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ALICIA C. MARANAN, Petitioner, - versus - |
G.R. No. 164398 Present: QUISUMBING,
J., Chairperson, CARPIO, CARPIO
MORALES, TINGA, and VELASCO, JR., JJ. |
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MANILA BANKING CORPORATION, Respondent. |
Promulgated: March 30, 2007 |
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QUISUMBING, J.:
For
review on certiorari are the Decision[1]
dated March 29, 2004 and Resolution[2]
dated July 5, 2004 of the Court of Appeals in CA-G.R. SP No. 35398, which
affirmed the Orders[3]
dated November 17, 1993 and July 27, 1994 of the Regional Trial Court of Makati
City, Branch 150 in Civil Case No. 90-2918.
The facts,
borne out by the records, are as follows:
On
By June 30,
1990, Mandarin’s outstanding loan obligation inclusive of interest reached P30,500,000
prompting respondent to file a complaint[5]
for a sum of money against Mandarin, as well as Pacific Enamel and Glass
Manufacturing Corporation (Pacific Enamel), S. Antonio Roxas
Chua, Jr., and the aforementioned guarantors including herein petitioner.
Chua and
Pacific Enamel filed a motion to dismiss on the ground that the complaint
states no cause of action against them.[6] The trial court granted the motion to dismiss
and accordingly dropped them from the case.[7]
For her part, petitioner filed an Answer alleging that the surety agreement did not express the true
intent of the parties. She claimed that
Chua was the real borrower and actual recipient of the loan and that Mandarin
was merely used as a conduit of Pacific Enamel.
Mandarin and Pacific Enamel were allegedly owned and controlled by Chua.[8]
She stated in the Answer that as a mere
employee of Chua, she was made to sign the surety agreement in compliance with
the formalities required by the Central Bank.
Respondent subsequently
filed a Motion for Judgment on the Pleadings.[9] The trial court, however, denied the said
motion.
About two
years later, petitioner filed an Amended
Answer[10]
impleading Chua and Pacific Enamel as defendants in her counterclaim.
In its first
assailed Order, the trial court denied the admission of petitioner’s Amended
Answer and deemed the same expunged from the records, thus:
Wherefore, defendants (sic) Amended Answer is hereby DENIED and considered expunged from the record.
SO ORDERED.[11]
The
trial court explained that it had already dismissed the complaint against Chua
and Pacific Enamel for lack of cause of action. It had also denied the motion for
reconsideration of said dismissal. The trial
court further pointed out that the Amended Answer was filed without prior leave
of court.
Petitioner filed a motion for reconsideration, which the
trial court denied in its second impugned Order.
Petitioner elevated the case to the Court of Appeals
ascribing grave abuse of discretion to the court a quo in not admitting the
Amended Answer.
The appellate court dismissed the petition for lack of
merit. Petitioner’s motion for reconsideration was likewise denied. Hence, the instant petition anchored on the
following grounds:
THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING THE PETITION FOR CERTIORARI IN CA-G.R. SP NO. 35398.
A. The filing of petitioner’s Amended Answer was a matter of right and, therefore, did not require prior leave of court.
B. As mandated by the Rules of Court, petitioner correctly resorted to filing a counterclaim, and not a third-party complaint, in impleading the intended defendants-on-counterclaim.
C.
Jurisprudence
looks upon amendment of pleadings with favor and liberality in order to
determine every case as far as possible on its merits and without regard to
technicalities.[12]
Petitioner contends that the filing of an Amended Answer before a
responsive pleading is filed does not require prior leave of court. She alleges that respondent’s Motion for
Judgment on the Pleadings cannot be considered a responsive pleading as it does
not set up any defense against the claims stated in the Answer. She maintains that resort to the filing of a
counterclaim instead of a third-party complaint in impleading Chua and Pacific
Enamel is sanctioned by the Rules. She
insists that her counterclaim for annulment of the loan and the surety agreement
arose out of the same occurrence as the obligation being enforced by
respondent. She further alleges that
payment of docket fees is not required for jurisdiction to be acquired.
Respondent,
however, counters that prior leave of court is required before petitioner’s
Amended Answer may be admitted as the Motion for Judgment on the Pleadings set
up the defense that petitioner’s Answer did not tender any genuine issue and
sought the affirmative relief of a judgment on the pleadings. Respondent further
alleges that the allegations in the Amended Answer altered the theory of the
defense, and thus should have been properly pleaded in a third-party complaint.
Simply stated,
the basic issues for resolution now are: (1) whether petitioner’s Amended Answer, filed
without prior leave of court, should have been admitted; and (2) whether petitioner’s
resort to a counterclaim instead of a third-party complaint in impleading Chua
and Pacific Enamel was proper.
We find the
petition without merit, and we hold that the Court of Appeals did not err in
dismissing the petition below.
At the
outset, we note that petitioner’s Answer was confined to allegations that the surety
agreement did not express the true intent of the parties. The Answer merely purported to show that Chua
was the real borrower and actual recipient of the loan and that Mandarin was only
used as a conduit of Pacific Enamel. Also,
petitioner therein alleged that as a mere employee of Chua, she was made to
sign the surety agreement in compliance with the formalities required by the
Central Bank.
In her Amended
Answer, however, petitioner alleged for the first time that the surety
agreement dated
Obviously, petitioner’s
Amended Answer contained substantial amendments not found in her original
Answer and involved a significant shift in the theory of the defense. Noteworthy
too, said Amended Answer was filed after the case was already set for hearing.
In this
connection, Sections 2 and 3 of Rule 10 of the Rules of Court[14]
state:
SEC. 2. When amendments allowed as a matter of right. – A party may amend his pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, he may so amend it at any time within ten (10) days after it is served. (Emphasis supplied.)
SEC.
3. Amendments by leave of court. – After the case is set for hearing,
substantial amendments may be made only upon leave of court. But such leave may be refused if it
appears to the court that the motion was made with intent to delay the action
or that the cause of action or defense is substantially altered. Orders of the court upon the matters provided
in this section shall be made upon motion filed in court, and after notice to
the adverse party, and an opportunity to be heard. (Emphasis supplied.)
It is
clear from Sections 2 and 3 of Rule 10 that once a case has already been set
for hearing, regardless of whether a responsive pleading has been served, substantial
amendments such as those contained in petitioner’s Amended Answer may only be
made upon leave of court. Unfortunately,
petitioner failed to secure such prior leave, thus, the lower court cannot be
faulted for denying the admission of the said Amended Answer. Nonetheless, even if such prior leave of court
was duly filed, the court a quo could still deny it on the ground that the
Amended Answer substantially altered the theory of the defense.
As to the
second issue, Sections 6 and 14 of Rule 6 provide:
SEC. 6. Counterclaim. – A counterclaim is any claim for money or other relief which a defending party may have against an opposing party. A counterclaim need not diminish or defeat the recovery sought by the opposing party, but may claim relief exceeding in amount or different in kind from that sought by the opposing party’s claim. (Emphasis supplied)
SEC.
14. Bringing new parties. – When the presence of parties other than
those to the original action is required for the granting of complete relief in
the determination of a counterclaim or cross-claim, the court shall order them
to be brought in as defendants, if jurisdiction over them can be obtained.
Records
show that at the time of the filing of the Amended Answer in which Chua and
Pacific Enamel were impleaded in the counterclaim, the two were no longer
parties to the action. Note that the
trial court had already dropped Chua and Pacific Enamel from the case for lack
of cause of action against them. Under
the Rules, a counterclaim may be filed only against an opposing party. The filing of a counterclaim against a third
party is not allowed, but the court may order such party to be brought in as
defendant.
Corollarily,
Section 12 of Rule 6 further provides:
SEC. 12. Third-party complaint. – A
third-party complaint is a claim that a defending party may, with leave of
court, file against a person not a party to the action, called the third-party
defendant, for contribution, indemnity, subrogation or any other relief, in
respect of his opponent’s claim.
The purpose of the foregoing provision is to allow a
defendant to assert an independent claim against a third party, which would
otherwise be asserted in another action, thus preventing multiplicity of
suits. A prerequisite to the exercise of
such right is the existence of substantive basis for a third-party claim, such
as indemnity, subrogation, contribution or other substantive right. The bringing of a third-party defendant is
proper if the latter would be liable to the plaintiff or to the defendant or
both for all or part of the plaintiff’s claim against the original defendant,
although the third-party defendant’s liability arises out of another
transaction.[15]
In this
case, petitioner’s allegations in the Amended Answer point to the existence of
a substantive right against Chua and Pacific Enamel, and impute liability to
both for the sum of money respondent claims against petitioner. Clearly, under Section 12 of Rule 6, the petitioner’s
appropriate recourse is the filing, with proper leave of court, of a
third-party complaint against Chua and Pacific Enamel.
At any
rate, as previously discussed, the Amended Answer could not have been admitted for
lack of prior leave of court and for having substantially altered the theory of
the defense. Thus, at this stage, whether
Chua and Pacific Enamel were impleaded through a simple counterclaim or through
a third-party complaint would not have mattered.
As a final point, petitioner’s plea for liberal
construction of the Rules is without merit.
Liberal construction of the Rules applies only in
situations involving excusable formal error in a pleading, as long as the same
does not subvert the essence of the proceeding and connotes at least a
reasonable attempt at compliance with the Rules. Utter disregard of the Rules, in our view, cannot
justly be rationalized by harking on the policy of liberal construction.[16]
WHEREFORE, the petition is DENIED for
lack of merit. The assailed Decision dated
SO ORDERED.
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LEONARDO A. QUISUMBING Associate Justice |
WE CONCUR:
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ANTONIO T. CARPIO Associate Justice |
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CONCHITA CARPIO MORALES Associate Justice |
DANTE O. TINGA Associate Justice |
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PRESBITERO J. VELASCO,
JR. Associate Justice |
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A T T E S T A T I O N
I attest that the conclusions in the above Decision
had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.
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LEONARDO A. QUISUMBING Associate Justice Chairperson |
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 Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
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REYNATO S. PUNO Chief Justice |
[1] Rollo, pp. 268-282.
[2]
[3] Records, pp. 733-734, 807-808.
[4]
[5]
[6]
[7]
[8]
[9] Rollo, pp. 396-406.
[10] Records, pp. 581-593.
[11]
[12] Rollo, p. 418.
[13] Is a business acronym that stands for Directors, Officers, Stakeholders and other Related Interests, an acronym mostly used by banks.
[14] Since the controversy started in 1993, the pre-1997 Rules of Court applies.
[15] Asian Construction and Development Corporation v. Court of Appeals, G.R. No. 160242, May 17, 2005, 458 SCRA 750, 759.
[16] Delgado v. Court of Appeals, G.R. No. 137881,