and
Resolution AFFIRMED.

Costs against petitioner.

SO ORDERED.