FIRST
DIVISION
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STRONGWORLD CONSTRUCTION CORPORATION,
LEO CLETO A. GAMOLO, and REYNOLD P. MOLO, Petitioners, - versus
- HON. N.C. PERELLO in her capacity as
Presiding Judge of Branch 276 of the
Regional Trial Court of Muntinlupa City, FIRST PEOPLE’S BANK, BANK OF
COMMERCE, ORLANDO O. FRANCISCO, and EDITHA LIZARDA, Respondents. |
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G.R. No. 148026 Present: PANGANIBAN, C.J. Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO,
SR., and CHICO-NAZARIO,
JJ. Promulgated: July
27, 2006 |
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Before Us is a Petition for Review on Certiorari, seeking to set aside the Decision[1]
and Resolution[2] of the
Court of Appeals in CA-G.R. SP. No. 49462, dated
The Antecedents
Petitioner Strongworld Construction
Corporation (Strongworld) is a domestic corporation engaged in the business of
construction. Petitioners Leo Cleto A.
Gamolo (Gamolo) and Reynold P. Molo (Molo) are members of the Board of
Directors of petitioner Strongworld. On
31 October 1997, petitioners filed a Complaint[3]
for Sum of Money and Damages with the Regional Trial Court (RTC) of Muntinlupa
City, Branch 276, presided over by the Hon. N. C. Perello, and docketed as
Civil Case No. 97-222, against private respondents First People’s Bank
(formerly known as Rural Bank of San Teodoro), Bank of Commerce, Orlando O.
Francisco (Francisco), and Editha Lizarda (Lizarda).
In their Complaint, petitioners
alleged, inter alia, that: in 1996,
Rizal Cement Company, Inc. delivered to petitioner Strongworld four (4) checks[4] as
payment for the construction of housing units;[5] at
the time of the issuance of the aforesaid checks, petitioner Strongworld
maintained a single account with private respondent Bank of Commerce, San Pedro
Branch,[6] with
private respondents Francisco, former president of petitioner Strongworld, and
its incumbent president, petitioner Gamolo as authorized signatories; the
subject checks were not deposited to the account of petitioner Strongworld;
instead, private respondents Francisco and Lizarda, conspiring and confederating
between themselves and with the employees of private respondent First People’s
Bank, maliciously and fraudulently diverted the checks to their personal
accounts, specifically First People’s Bank Savings Account No. 51-03025-5,
without the knowledge and consent of petitioners Gamolo and Molo, and without
authority from the Board of Directors of petitioner Strongworld;[7]
and that repeated demands against the private respondents were not heeded
resulting in the damage and prejudice of petitioners.
The petitioners prayed for the
following reliefs:
WHEREFORE, it is respectfully prayed that judgment be rendered as follows:
1.
Ordering the defendants to pay plaintiff Strongworld, jointly and severally,
the amount of P5,085,615.22 constituting the value of plaintiff
corporation’s checks, and P3,000,000.00, constituting lost profits,
interest and other expenses which resulted by reason of the illegal acts of
defendants.
2.
Ordering defendants to pay plaintiffs, jointly and severally, a) P3,000,000.00
by way of moral damages divided as follows: i) plaintiff Gamolo P1,500,000.00,
ii) plaintiff Molo P750,000.00, and iii) plaintiff Strongworld P750,000.00;
b) P100,000.00 exemplary damages; and c) P200,000.00 attorney’s
fees.
Other reliefs just and equitable under the premises are likewise prayed for.[8]
On
On
From the allegations of the COMPLAINT, it appears that money sought to be recovered belongs to the Corporation and who allegedly was damaged due to the unauthorized expenditure of this sum. Therefore, Plaintiff Leo Cleto A. Gamolo and Reynaldo P. Molo, although, admittedly are officers of the corporation appear to have instituted this action for and in behalf of the corporation, yet their authority to sue or defend the corporation has not been shown in this COMPLAINT. No Board Resolution for this purpose has been attached or recited in it. Thus this complaint is not prosecuted by the proper property in interest.[14]
On
On
In the interim, on
Subsequently, petitioners apparently
filed a Motion for Reconsideration of the
On
Resolving
petitioners’ Motion for Clarification, the trial court issued an Order[28]
in open court, dated 17 July 1998, reiterating that the case should remain
dismissed as petitioners’ Motion for Reconsideration was defective, and hence,
unbinding against the Order of 7 May 1998.
Similarly, the trial court corrected the Order of
Even as the MOTION FOR RECONSIDERATION by the Plaintiff was not assailed by the other Defendant, but due to lack of notification, this Motion should not have been received by the Court at all, therefore [it] is a mere scrap of paper which requires no ruling.
1. A motion that does not contain a notice of hearing is a mere scrap of paper, it represents no question which merits the attention of the Court. (Goldloop Properties, Inc. vs. Court of Appeals, 212 SCRA 498).
2. Rule 15, Sec. 4. Hearing of motion- Except for motions which the Court may act upon without prejudicing the rights of the adverse party, every written motion shall be set for hearing by the applicant.
3. Every written motion required to be heard and the notice of the hearing thereof shall be served in such a manner to ensure its receipt by the other party at least three (3) days before the date of hearing unless the Court for good cause sets the hearing on shorter notice.
4. Sec. 5, Notice of hearing – The notice of hearing shall be addressed to all parties concerned, and shall specify the time and date of the hearing which must not be later than ten (10) days after the filing of the motion.
5. Sec. 6, Proof of service necessary – No written motion set for hearing shall be acted upon by the Court without proof of service thereof.
6. Any motion that does not contain proof of service of notice to the other party is not entitled to judicial cognizance. (Cui vs. Madayag, 245 SCRA 1).[30]
Aggrieved, petitioners filed a Petition for Certiorari with the Court of Appeals,
assailing the Orders of the
The Ruling of the Court of Appeals
The
Court of Appeals dismissed petitioners’ Petition for Certiorari for utilizing the wrong recourse of certiorari, instead of an ordinary appeal. The appellate court said that the Complaint
was finally dismissed on
In
dismissing the Petition, the Court of Appeals, in part, declared:
As
earlier said, however Our Supreme Court has held that if a party essays a
course by the wrong procedure, the only recourse of action open is to dismiss
the case (Murillo vs. Rodolfo Consul, UDK
9748, 182 SCRA XI (sic)). The remedy
of appeal being available to the petitioners, it cannot resort to Certiorari (Felizardo vs. Court of Appeals, 233 SCRA
220).
It is settled that a special civil action for certiorari will not lie as a substitute for the last (sic) remedy of appeal (Dela Paz v. Panis, 245 SCRA 242) and we find no special nor compelling reasons why we should make out this case as an exception.[33]
Petitioners
moved for Reconsideration[34] thereon,
but the same was denied by the Court of Appeals in the assailed Order
promulgated on
Assignment of Errors
Hence,
petitioners come to us via the
instant Petition for Review, submitting that the Court of Appeals erred, viz:
I.
IN RULING THAT APPEAL IS THE PROPER REMEDY AND PETITION FOR CERTIORARI IS NOT AVAILABLE IN THE PRESENT CASE;
II.
IN NOT FINDING THAT APPEAL IS NOT THE REMEDY WITH RESPECT TO PETITIONER’S (sic) MOTION FOR CLARIFICATION;
III.
IN NOT FINDING THAT THE TRIAL COURT ABUSED ITS DISCRETION IN NOT REINSTATING THE COMPLAINTS (sic) AND IN FAILING TO CONSIDER THAT THE TRIAL COURT GRAVELY ERRED IN: 1) DISMISSING THE COMPLAINT ON THE GROUND THAT A BOARD RESOLUTION WAS NOT RECITED IN OR ATTACHED TO THE COMPLAINT; 2) IN DISMISSING THE COMPLAINT EVEN AGAINST THE RESPONDENTS WHO DID NOT FILE A MOTION TO DISMISS AND WHO DID NOT RAISE THE SAME GROUNDS RELIED UPON BY THE TRIAL COURT IN DISMISSING THE COMPLAINT; 3) IN REINSTATING ITS JANUARY 9, 1998 ORDER AND IN NOT RECALLING THE JANUARY 9, 1998.[35]
Issue
For
our resolution is whether the appellate court was in error when it dismissed
petitioners’ Petition for Certiorari
on the ground that appeal was the appropriate remedy under Rule 41 of the 1997 Revised
Rules of Civil Procedure, and not a Petition for Certiorari, under Rule 65 thereof.
The Court’s Ruling
At
the outset, attention must be called to Section 1, Rule 41 of the 1997 Revised Rules
of Civil Procedure, to wit:
SECTION 1. Subject of appeal. – An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable:
No appeal may be taken from:
(a) An order denying a motion for new trial or reconsideration;
(b) An order denying a petition for relief or any similar motion seeking relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud, mistake or duress, or any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; and
(h) An order dismissing an action without prejudice;
In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.
From the foregoing, it is evident
that under Section 1(h), Rule 41, no appeal may be taken from an order
dismissing an action without prejudice.
In such a case, the 1997 Revised Rules of Civil Procedure states that
the remedy available to the aggrieved party is to file an appropriate special
civil action under Rule 65.
Jurisprudence has similarly
underscored that with the advent of the 1997 Revised Rules of Civil Procedure,
an order of dismissal without prejudice is no longer appealable, as expressly
provided by Section 1(h), Rule 41 thereof.
In Philippine Export and Foreign
Loan Guarantee Corporation v. Philippine Infrastructures, Inc.,[36] this Court had the opportunity to
resolve whether an order dismissing a petition without prejudice should be
appealed by way of ordinary appeal, petition for review on certiorari or a petition for certiorari. The Court said that, indeed, prior to the
1997 Revised Rules of Civil Procedure, an order dismissing an action may be
appealed by ordinary appeal.[37] Verily, Section 1, Rule 41 of the 1997 Revised
Rules of Civil Procedure recites the instances when appeal may not be taken,
specifically, in case of an order dismissing an action without prejudice, in which case, the remedy available to the
aggrieved party is Rule 65.
Thus, the question is: was the Order
of the
We distinguish a dismissal with prejudice from a dismissal without prejudice. The former disallows and bars the refiling of
the complaint; whereas, the same cannot be said of a dismissal without
prejudice.[38] Likewise, where the law permits, a dismissal
with prejudice is subject to the right of appeal.[39]
To resolve the issue before us, it is
critical to examine the Order of dismissal rendered by the court a quo.
It can be recalled that on
As can be gleaned therefrom, the trial
court’s order of dismissal of
Jurisprudence states that if the suit
is not brought in the name of, or against, the real party in interest, a Motion
to Dismiss may be filed on the ground that the Complaint states no cause of
action.[43] Section 1(g), Rule 16 of the 1997 Revised
Rules of Civil Procedure allows the filing of a Motion to Dismiss on the ground
that the Complaint states no cause of action.
Thus, in Aguila, Jr. v. Court of
Appeals,[44] we pronounced:
A real party in interest is one who would be benefited or injured by the judgment, or who is entitled to the avails of the suit. This ruling is now embodied in Rule 3, Section 2 of the 1997 Revised Rules of Civil Procedure. Any decision rendered against a person who is not a real party in interest in the case cannot be executed. Hence, a complaint filed against such a person should be dismissed for failure to state a cause of action.[45]
Section
1, Rule 16 of the 1997 Revised Rules of Civil Procedure enumerates the grounds
for which a Motion to Dismiss may be filed, viz.:
SECTION 1. Grounds. – Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
(a) That the court has no jurisdiction over the person of the defending party;
(b) That the court has no jurisdiction over the subject matter of the claim;
(c) That venue is improperly laid;
(d) That the plaintiff has no legal capacity to sue;
(e) That there is another action pending between the same parties for the same cause;
(f) That the cause of action is barred by a prior judgment or by the statute of limitations;
(g) That the pleading asserting the claim states no cause of action;
(h) That the claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned, or otherwise extinguished;
(i) That the claim on which the action is founded is unenforceable under the provisions of the statute of frauds; and
(j) That a condition precedent for filing the claim has not been complied with.
Section 5 of the same Rule, recites
the effect of a dismissal under Sections 1(f),[46]
(h),[47]
and (i),[48] thereof, thus:
SEC. 5. Effect of dismissal. – Subject to the right of appeal, an order granting a motion to dismiss based on paragraphs (f), (h), and (i) of section 1 hereof shall bar the refiling of the same action or claim.
Briefly stated, dismissals that are based
on the following grounds, to wit: (1) that the cause of action is barred by a
prior judgment or by the statute of limitations; (2) that the claim or demand
set forth in the plaintiff’s pleading has been paid, waived, abandoned or
otherwise extinguished; and (3) that the claim on which the action is founded
is unenforceable under the provisions of the statute of frauds, bar the refiling
of the same action or claim. Logically,
the nature of the dismissal founded on any of the preceding grounds is “with
prejudice” because the dismissal prevents the refiling of the same action or
claim. Ergo, dismissals based on the
rest of the grounds enumerated are without prejudice because they do not
preclude the refiling of the same action.
Verily, the dismissal of petitioners’
Complaint by the court a quo was not
based on any of the grounds specified in Section 5, Rule 16 of the 1997 Revised
Rules of Civil Procedure; rather, it was grounded on what was encapsulated in
Section 1(g), Rule 16 of the 1997 Revised Rules of Civil Procedure. As the trial court ratiocinated in its
As has been earlier quoted, Section
1(h), Rule 41 of the 1997 Revised Rules of Civil Procedure mandates that no
appeal may be taken from an order dismissing an action without prejudice. The same section provides that in such an
instant where the final order is not appealable, the aggrieved party may file
an appropriate special civil action under Rule 65.
The appellate court erred,
thus, when it pronounced in its Decision of
A Petition for Certiorari under Rule 65 is available in cases when there is no
appeal, nor any plain, speedy, and adequate remedy in the ordinary course of
law. In the case at bar, appeal of the
In sum, the appellate court erred
when it ruled that petitioners’ Petition for
Certiorari filed before it was not the proper remedy. The dismissal of the Complaint being without
prejudice, the remedy available to the aggrieved party is Rule 65.
WHEREFORE, the
petition is GRANTED. The Decision and Resolution of the Court
of Appeals in CA-G.R. SP. No. 49462, dated
and decide petitioners’ Petition for Certiorari with utmost dispatch. No costs against petitioners.
SO
ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
Chief Justice
Chairperson
Associate
Justice
Associate Justice
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ROMEO J. CALLEJO, SR. Associate Justice |
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Pursuant to Article VIII,
Section 13 of the Constitution, 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.
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ARTEMIO V.
PANGANIBAN Chief Justice |
[1] Penned
by Associate Justice Mariano M. Umali with Associate Justices Conrado M.
Vasquez, Jr. and Eriberto U. Rosario, Jr., concurring; Rollo, pp. 34-38.
[2] Penned by Associate Justice
Eriberto U. Rosario, Jr. with Associate Justices Conrado M. Vasquez, Jr. and
Remedios Salazar-Fernando, concurring;
[3] Records, Vol. I, pp. 1-8.
[4]
Date Name of Bank Check No. Amount
P1,914,412.92
Taytay Branch
P1,169,272.73
Salcedo,
P1,405,249.34
P 596,680.23
Taft Branch
TOTAL P5,085,615.22
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23]
[24]
[25]
[26]
[27]
[28]
[29] Supra note 25.
[30] Records, Vol. I., p. 187.
[31] G.R. No. L-75000,
[32] CA rollo, pp. 138-139.
[33]
[34]
[35] Rollo, pp. 20-21.
[36] G.R. No. 120384,
[37] In Philippine Export, the Court cited the cases of Lucas v. Hon. Mariano, 150-A Phil. 296,
309 (1972); and Vda. de Haberer v. Martinez, 159 Phil. 200, 210-211 (1975) whereby appeal was allowed from
an order dismissing an action. The
aforecited cases were decided prior to the effectivity of the 1997 Rules of
Civil Procedure. The 1997 Rules of Civil
Procedure (Rule 1-71) became effective
[38] Under Section 5, Rule 16 of the 1997 Revised Rules of Court, dismissal on Motion to Dismiss shall bar the refilling of the same action or claim in the following cases, to wit:
(a) The cause of action is barred by a prior judgment or by the statute of limitations;
(b) The claim or demand set forth in the plaintiff’s pleading has been paid, waived, abandoned or otherwise extinguished;
(c) The claim on which the action is founded is unenforceable under the provisions on the statute of frauds.
[39] Section 5 , Rule 16 of the 1997 Revised Rules of Court reads:
SEC. 5. Effect of dismissal. – Subject to the right of appeal, an order
granting a motion to dismiss based on paragraphs (f), (h) and (i) of section 1
hereof shall bar the refiling of the same action or claim. (Underscoring
supplied.)
[40] Section 2, Rule 3 of the 1997 Rules of Civil Procedure states:
SEC. 2. Parties in interest. – A real party in interest is the party who
stands to be benefited or injured by the judgment in the suit, or the party
entitled to the avails of the suit.
Unless otherwise authorized by law or these Rules, every action must be
prosecuted or defended in the name of the real party in interest.
[41]
[42]
[43] Caro
v. Sucaldito, G.R. No. 157536,
[44] 377 Phil. 257 (1999).
[45]
[46] Section 1 (f) of Rule 16 of the 1997 Rules of Civil Procedure states:
SECTION 1. Grounds. – Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
x x x x
(f)
That the cause of action is barred by a prior judgment or by the statute of
limitations;
[47]
[48]
[49] Records, Vol. I, p. 120.