THIRD DIVISION
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UNITED
OVERSEAS BANK (formerly WESTMONT BANK), Petitioner, - versus - HON. JUDGE REYNALDO ROS, Presiding Judge of the Regional Trial Court
of Manila, Branch 33, and ROSEMOOR MINING AND DEVELOPMENT CORPORATION, Respondents. |
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G.R. No. 171532 Present: YNARES-SANTIAGO, J., Chairperson, AUSTRIA-MARTINEZ,
CHICO-NAZARIO, and NACHURA, JJ. Promulgated: |
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CHICO-NAZARIO,
J.:
Before this Court is a Petition for
Review on Certiorari under Rule 45 of the Revised Rules of Court,
filed by petitioner United Overseas Bank, seeking the reversal and the setting
aside of the Decision[1]
dated 19 April 2005, and the Resolution[2]
dated 13 February 2006 of the Court of Appeals in CA-G.R. SP No. 82626. The appellate court,
in its assailed Decision and Resolution affirmed the Order of the Regional
Trial Court (RTC) of
Petitioner is
a banking institution duly authorized as such under Philippine laws.[3]
Private
respondent Rosemoor Mining and Development Corporation, on the other hand, is a
domestic corporation likewise duly authorized by the Philippine laws to engage
in mining operation.[4]
On
In its
Complaint,[6]
private respondent alleged that it obtained a loan from petitioner in the
amount of P80,000,000.00
in order to raise the needed capital for the importation of machineries
necessary for its operation. The said
loan was secured by two Real Estate Mortgage Contracts over several parcels of
land situated in the Provinces of Bulacan and Nueva Ecija.
The
arrangement agreed to by the parties was for the petitioner to handle on behalf
of the private respondent the amount of P50,000,000.00 while the loan balance of P30,000,000.00 will be
released by petitioner to private respondent as a revolving credit line. Petitioner, however, allegedly mishandled the
proceeds of the loan causing serious financial injury to private respondent.
On 10
August 1998, petitioner filed an Urgent Motion to Dismiss[7]
the private respondent’s complaint on the ground of improper venue since the
said complaint included the prayer for the nullification of the foreclosure of
real estate mortgage, a real action which must be lodged before the RTC of the
place where the property or one of the properties is situated. Consequently, the private respondent amended
its Complaint, this time praying for Accounting, Release of the Balance of the
Loan and Damages.
In resolving
petitioner’s Urgent Motion to Dismiss, the RTC of Manila issued an Omnibus
Resolution[8]
on
On
Subsequently,
petitioner filed its Answer with Counterclaim.[11] After the pre-trial was conducted, trial on
the merits ensued.
On
The filing
of the above mentioned case prompted the petitioner to file a second Motion to
Dismiss[13]
Civil Case No. 98-90089, before the RTC of Manila on the ground of forum
shopping. In an Order[14]
dated
On
On 16
October 2003, the Manila RTC denied petitioner’s third Motion to Dismiss Civil
Case No. 98-90089 on the ground that petitioner was already estopped to raise the issue. Having participated in several stages of the
proceedings, and having invoked the authority of the court by seeking an
affirmative relief therefrom through the filing of the Answer with
Counterclaim, petitioner was now barred from assailing the authority of the
Court to hear and decide the case.[17] The dispositive portion of the Order of the
Manila RTC dated
WHEREFORE, the motion to dismiss is DENIED on the ground of estoppel.
Similarly
ill-fated was petitioner’s motion for reconsideration of the foregoing Order which
was denied by the RTC in another Order dated
Aggrieved,
petitioner filed a Petition for Certiorari[19]
before the Court of Appeals, alleging that the Manila RTC acted with grave
abuse of discretion amounting to lack or excess of jurisdiction in issuing the
Orders dated 16 October 2003 and 5 January 2004.
In a Decision[20]
promulgated on
The Court
of Appeals likewise denied petitioner’s Motion for Reconsideration, since the
arguments raised therein were mere reiterations of those already considered and
passed upon by the appellate court.[21]
Undaunted, petitioner
filed this instant Petition for Review on Certiorari[22]
before this Court, alleging that the Decision and Resolution of the Court
of Appeals denying its Petition for Certiorari
are contrary to law.
For the
resolution of this Court then are the following issues:
I. WHETHER
OR NOT THE COURT OF APPEALS ERRED IN DENYING THE PETITION FOR CERTIORARI FILED BY THE PETITIONER.
II. WHETHER OR NOT THE PETITIONER IS BARRED
BY LACHES FROM QUESTIONING THE RTC’s JURISDICTION.
III. WHETHER OR NOT THE FAILURE OF THE PRIVATE
RESPONDENT TO PAY THE DOCKET FEES WARRANTS THE DISMISSAL OF THE INSTANT CASE.
Petitioner asserts that the appellate
court committed an error of law in dismissing its petition for certiorari and affirming the Orders
dated
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, crossclaims 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. (Emphasis provided.)
Based on the foregoing, it is clear that no appeal, under
Rule 45 of the Revised Rules of Court, may be taken from an interlocutory
order. In case of denial of an
interlocutory order, the immediate remedy available to the aggrieved party is
to file an appropriate Special Civil Action for Certiorari under Rule 65 of the Revised Rules of Court.
The word interlocutory refers to
something intervening between the commencement and the end of the suit which decides
some point or matter but is not a final decision of the whole controversy.[23] This Court had the occasion to distinguish a
final order or resolution from an interlocutory one in the case of Investments, Inc. v. Court of Appeals,
thus:
x x x A “final”
judgment or order is one that finally disposes of a case, leaving nothing more
to be done by the Court in respect thereto, e.g., an adjudication on the merits
which, on the basis of the evidence presented on the trial, declares
categorically what the rights and obligations of the parties are and which
party is in the right; or a judgment or order that dismisses an action on the
ground, for instance, of res judicata
or prescription. Once rendered, the task
of the Court is ended, as far as deciding the controversy or determining the
rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court
except to await the parties’ next move (which among others, may consist of the filing
of a motion for new trial or reconsideration, or the taking of an appeal) and
ultimately, of course, to cause the execution of the judgment once it becomes
“final” or, to use the established and more distinctive term, “final and
executory.”
x x x x
Conversely,
an order that does not finally dispose of the case, and does not end the
Court’s task of adjudicating the parties’ contentions and determining their
rights and liabilities as regards each other, but obviously indicates that
other things remain to be done by the
Court, is “interlocutory” e.g., an order denying motion to dismiss under Rule
16 of the Rules, or granting of motion on extension of time to file a pleading,
or authorizing amendment thereof, or granting or denying applications for
postponement, or production or inspection of documents or things, etc. Unlike a “final” judgment or order, which is
appealable, as above pointed out, an “interlocutory” order may not be
questioned on appeal except only as part of an appeal that may eventually be
taken from the final judgment rendered in the case.[24]
Since an Order denying a Motion to
Dismiss does not finally dispose of the case, and in effect, allows the case to
proceed until the final adjudication thereof by the court, then such order is
merely interlocutory in nature.
In affirming the interlocutory nature
of an order denying a motion to dismiss, the Court thus categorically declares
in Españo v. Court of Appeals[25]:
We find occasion here to state the rule, once more, that an order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of law by an appeal from the judgment after trial. The ordinary procedure to be followed in that event is to file an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment.
Indubitably, the Order of the RTC
dated
This rule
is founded on considerations of orderly procedure, to forestall useless appeals
and avoid undue inconvenience to the appealing party by having to assail orders
as they are promulgated by the court, when all such orders may be contested in
a single appeal.[26] To allow appeals from interlocutory orders
would result in the “sorry spectacle” of a case being a subject of a
counter-productive ping-pong to and from the trial court, as often as the trial
court is perceived to have made an error in any of its interlocutory resolutions.[27]
In Sitchon v. Sheriff of Occidental Negros,[28]
this Court reiterated the rationale for this rule:
The reason of the law in permitting appeal only from a final order or judgment, and not from interlocutory or incidental one, is to avoid multiplicity of appeals in a single action, which must necessarily suspend the hearing and decision on the merits of the case during the pendency of the appeal. If such appeal were allowed the trial on the merits of the case should necessarily be delayed for a considerable length of time, and compel the adverse party to incur unnecessary expenses; for one of the parties may interpose as many appeals as incidental questions may be raised by him and interlocutory orders rendered or issued by the lower court.
However,
the aggrieved party is not without remedy under the law after his Motion to
Dismiss the case was denied by the lower court.
As stated above, the aggrieved party may wait for the court a quo to render a judgment or decision
and reiterate such interlocutory order as an error of the court on appeal.[29]
In underscoring
this remedy, we further ruled in Espaňo
v. Court of Appeals[30]:
We find the occasion here to state the rule, once more, that an order denying a motion to dismiss is merely interlocutory and therefore not appealable, nor can it be the subject of a petition for review on certiorari. Such order may only be reviewed in the ordinary course of law by an appeal from the judgment after the trial. The ordinary procedure to be followed in that event is to file an answer, go to trial, and if the decision is adverse, reiterate the issue on appeal from the final judgment.
In J.L. Bernardo Construction v. Court of
Appeals,[31]
this Court also prescribed an alternative remedy to be taken from an order
denying a motion to dismiss:
As
a general rule, an interlocutory order is not appealable until after the rendition
of the judgment on the merits for a contrary rule would delay the
administration of justice and unduly burden the courts. However, we have ruled that certiorari is an appropriate remedy to
assail an interlocutory order (1) when the tribunal issued such order without
or in excess of jurisdiction or with grave abuse jurisdiction and (2) when the
assailed interlocutory order is patently erroneous and the remedy of appeal
would not afford adequate and expeditious relief.
Since the
aggrieved party did not wait for the final determination of Civil Case No.
98-90089 from which he could appeal, but opted to assail the Manila RTC Order dated 16 October 2003
through a Petition for Certiorari
before the Court of Appeals, it is imperative upon this Court to determine
whether the prerequisites prescribed in the J.L.
Bernardo Construction for initiating an original action for certiorari are attendant in the case at
bar. This Court must thus address the
issue of whether the Manila RTC in issuing its
The Manila
RTC grounded its Order dated
This
Court would have agreed with the [petitioner] had this question been raised
earlier. The Court notes that this
motion was filed at the time when the [petitioner] [was] supposed to
cross-examine the [private respondent’s] witness Dra. Lourdes S. Pascual, whose
testimony was taken only after five (5) years since the case was filed on
In
the case of Maersk Tabacalera Shipping
Agency vs. Court of Appeals, 187 SCRA 646, the Supreme Court ruled:
“Unlike
In the case at bar, the said [petitioner] filed their counter-claim seeking affirmative relief and then filed a motion to dismiss without raising the issue of non-payment of docket fees. And when plaintiff’s witness Dra. Lourdes S. Pascual was presented on direct examination the said [petitioner] did not object and participated in the proceedings. It is only when the said witness was to be cross examined that the issue of non-payment of docket fees was raised. Clearly, the said [petitioner] [is] in estoppel to question the jurisdiction of the Court.[32]
After
carefully examining the aforequoted Order in light of the prevailing
circumstances surrounding its issuance, we find nothing which would support
petitioner’s contention that the lower court abused its discretion in denying petitioner’s
Motion to Dismiss or that the assailed Order was patently erroneous. To the contrary, the Manila RTC Order dated
In its
Order, the lower court even recognized the validity of petitioner’s claim of
lack of jurisdiction had it timely raised the issue. It bears to stress that the non-payment of the
docket fees by private respondent and the supposed lack of jurisdiction of the
Manila RTC over Civil Case No. 98-90089 was raised by the petitioner only five
years after institution of the instant case and after one of the private
respondent’s witnesses was directly examined in open court. Not only that, the petitioner even implored the
court a quo’s jurisdiction by filing
an Answer with Counterclaim praying that the amount of P12,643,478.46 as deficiency
claim of the credit granted to private respondent and the sum P6,411,786.19 as full payment
of one of the Letters of Credit, be awarded in its favor. Petitioner likewise prayed for the award of
exemplary damages in the amount of P1,000,000.00,
attorney’s fees and cost of the suit.
It should
also be underscored that the petitioner interposed a second Motion to Dismiss
after the private respondent filed its Second Amended Complaint but never questioned
therein private respondent’s non-payment of docket fees and the Manila RTC’s
lack of jurisdiction over the case by reason thereof.
The petitioner
would like to sway this Court that the ripe time to raise the issue of lack of
jurisdiction of the Manila RTC arose only after the testimony of one of the
private respondent’s witnesses when it became evident that the private
respondent failed to make good its promise that it would eventually specify the
amount of damages it was claiming.
This Court,
however, is not persuaded. It is
incumbent upon the petitioner to file a Motion to Dismiss at the earliest
opportune time to raise the issue of the court’s lack of jurisdiction, more so,
that this issue is susceptible to laches.
Petitioner’s failure to seasonably raise the question of jurisdiction leads
us to the inevitable conclusion that it is now barred by laches to assail the Manila
RTC’s jurisdiction over the case. As defined in the landmark case of Tijam v. Sibonghanoy[33]:
Laches, in general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable length of time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.
It has been
held that a party cannot invoke the jurisdiction of a court to secure
affirmative relief against his opponent and, after obtaining or failing to
obtain such relief, repudiate or question that same jurisdiction. By way of explaining the rule, it was further
said that the question of whether or not the court had jurisdiction either over
the subject matter of the action or the parties is not important in such cases
because the party is barred from such conduct, not because the judgment or the
order of the court is valid and conclusive as an adjudication, but for the
reason that such a practice cannot be tolerated by reason of public policy.[34]
The doctrine
of laches or of “stale demands” is based upon grounds of public policy which
requires, for the peace of society, the discouragement of stale claims and,
unlike the statute of limitation, is not merely a question of time but is
principally a question of the inequity or unfairness of permitting a right or
claim to be enforced or asserted.[35]
There is no
absolute rule as to what constitutes laches or staleness of demand; each case
is to be determined according to its particular circumstances. Ultimately, however, the question of laches
is addressed to the sound discretion of the court and, since it is an equitable
doctrine, its application is controlled by equitable consideration. [36]
Since the Manila
RTC ruled that the petitioner is now estopped
by laches from questioning its jurisdiction and considering that its Order
denying petitioner’s Motion to Dismiss is not tainted with grave abuse of
discretion but wholly substantiated by the evidence on the record, this Court
would no longer disturb said order.
Of
significant application in the case at bar is our ruling in the case of Pantranco North Express, Inc. v. Court of
Appeals[37]:
[P]articipating in all stages of the case before the trial court and even invoking the trial court’s authority in order to ask for affirmative relief, the petitioner is effectively barred by estoppel from challenging the court’s jurisdiction.
Even
granting arguendo that petitioner is
not barred from questioning the jurisdiction of the Manila RTC by estoppel, this petition will still fail
on the merits. Petitioner’s own
construction of the doctrine laid down in the cases of Manchester Development Corporation v. Court of Appeals,[38]
and Sun Insurance Office, Ltd.,
(SIOL) v.
It must be
stressed that the application of the doctrines enunciated by this Court in the
cases of Manchester and Sun Insurance must be guided by the
prevailing circumstance attendant to each and the respective strict and liberal
construction of the rules on the payment of docket fees prescribed therein must
not be sought to evade penalty of one’s fraudulent act or to attribute fraud,
in the absence of any.
In
Faced with an
entirely different set of circumstances in Sun
Insurance, we modified our ruling in
The petitioner
posits that this Court’s pronouncement in Sun
Insurance is not applicable to the private respondent, since it employed
fraudulent schemes in order to deprive the court of the docket fees due. It highlights the private respondent’s act of
omitting the amount of damages in its Second Amended Complaint and emboldens such
act in order to make it appear that the present case is of the same
circumstance as that of
Again, we
do not agree. This Court wonders how the
petitioner could possibly arrive at the conclusion that the private respondent
was moved by fraudulent intent in omitting the amount of damages claimed in its
Second Amended Complaint, thus placing itself on the same footing as the
complainant in Manchester, when it is
clear that the factual milieu of the instant case is far from that of Manchester.
First, the complainant in P410.00, notwithstanding its claim for damages in the
amount of P78,750,000.00,
while in the present case, the private respondent paid P42,000.00 as docket fees
upon filing of the original complaint.
Second, complainant’s counsel in P78,750.00
but omitted the same in its prayer in order to evade the payment of docket
fees. Such fraud-defining circumstance
is absent in the instant petition.
Finally,
when the court took cognizance of the issue of non-payment of docket fees in Manchester, the complainant therein
filed an amended complaint, this time omitting all mention of the amount of
damages being claimed in the body of the complaint; and when directed by the
court to specify the amount of damages in such amended complaint, it reduced
the same from P78,750,000.00
to P10,000,000.00,
obviously to avoid payment of the required docket fee. Again, this patent fraudulent scheme is
wanting in the case at bar.
This Court
is not inclined to adopt the petitioner’s piecemeal construction of our rulings
in
All told,
the rule is clear and simple. In case
where the party does not deliberately intend to defraud the court in payment of
docket fees, and manifests its willingness to abide by the rules by paying
additional docket fees when required by the court, the liberal doctrine
enunciated in Sun Insurance and not
the strict regulations set in
In the case
at bar, it was not shown that the private respondent, in failing to state the
exact amount of damages it was claiming in its Second Amended Complaint intended
to defraud the court of the docket fees due.
In the first place, upon filing of the original Complaint, the private
respondent paid docket fees in the amount of P42,000.00. Clearly,
the circumstances attendant in
With
respect to petitioner’s contention that the lower court did not acquire
jurisdiction over the amended complaint increasing the amount of damages
claimed to P600,000.00, we agree with the Court of Appeals that the
lower court acquired jurisdiction over the case when private respondent paid
the docket fee corresponding to its claim in its original complaint. Its
failure to fee the docket fee corresponding to its increased claim for damages
under the amended complaint should not be considered as having curtailed the
lower court’s jurisdiction. Pursuant to
the ruling in Sun Insurance Office, Ltd.,
(SIOL) v. P600,000.00 as its claim for
damages in its amended complaint.
Based on
the foregoing, it is but proper therefore, that this case should not be dismissed
but be allowed to continue until judgment, and the private respondent’s unpaid docket fee should be
considered as a lien on any monetary judgment in its favor.
WHEREFORE, IN
VIEW OF THE FOREGOING, the instant Petition is DENIED. The Decision
dated
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate Justice
Associate Justice
ATTESTATION
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.
CONSUELO YNARES-SANTIAGO
Associate
Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’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.
REYNATO S.
PUNO
Chief Justice
[1] Penned by Associate Justice Portia
Alino-Hormachuelos with Associate Justices Juan Q. Enriquez, Jr. and Vicente Q.
Roxas, concurring. Rollo, pp. 53-59.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18]
[19]
[20]
[21]
[22]
[23] Ramiscal,
Jr. v. Sandiganbayan, G.R. Nos. 140576-99,
[24] G.R. No. L-60036,
[25] 335 Phil. 983, 987-988 (1997).
[26] Rudecon
Mananagement Corporation v. Singson, G.R. No. 150798,
[27] Go v. Court of Appeals, 358 Phil. 214, 223 (1998).
[28] 80 Phil. 397, 399 (1948); Rudecon Management Corporation v. Singson, supra note 26 at 629.
[29] Quelnan
v. VHF Philippines, Inc. G.R. No. 145911,
[30] Supra note 25 at 515.
[31] 381 Phil. 25, 36 (2000).
[32] Rollo,
p. 311.
[33] 131 Phil. 556, 563 (1968).
[34]
[35]
[36] Espaňo
v. Court of Appeals, supra note 25 at 986.
[37] G.R. No. 105180,
[38] G.R. No. L-75919,
[39] G.R. Nos. 79937-38,
[40] Dela Paz v. Court of Appeals, 385 Phil. 441, 449-450 (2000).
[41]
[42] 358 Phil. 38, 62 (1998).