October 2010 Philippine Supreme Court Decisions on Remedial Law (Part II)

Certiorari; improper remedy.  A party desiring to appeal by certiorari from a judgment, final order, or resolution of the CA, as in this case, may file before this Court a verified petition for review on certiorari under Rule 45 of the Rules of Civil Procedure within 15 days from notice of the judgment, final order, or resolution appealed from. Petitioners, instead of a petition for review on certiorari under Rule 45, filed with this Court the instant petition for certiorari under Rule 65, an improper remedy. By availing of a wrong or inappropriate mode of appeal, the petition merits outright dismissal.  Esmeraldo C. Romullo, et al. v.. Samahang Magkakapitbahay ng Bayanihan Compound Homeowners Association, Inc. represented by its President, Paquito Quitalig, G.R. No. 180687, October 6, 2010

Certiorari; not available to set aside denial of motion to dismiss in absence of grave abuse of discretion.  An order denying a motion to dismiss is an interlocutory order which neither terminates nor finally disposes of a case as it leaves something to be done by the court before the case is finally decided on the merits. As such, the general rule is that the denial of a motion to dismiss cannot be questioned in a special civil action for certiorari which is a remedy designed to correct errors of jurisdiction and not errors of judgment. To justify the grant of the extraordinary remedy of certiorari, the denial of the motion to dismiss must have been tainted with grave abuse of discretion. By “grave abuse of discretion” is meant such capricious and whimsical exercise of judgment that is equivalent to lack of jurisdiction. The abuse of discretion must be grave as where the power is exercised in an arbitrary or despotic manner by reason of passion or personal hostility, and must be so patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform the duty enjoined by or to act all in contemplation of law. In the instant case, Global did not properly substantiate its claim of arbitrariness on the part of the trial court judge that issued the assailed orders denying the motion to dismiss. In a petition for certiorari, absent such showing of arbitrariness, capriciousness, or ill motive in the disposition of the trial judge in the case, we are constrained to uphold the court’s ruling, especially because its decision was upheld by the CA.  Global Business Holdings, Inc. vs. Surecomp Software B.V., [G.R. No. 173463. October 13, 2010]

Certiorari; period to file.  The petition before the CA was filed out of time. A perusal of the allegations in the subject petition reveals that though it sought the nullification of the February 2, 2004 Decision of the RTC, what it questioned was the RTC’s resolve to render a judgment before trial pursuant to Section 4, Rule 4 of the Interim Rules of Procedure for Intra-Corporate Controversies.  Said section provides,

Sec. 4. Judgment before pre-trial. – If, after submission of the pre-trial briefs, the court determines that, upon consideration of the pleadings, the affidavits and other evidence submitted by the parties, a judgment may be rendered, the court may order the parties to file simultaneously their respective memoranda within a non-extendible period of twenty (20) days from receipt of the order. Thereafter, the court shall render judgment, either full or otherwise, not later than ninety (90) days from the expiration of the period to file the memoranda.

As correctly pointed out by the Farmix Group, it is very clear that the issues raised in the subject petition pertained to previous orders of the RTC – the November 12 and December 3, 2003 Orders – submitting the case for decision.

The November 12, 2003 Order was received by WINCORP on November 13, 2003. It then filed a Manifestation and Motion adopting the UOB Group’s motion for reconsideration of said order and even raised additional arguments. Thereafter, the RTC issued the December 3, 2003 Order denying UOB Group’s motion for reconsideration but there was no mention of WINCORP’s manifestation and motion.

Rule 1 of the Interim Rules of Procedure for Intra-Corporate Controversies specifically prohibits the filing of motions for reconsideration, to wit:

Sec. 8. Prohibited pleadings. – The following pleadings are prohibited:

(1) Motion to dismiss;

(2) Motion for a bill of particulars;

(3) Motion for new trial, or for reconsideration of judgment or order, or for re-opening of trial;

(4) Motion for extension of time to file pleadings, affidavits or any other paper, except those filed due to clearly compelling reasons. Such motion must be verified and under oath; and

(5) Motion for postponement and other motions of similar intent, except those filed due to clearly compelling reasons. Such motion must be verified and under oath. (Emphasis and underscoring supplied.)

With the above proscription, the RTC in the first place should not have issued the December 3, 2003 Order denying the UOB Group’s motion for reconsideration, which WINCORP adopted. The remedy of an aggrieved party like WINCORP is to file a petition for certiorari within sixty (60) days from receipt of the assailed order and not to file a motion for reconsideration, the latter being a prohibited pleading. Here, WINCORP should have filed the petition for certiorari before the CA on or before January 12, 2004.  It was, however, filed only on February 13, 2004. With that, the CA should have dismissed the petition outright for being filed late.

Even if the sixty (60)-day period will be reckoned from WINCORP’s receipt of the December 3, 2003 Order, the petition for certiorari was still filed out of time since it should have been filed on or before February 2, 2004.

This Court can only conclude that WINCORP filed the petition for certiorari supposedly assailing the February 2, 2004 Decision as a subterfuge to make it appear that it was filed on time when in truth it was assailing an earlier order, the period for which to assail the same has long elapsed.  Westmont Investment Corporation vs. Farmix Fertilizer Corporation, et al., G.R. No. 165876, October 4, 2010

Certiorari; requirement that respondents be exercising judicial or quasi-judicial functions. Preliminarily, certiorari does not lie against respondents who do not exercise judicial or quasi-judicial functions.  Section 1, Rule 65 of the Rules of Court is clear:

Section 1.  Petition for certiorari.—When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor 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.

Parenthetically, petitioners do not even allege with any modicum of particularity how respondents acted without or in excess of their respective jurisdictions, or with grave abuse of discretion amounting to lack or excess of jurisdiction.  Southern Hemisphere Engagement Network, Inc. etc., et al. vs. Anti-Terrorism council, et al./Kilusang Mayo Uno etc., et al. Vs. Hon. Eduardo Ermit., et al./Bagong Alyansang Makabayan (Bayan), et al.  vs. Gloria Macapagal-Arroyo, etc., et al./Karapatan, et al. vs. Gloria Macapagal-Arroyo, etc., et al./The Integrated Bar of the Philippines etc. et al. vs. Executive Secretary Eduardo Ermita, et al./Bagong Alyansang Makabayan-Southern Tagalog, et al. vs. Gloria Macapagal-Arroyo, etc., et al., G.R. Nos. 178552, 178554, 178581, 178890, 179157, 179461.October 5, 2010

Consolidation.  At this juncture, considering that both the Receivership Case and the Certiorari Petition have yet to be resolved, we now come to terms with the central issue of whether the consolidation of these cases is proper under the circumstances.  Consolidation of cases is governed by Section 1, Rule 31 of the Rules of Court, which materially states:

Section 1. Consolidation. – When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated; and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.

It is well recognized that consolidation of cases avoids multiplicity of suits, guards against oppression and abuse, prevents delay, clears congested court dockets, simplifies the work of the courts and seeks to attain justice with the least expense and vexation to litigants.  Generally, consolidation applies only to cases pending before the same judge and not to cases pending in different branches of the same court or in different courts.

Yet in appropriate instances and in the interest of justice, cases pending in different branches of the court or in different courts may be consolidated, consistent with the rule in our jurisdiction that leans towards permitting consolidation of cases whenever possible and irrespective of the diversity of the issues for resolution.  Hence, consolidation of cases is proper when the actions involve the same reliefs or the same parties and basically the same issues, or when there is real need to forestall the possibility of conflicting decisions being rendered in the cases, provided that the measure will not give one party an undue advantage over the other, or prejudice the substantial rights of any of the parties.

Indeed, the objectives of judicial economy and simplicity sit well with the prospect of consolidating the two subject cases.  We take note that the Certiorari Petition in this case is only a pending incident in the Receivership Case, which is the main action and in which a motion for the recall of the April 30, 2000 Order of the hearing officer is still awaiting resolution before Branch 138 of the RTC of Makati, where the case was transferred.   Thus, the outcome of the Certiorari Petition will definitely have a bearing on the Receivership Case, involving as they do the same focal issue of whether or not Excap had been found in possession of Bancapital’s assets and requiring substantially the same evidence on that matter.  In other words, conducting separate trials of the cases would only entail substantial duplication of time and effort not only by the parties but also by the courts and could terminate in the two courts rendering conflicting decisions.  Bank of Commerce vs. Hon. Estela Perlas-Bernabe, etc., et al., G.R. No. 172393, October 20, 2010.

Contempt; indirect contempt. Indirect contempt of court is governed by Section 3, Rule 71 of the Rules of Court, which provides:

SEC. 3. Indirect contempt to be punished after charge and hearing.-After a charge in writing has been filed, and an opportunity given to the respondent to comment thereon within such period as may be fixed by the court and to be heard by himself or counsel, a person guilty of any of the following acts may be punished for indirect contempt:

(a) Misbehavior of an officer of a court in the performance of his official duties or in his official transactions;

(b) Disobedience of or resistance to a lawful writ, process, order, or judgment of a court, including the act of a person who, after being dispossessed or ejected from any real property by the judgment or process of any court of competent jurisdiction, enters or attempts or induces another to enter into or upon such real property, for the purpose of executing acts of ownership or possession, or in any manner disturbs the possession given to the person adjudged to be entitled thereto;

(c) Any abuse of or any unlawful interference with the processes or proceedings of a court not constituting direct contempt under section 1 of this Rule;

(d) Any improper conduct tending, directly or indirectly, to impede, obstruct, or degrade the administration of justice;

(e) Assuming to be an attorney or an officer of a court, and acting as such without authority;

(f) Failure to obey a subpoena duly served;

(g) The rescue, or attempted rescue, of a person or property in the custody of an officer by virtue of an order or process of a court held by him. x x x.

Do the acts of respondents Enriquez and Sia in filing a motion for partial execution; of LA Calanza in granting the writ of execution and applying or not applying established jurisprudence; and of Sheriff Paredes in serving the notice of sale of the real property owned by petitioner fall under the above enumeration? We answer in the negative.

Contempt of court is defined as a disobedience to the court by acting in opposition to its authority, justice, and dignity. It signifies not only a willful disregard or disobedience of the court’s order, but such conduct which tends to bring the authority of the court and the administration of law into disrepute or, in some manner, to impede the due administration of justice. It is a defiance of the authority, justice, or dignity of the court which tends to bring the authority and administration of the law into disrespect or to interfere with or prejudice party-litigants or their witnesses during litigation. The power to punish for contempt is inherent in all courts and is essential to the preservation of order in judicial proceedings and to the enforcement of judgments, orders, and mandates of the court, and consequently, to the due administration of justice. However, such power should be exercised on the preservative, not on the vindictive, principle. Only occasionally should the court invoke its inherent power in order to retain that respect, without which the administration of justice will falter or fail. Only in cases of clear and contumacious refusal to obey should the power be exercised. Such power, being drastic and extraordinary in its nature, should not be resorted to unless necessary in the interest of justice. It is true that, at the time of the filing by Enriquez and Sia of the motion for the partial execution of the LA decision which directed their reinstatement, the decision had already been reversed by the NLRC, and such reversal was affirmed by the CA. The case was then on appeal to this Court via a petition for review on certiorari under Rule 45 of the Rules of Court. We find that their motion for partial execution was a bona fide attempt to implement what they might have genuinely believed they were entitled to in accordance with existing laws and jurisprudence. This is especially true in the instant case where the means of livelihood of the dismissed employees was at stake. Any man in such an uncertain and economically threatened condition would be expected to take whatever measures are available to ensure a means of sustenance for himself and his family. Clearly, Enriquez and Sia were merely pursuing a claim which they honestly believed was due them. Their act is far from being contumacious.

On the other hand, LA Calanza, on motion of Enriquez and Sia, issued the writ of execution considering that at the time of the application of the writ, this Court had yet to decide G.R. No. 172812. LA Calanza opined that so long as there is no finality yet of the decision reversing a ruling of the LA awarding reinstatement, the same should be enforced. This was how he interpreted this Court’s pronouncements in Roquero and Zamora; that “even if the order of reinstatement of the Labor Arbiter is reversed on appeal, it is obligatory on the part of the employer to reinstate and pay the wages of the dismissed employee during the period of appeal until reversal by the higher court.” But as we clearly discussed in Bago v. National Labor Relations Commission, while it is true that the reinstatement aspect of the LA decision is immediately executory, the reversal thereof by the NLRC becomes final and executory after ten (10) days from receipt thereof by the parties. That the CA may take cognizance of and resolve a petition for the nullification of the NLRC decision on jurisdictional and due process considerations does not affect the statutory finality of the NLRC decision. It then logically follows that, at the time of the application for the writ ¾ since the Court eventually sustained the NLRC and the CA decisions in G.R. No. 172812 ¾ no issue of payroll reinstatement may be considered at all after the reversal of the LA decision by the NLRC. Still, the erroneous issuance of the writ of execution by LA Calanza can only be deemed grave abuse of discretion which is more properly the subject of a petition for certiorari and not a petition for indirect contempt. No one who is called upon to try the facts or interpret the law in the process of administering justice can be infallible in his judgment.

Finally, Sheriff Paredes, in serving the notice of sale, was only performing his duty pursuant to the writ of execution. No matter how erroneous the writ was, it was issued by LA Calanza and was addressed to him as the sheriff, commanding him to collect from petitioner the amount due Enriquez and Sia. In the event he failed to collect the amount, he was authorized to cause the satisfaction of the same on the movable and immovable properties of petitioner not exempt from execution. Thus, any act performed by Sheriff Paredes pursuant to the aforesaid writ cannot be considered contemptuous. At the time of the service of the notice of sale, there was no order from any court or tribunal restraining him from enforcing the writ. It was ministerial duty for him to implement it.

To be considered contemptuous, an act must be clearly contrary to or prohibited by the order of the court or tribunal. A person cannot, for disobedience, be punished for contempt unless the act which is forbidden or required to be done is clearly and exactly defined, so that there can be no reasonable doubt or uncertainty as to what specific act or thing is forbidden or required. Bank of the Philippine Islands vs. Labor Arbiter Roderick Joseph Calanza, et al., G.R. No. 180699. October 13, 2010.

Counsel; withdrawal of appearance.  Rule 138, section 26 of the Rules of Court outlines the procedure in case of withdrawal of counsel.  It states:

RULE 138

Attorneys and Admission to Bar

Sec. 26.  Change of attorneys. – An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court.  He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire.  In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

Under the first sentence of Section 26, the withdrawal of counsel with the conformity of the client is completed once the same is filed in court.  No further action thereon by the court is needed other than the mechanical act of the Clerk of Court of entering the name of the new counsel in the docket and of giving written notice thereof to the adverse party.

In this case, it is uncontroverted that the withdrawal of respondent Samsung’s original counsel, V.E. Del Rosario and Partners on 19 October 2000, was with the client’s consent.  Thus, no approval thereof by the trial court was required because a court’s approval is indispensable only if the withdrawal is without the client’s consent.  It being daylight clear that the withdrawal of respondent Samsung’s original counsel was sufficient as the same carried the stamp of approval of the client, the notice of mediation sent to respondent Samsung’s original counsel was ineffectual as the same was sent at the time when such counsel had already validly withdrawn its representation.  Corollarily, the absence of respondent Samsung during the scheduled mediation conference was excusable and justified.  Therefore, the trial court erroneously dismissed Civil Case No. 97-86265.  Real Bank Inc. vs. Samsung Mabuhay Corporation, et al., G.R. No. 175862, October 13, 2010.

Counterclaims; permissive counterclaims; improper dismissal even if docket fees are due and unpaid.  Be that as it may, the trial court was incorrect in dismissing Bayerphil’s counterclaim for non-payment of docket fees.   All along, Bayerphil has never evaded payment of the docket fees on the honest belief that its counterclaim was compulsory.  It has always argued against Calibre’s contention that its counterclaim was permissive ever since the latter opposed Bayerphil’s motion before the RTC to implead the Sebastian spouses.  Lastly, Bayerphil’s belief was reinforced by Judge Claravall’s October 24, 1990 Resolution when she denied Calibre’s motion to strike out Bayerphil’s counterclaim.  Thus:

With respect to the motion to strike out the counterclaim, the Rejoinder and Reply of CALIBRE mentioned two reasons to support it.  These are: 1) that the counterclaim is not against the opposing party only, and 2) that the plaintiff’s claim against the defendant is totally unrelated to the latter’s claim against the Sebastian spouses because they are “not the same.”

To resolve the issues abovementioned, the elements of a compulsory counterclaim are thus given:

A counterclaim is compulsory and is considered barred if not set up where the following circumstances are present: 1) that it arises out of the, or is necessarily connected with the transaction or occurrence that is the subject matter of the opposing party’s claim, 2) that it does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction, and 3) that the court has jurisdiction to entertain the claim. (Javier vs. IAC, 171 SCRA 605)

The provisions of Section 8, Rule 6 must necessarily be mentioned also.  To wit:

Sec. 8, Rule 6.  Counterclaim or cross-claim in the answer. – The answer may contain any counterclaim or crossclaim which a party may have at the time against the opposing party or a co-defendant provided, that the court has jurisdiction to entertain the claim and can, if the presence of third parties is essential for its adjudication, acquire jurisdiction of such parties.

The rules and jurisprudence do not require that the parties to the counterclaim be the original parties only.  In fact, the presence of third parties is allowed, the only provision being their capacity to be subjected under the court’s jurisdiction.  As regards the nature of the claims of the parties, neither is it required that they be of the same nature, only that they arise from the same transaction or occurrence.

It cannot be gainsaid that the emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities.  Rules on the payment of filing fees have already been relaxed:

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

2.  The same rule applies to permissive counterclaims, third-party claims and similar pleadings, which shall not be considered filed until and unless the filing fee prescribed therefor is paid. The court may also allow payment of said fee within a reasonable time but also in no case beyond its applicable prescriptive or reglementary period.

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

It is a settled doctrine that “although the payment of the prescribed docket fees is a jurisdictional requirement, its non-payment x x x should not result in the automatic dismissal of the case provided the docket fees are paid within the applicable prescriptive period.”  “The prescriptive period therein mentioned refers to the period within which a specific action must be filed.  It means that in every case, the docket fee must be paid before the lapse of the prescriptive period.  Chapter 3, Title V, Book III of the Civil Code is the principal law governing prescription of actions.”

In accordance with the aforementioned rules on payment of docket fees, the trial court upon a determination that Bayerphil’s counterclaim was permissive, should have instead ordered Bayerphil to pay the required docket fees for the permissive counterclaim, giving it reasonable time but in no case beyond the reglementary period.  At the time Bayerphil filed its counter-claim against Calibre and the spouses Sebastian without having paid the docket fees up to the time the trial court rendered its Decision on December 6, 1993, Bayerphil could still be ordered to pay the docket fees since no prescription has yet set in.  Besides, Bayerphil should not suffer from the dismissal of its case due to the mistake of the trial court.  Calibre Traders Inc., Mario Sison Sebastian and Minda Blanco Sebastian vs. Bayer Philippines, Inc., G.R. No. 161431, October 13, 2010.