Al-Amanah vs Celebrity : 155524 : August 12, 2004 : J. Callejo, Sr : Second Division : Decision

SECOND DIVISION

AL-AMANAH ISLAMIC G.R. No. 155524

INVESTMENT BANK OF THE

PHILIPPINES (formerly PHILIPPINE Present:

AMANAH BANK),

Petitioner, PUNO, J., Chairman,

AUSTRIA-MARTINEZ,

CALLEJO, SR.,

- versus - TINGA, and

CHICO-NAZARIO, JJ.

CELEBRITY TRAVEL AND Promulgated:

TOURS, INCORPORATED,

Respondent. August 12, 2004

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

D E C I S I O N

CALLEJO, SR., J.:

This is a petition for review on certiorari filed by petitioner Al-Amanah Islamic Investment Bank of the Philippines (AIIB)[1] for the nullification of the Resolution[2] of the Court of Appeals dismissing the petition in CA-G.R. SP No. 70937 and the resolution denying its motion for reconsideration.

Under Executive Order No. 122-A of the President of the Philippines, the Office of the Muslim Affairs (OMA) is tasked to supervise the orderly conduct of pilgrimages to Mecca, Saudi Arabia.[3] One of the offices under the OMA is the Bureau of Pilgrimage and Endowment (BPE), which is primarily responsible for the administration of the annual Muslim pilgrimage to Mecca, Saudi Arabia.[4]

Sometime in 1988, the OMA and the BPE entered into a Memorandum of Agreement (MOA)[5] with respondent Celebrity Travel and Tours, Inc., under which it was agreed that the latter would charter Philippine Airlines and Saudia Airlines flights and secure accommodations for Filipino-Muslim participants in the 1998 Hajj Pilgrimage to Mecca. The OMA would provide the respondent with the names of the pilgrims, and the latter, in turn, would purchase and deliver the airline tickets to the pilgrims for the trip. The petitioner AIIB[6] was designated to be the official depository of the pilgrims’ funds. By virtue of a Debit Memorandum[7] signed by OMA Director for Finance Yusup T. Mangoda and BPE Director Kharis B. Mikunug, the petitioner issued Manager’s Check No. 001766[8] in the amount of P14,742,187 payable to the order of the respondent for the payment of the airfare, accommodations and other fees. When OMA Director Mangoda received information that some of the pilgrims paid directly to the respondent for their plane fares and accommodations, he requested the petitioner to stop the payment of the manager’s check, for further verification.[9] The petitioner agreed to the request. Hence, the check
was dishonored by the petitioner bank. The respondent then sought the intervention of OMA Executive Director Dimasangcay Pundato and BPE Director Kharis B. Mikunug for the payment of the amount of the check, to no avail.

The respondent filed a complaint on August 14, 1990 for sum of money and damages with the Regional Trial Court of Makati against the petitioner bank, Directors Pundato and Mikunug for the collection of P5,969,428.88. It prayed that, after due proceedings, judgment be rendered in its favor:

WHEREFORE, it is respectfully prayed that judgment be rendered ordering defendants to pay jointly and severally to plaintiff:

1. P5,969,428.88 plus interest thereon at the rate of twelve per cent (12%) a year counted from the date of first demand until the same is fully paid;

2. P1,289,720.00 as aggregate consequential damages;

3. P1,000,000.00 as exemplary damages;

4. Five per cent (5%) of the aggregate amount due plaintiff plus P75,000.00 as attorney’s fees; and

5. Costs of suit.

Plaintiff prays for such other reliefs as this Honorable Court may deem just and equitable in the premises.[10]

The case was docketed as Civil Case No. 90-2270. The petitioner retained the services of a private counsel, Atty. Reynaldo A. Pineda.

On June 14, 1994, the trial court rendered a Decision[11] in favor of the respondent, but only for the amount of P211,459.52. The decretal portion reads:

The foregoing considered, judgment is rendered ordering defendant Amanah Bank to pay plaintiff the sum of P211,459.52. No interest is awarded since this defendant was willing to pay the same at the onset. No damages nor attorney’s fees should be awarded since the parties gave cause to the filing of this case.

SO ORDERED.[12]

Both parties appealed the decision to the Court of Appeals. The case was docketed as CA-G.R. CV No. 46269 and raffled to the Twelfth Division of the appellate court. However, the petitioner’s appeal was dismissed for failure to file its brief, per the CA Resolution dated September 12, 1996.

On March 31, 1999, the CA rendered its Decision[13] affirming the trial court’s decision with modification. The CA ordered the petitioner to pay the amount of P14,742,187 to the respondent. The fallo of the decision reads:

WHEREFORE, the appealed decision is modified as follows:

(1) Defendant bank is hereby ordered to pay plaintiff-appellant the sum of P14,742,187.00 representing the value of the dishonored Manager’s Check, with legal interest until the sum is fully paid.

(2) The complaint is dismissed against defendants-appellants Mikunug and Pundato.

SO ORDERED.[14]

The decision of the CA became final and executory. Entry of Judgment[15] was made of record on January 4, 2000. The records of the case were remanded to the RTC of Makati.[16] The respondent filed a motion for a writ of execution which the court granted on April 4, 2001.[17] The corresponding writ of execution was issued thereafter.[18] The Sheriff prepared and served a notice of garnishment on the petitioner’s manager, the Governor of the Bangko Sentral ng Pilipinas, and the Philippine Deposit Insurance Corporation.[19] However, the petitioner failed to respond or file any pleading to annul the writ of execution and the writ of garnishment. The respondent still failed to collect from the petitioner. Subsequently, the court ordered the case archived.

The petitioner, through the Office of the Government Corporate Counsel (OGCC), filed, on September 5, 2001, a Motion to Quash Writ of Execution and to Stop the Implementation of the Writ of Execution,[20] and a Supplemental Motion[21] on October 16, 2001, grounded on the following: (a) it was deprived of its day in court due to the gross and inexcusable negligence of its private retained counsel; (b) the decision of the CA was ambiguous, as it failed to specify the rate of interest to be applied and when such rate commenced to run; (c) the CA awarded P14,742,187 to the respondent, an amount larger than the P5,969,428.88 prayed for it in its complaint; and, (d) the respondent failed to pay the required filing and docket fees for the amount of P8,773,658, the difference between the amount claimed by the respondent in its complaint and the amount awarded by the CA in favor of the respondent. The petitioner concluded that the court did not have jurisdiction to award P14,742,187; hence, the decision of the CA awarding the said amount was null and void.

In its opposition to the motion, the respondent alleged that the RTC was merely implementing its own decision as modified by the CA, and if the latter erred in awarding an amount larger than that prayed for in the complaint, the remedy of the petitioner was to seek redress from the Supreme Court, and not the RTC. The respondent further averred that it paid the requisite docket and filing fees for its complaint, and, as such, the RTC had jurisdiction over its action and retained such jurisdiction even after the CA had modified its decision and increased the award to P14,742,187. The respondent also contended that the rate of interest on the petitioner’s liability was 12% per annum, pursuant to Central Bank Circular No. 416, to commence on the date of its demand, July 19, 1988.[22] It averred that any error, committed by the CA was a mere error of judgment and not of jurisdiction, an error correctible only by the Supreme Court.

On November 5, 2001, the RTC issued an Order[23] denying the said motions. The RTC held that the legal rate of interest fixed by the CA in its decision should commence from the time judicial demand was made by the respondent, or on August 14, 1990. It also ruled that it had no authority to modify the decision of the CA and to reduce the amount awarded to the respondent, and that it was its ministerial duty to implement the decision. The petitioner filed a motion for reconsideration thereon, but the same was denied on March 1, 2002.[24]

The petitioner, through the OGCC, filed a petition for certiorari under Rule 65 of the Rules of Court, as amended, with the CA for the nullification of the November 5, 2001 and March 1, 2002 Orders of the trial court and the writ of execution issued by it. The case was docketed as
CA-G.R. SP No. 70937 and raffled to the Fourth Division. The petitioner alleged therein that –

RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION, AMOUNTING TO LACK OR EXCESS OF JURISDICTION, WHEN HE ALLOWED THE EXECUTION OF THE DECISION DATED MARCH 31, 1999 OF THE COURT OF APPEALS NOTWITHSTANDING THE FACT THAT IT WAS CLEARLY NULL AND VOID AND WITHOUT EVEN DIRECTING PRIVATE RESPONDENT TO PAY THE REQUIRED DOCKET FEES.

RESPONDENT JUDGE GRAVELY ABUSED HIS DISCRETION, AMOUNTING TO LACK OR EXCESS OF JURISDICTION, WHEN HE RULED IN HIS ASSAILED ORDERS THAT PETITIONER AL-AMANAH SHOULD PAY INTEREST ON THE PRINCIPAL AWARD AT THE RATE OF 12% PERCENT PER ANNUM STARTING FROM THE FILING OF THE COMPLAINT ON AUGUST 14, 1990.

III

THERE IS NO APPEAL OR ANY OTHER PLAIN, SPEEDY AND ADEQUATE REMEDY AVAILABLE TO PETITIONER AL-AMANAH IN THE ORDINARY COURSE OF LAW EXCEPT THIS SPECIAL CIVIL ACTION.

THERE IS EXTREME URGENCY FOR THE ISSUANCE OF A TEMPORARY RESTRAINING ORDER AND WRIT OF PRELIMINARY INJUNCTION TO SAVE PETITIONER AL-AMANAH FROM THE IRREMEDIABLE EFFECTS OF THE EXECUTION OF A PATENTLY INIQUITOUS AWARD.[25]

On June 25, 2002, the CA issued a Resolution dismissing the petition, on the ground that the copy of the writ of execution appended to the petition was a mere photocopy, and not a certified true or duplicate original copy
thereof as required under Section 3, Rule 46, in relation to Section 1, Rule 65 of the 1997 Rules of Civil Procedure. The petitioner filed a motion for reconsideration, arguing that the final orders sought to be nullified in its petition were the November 5, 2001 and March 1, 2002 Orders of the trial court, and not the writ of execution it issued.

The CA denied the petitioner’s motion for reconsideration for lack of merit on September 25, 2002. The appellate court noted that the petitioner even failed to append to its motion for reconsideration a certified true or duplicate original copy of the assailed writ of execution; hence, there was no occasion for a liberal application of the Rules of Court.

The petitioner now assails the resolutions of the CA in this Court, contending as follows:

WHEN IT DISMISSED OUTRIGHT THE CLEARLY MERITORIOUS PETITION FOR CERTIORARI AND PROHIBITION OF HEREIN PETITIONER AL-AMANAH ON THE GROUND THAT A COPY OF THE WRIT OF EXECUTION APPENDED THERETO WAS A MERE PHOTOCOPY AND NOT A CERTIFIED TRUE OR DUPLICATE ORIGINAL COPY.[26]

The petitioner asserts that, as alleged in its petition, the subject matter of its petition in the CA was the Order of the RTC dated November 5, 2001 which denied its motion and supplemental motion to quash the writ of execution and to stop the implementation thereof, as well as the Order of the trial court dated March 1, 2002 denying its motion for reconsideration. The petitioner avers that it never intended the writ of execution issued by the trial
court to be the subject of its petition. It insists that in appending certified copies of the assailed orders of the trial court, it complied with Section 3, Rule 45 of the 1997 Rules of Civil Procedure, in relation to the second paragraph of Section 1, Rule 65. The petitioner contends that the photocopy of the writ of execution is merely a “supporting relevant paper” which accompanied its petition. Hence, it is not mandated to append a certified true or duplicate original copy of the writ of execution issued by the trial court. In support of its argument, the petitioner cited the ruling of this Court in Cadayona v. Court of Appeals.[27]

The petitioner avers that, if in the perception of the CA, the petition should have been accompanied by a certified true or duplicate original copy of the writ of execution, it should not have dismissed the petition outright; instead, it should have required the petitioner to submit the requisite copy of the writ, in the interest of substantial justice and fair play.

The respondent, for its part, avers that, as gleaned from its petition, the petitioner assails the writ of execution issued by the trial court, and even sought for the nullification thereof. The respondent also points out that the petitioner sought a writ of prohibition and a writ of preliminary injunction to enjoin the implementation of the writ of execution.

The sole issue to be resolved is whether or not the CA erred in dismissing the petition outright for the petitioner’s failure to append thereto
a certified true or duplicate original copy of the writ of execution issued by the trial court.

We rule against the petitioner.

To determine the subject matter of the petition, all the material allegations thereof as well as the reliefs prayed for therein must be considered. As gleaned from the material averments of the petition in the CA and the reliefs prayed for therein by the petitioner, the subject matter thereof are the following: (a) the writ of execution issued by the RTC; (b) the court a quo’s November 5, 2001 Order denying the motion and supplemental motion to quash the writ of execution and to stop the implementation thereof; and, (c) the March 1, 2002 Order denying its motion for reconsideration. It bears stressing that the petition in the CA was one for certiorari and prohibition for the nullification of the two orders of the RTC, as well as the writ of execution issued by it. This is also evident in the petitory portion of the petition, in which the petitioner prayed not only for the nullification of the said orders, but also of the writ of execution. The petitioner even sought a writ of prohibition and a writ of preliminary injunction to enjoin the enforcement of the writ of execution, as well as the two orders issued by the RTC. Furthermore, the motion and supplemental motion of the petitioner in the RTC sought to annul and stop the implementation of the writ of execution. For the petitioner to argue that the subject matter of its petition was only the two orders of the RTC and not the writ of execution issued by the latter is the apex of absurdity.

Conformably with the second paragraph of Section 1, Rule 65 of the Rules of Court, in relation to Section 3, Rule 46, the petitioner was mandated to append to its petition a certified true or duplicate original copy of the said writ. Failure to append the same would result in the dismissal of the petition.[28] Even in its motion for reconsideration of the appellate court’s dismissal of its petition, the petitioner again failed to append the requisite certified true or duplicate original copy of the said writ. The CA cannot, thus, be faulted for dismissing the petition outright, as it merely applied the plain and clear language of the Rules of Court, as amended.

Nevertheless, we resolve to grant the petitioner’s plea for a relaxation of the Rules of Court in the interest of substantial justice. As we held in Van Melle Philippines, Inc. v. Endaya:[29]

In a case of recent vintage, we held that while a petition for certiorari must be accompanied by a duplicate original or certified true copy of the judgment, order, resolution or ruling subject thereof, there is no requirement that all other relevant documents attached to the petition should be certified true copies as well. The CA nevertheless outrightly dismissed the petition on account of the petitioner’s failure to append certified true copies of certain relevant documents referred to therein.

In any event, we agree with the petitioners that even assuming that the Rules require all attachments to a petition for certiorari to be certified true copies, the CA should have nevertheless taken cognizance of the petition. It has been the consistent holding of this Court that cases should be determined on the merits, after full opportunity to all parties for ventilation of their causes and defense, rather than on technicality or some procedural imperfections. In so doing, the ends of justice would be better served. Rules of procedure are mere tools designed to expedite the decision or resolution of cases and other matters pending in court. A strict and rigid application of the rules that would result in technicalities that tend to frustrate rather than promote substantial justice must be avoided.[30]

Indeed, when a case is impressed with public interest, the Court may relax the application of the Rule.[31] Where strong considerations of substantive justice are manifest in the petition, the strict application of the rules of procedure may be relaxed, in the exercise of its equity jurisdiction. In addition to the basic merits of the main case, such a petition usually embodies a justifying circumstance which warrants our heeding to the petitioner’s cry for justice in spite of the earlier negligence of counsel. As we held in Obut v. Court of Appeals:[32]

We cannot look with favor on a course of action which would place the administration of justice in a straightjacket for then the result would be a poor kind of justice if there would be justice at all. Verily, judicial orders, such as the one subject of this petition, are issued to be obeyed, nonetheless a non-compliance is to be dealt with as the circumstances attending the case may warrant. What should guide judicial action is the principle that a party-litigant is to be given the fullest opportunity to establish the merits of his complaint or defense rather than for him to lose life, liberty, honor or property on technicalities.[33]

The rules of procedure are used only to secure and not override or frustrate justice.[34] The rules of court governing practice and procedure were formulated in order to promote just, speedy and inexpensive disposition of every action or proceeding without sacrificing substantial justice and equity considerations.[35] As we ruled in Development Bank of the Philippines v. Court of Appeals:[36]

… [T]he rules of procedure are mere tools intended to facilitate the attainment of justice, rather than frustrate it. A strict and rigid application of the rules must always be eschewed when it would subvert the rules’
primary objective of enhancing fair trials and expediting justice. Technicalities should never be used to defeat the substantive rights of the other party. Every party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities.[37]

The core issues before the CA (Fourth Division) are the following: (a) whether the RTC is competent to review and clarify the decision of the CA (Twelfth Division) in CA-G.R. CV No. 46269 as to when the legal rate of interest awarded in favor of the respondent should be computed; (b) if in the affirmative, whether the RTC committed a grave abuse of discretion in ruling that the legal rate of interest on the monetary award in favor of the respondent should be computed from judicial demand, and not from the finality of the decision of the CA in the said case; (c) whether the CA had jurisdiction to award the amount of P14,742,187, considering that the respondent claimed only P5,969,428.88 in its complaint and did not pay the filing fees for the said amount either in the RTC or in the CA; (d) whether or not the RTC is competent to determine whether the CA had jurisdiction to award the amount of P14,742,187; and, (e) if in the affirmative, whether the RTC committed a grave abuse of discretion in enforcing its decision as amended by the CA and ordering the petitioner to pay P14,742,187. If we affirm the assailed resolutions, the petitioner would have no more remedy.

We note that, in its comment on the petition, the respondent confined itself on the issue of whether or not the CA erred in dismissing outright the petitioner’s petition for certiorari. The respondent must be accorded an opportunity to be heard on the foregoing issues before the court resolves the case on the merits.

Accordingly, the petition is GRANTED. The assailed resolutions of the Court Appeals are NULLIFIED. The case is remanded to the Court of Appeals for further proceedings. No costs.

SO ORDERED.

ROMEO J. CALLEJO, SR.

Associate Justice

WE CONCUR:

REYNATO S. PUNO

Associate Justice

Chairman

MA. ALICIA AUSTRIA-MARTINEZ DANTE O. TINGA

Associate Justice Associate Justice

MINITA V. CHICO-NAZARIO

Associate Justice

A T T E S T A T I O N

I attest that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO

Associate Justice

Chairman, Second Division

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairman’s Attestation, it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

HILARIO G. DAVIDE, JR.

Chief Justice

[1] Created under Republic Act No. 6848 for the primary purpose of promoting and accelerating the socio-economic development of the Autonomous Region by performing banking, financing and investment operations and to establish and participate in agricultural, commercial and industrial ventures based on the Islamic concept of banking.

[2] Penned by Associate Justice Rebecca de Guia-Salvador, with Associate Justices Godardo A. Jacinto and Eloy R. Bello, Jr., concurring.

[3] Executive Order No. 122-A, Section 5(p).

[6] Formerly Philippine Amanah Bank created under P.D. No. 264, as amended.

[13] Penned by Associate Justice Buenaventura J. Guerrero, with Associate Justices Portia Aliño-Hormachuelos and Teodoro P. Regino, concurring.

[28] See OSM Shipping Philippines, Inc. v. NLRC, 398 SCRA 606 (2003).

[31] Development Bank of the Philippines v. Court of Appeals, 358 SCRA 501 (2001).

[34] Republic of the Philippines v. Court of Appeals, 83 SCRA 453 (1978).

[35] Republic v. Imperial, Jr., 303 SCRA 127 (1999).