cases - appeals

7/30/2019 Cases - Appeals

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G.R. No. 141524DOMINGO NEYPES, LUZ FAUSTINO, ROGELIO FAUSTINO, LOLITO VICTORIANO, JACOB OBANIA

AND DOMINGO CABACUNGAN vs. COURT OF APPEALS

D E C I S I O NCORONA, J.:Petitioners Domingo Neypes, Luz Faustino, Rogelio Faustino, Lolito Victoriano, Jacob Obania andDomingo Cabacungan filed an action for annulment of judgment and titles of land and/orreconveyance and/or reversion with preliminary injunction before the Regional Trial Court, Branch43, of Roxas, Oriental Mindoro, against the Bureau of Forest Development, Bureau of Lands, Land Bankof the Philippines and the heirs of Bernardo del Mundo, namely, Fe, Corazon, Josefa, Salvador andCarmen.In the course of the proceedings, the parties (both petitioners and respondents) filed various motions withthe trial court. Among these were: (1) the motion filed by petitioners to declare the respondent heirs, theBureau of Lands and the Bureau of Forest Development in default and (2) the motions to dismiss filed bythe respondent heirs and the Land Bank of the Philippines, respectively.

In an order dated May 16, 1997, the trial court, presided by public respondent Judge Antonio N. Rosales,resolved the foregoing motions as follows: (1) the petitioners motion to declare respondents Bureau ofLands and Bureau of Forest Development in default was granted for their failure to file an answer, butdenied as against the respondent heirs of del Mundo because the substituted service of summons onthem was improper; (2) the Land Banks motion to dismiss for lack of cause of action was denied becausethere were hypothetical admissions and matters that could be determined only after trial, and (3) themotion to dismiss filed by respondent heirs of del Mundo, based on prescription, was also deniedbecause there were factual matters that could be determined only after trial. [1]

The respondent heirs filed a motion for reconsideration of the order denying their motion to dismiss on theground that the trial court could very well resolve the issue of prescription from the bare allegations of thecomplaint itself without waiting for the trial proper.

In an order[2]

dated February 12, 1998, the trial court dismissed petitioners complaint on the groundthat the action had already prescribed. Petitioners allegedly received a copy of the order of dismissalon March 3, 1998 and, on the 15th day thereafter or on March 18, 1998, filed a motion for reconsideration.On July 1, 1998, the trial court issued another order dismissing the motion for reconsideration [3] whichpetitioners received on July 22, 1998. Five days later, on July 27, 1998, petitioners filed a notice ofappeal[4]and paid the appeal fees on August 3, 1998.On August 4, 1998, the court a quo denied the notice of appeal, holding that it was filed eight dayslate.[5] This was received by petitioners on July 31, 1998. Petitioners filed a motion forreconsideration but this too was denied in an order dated September 3, 1998. [6]

Via a petition forcertiorariand mandamus under Rule 65 of the 1997 Rules of Civil Procedure, petitionersassailed the dismissal of the notice of appeal before the Court of Appeals.

In the appellate court, petitioners claimed that they had seasonably filed their notice of appeal. Theyargued that the 15-day reglementary period to appeal started to run only on July 22, 1998 since thiswas the day they received the final order of the trial court denying their motion for reconsideration.When they filed their notice of appeal on July 27, 1998, only five days had elapsed and they werewell within the reglementary period for appeal.[7]

On September 16, 1999, the Court of Appeals (CA) dismissed the petition. It ruled that the 15-day periodto appeal should have been reckoned from March 3, 1998 or the day they received the February 12, 1998
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order dismissing their complaint. According to the appellate court, the order was the final orderappealable under the Rules. It held further:Perforce the petitioners tardy appeal was correctly dismissed for the (P)erfection of an appeal within thereglementary period and in the manner prescribed by law is jurisdictional and non-compliance with such legalrequirement is fatal and effectively renders the judgment final and executory. [8]

Petitioners filed a motion for reconsideration of the aforementioned decision. This was denied by theCourt of Appeals on January 6, 2000.

In this present petition for review under Rule 45 of the Rules, petitioners ascribe the followingerrors allegedly committed by the appellate court:

ITHE HONORABLE COURT OF APPEALS ERRED IN DISMISSING THE PETITIONERS PETITION

FOR CERTIORARI AND MANDAMUS AND IN AFFIRMING THE ORDER OF THE HON. JUDGEANTONIO N. ROSALES WHICH DISMISSED THE PETITIONERS APPEAL IN CIVIL CASE NO. C-36OF THE REGIONAL TRIAL COURT, BRANCH 43, ROXAS, ORIENTAL MINDORO, EVEN AFTER THEPETITIONERS HAD PAID THE APPEAL DOCKET FEES.IITHE HONORABLE COURT OF APPEALS LIKEWISE ERRED IN RULING AND AFFIRMING THEDECISION OR ORDER OF THE RESPONDENT HON. ANTONIO M. ROSALES THAT PETITIONERS

APPEAL WAS FILED OUT OF TIME WHEN PETITIONERS RECEIVED THE LAST OR FINAL ORDEROF THE COURT ON JULY 22, 1998 AND FILED THEIR NOTICE OF APPEAL ON JULY 27, 1998 ANDPAID THE APPEAL DOCKET FEE ON AUGUST 3, 1998.IIITHE HONORABLE COURT OF APPEALS FURTHER ERRED IN RULING THAT THE WORDS FINALORDER IN SECTION 3, RULE 41, OF THE 1997 RULES OF CIVIL PROCEDURE WILL REFER TOTHE [FIRST] ORDER OF RESPONDENT JUDGE HON. ANTONIO M. MORALES DATED FEBRUARY12, 1998 INSTEAD OF THE LAST AND FINAL ORDER DATED JULY 1, 1998 COPY OF WHICH WASRECEIVED BY PETITIONERS THROUGH COUNSEL ON JULY 22, 1998.IV.THE HONORABLE COURT OF APPEALS FINALLY ERRED IN FINDING THAT THE DECISION IN THECASE OF DENSO, INC. V. IAC, 148 SCRA 280, IS APPLICABLE IN THE INSTANT CASE THEREBYIGNORING THE PECULIAR FACTS AND CIRCUMSTANCES OF THIS CASE AND THE FACT THATTHE SAID DECISION WAS RENDERED PRIOR TO THE ENACTMENT OF THE 1997 RULES OF CIVIL

PROCEDURE.[9]

The foregoing issues essentially revolve around the period within which petitioners shouldhave filed their notice of appeal.

First and foremost, the right to appeal is neither a natural right nor a part of due process. It is merelya statutory privilege and may be exercised only in the manner and in accordance with the provisions oflaw. Thus, one who seeks to avail of the right to appeal must comply with the requirements of the Rules.
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Failure to do so often leads to the loss of the right to appeal. [10] The period to appeal is fixed by bothstatute and procedural rules. BP 129, [11] as amended, provides:

Sec. 39. Appeals. The period for appeal from final orders, resolutions, awards, judgments, ordecisions of any court in all these cases shall be fifteen (15) days counted from the notice of the finalorder, resolution, award, judgment, or decision appealed from . Provided, however, that in habeascorpus cases, the period for appeal shall be (48) forty-eight hours from the notice of judgment appealedfrom. x x x

Rule 41, Section 3 of the 1997 Rules of Civil Procedure states:

SEC. 3. Period of ordinary appeal. The appeal shall be taken within fifteen (15) days from thenotice of the judgment or final order appealed from. Where a record on appeal is required, the appellantshall file a notice of appeal and a record on appeal within thirty (30) days from the notice of judgment orfinal order.

The period to appeal shall be interrupted by a timely motion for new trial orreconsideration. No motion for extension of time to file a motion for new trial or reconsideration shall beallowed.

Based on the foregoing, an appeal should be taken within 15 days from the notice of judgment orfinal order appealed from. A final judgment or order is one that finally disposes of a case, leavingnothing more for the court to do with respect to it. It is an adjudication on the merits which, consideringthe evidence presented at the trial, declares categorically what the rights and obligations of the partiesare; or it may be an order or judgment that dismisses an action. [12]

As already mentioned, petitioners argue that the order of July 1, 1998 denying their motion for

reconsideration should be construed as the final order, not the February 12, 1998 order which dismissedtheir complaint. Since they received their copy of the denial of their motion for reconsideration only onJuly 22, 1998, the 15-day reglementary period to appeal had not yet lapsed when they filed theirnotice of appeal on July 27, 1998.

What therefore should be deemed as the final order, receipt of which triggers the start of the 15-day reglementary period to appeal the February 12, 1998 order dismissing the complaint or the July1, 1998 order dismissing the MR?

In the recent case ofQuelnan v. VHF Philippines, Inc.,[13] the trial court declared petitionerQuelnan non-suited and accordingly dismissed his complaint. Upon receipt of the order of dismissal, he filed anomnibus motion to set it aside. When the omnibus motion was filed, 12 days of the 15-day period toappeal the order had lapsed. He later on received another order, this time dismissing his omnibus motion.He then filed his notice of appeal. But this was likewise dismissed for having been filed out of time.The court a quo ruled that petitioner should have appealed within 15 days after the dismissal of hiscomplaint since this was the final order that was appealable under the Rules. We reversed the trialcourt and declared that it was the denial of the motion for reconsideration of an order of dismissal

of a complaint which constituted the final order as it was what ended the issues raised there.This pronouncement was reiterated in the more recent case ofApuyan v. Haldeman et al.[14] where

we again considered the order denying petitioner Apuyans motion for reconsideration as the final orderwhich finally disposed of the issues involved in the case.

Based on the aforementioned cases, we sustain petitioners view that the order dated July 1, 1998denying their motion for reconsideration was the final ordercontemplated in the Rules.
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We now come to the next question: if July 1, 1998 was the start of the 15-day reglementary period toappeal, did petitioners in fact file their notice of appeal on time?Under Rule 41, Section 3, petitioners had 15 days fromnotice of judgment or final orderto appeal thedecision of the trial court. On the 15th day of the original appeal period (March 18, 1998), petitioners didnot file a notice of appeal but instead opted to file a motion for reconsideration. According to the trialcourt, the MR only interrupted the running of the 15-day appeal period.[15] It ruled that petitioners,havingfiled their MR on the last day of the 15-day reglementary period to appeal, had only one (1) day left to filethe notice of appeal upon receipt of the notice of denial of their MR. Petitioners, however, argue thatthey were entitled under the Rules to a fresh period of 15 days from receipt of the final order orthe order dismissing their motion for reconsideration .In Quelnan andApuyan, both petitioners filed a motion for reconsideration of the decision of the trialcourt. We ruled there that they only had the remaining time of the 15-day appeal period to file thenotice of appeal. We consistently applied this rule in similar cases, [16]premised on the long-settleddoctrine that the perfection of an appeal in the manner and within the period permitted by law isnot only mandatory but also jurisdictional.[17]The rule is also founded on deep-seated considerationsof public policy and sound practice that, at risk of occasional error, the judgments and awards of courtsmust become final at some definite time fixed by law.[18]

Prior to the passage of BP 129, Rule 41, Section 3 of the 1964 Revised Rules of Court read:Sec. 3. How appeal is taken. Appeal maybe taken by serving upon the adverse party and filing with thetrial court within thirty (30) days from notice of order or judgment, a notice of appeal, an appeal bond, anda record on appeal. The time during which a motion to set aside the judgment or order or for new trial hasbeen pending shall be deducted, unless such motion fails to satisfy the requirements of Rule 37.But where such motion has been filed during office hours of the last day of the period herein provided, theappeal must be perfected within the day following that in which the party appealing received notice of thedenial of said motion.[19]

According to the foregoing provision, the appeal period previously consisted of 30 days. BP 129,

however, reduced this appeal period to 15 days. In the deliberations of the Committee on JudicialReorganization[20] that drafted BP 129, the raison d etre behind the amendment was to shorten the periodof appeal[21] and enhance the efficiency and dispensation of justice. We have since required strictobservance of this reglementary period of appeal. Seldom have we condoned late filing of notices ofappeal,[22]and only in very exceptional instances to better serve the ends of justice.In National Waterworks and Sewerage Authority and Authority v. Municipality of Libmanan ,[23] however,we declared that appeal is an essential part of our judicial system and the rules of procedure should notbe applied rigidly. This Court has on occasion advised the lower courts to be cautious about not deprivinga party of the right to appeal and that every party litigant should be afforded the amplest opportunity forthe proper and just disposition of his cause, free from the constraint of technicalities.In dela Rosa v. Court of Appeals,[24] we stated that, as a rule, periods which require litigants to do certain

acts must be followed unless, under exceptional circumstances, a delay in the filing of an appeal may beexcused on grounds of substantial justice. There, we condoned the delay incurred by the appealing partydue to strong considerations of fairness and justice.In setting aside technical infirmities and thereby giving due course to tardy appeals, we have not beenoblivious to or unmindful of the extraordinary situations that merit liberal application of the Rules. In thosesituations where technicalities were dispensed with, our decisions were not meant to undermine the forceand effectivity of the periods set by law. But we hasten to add that in those rare cases where proceduralrules were not stringently applied, there always existed a clear need to prevent the commission of a graveinjustice. Our judicial system and the courts have always tried to maintain a healthy balance between the
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strict enforcement of procedural laws and the guarantee that every litigant be given the full opportunity forthe just and proper disposition of his cause.[25]

The Supreme Court may promulgate procedural rules in all courts.[26] It has the sole prerogative to amend,repeal or even establish new rules for a more simplified and inexpensive process, and the speedydisposition of cases. In the rules governing appeals to it and to the Court of Appeals, particularly Rules42,[27] 43[28] and 45,[29] the Court allows extensions of time, based on justifiable and compelling reasons, forparties to file their appeals. These extensions may consist of 15 days or more.To standardize the appeal periods provided in the Rules and to afford litigants fair opportunity to appealtheir cases, the Court deems it practical to allow a fresh period of 15 days within which to file thenotice of appeal in the Regional Trial Court, counted from receipt of the order dismissing a motionfor a new trial or motion for reconsideration.[30]

Henceforth, this fresh period rule shall also apply to Rule 40 governing appeals from the MunicipalTrial Courts to the Regional Trial Courts; Rule 42 on petitions for review from the Regional Trial Courts tothe Court of Appeals; Rule 43 on appeals from quasi-judicial agencies[31] to the Court of Appeals and Rule45 governing appeals by certiorarito the Supreme Court.[32]The new rule aims to regiment or make theappeal period uniform, to be counted from receipt of the order denying the motion for new trial, motion forreconsideration (whether full or partial) or any final order or resolution.

We thus hold that petitioners seasonably filed theirnotice of appeal within the fresh period of 15 days,counted from July 22, 1998 (the date of receipt of notice denying their motion for reconsideration). Thispronouncement is not inconsistent with Rule 41, Section 3 of the Rules which states that the appeal shallbe taken within 15 days from notice of judgment orfinal order appealed from. The use of the disjunctiveword or signifies disassociation and independence of one thing from another. It should, as a rule, beconstrued in the sense in which it ordinarily implies. [33] Hence, the use of or in the above provisionsupposes that the notice of appeal may be filed within 15 days from the notice of judgment or within 15days from notice of the final order, which we already determined to refer to the July 1, 1998 orderdenying the motion for a new trial or reconsideration.Neither does this new rule run counter to the spirit of Section 39 of BP 129 which shortened the appealperiod from 30 days to 15 days to hasten the disposition of cases. The original period of appeal (in this

case March 3-18, 1998) remains and the requirement for strict compliance still applies. The fresh periodof 15 days becomes SIGNIFICANT ONLYwhen a partyopts to file a motion for new trial or motionfor reconsideration. In this manner, the trial court which rendered the assailed decision is given anotheropportunity to review the case and, in the process, minimize and/or rectify any error of judgment. Whilewe aim to resolve cases with dispatch and to have judgments of courts become final at some definitetime, we likewise aspire to deliver justice fairly.In this case, the new period of 15 days eradicates the confusion as to when the 15-day appeal periodshould be counted from receipt of notice of judgment (March 3, 1998) or from receipt of notice of finalorder appealed from (July 22, 1998).

To recapitulate, a party litigant may either file his NOTICE OF APPEAL within 15 days from receiptof the Regional Trial Courts decision orfile it within 15 days from receipt of the order (the final

order) denying his motion for new trial or motion for reconsideration . Obviously, the new 15-dayperiod may be availed ofonly if either motion is filed; otherwise, the decision becomes final andexecutory after the lapse of the original appeal period provided in Rule 41, Section 3.

Petitioners here filed their notice of appeal on July 27, 1998 or five days from receipt of the order denyingtheir motion for reconsideration on July 22, 1998. Hence, the notice of appeal was well within the freshappeal period of 15 days, as already discussed.[34]

We deem it unnecessary to discuss the applicability ofDenso (Philippines), Inc. v. IAC[35]since the

Court of Appeals never even referred to it in its assailed decision.
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WHEREFORE, the petition is hereby GRANTED and the assailed decision of the Court of

Appeals REVERSED andSET ASIDE. Accordingly, let the records of this case be remanded to the Courtof Appeals for further proceedings.

No costs.

SO ORDERED.

G.R. No. L-61042 April 15, 1987

HECTOR L. ONG, petitioner,vs.

MARILYN TATING AND ROBERT TATING, ET AL., respondents.

NARVASA, J.:

The issue in this case concerns the jurisdiction of an inferior Court to take cognizance of a motionimpugning the sheriff's authority to execute a final judgment in an ejectment case whichcommands payment of rentals in arrears against personalty claimed as theirs by persons formerlyresiding in the leased premises together with the evicted defendant-lessee.

An action ofdesahucio was instituted in the City Court of Quezon City by petitioner Ong againsthis lessee, Evangeline Roces. 1 This in time culminated in a judgment by the Court of First Instance(Branch XVIII) 2disposing of the case as follows:

WHEREFORE, premises considered, the judgment of the City Court is set aside andin lieu thereof judgment is rendered ordering defendant Evangeline Roces and all

persons claiming under her to vacate plaintiff's premises located at 169-D,Tolentino St., San Francisco del Monte, Quezon City; to pay rentals in arrears in thesum of P10,920.00 as of September 1978 and P260.00 a month from October 1978 untilthe premises are vacated with interest at 12% per annum; P1,000.00 as attomey's feesand the costs. 3

The decision became final and executory,no appeal having been taken therefrom; and in due course,the records of the case were remanded to the City Court.

On Ong's application, the City Court directed execution of the judgment. Accordingly, the sheriff clearedthe premises of its occupants, which included Anacleto Tating (Evangeline's stepfather and lawyer),Marilyn Tating (Anacleto's wife), and Robert Tating. 4

The sheriff also levied on certain chattels found in the place: a "Citizen" stereo set; a "Sanyo" televisionset; a "Frigidaire" refrigerator; and a "Hitachi" electric desk fan. Marilyn and Robert Tating sought toretrieve these appliances from the sheriff, alleging that the articles belonged to them and not to thelessee, Evangeline Roces. 5To this end, Robert filed with the sheriff a "Third Party Claim" datedSeptember 13, 1979 as regards the "Citizen" stereo set; and Marilyn, a similar claim with respectto the other chattels. 6 When these proved unavailing, they filed with the City Court Identical applicationsdated September 17, 1979, entitled "Urgent Motion for Suspension of Sheriff Sale and for Release ofProperties Wrongfully Levied Upon on Execution," in which they set out their respective titles to the


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goods and prayed that the execution sale thereof scheduled on September 19, 1979 be abated and that,after hearing, said goods be released to them as the true and lawful owners thereof. 7

To neutralize the Tatings' moves, and so that the execution sale might proceed as scheduled, Ong postedtwo (2) surety bonds 8 to indemnify the sheriff for any liability for damages. 9 But by Order datedSeptember 19, 1979 the City Court restrained the sale and set the Tatings' motions for hearing. 10

What Ong did was to present an "Omnibus Opposition, etc. " dated October 2, 1979, 11 contending thatthe Tatings' motions should have been filed with the Court of First Instance since it was the latter'sdecision which was being executed; and that, in any event, the Tatings' remedy was "to file an action fordamages against the indemnity bonds after the auction sale. " He also theorized that

* * Atty. Tating, and the third party claimants having stayed in the premises and havingenjoyed the same should be required to pay the back rentals, attorney's fees and sheriff'sand legal expenses (and should not) escape by avoiding paying any amount as stated inthe judgment. * * 12

Ong later filed a "Motion to Inhibit" dated January 9, 1980, which the City Court denied by Orderdated January 23, 1980. The Court also directed Ong's counsel to explain certain apparently

contumacious statements in the motion. The Order reads as follows:

O R D E R

Considering the Motion to Inhibit filed by the plaintiff, dated January 9, 1980, and theManifestation filed by the third party claimants, Marilyn Tating and Robert Tating, datedJanuary 16, 1980, this Court finds the motion without merit and hereby resolves todeny it.

Furthermore, Atty. Manuel E. Yuzon, counsel for the plaintiff, is hereby ordered to explainin writing within ten (10) days from notice hereof why he should not be cited for indirectcontempt of court for stating in his Motion to Inhibit that if this Court 'proceeds to hear andresolve the third-party claims, it is foregone conclusion that the third-party claimants willsurely win and the plaintiff will lose,' thereby casting aspersions on the integrity of thisCourt and degrading the administration of justice.

In the meantime, let the continuation of the hearing of the motion for suspension ofsheriff's sale etc. be set for February 11, 1980, at 9:00 o'clock in the morning.

SO ORDERED. 13

Ong promptly initiated proceedings to negate this Order. He filed with the Court of First Instance onFebruary 7, 1980 a petition for certiorari and prohibition, with application for preliminaryinjunction. 14 Acting thereon, the Court (Branch IX) promulgated an Order dated April 2, 1980 directingthe maintenance of the status quo and commanding that the City Court refrain "from hearing and

deciding the third party claims and the urgent motion for suspension of Sheriff's Sale, etc. untilthe resolution of the injunction * *. 15 It afterwards rendered a decision, dated December 15,1981, 16 pertinently reading as follows:

The issue in this petition boils down to this should the third-party claims be heard anddecided by the lower court.

While it is true that the respondents Marilyn and Robert Tating were not parties in theejectment case because the lease was between the petitioner and Evangeline Roces,


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they stayed with her and the decision of the appellate court covered them as it ordered"Evangeline Roces and all persons claiming under her to vacate plaintiff's premises" ...Besides, the procedure followed by said private respondents in vindicating their rightsover the four (4) levied appliances is not the one sanctioned by law for they should havefiled a separate and independent action making parties the deputy sheriff and thepetitioner and making them responsible for the execution (Santos et al., vs. Hon. Mojica,L-19618, Feb. 28, 1964).

WHEREUPON, premises considered, the petitioner Hector L. Ong is entitled to relief. Thedecision of Branch XVIII of the CFI Quezon City which is final and executory, stands.

The preliminary injunction issued on April 2, 1980 is hereby ordered permanent. 17

The Tatings appealed to the Court of Appeals by "a petition for review filed * * on March 1,1982. 18 In its decision, promulgated on June 23, 1982, after due proceedings, 19 the Court of Appealsexpressed puzzlement why the matter of the execution and related incidents were passed upon bythe lower court, when the only issue was the correctness of the City Judge's refusal to inhibit,himself. 20 It dismissed the petition, and sent the case back to the City Court for further proceedings."Said the Court:

It is a puzzle to Us why the hearing went out of bounds. Instead of determining merely the proprietyof the order of denial of the motion to inhibit, the parties and the Court of First Instance * * went intothe merits of the propriety of the execution of the decision of the City Court, the auction sale of theappliances claimed by the Tatings, the levy,the third party claim,the indemnity bond, and the motionto suspend the sale and the filling of the sheriffs bond matters which are properly only to be treatedin a separate proceeding.

From the records,We see that if at all the matter of execution of the decision ** (etc.) werementioned,it was merely to give a background to the motion to inhibit Judge Laquio, Jr. fromproceeding to take further participation in the incident of the execution ** and the incident stemmingtherefrom.

The propriety of the denial of the motion to inhibit was lost in the maze of the irrelevant facts and

incidents taken during the hearing of this case in the court below.

A thorough review of the decision of the Court of First Instance * * Branch IX, in this certiorari caseshows that the Presiding Judge * * erroneously treated the pleadings before it in Civil Case No.29245. Thus, We are constrained to set the same aside and remand the case to the City Courtpresided over by Judge Laquio, Jr. for further proceedings. Principally, We rule the denial of themotion for Judge Laquio, Jr. to inhibit himself from the ejectment case No. 28309, QuezonCity Court, was well taken. The petition assailing the order of denial which is the main issue inCivil Case No. 29245 is without merit. * * 21

Ong is now before this Court, praying for the reversal of the decision of the Court of Appeals, and theperpetual inhibition of the City Judge "from further hearing and deciding the (Tatings') third-partyclaims." 22

It will not do to dismiss the petition as the IAC did by declaring that the only issue involved is thepropriety of the City Judge's denial of the motion for his inhibition, and pronouncing the denial tobe correct. Not only is such a limitation of the issues disputed by Ong, but the resolution of the singlepoint would leave unanswered several other nagging questions. The opportunity to resolve thosequestions having been presented, the Court will do precisely that, to the end that the controversy may beexpeditiously laid to rest,

Three theories are advocated by Ong, namely:


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1. From the decision of the Court of First Instance (Branch IX) on his petition for certiorari and prohibition,the Tatings' remedy was appeal (by writ of error), not a petition for review, to the Court of Appeals.

2. The City Court lost jurisdiction to hear and determine the Tatings' third-party claims upon the filing byhim (Ong) of the bonds prescribed by Section 17, Rule 39, the purpose of which is precisely to hold thesheriff free from liability for damages for proceeding with the execution sale despite said third- party

claims.

3. Corollarily, the Tatings' remedy was to file a separate suit to recover against said bonds posted byOng, whatever damages might be suffered by them by reason of the effectuation of the execution sale. 23

Ong is correct in arguing that the mode of appeal to the Court of Appeals available to the Tatingsfrom the adverse judgment of the CFI in the action of certiorari and prohibition instituted by him ,was not by "petition for review" under Section 22 of B.P. Blg., 129 24but an ordinary appeal (by writ oferror) under Rule 41, Rules of Court and Section 39, of B.P. Blg. 129 (also, Section 20 of the InterimRules) A " PETITION FOR REVIEW " is the correct mode of appeal from a judgment rendered by aCFI (RTC) in the exercise ofappellate jurisdiction i.e., when it decides a case appealed to it from theinferior court. In such a case, the appeal is not a matter of right, its acceptance being discretionary onthe Court of Appeals, which "may give it due course only when the petition showsprima facie that the

lower court has committed an error of fact or law that will warrant a reversal or modification of the decisionor judgment sought to be reviewed." On the other hand, when a CFI (RTC) adjudicates a case in theexercise of its original jurisdiction, the correct mode of elevating the judgment to the Court ofAppeals is by ORDINARY APPEAL , or appeal by writ of error, involving merely the filing of a notice ofappeal except only if the appeal is taken in special proceedings and other cases wherein multiple appealsare allowed under the law, in which event the filing of a record on appeal is additionally required. 25 Ofcourse, when the appeal would involve PURELY QUESTIONS OF LAW or any of the other cases(except criminal cases as stated hereunder) specified in Section 5(2), Article X of the Constitution, 26itshould be taken to the Supreme Court by PETITION FOR REVIEW ON CERTIORARIin accordancewith Rules 42 and 45 of the Rules of Court. 27 However, in criminal cases in which the penalty imposedis death or life imprisonment, the appeal to the Supreme Court is by ordinary appeal on both questions offact and law. In cases where the death penalty is imposed, there is an automatic review by the SupremeCourt. (Sec. 3 of the 1985 Rules on Criminal Procedure)

The mode by which the Tatings thus brought up to the Court of Appeals the adverse judgment of the CFI i.e., by petition for review was erroneous. This aspect of the case apparently escaped the AppellateCourt's attention; it did not treat of it at all. This is however of no moment. The need of finally resolve thiscase makes this defect inconsequential. In any event, the defect has been waived, no issue concerning ithaving been raised in the proceedings before the Court of Appeals. 28

Ong's second contention that the posting by him of a bond to indemnify the sheriff for damages forproceeding with an execution sale despite the existence of third-party claims on the property levied on(pursuant to Section 17, Rule 39) caused the Trial Court to lose jurisdiction to deal with the third-partyclaimants' plea for relief against what they deemed to be an act of trespass by the sheriff is incorrect.

Certain it is that the Trial Court has plenary jurisdiction over the proceedings for the enforcement of its

judgments. It has undeniable competence to act on motions for execution (whether execution be a matterof right or discretionary upon the Court), issue and quash writs, determine if property is exempt fromexecution, or fix the value of property claimed by third persons so that a bond equal to such value may beposted by a judgment creditor to indemnify the sheriff against liability for damages, resolve questionsinvolving redemption, examine the judgment debtor and his debtors, and otherwise perform such otheracts as may be necessary or incidental to the carrying out of its decisions. It may and should exercisecontrol and supervision over the sheriff and other court officers and employees taking part in theexecution proceedings, and correct them in the event that they should err in the discharge of theirfunctions.


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Now, it is axiomatic that money judgments are enforceable only against property unquestionablybelonging to the judgment debtor. One man's goods shall not be sold for another man's debts, as thesaying goes. 29 Therefore, the sheriff acts properly only when he subjects to execution propertyundeniably belonging to the judgment debtor. But to the extent that he levies on assets of a third person,in which the judgment debtor has no interest, to that extent he acts as a trespasser, and to that extenthe is amenable to control and correction by the Court. 30

When the sheriff thus seizes property of a third person in which the judgment debtor holds no right orinterest, and so incurs in error, the supervisory power of the Court which has authorized execution maybe invoked by the third person. Upon due application by the third person, and after summaryhearing, the Court may command that the property be released from the mistaken levy andrestored to the rightful owner or possessor. What the Court can do in these instances however islimited to a determination of whether the sheriff has acted rightly or wrongly in the performance ofhis duties in the execution of the judgment, more specifically, if he has indeed taken hold of property notbelonging to the judgment debtor. The Court does not and cannot pass upon the question of title tothe property, with any character of finality. It can treat of that matter only in so far as may benecessary to decide if the Sheriff has acted correctly or not. 31The Court can require the sheriff torestore the property to the claimant's possession if warranted by the evidence . If the claimant'sproofs do not however persuade the Court of his title or right of possession thereof, the claim will ofcourse be denied.

This remedy is not that of intervention, which is dealt with in Rule 12 of the Rules of Court, and may beavailed of only before or during trial, not thereafter, and certainly not when judgment is executory. It israther simply an invocation of the Court's power of supervision and control over the actuations of itsofficers and employees to the end that it be assured that these conform to the law. 32

Independently of the recourse just indicated, and even before or without availment thereof, the personwho claims that his property has been wrongfully seized by resort to the remedy known asterceria set out in Section 17, Rule 39 of the Rules of Court, viz:

SEC. 17. Proceedings where property claimed by third person. If property levied on beclaimed by any other person than the judgment debtor or his agent, and such person

make an affidavit of his title thereto or right to the possession thereof, stating the groundsof such right or title, and serve the same upon the officer making the levy, and a copythereof upon the judgment creditor, the officer shag not be bound to keep the property,unless such judgment creditor or his agent, on demand of the officer, indemnify theofficer against such claim by a bond in a sum not greater than the value of the propertylevied on. In case of disagreement as to such value, the same shall be determined by thecourt issuing the writ of execution.

The officer is not liable for damages, for the taking or keeping of the property, to anythird-party claimant unless a claim is made by the latter and unless an action fordamages is brought by him against the officer within one hundred twenty (120) days fromthe date of the filing of the bond. But nothing herein contained shall prevent suchclaimant or any third person from vindicating his claim to the property by any proper

action.

The remedies just mentioned are without prejudice to "any proper action" that a third-partyclaimant may deem suitable, to vindicate "his claim to the property." Such a "proper action," in thecontext of Section 17 of Rule 39, has been held to refer to an action DISTINCT AND SEPARATE fromthat in which the judgment is being enforced.

Such a "proper action" is, quite obviously, entirely distinct from the explicitly described in Section 17 ofRule 39, i.e., "an action for damages ** brought (by a third-party claimant) against the officer within one


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hundred twenty (120) days from the date of the filing of the bond ** for the taking or keeping of theproperty" subject of the terceria. Quite obviously, too, this "proper action" would have for its object therecovery of the possession of the property seized by the sheriff, as well as damages resulting from theallegedly wrongful seizure and detention thereof despite the third-party claim; and it may be broughtagainst the sheriff, of course, and such other parties as may be alleged to have wrongful with the sheriff inthe supposedly wrongful execution proceedings, such as the judgment creditor himself. And such a"proper action," as above pointed out, is and should be an entirety separate and distinct action from thatin which execution has issued, if instituted by a stranger to the latter suit. 33

** (C)onstruing Section 17 of Rule 39 of the Revised Rules of Court, the rights of third-party claimant over certain properties levied upon by the sheriff to satisfy the judgmentshould not be decided in the action where the third- party claims have been presented,but in the separate action instituted by the claimants.

This is evident from the very nature of the proceedings. In Herald Publishing, supra. Weintimated that the levy by the sheriff of a property by virtue of a writ of attachment may beconsidered as made under authority of the court only when the property levied uponunquestionably belongs to the defendant. If he attaches properties other than those of thedefendant, he acts beyond the acts of his authority. Otherwise stated, the court issuing a

writ of execution is supposed to enforce its authority only over properties of the judgmentdebtor, and should a third party appear to claim the property levied upon by the sheriff,the procedure laid down by the Rules is that such claim should be the subject of aseparate and independent action.

As we explained in the Quebralcase (Quebral v. Garduno, 67 Phil., 316), since the third-party claimant is not one of the parties to the action, she could not strictly speaking,appeal from the order denying her claim, but should file a separate reivindicatory actionagainst the execution creditor or the purchaser of her property after the sale at publicauction, or a complaint for damages against the bond filed by the judgment creditor infavor of the sheriff.

We reiterated this in Potenciano v. Dineros, et al. (97 Phil. 196; Agricultural Credit

Administration v. Lasam 28 SCRA 1098) when We ruled that "such reivindicatory actionis reserved to the third-party claimant by Section 15 of Rule 39 despite disapproval of hisclaim by the court itself (Planas v. Madriga 94 Phil. 754, Lara v. Bayona, G.R. No. L-7920, decided May 10, 1955)." This rule is dictated by reasons -of convenience, as"intervention is more likely to inject confusion into the issues between the parties in thecase *** with which the third-party claimant has nothing to do and thereby retard insteadof facilitate the prompt dispatch of the controversy which is the underlying objective of therules of pleading and practice" ( Herald Publishing, supra, p. 101). Besides, interventionmay not be permitted after trial has been concluded and a final judgment rendered in thecase. 34

In such separate action, the court may issue a writ of preliminary injunction against the sheriffenjoining him from proceeding with the execution sale. 34- A

Upon the other hand, if the claim of impropriety on the part of the sheriff in the execution proceedings ismade by a party to the action, not a stranger thereto, any relief therefrom may be applied for with, andobtained from, only the executing court; and this is true even if a new party has been impleaded in theSuit. 35

In any case, Ong's claim that the filing of the judgment creditor's bond operated to divest the Court ofjurisdiction to control and supervise the conduct of the execution sale must be rejected. That bond hadabsolutely no effect on the Court's jurisdiction. It was merely "equivalent to the personal interference of


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the indemnitor and his bondsmen in the course of the proceeding by directing or requesting the sheriff tohold and sell the goods as if they were the property of the defendants in attachment. In doing this they(the indemnitor and his bondsmen) assume the direction and control of the sheriff's future action so far asit constitutes a trespass; and they become to that extent the principals and he their agent in thetransaction. This makes them responsible for the continuance of the wrongful possession and for the saleand conversion of the goods; in other words, for all the real damages which plaintiff sustains (Love Joy vs.Murray, 70 U.S. 129). 36

Ong's third theory that the Tatings' remedy in the event of the denial of their application for relief by theTrial Court is a separate action for recovery of possession of the goods by them claimed plus damagesfor wrongful detention is correct and should be sustained, in line with the doctrine in Bayer,supra, 37 and the other cases which followed it. 38

As regards the matter of the inhibition of the City Court Judge, the incident has been correctly determinedby the Court of Appeals. No proper ground exists to disqualify His Honor from continuing to act in CivilCase No. 28309.

One last issue remains, and that is, whether the Tatings, who were living with Evangeline Roces in thepremises lease by the latter from Ong, are hable for the payment of rentals in arrears jointly or solidarily

with said Evangeline Roces. They are not. They were never impleaded as parties and never served withsummons in the suit for ejectment initiated by Ong against Evangeline Roces. The Court therefore neveracquired jurisdiction over them. And while the judgment against Evangeline Roces, in so far as it decreesher ouster from the leased premises, may be enforced not only against her but also against "any personor persons claiming under" her39that judgment, in so far as it directs payment of money by way ofarrearages in rents, is not binding on the Tatings and definitely not enforceable against them.

WHEREFORE, the petition is dismissed for lack of merit. The case shall be remanded to the MetropolitanTrial Court at Quezon City which shall forthwith resolve the Tatings' pending motions in Civil Case No.28309, consistently with the principles herein set forth. Costs against petitioner.

SO ORDERED.

Yap (Chairman), Melencio-Herrera, Cruz, Feliciano, Gancayco and Sarmiento, JJ., concur.

G.R. No. L-25140 July 15, 1980

UNIVERSAL MOTORS CORPORATION, plaintiff-appellant,vs.

MARIANO D. VELASCO, ET AL., defendants-appellees.

ABAD SANTOS, J.:

This is an appeal on a question of law from a decision of the Court of First Instance of Manila. Since theappeal was perfected in 1965 before the enactment of R.A. No. 5440 which took effect on September 7,

1968, a record on appeal was submitted. The plaintiff-appellant filed a brief but defendants-appelleeshaving failed to file their brief within the reglementary period the case was submitted for decision withouttheir brief.

The uncontroverted facts are:

Mariano T. Velasco bought from Universal Motors Corporation a Mercedes-Benz truck on installmentbasis. To the balance of the purchase price of P35,243.68 he executed a promissory note and executed achattel mortgage over the truck. He defaulted in his payments and as a consequence the Vendor asked


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him to surrender the truck in accordance will the term and conditions of the chattel mortgage contract. liefailed and refused to surrender the truck whereupon the vendor instituted an action in the court a quo torecover the truck preparatory to foreclosure of the chattel mortgage. As an alternative, in case the truckcould not be recovered, the plaintiff asked for the payment, among other things, of its vs in the sum ofP23,763.09 plus legal interest. By virtue of a writ of replevin issued by said court, the seller was able tore-possess the truck.

Going back to the action which was commenced on December 29, 1964, the defendants failed to answerthe complaint within the reglementary period and were declare in default. On April 26, 1965, defendantVelasco filed a motion to lift the default order which was granted. He did not, however, file an answer. Inlieu thereof the parties, on June 15, 1965, submitted the following:

STIPULATION OF FACTS

COME NOW the parties in the above-entitled case, through their respective counsel andbefore this Honorable Court respectfully stipulate:

1. That defendant was, at the time of the filing of the complaint indebted to plaintiff in theprincipal sum of P23,763.09, which amount is covered by a promissory note secured by a

Chattel Mo (Annex 'A' of the complaint) on a motor vehicle described in paragraph 2 ofthe complaint

2. That notwithstanding defendant being in default of this aforesaid mentioned sum andnotwithstanding demands made by plain tiff on December 11, 1964, defendant failed tosurrender the chattel described in paragraph 2 of the complaint thereby preventingplaintiff from f on the same;

3. That plaintiff is entitled to the possession of the chattel bed in paragraph 2 of thecomplaint and was constrained to institute the t action for recovery of possession as apreliminary stop to forced.

4. That in the se and execution of the writ of seizure issued in this cage and in g thepossession of the vehicle subjected of the complaint plaintiff the occured the followingexpenses:

a) Premium on replevin bond P971.47

b) Sheriff's expenses 300.00

c) Costs of suit 132.00

d) Mechanic's lien paid by plaintiff in defendant defendant's behalf to G. Cruz Truck BodyBuilder & Welding Shop 3,000.00 P 4,403.47

5. That on May 21, 1965, plaintiff received from the Workmen's Insurance Company, Inc.,the sum of P1,870.99 in full settlement of the damages sustained by the truck subjectmatter hereof when it figured in an accident on December 5, 1964, totally immobile themotor vehicle

6. That subsequent to said event, defect failed to deliver the truck m question despitedemands made by plaintiff,


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7. That the following stipulation is found in paragraph 14 of the Chattel Mortgage (Annex'A') of the complaint the genuineness and due execution of which is hereby admitted bythe defendant:

14. That in case of non-compliance or violation; or default by the mortgagor, and forcedor any other legal remedy is undertaken by the mortgagee to compel pa of compensation

in the concept of attorney's fees and cost payment of his obligation the mortgagee shallbe entitled to a reasonable election in a sum equal to twenty five percent (25%) of thetotal amount of the indebtedness then outstanding and unpaid by the mortgagor, but inno case less than Fifty Pesos (P50.00) as well as payment of the premium on the repbond and was of suit in case of court action, which amounts said agree to pay and forsuch payment a first Em is hereby in favor of the mortgagee upon the propertymortgaged.

8. That the following stipulation is also found in paragraph 10 of the Chattel Mortgage(Annex 'A' of the complaint):

10. The mortgagor further agrees that in cm non-compliance with, or violation of, any ofthe of the mortgage, and/or in case of default in the payment of the principle municipal

sum or any part thereof or interest as and when the mm shad become due and payable,the mo property shall be delivered on demand to the mortgagee in Manila of all charges,and should be mortgage fail or refuse to deliver peacefully the said Property as abovestated, the mortgagee and/or its representative or the S is hereby given full andirevocable power and authority to take possession of the said property, wherever it maybe found and have the same brought in the City of Manila the HEREBY RATIFYING ANDCONFIRMING all that said mortgagee and/or its representative and/or the Sheriff shalllawfully do or cause to be done under and by virtue of these presents and the expensesof locating and bringing property to the City of Manila shall the account of the mortgegeeand shall form part of the sum by this mortgage ...

9. That plaintiff waives the attorney's fees herein stipulated, but not the reasonableamount that may be adjudged by this Honorable Court, the premium of the replevin bond,

sheriff's expenses, costs of suit and the mechanic's lien mentioned in paragraph 4 herein.

10. That plaintiff admits that it is not entitled to deficiency judgment on the principal sumof P23,763.09 once it has foreclosed on the mortgage, but only to a reasonable amountof attorney's fees and those amounts mentioned in paragraph 4 herein, less the amountof P1,870.99 paid by the insurance company.

Acting on the stipulation, the court a quo rendered a decision part of which reads as follows:

The only issue is whether the plaintiff is entitled to recover the expenses mentionedin paragraph 4 and attorney's fees. It undoubtedly has a right to repayment for thepremium on the replevin bond it filed, the sheriff's fees, costs of this suit, and areasonable sum as attorney's fees. These are expenses rendered necessary by the

defendant's refusal to surrender voluntarily possession of the vehicle, in violation of hisagreement with the plaintiff. But the mechanic's lien the plaintiff satisfied is notrecoverable in this action. Nothing is said about it in the complaint and it is not one of thereliefs sought therein.

It must be understood, however, that all sums adjudged in the plaintiff's favor may beenforced only against the proceeds of the vehicle mortgaged in accordance with thesettled rule that in an proceedings for foreclosure of mortgages executed on chattelswhich have been sold on the installment plan, the mortgagee is limited to the property


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included in the mortgage. Macondray & Co. vs. Tan, 38, O.G. 2606; Macondray & Co. vs.Ruiz, 38, O.G. 2168; and Bachrach Motor Co. vs. Milan, 61 Phil. 409.

WHEREFORE, judgment is hereby rendered declaring that the plaintiff is entitled to thepossession of the vehicle described in the complaint and ordering the defendant MarianoVelasco to pay the plaintiff P1,403.47 as well as the additional sum of P1,500.00 as

attorney's fees to be satisfied out of the proceeds of the sale vehicle.

The plaintiff filed a motion requesting that the Court " reconsider its decision dated June 28, 1965, byrequiring the defendant to pay plaintiff directly the sums of P1,403.47 and P500.00 instead of o thesatisfaction of the same from the p of the auction sale ." When the motion was domed the plaintiffappealed as aforementioned assuming only one , namely "The lower court erred in that the sumsadjudged in favor of the plaintiff are to be satisfied only vehicle.

In stipulating that the sums adjudged P971.41, premium on replevin bond, P300.00, sheriff's P132.00,costs of the suit total P1,403.47; and P500.00, attorney's fees the lower court relied on the provisionsof Article 1484 of the Civil Code which insofar as relevant reads as follows:

Art 1484. In a contract of sale of property the price of which is payable in to, the vs may

any of the following

xxx xxx xxx

(3) Foreclose the chattel mortgage on the thing sold if one has been constituted, shouldthe vendee's failure to pay cover two or more installment In this case, he shag have nofurther action against the purchase to recover any unpaid of the balance of the price Anyagreement to the contrary shall be void.

The third paragraph of Art. 1484 is inapplicable to the cam at bar. First, as the plaintiff has correctlypointed out the action instituted in the court a quo was not foreclosure at the chattel/mortgage but for thereplevin; and second, the amounts adjudged in favor of the plaintiff were not part ofthe unpaid balance ofthe price" or in the concept of a deficiency judgment but were for expenses of the suit.

WHEREFORE, the judgment appealed from is modified by ordering the defendant-appellee Mariano D.Velasco to pay the amount adjudged m favor of the plaintiff-appellant of having the same satisfied out ofthe proceeds of the auction sale on the motor vehicle the defendant-appellee.

SO ORDERED.

Concepcion, Jr., and De Castro, JJ., concur.

G.R. No. L-45114 October 26, 1987

APOLONIO SUMBINCO, petitioner,vs.COURT OF APPEALS, et al., respondents.

No. L-45192 October 26, 1987

JEPTE DEMERIN et al., petitioners,vs.

COURT OF APPEALS, et al., respondents.


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NARVASA, J.:

Jepte Demerin Rogelio Argel, Demetrio Jongco and Alfonso Demerin filed with the Court of AgrarianRelations a complaint against Apolonio Sumbingco, seeking their reinstatement as tenants on the latter

two (2) haciendas and the payment to them of damages for their ouster therefrom. According to them,prior to the purchase by Sumbingco of the haciendas in question from Ricardo Nolan, they were alreadytenants of the latter, planting the areas occupied by them 'with rice: that even after Sumbingco acquiredthe land they continued as tenants thereon by permission of Sumbingco's administrator; that Sumibingcocaused the planting of their landholdings to citrus little by little, thus progressively depriving them ofpossession thereof until the time came when their landholdings were completely planted to citrus and theywere effectively, divested of any area to cultivate: that in view thereof, they asked Sumbingco tocompensate them for the loss of their tenacy rights but although the former promised to do so, he neverdid; that instead, in 1964, Sumbingco told them to vacate their landholdings.

The court of Agrarian Relations dismissed their complaint. It declined to give credence to theevidence proferred by them to substantiate their claim of being Sumbingco's tenants , declaringthat evidence to be both implausible and tainted by material trial inconsistencies.

On appeal, however, the court of Appeals reversed the judgment of the Court of Agrarian Relation .It ruled that in the light of the admission that Jepte Demerio and his co-plaintiffs were tenants in at leastone of the haciendas prior to the sale to Sumbingco, it was difficult to believe the latter's protestation thathe had never seen them; at the very least, Sumbingco's overseer should have apprised him of theirpresence on the land; hence, it was safe to assume that Demerin and his companions continued astenants on the land under the new owner. The Appellate Court accordingly ordered the payment toDemerin, et al. of damages by Sumbingco but not their reinstatement on the ground that thelandholdings had already been completely planted to citrus.

Both Sumbingco and the Demerin group have taken an appeal by certiorarito this Court, the former'sbeing docketed as G.R. No. 45114 and the latter's, G.R. No. 45192.

It is axiomatic that appeals from the Court of Appeals are not a matter of right but of sound judicialdiscretion on the part of this Court, and will be granted only when there are special and important reasonstherefor. 1 In other words, appeals from the Court of Appeals are not entertained as a matter of routine;they may be rejected out of hand in the exercise of this Court's sound judicial discretion. The prescribedmode of appeal is by certiorari, 2limited only to issues or questions of law which must be distinctly set forthin the petition for review on certiorari. 3The findings of fact of the Appellate Court are conclusive even onthis Court, subject only to a few well defined exceptions (none of which is present in the instant case). 4 Itis incumbent on the appellant to make out a sufficiently strong demonstration of serious error on the partof the Court of Appeals, and adduced special and important reasons to justlfy the exercise by this Court ofits discretionary appellate jurisdiction, 5 failing in which this Court will decline to wield its invoked power ofreview and will dismiss the appeal on the ground that it is without merit, or is prosecuted manifestly fordelay or the questions raised are too unsubstantial to require consideration. 6

A thoroughgoing review of the record discloses that contrary to this Court's first impression, which initiallyled it to give due course to both petitions in its case, there is no special and important reason to justify thisCourt's exercise of its appellate jurisdiction. The issues raised are principally factual, and such of thoseissues as may be characterized as legal are not sufficiently weighty or substantial to warrantconsideration and review.

WHERFFORE, the petitions in G.R. No. 45114 and G.R. No. 45192 are DENIED, and the decision of theCourt of Appeals sought to be thereby reviewed is affirmed. This decision is immediately, executory, andno motion for extension of time to file a motion for reconsideration will be entertained.


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Teehankee, C.J., Cruz, Paras * and Gancayco, JJ., concur.

G.R. No. 111837 October 24, 1995

NEW YORK MARINE MANAGERS, INC., petitioner,vs.

COURT OF APPEALS and VLASONS SHIPPPING INC., respondents.

BELLOSILLO, J.:

NEW YORK MARINE MANAGERS, INC., a foreign corporation organized under the laws of the UnitedStates, seeks in this special civil action forcertiorariunder Rule 65 of the Rules of Court 1 the annulmentof the decision of the Court of Appeals which reversed the ruling of the trial court denying the motion todismiss of private respondent Vlasons Shipping Company, Inc.

On 25 July 1990 American Natural Soda Ash Corporation (ANSAC) loaded in Portland, U.S.A., ashipment of soda ash on board the vessel " MS Abu Hanna" for delivery to Manila. The supplier/shipperinsured the shipment with petitioner. Upon arrival in Manila the shipment was unloaded and transferred to

the vessel "MV Biyayang Ginto" owned by private respondent. Since the shipment allegedly sustainedwettage, hardening and contamination, it was rejected as total loss by the consignees. When the suppliersought to recover the value of the cargo loss from petitioner the latter paid the claim in the amount ofUS$58,323.96.

On 20 November 1991 petitioner as subrogee filed with the Regional Trial Court of Manila acomplaint for damages against private respondentalleging among others that

. . . 1.01. Plaintiff is a non-life foreign insurance corporation organized under the laws ofthe State of New York with offices at 123 William Street, New York, N.Y. 10038 andengaged in an isolated transaction in this case; defendant is a local domestic corporationorganized under Philippine law with offices at Zobel Street, Isla de Provisor, Paco, MetroManila where it may be served with summons and other court processes . . . . 2

On 24 January 1992 private respondent filed a motion to dismiss the complaint alleging that: (a) Thecomplaint was filed by counsel who had no authority to sue for plaintiff; (b) The complaint stated no causeof action or without a cause of action as (a) there was no privity of contract between plaintiff anddefendant; (b) the risks which allegedly caused damages on the goods were not covered by the insuranceissued by plaintiff, and (c) the charter agreement between the consignee, ALCHEMCO PHILIPPINES,INC., and private respondent absolved the latter from all kinds of claim whatsoever; (3) The claim ofplaintiff was already extinguished, waived, abandoned and/or had prescribed; and, (4) Plaintiff had nolegal capacity to sue.

On 5 February 1992 petitioner opposed the motion to dismiss. On 10 April 1992 the trial court denied themotion. On 18 August 1992 the motion to reconsider the denial was also denied. The trial court ruled thatsince petitioner alleged in its complaint that it was suing on an isolated transaction the qualifying

circumstance of plaintiff's capacity to sue as an essential element has been properly pleaded. The trialcourt also held that the grounds relied upon by private respondent in its motion to dismiss were matters ofdefense.

On 28 September 1992 private respondent filed a petition forcertiorari and prohibition with theCourt of Appeals alleging that the trial court gravely abused its discretion in issuing the orders of10 April 1992 and 18 August 1992 which amounted to lack or excess of jurisdiction.


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On 29 July 1993 the appellate court granted the petition after finding the assailed orders to bepatently erroneous. 3 While it found the allegation in the complaint that plaintiff was a non-life foreigninsurance corporation engaged in an isolated transaction to be a sufficient averment, it nevertheless heldthe complaint to be fatally defective for failure to allege the duly authorized representative or residentagent of petitioner in the Philippines. Thus it enjoined the trial court from further proceeding exceptto dismiss the case with prejudice.

This petition alleges that the Court of Appeals acted whimsically, capriciously and arbitrarilyamounting to lack or excess of jurisdiction in deciding that petitioner's complaint was fatallydefective for failing to allege its duly authorized representative or resident agent in thePhilippines. Petitioner argues that there is no law, substantive or procedural, that requires a foreigncorporation engaged only in an isolated transaction to appoint a duly authorized representative or aresident agent in the Philippines before it can sue locally.

The proper remedy available to petitioner from a decision of the Court of Appeals is a petition forreview on certiorari under Rule 45 of the Rules of Court, not a petition for certiorari under Rule 65of the Rules of Court. Mere errors of judgment cannot be the proper subject of a special civil actionforcertiorari. Where the issue or question involved affects the wisdom or legal soundness of thedecision not the jurisdiction of the court to render said decision the same is beyond the

province of a special civil action forcertiorari. Erroneous findings and conclusions do not render theappellate court vulnerable to the corrective writ ofcertiorari. For where the court has jurisdiction over thecase, even if its findings are not correct, they would, at most, constitute errors of law and not abuse ofdiscretion correctible by certiorari. 4

But even if we treat the instant petition as one for review on certiorarithe same must still fail. The issueon whether a foreign corporation can seek the aid of Philippine courts for relief recoils to thebasic question of whether it is doing business in the Philippines or has merely entered into anisolated transaction. This Court has held in a long line of cases that a foreign corporation not engagedin business in the Philippines may exercise the right to file an action in Philippine courts for an isolatedtransaction. 5 However, in Commissioner of Customs v. K.M.K. Gani et a1., 6citing Atlantic MutualInsurance Company v. Cebu Stevedoring, Inc.,7 we ruled that to say merely that a foreign corporation notdoing business in the Philippines does not need a license in order to sue in our courts does not

completely resolve the issue. When the allegations in the complaint have a bearing on the plaintiff'scapacity to sue and merely state that the plaintiff is a foreign corporation existing under the laws of theUnited States, such averment conjures two alternative possibilities: either the corporation is engaged inbusiness in the Philippines, or it is not so engaged. In the first, the corporation must have been dulylicensed in order to maintain the suit; in the second, and the transaction sued upon is singular andisolated, no such license is required. In either case, compliance with the requirement of license, or thefact that the suing corporation is exempt therefrom, as the case may be, cannot be inferred from the merefact that the party suing is a foreign corporation. The qualifying circumstance being an essential partof the plaintiff's capacity to sue must be affirmatively pleaded. Hence, the ultimate fact that aforeign corporation is not doing business in the Philippines must first be disclosed for it to beallowed to sue in Philippine courts under the isolated transaction rule. 8 Failing in this requirement,the complaint filed by petitioner with the trial court, it must be said, fails to show its legal capacity to sue.

Moreover, petitioner's complaint is fatally defective for failing to allege its duly authorized representativeor resident agent in this jurisdiction. The pleadings filed by counsel for petitioner do not suffice. True,a lawyer is generally presumed to be properly authorized to represent any cause in which heappears, and no written power of attorney is required to authorize him to appear in court for hisclient. But this presumption is disputable. Where said authority has been challenged or attacked bythe adverse party the lawyer is required to show proof of such authority or representation in orderto bind his client. The requirement of the production of authority is essential because the client will bebound by his acquiescence resulting from his knowledge that he was being represented by saidattorney. 9 In the instant case, the extent of authority of counsel for petitioner has been expressly and


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continuously assailed but he has failed to show competent proof that he was indeed duly authorized torepresent petitioner.

WHEREFORE, the petition is DENIED. The assailed decision of the Court of Appeals dated 29 July 1993is AFFIRMED. Costs against petitioner.

SO ORDERED.

Padilla, Davide, Jr., Kapunan and Hermosisima, Jr., JJ., concur.

[G.R. No. 117499. February 9, 1996]

SPOUSES VICTOR WARLITO V. YBAEZ and VIRGINIA A. YBAEZ, represented by their attorney-in-fact, FORTUNATO V. YBAEZ,petitioners, vs. COURT OF APPEALS; REGIONAL TRIAL

COURT OF RIZAL, BR. NO. 154; METROPOLITAN TRIAL COURT OF PASIG, BR. NO. 72;and SPOUSES AVELINO P. IFURUNG and VIRGINIA F. IFURUNG, respondents.

D E C I S I O N

FRANCISCO, J.:

This is the factual background.

In December 1984, petitioners spouses Victor Warlito V. Ybaez and Virginia A. Ybaez, asvendors, entered into a Deed of Sale With Assumption of Mortgage and With Right of Purchase over amortgaged 400 sq. m. parcel of land in favor of private respondents spouses Avelino P. Ifurung and

Virginia F. Ifurung, as vendees. The deed of sale has, among others, the following salient terms: (1)private respondents shall pay the sum of P118,000.00 to the petitioners and assume the obligationsunder the Deed of Mortgage of the subject property with the Development Bank of the Philippines (DBP);(2) petitioners shall have the right to repurchase the property within three months from the date of thesale; (3) failure on the part of petitioners to repurchase within the agreed period will cause the transfer ofthe property to private respondents without reservation, and petitioners will vacate the subject propertyand surrender possession thereof in favor of private respondents. [1] To enable the private respondents topay the monthly amortizations to the DBP, petitioners executed a power of attorney for the purpose,which was subsequently revoked by them.[2]

The agreed three-month period expired without petitioners exercising their right to repurchase thesubject property. Private respondents, through counsel, demanded that petitioners surrender thepossession of the subject property and vacate the premises in accordance with the deed of sale, only tobe unheeded. Thus, in 1992, private respondents filed an ejectment suit against petitioners before theMetropolitan Trial Court (MTC) docketed as Civil Case No. 2751. Summons were issued and served bysubstituted service thru Engr. and Mrs. Nomer Ybaez (brother of Mr. Victor Warlito V. Ibalez [sic]) [3]. Asa result of petitioners failure to file an answer, the MTC, in accordance with Section 6 of the RevisedRules on Summary Procedure, motu propio rendered judgment in favor of private respondents orderingpetitioners to deliver possession and vacate the premises in question [and] to pay x x x the amount[s] ofP5,000.00 for and as attorneys fees, x x x P309,000.00 as reasonable rent at P3,000.00 per monthstarting March, 1984 until September 1992, x x x [and] to pay the costs. [4]
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Petitioners appealed before the Regional Trial Court (RTC) of Pasig, Branch 154, docketed as SCANo. 253, and premised the same on the alleged lack of valid service of summons over theirpersons. They asserted that service of summons to Engr. and Mrs. Nomer Ybaez is improper andinvalid since petitioners, as early as 1988, have left for abroad, although it is uncontroverted that the latterspouses (Engr. and Mrs Nomer Ybaez) were found residing at petitioners last known address. Theappeal did not prosper. Finding the substituted service of summons proper and valid, the RTC affirmedthe MTC decision, but modified the amount of reasonable rentals to P3,000.00 a monthbeginning September 13, 1991 with legal interest of 6% per annum until defendants [petitioners herein]actually vacate the premises.[5]Petitioners thereafter filed a notice of appeal signifying their intention toappeal the judgment to the Court of Appeals which was denied due course by the RTC on the ground thatit is not the proper remedy[6]- the correct recourse being the filing of a petition for review.[7]On March 31,1993, petitioners filed a motion for new trial before the RTC. In an Order dated March 11, 1994, the RTCdenied the motion for having been filed beyond the reglementary period, among others. [8]With the denialof private respondents motion and the decision having attained finality, the RTC in SCA No. 253 issued awrit of execution dated March 22, 1994, and subsequently caused the entry of the judgment through anOrder dated September 1, 1994.

In a bid to nullify the deed of sale, petitioners commenced an action for Cancellation of Deed of SaleWith Assumption of Mortgage and With Right of Repurchase With Damages, before RTCBranch 156, docketed as Civil Case No. 64437. [9] On September 16, 1994, RTC Branch 156dismissed for

lack of merit petitioners complaint for cancellation of the deed of sale. This dismissal is now pendingappeal before the Court of Appeals.

Apparently, in a desperate move, on May 2, 1994, petitioners filed another action - a petition forannulment of judgment of the RTC in SCA No. 253 before respondent Court of Appeals ,[10] now thesubject of this petition. Petitioners assailed the validity of the substituted service of summons over theirpersons in the MTC ejectment case, an issue well settled in their appeal before the RTC. Likewise,petitioners attacked the RTC jurisdiction to modify and affirm on appeal the MTC decision and furthercontended that private respondents obtained the judgment by default against the petitioners by means ofextrinsic fraud[11]Respondent court reversed the RTC in so far as the validity of the substituted service ofsummons is concerned and ruled that there was an improper substituted service of summons uponpetitioners. However, respondent court stressed that the RTCs decision is not void since, by asking foraffirmative relief through their appeal and motion for new trial before the RTC, petitioners were effectivelybarred from questioning the validity of the substituted service of summons, as well as the RTCs

jurisdiction over their persons. On the issue of extrinsic fraud, respondent court ruled that there was noextrinsic fraud to warrant the annulment of the MTC and RTC judgments. Dissatisfied, but without filing amotion for reconsideration for no apparent reason, petitioners filed the instant petition stressing that t]hisis a petition for certiorari, both under Rule 65and Rule 45,Rules of Court[12]raising substantially thefollowing issues: (1) whether or not the SUBSTITUTED SERVICE OF SUMMONS over the persons ofthe petitioners in the ejectment case was valid to vest the MTC jurisdiction over their persons,and (2)whether or not the judgments of the MTC in the ejectment suit and of the RTC on appealwere obtained by means of extrinsic fraud to warrant their nullification. [13]

At the outset, we note that petitioners immediately filed this petition without even filing a motion forreconsideration of the assailed decision thereby depriving respondent court of the opportunity to correct atthe first instance an error which it may have committed. We see no cogent reason and none waspersuasively presented to excuse petitioners from their failure to file a motion for reconsideration. Alsoglaring is the ambivalent, if not irresolute, posture taken by the petitioners by categorizing this petition tobe both under Rule 65 and Rule 45, Rules of Court[14]in an attempt, apparently, to evade the dismissalof the petition based on a wrong mode of appeal in accordance with Circular No. 2-90 issued on March 9,1990. The court cannot tolerate this practice much less the seeming ignorance of the law onappeals. This petition cannot be subsumed simultaneously under Rule 45 and Rule 65 of theRules of Court, and neither may petitioners delegate upon the court the task of determining underwhich rule the petition should fall. Under Circular No. 2-90, wrong or inappropriate mode of appeal, asin this case, merits an outright dismissal. In fact, paragraph 4 (e) of the circular specifically warnslitigants counsels by providing the following:
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Duty of counsel. - It is therefore incumbent upon every attorney who would seek review of a judgment ororder promulgated against his client to make sure of the nature of the errors he proposes to assign,whether these be of fact or law; then upon such basis to ascertain carefully which Court has appellate

jurisdiction; and finally, to follow scrupulously the requisites for appeal prescribed by law, ever aware thatany error or imprecision in compliance may well be fatal to his clients cause.

The disposition of this case could have stopped here without further ado, but nevertheless we will brieflydeal with the assigned issues for while the respondent court correctly dismissed the action for annulmentof judgment, its reversal of the RTC ruling on the issue of substituted service of summons is misplaced.

On the first issue, we feel that respondent court acted inadvertently when it set aside the RTC rulingrelative to the validity of the substituted service of summons over the persons of the petitioners in theMTC level. We must not lose sight of the fact that what was filed before respondent court is an action toannul the RTC judgment and not a petition for review. Annulment of judgment may either be based on theground that a judgment is void for want of jurisdiction [15]or that the judgment was obtained by extrinsicfraud.[16]There is nothing in the records that could cogently show that the RTC lacked jurisdiction. Chiefly,Section 22 of B.P. Blg. 129, otherwise known as the Judiciary Reorganization Act of 1980, vests upon theRTC the exercise of an appellate jurisdiction over all cases decided by the Metropolitan Trial Courts,Municipal Trial Courts, and Municipal Circuit Trial Courts in their respective territorial

jurisdictions.[17]Clearly then, when the RTC took cognizance of petitioners appeal from the adverse

decision of the MTC in the ejectment suit, it (RTC) was unquestionably exercising its appellate jurisdictionas mandated by law. Perforce, its decision may not be annulled on the basis of lack of jurisdiction as ithas, beyond cavil, jurisdiction to decide the appeal.

Corollarily, it is inappropriate for respondent court to reverse the RTC ruling that there was properand valid substituted service of summons over the persons of the petitioners. Petitioners properlyassigned this issue and, in fact, it was exhaustively argued in their appeal, albeit without success. Theysubsequently failed to seasonably question the soundness of the RTC ruling before respondent court viaa petition for review. As it stands, therefore, the ruling of the RTC that substituted service of summonswas validly effected has long acquired finality. Raising this long settled issue in the annulment case couldvery well be petitioners device and technique to acquire a fresh opportunity to assail this ruling, a chancethey already lost because of their failure to seasonably file a petition for review. This scheme is highlyirregular and may as well constitute misuse of court processes. [18]In addition, it stultifies and rendersasunder the principle, well embedded in our jurisprudence, that a judgment properly rendered by a courtvested with jurisdiction. like the RTC. and which has acquired finality becomes immutable andunalterable, hence, may no longer be modified in any respect except only to correct clerical errors ormistakes.[19] Judgments of courts become final at some definite time fixed by law and that parties, like thepetitioners, should not be permitted to litigate the same issue/s over again.

Moreover, a party cannot, by varying the form of action, or adopting a different method of presentinghis case, escape the effect of a valid judgment. Section 49 (b) and (c), Rule 39 of the Rules of Courtstates:

SEC. 49. Effect of judgments. - The effect of a judgment or final order rendered by a court or judge ofthe Philippines, having jurisdiction to pronounce the judgment or order, may be as follows:

xxx xxx xxx

(b) In other cases the judgment or order is, with respect to the matter directly adjudged or as to any other matter thatcould have been raised in relation thereto, conclusive between the parties and their successors-in-interest by titlesubsequent to the commencement of the action or special proceeding, litigating for the same thing and under thesame title and in the same capacity;

(c) In any other litigation between the same parties or their successors-in-interest, that only is deemed to have beenadjudged in a former judgment which appears upon its face to have been so adjudged, or which was actually andnecessarily included therein or necessary thereto.
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