FIRST DIVISION
|
ALBAY ELECTRIC COOPERATIVE, INCORPORATED, Petitioner, - versus - SECURITY PACIFIC ASSURANCE CORPORATION,
Respondent. |
|
G.R. No. 174189 Present: PUNO, C.J., Chairperson, SANDOVAL-GUTIERREZ, AZCUNA, and GARCIA, JJ.
Promulgated: October 5, 2007 |
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D E C I S I O N
GARCIA, J.:
Assailed and sought to be set aside
in this petition for review under Rule 45 of the Rules of Court are the
Decision[1] dated May 26, 2006 of the
Court of Appeals (CA), in CA-G.R. SP No.
85324, and its modificatory
resolution[2] of July 21, 2006 which
denied the herein petitioner’s motion for reconsideration. As thus modified,
the assailed decision nullified (a) the
orders of the Regional Trial Court (RTC) of
Records yield the
following relevant facts:
Herein petitioner
Albay Electric Cooperative, Inc. (ALECO), during the period material, operated
the Polangui, Albay 10 MVA electric substation, while herein respondent
Security Pacific Assurance Corporation (SPAC) is an insurance firm engaged in
non-life insurance business.
The case started when, on September 24, 2001,
in the RTC of Quezon City, ALECO, represented by Gil B. Medina, filed a complaint[3] for a sum of money and
breach of contract with prayer for a writ of preliminary attachment against
Roberto D. Tuazon and/or R.D. Tuazon Construction (individually or collectively
Tuazon, hereinafter). The contract[4] Tuazon allegedly breached
despite his receipt of a cash advance
payment related to the construction of a power station project. The complaint
was docketed in the said court as Civil Case No. Q-O1-45171, which was eventually
raffled to Branch 77 thereof.
On P9,000,000.00.
Following the issuance by the P9,000.000.00. The offered dissolving bond - SPAC BOND No.
01163/2001- was under the signature of Aurora C. Galvez (Galvez), former
president of SPAC. ALECO’s opposition to the dissolution aforementioned, rooted
on the alleged financial incapability of SPAC to undertake the counter-bond,
prompted the trial court to schedule hearings on the matter.
Before the trial
court could act on the request for approval of the counter-bond, Galvez,
purportedly upon authority of the SPAC
Board, filed on
Galvez, by herself,
would later reverse course as, on January 18, 2002, she filed an “Urgent Motion for Withdrawal of the
Manifestation dated 28 November 2001,”[6] therein praying for the revival of the
cancelled bond, and declaring that there
is no other bonding company that can acceptably assume the obligation of a
surety for this particular case and
that Tuazon has posted ample security for
said bond. In connection with the
hearing of this urgent motion, the SPAC board adopted on January 21, 2002 a
resolution[7] that the corporation shall
participate in the case and that “Mr.
Ponce be authorized … to represent [SPAC] in the proceedings of said case [but
only] to attest the authenticity of the bond issued in favor of R.R. Tuazon
Construction.”
Subsequently,
Tuazon secured a new counter-bond, i.e.,
SPAC BOND No. 01332/2002, in the amount of P9 Million. He then filed a
new motion to approve counter-bond and for the discharge of the writ of preliminary
attachment. On
The intervening legal skirmishes,
inclusive of the preliminary referral of the case to an arbitrator, are not
material to this narration. The bottom line is that on August 26, 2003, the trial court, on the basis of the arbitrator’s
finding, rendered judgment[9] for ALECO, as plaintiff, Tuazon being ordered,
as defendant, to pay ALECO the amount of P9,000,000.00, as actual and
compensatory damages, plus interest; P100,000.00 as and by way of
exemplary damages; P100,000.00 as
attorney's fees; and the costs of suit.
From
the above
At the September 19, 2003 hearing, the trial
court, in an open court order, denied[11]
Tuazon’s motion for reconsideration under the pro forma rule, failing as it did to indicate a particular time and
date for the hearing thereof. Tuazon
would, three days later –
Meanwhile, during the same
By Order[14] of
WHEREFORE, the Order, dated
SO ORDERED. (Emphasis added and words in
brackets.)
The
reconsideration thus granted did not, as to be expected, sit well with ALECO as
it filed on
Meanwhile, on
Subsequent
developments saw the trial court issuing another order[16] dated
What
transpired next is summarized in the appealed CA decision as follows:
On
On
February 27, 2004, ALECO in a letter addressed to [the] Branch Clerk of Court …
requested for "immediate issuance of a supplemental writ of execution to
include the enforcement of the judgment against SPAC which issued the
counter-attachment bond, conformably to the order of execution dated February
16, 2004 and Section 17, Rule 57 of tile
Rules of Court.” On
“WHEREAS, in an Order, dated February
16, 2004, the Court ruled as follows:
'(1)
The plaintiff’s [ALECO’s] motion for reconsideration
is hereby granted. Accordingly, the Order, dated October 3, 2003, is hereby
reconsidered and set aside;
(2) The plaintiff’s motion for execution is
hereby granted. Accordingly, let a writ of execution issue for the enforcement
of the Judgment, dated August 26, 2003, rendered in this case against the
defendant [Tuazon] and [SPAC].
WHEREAS,
in a Writ of Execution, dated
WHEREAS,
in a Partial Sheriffs Return, dated
WHEREAS,
…[ALECO has] requested for the immediate issuance of a Supplemental Writ of
Execution to include the enforcement of the Judgment against …[SPAC].
NOW
THEREFORE, in accordance with: (1) the Judgment dated August 26, 2003; (2) the
Order dated February 16, 2004; (3) the terms of the counter-bond executed
between the defendant and [SPAC] on January 5, 2002; and (4) Section 17, Rule
57 the 1997 Rules of Civil Procedure, as amended, we command you to enforce the
aforecited Judgment in this case against the Counter Bond No. 00133, issued by
the [SPAC], up to the amount stated therein which is Nine Million Pesos
(P9,000,000.00).
As
a result of the enforcement of the supplemental writ of execution and notices
of garnishment, private respondent ALECO managed to get P2,000.000.00 from
[SPAC’s] funds with the PCIB, Quezon Ave. Branch and remittances due petitioners
from Toyota Cubao, Inc., including that garnished from the Bureau of Treasury.[20]
(Emphasis and
words in brackets added.)
From the aforesaid
Aggrieved, SPAC went to the CA on July 16,
2004 via a petition for certiorari in CA-G.R. SP No. 85324, thereunder ascribing to the trial court the
commission of grave abuse of discretion in allowing execution on the subject counter-bond
notwithstanding the fact –
1. xxx THAT AT THE TIME
THE MOTION TO EXECUTE ON THE BOND WAS FILED, THE DECISION SOUGHT TO BE EXECUTED
HAS NOT YET BECOME FINAL AND EXECUTORY.
2.
xxx THAT PETITIONER [SPAC] WAS NOT
NOTIFIED OF THE RECONSIDERATION SOUGHT BY [ALECO] ON THE ORDER DATED 3 OCTOBER 2003 GIVING DUE
COURSE TO R.D. TUAZON'S MOTION FOR RECONSIDERATION OF THE DECISION OF 26 AUGUST
2003; WITHOUT CONDUCTING A SUMMARY HEARING WITH NOTICE TO THE SURETY PURSUANT
TO SECTION 17, RULE 57, OF THE 1997 RULES AND UPHOLDING THE ACT OF THE BRANCH
CLERK OF COURT WHO ISSUED THE ASSAILED SUPPLEMENTAL WRIT UPON A MERE LETTER OF
PLAINTIFF, WHICH FAILURE, EFFECTIVELY DEPRIVED PETITIONER THE, RIGHT TO DUE
PROCESS FOR LACK. OF NOTICE ON THE ILLEGAL AND UNJUST ISSUANCES OF WRIT AND
SUPPLEMENTAL WRIT OF EXECUTION, AND NOTICES OF GARNISHMENT, ….
3.
xxx MS. GALVEZ …, THE PERSON WHO ISSUED THE BOND, WAS NOT CLOTHED WITH POWER OR AUTHORITY TO DO
SO THEREBY MAKING HER ACT ULTRA VIRES AND THEREFORE, NULL AND VOID AND OF NO
FORCE AND EFFECT.
To the petition, ALECO filed
its Comment[24]
with a plea for summary dismissal, accusing SPAC of forum shopping by resorting
to two (2) modes of review to nullify the assailed orders of the trial court.
The CA eventually
issued its herein assailed decision[25] granting the petition of
SPAC, the appellate court predicating its ruling on the first two issues alone.
It left the third issue untouched predicating its non-action thereon on the
notion that the question delving on the validity of the counter-bond is factual
which would thus require presentation of evidence, a proceeding that is beyond
the scope of a certiorari
action. In full, the fallo of the assailed CA’s decision
reads:
WHEREFORE, the petition is GRANTED. The Orders dated
SO ORDERED. (Emphasis in the original)
On
WHEREFORE, respondent ALECO’S Motion for Reconsideration is DENIED for lack of merit. Petitioner’s
Urgent Motion is GRANTED and the
dispositive portion of the
WHEREFORE, the petition is GRANTED. The Orders dated
Hence,
ALECO’s instant petition for review on
its submission that the CA committed grave error of law:
1)
xxx IN HOLDING THAT SPAC DID NOT COMMIT FORUM SHOPPING WHEN IT
AVAILED OF TWO MODES OF REVIEW, FIRST BY WAY OF APPEAL AND WHEN DENIED BY
CERTIORARI, TO NULLIFY NOT THE DENIAL OF
APPEAL BUT SAME ORDERS ALLOWING EXECUTION SUBJECT MATTER OF THE FAILED APPEAL.
2.
xxx IN HOLDING THAT SPAC CANNOT BE LIABLE FOR FORUM SHOPPING IN
FILING A SEPARATE ACTION BEFORE A DIFFERENT COURT SEEKING INJUNCTIVE RELIEF
AND COMPLETELY IGNORING THE
“DISCLOSURE UNDERTAKING” IN ITS
CERTIFICATION OF NON-FORUM SHOPPING EVEN IF THE SEPARATE CLAIM FOR RELIEF WAS
DEEMED INCLUDED OR COULD HAVE BEEN INCLUDED IN THE PENDING CASE, SEEKING
SUBSTANTIALLY THE SAME RELIEF FROM THE SAME ORDERS OF EXECUTION AND
GARNISHMENT.
3.
THE [CA] , IN NULLIFYING
THE ORDERS OF EXECUTION FOR BEING
ALLEGEDLY PREMATURE, COMMITTED SERIOUS ERROR IN LAW, THE INTERVENING MOTIONS
FOR RECONSIDERATION OF THE JUDGMENT BEING FATALLY DEFECTIVE AND PRO-FORMA AND,
HENCE DID NOT TOLL THE REGLEMENTARY PERIOD, THEREBY ALLOWING THE JUDGMENT TO
BECOME FINAL AND EXECUTORY AT THE TIME THE MOTON FOR EXECUTION ON THE
COUNTER-BOND WAS FILED AND GRANTED.
We DENY.
The
first two issues raised by the petitioner, relating as they do to the alleged
forum shopping committed by herein respondent SPAC, are closely intertwined
and, thus, may be resolved jointly.
Petitioner
argues that the respondent is guilty of forum shopping in, firstly, appealing
the February 16, 2004 order as
effectively reiterated in the May 20, 2004 order of the trial court,
and then in subsequently filing a petition for certiorari when the trial court denied due course to its notice of
appeal.
The
Court is unable to sustain the above view of the petitioner. When the trial
court denied due course to respondent SPAC’s notice of appeal for being
erroneous – certiorari being the proper
remedy - it filed a timely petition for certiorari
with the appellate court. There was nothing legally amiss with this legal
strategy. SPAC was not precluded from
resorting to the proper judicial remedy – certiorari
– when the first one taken, which is appeal, was erroneous.
Forum shopping exists where the elements of litis pendentia are present or where a
final judgment in one case will amount to res
judicata in the other.[27] In the present case,
there was no final order yet and SPAC was still within its rights in availing
itself of the proper remedy, i.e., to
elevate the trial court’s orders to the higher court, having been apprised of
its erroneous resort to the wrong remedy of appeal. Furthermore, forum shopping
presupposes the availment of two or more simultaneous
remedies,[28]
not to successive ones arising out of an error that may have been committed in
good faith. Besides, the wrong remedy, as well as the correct one, was
addressed to one and the same court, the CA, which was the correct forum to
which the matter should be elevated. Raising a matter to the correct forum
employing the wrong mode or remedy, and later resorting to the correct one,
does not make an instance of forum shopping. The remedies of appeal and certiorari are mutually exclusive and not
alternative or successive.[29] In a case, we held that
the rule on forum shopping applies only where a party seeks a favorable opinion
in another forum through means other than appeal or certiorari.[30]
This brings us to the
third issue which pivots on the finality
of the trial court’s decision sought to be executed. In this regard, petitioner
faults the CA for holding that the issuance
by the trial court of the underlying order of execution is premature, the finality
of the August 26, 2003 decision of the trial court sought to be executed not
having set in at the time of such issuance.
The
appellate court’s rulings on prematurity and its resulting legal implication
commend themselves for concurrence.
We
shall again focus on the factual antecedents and the attending dizzying twists
and turns of the case which lead to the CA’s conclusion on prematurity.
As may be recalled, the trial court rendered on
At the
In the light of the trial court’s
October 3, 2003 Order, it would
appear that, at that stage of the proceedings, the underlying
August 26, 2003 decision of the trial court was not yet final and executory.
Hence, the filing on
The twist in the proceedings below
became more complicated when ALECO filed, without notice to SPAC, a
motion for reconsideration of the
We are not persuaded. As aptly held
by the CA:
Acting on [petitioner] ALECO’s motion, the RTC
issued the order of
And
lest it be overlooked, a recovery against the surety’s counter-bond may be
allowed present the element of finality
of the judgment, and provided that the statutory requirements on demand, notice and hearing are complied with.
Section 17, Rule 57 of the Rules of Court prescribes these requirements, thus:
SEC.
17. Recovery
upon the counter-bond- When the judgment has become executory, the surety
or sureties on any counter-bond given pursuant to the provisions of this Rule
to secure the payment of the judgment shall become charged on such counter-bond
and bound to pay the judgment obligee upon demand
the amount due under the judgment, which amount may be recovered from such
surety or sureties after notice and
summary hearing in the same action. (Emphasis added.)
As
determined by the appellate court, however, the trial court, in grave abuse of
discretion, proceeded to issue the desired order of execution against the
counter-bond – and then effectively reiterated it – notwithstanding the absence
of demand and the corresponding notice and hearing in Civil Case No.
Q-O1-45171. Wrote the CA, citing cases:[33]
xxx
But
contrary to the mandate of the aforesaid section [Sec. 17, Rule 57 of the Rules
of Court], [respondent SPAC] was not furnished with a copy of ALECO’s motion
for reconsideration of the Order dated October 3, 2003. It was imperative that [SPAC]
be furnished with a copy of the aforesaid motion for reconsideration because in
the event that ALECO’s motion for reconsideration is granted, the subject
counter-bond will eventually be the subject for execution for the satisfaction
of the judgment. Consequently in view of the lack of notice, it was impossible for [SPAC] to know that
ALECO was instituting an action against the counter-bond to answer for TUAZON’s
liability under the judgment. Thus,
following the settled rule, a writ of execution for recovery on the
counter-bond issued against the surety
who was not given notice and an opportunity to be heard is invalid.[34] (Words in brackets added.)
In all, the Court finds no reversible
error committed by the appellate court in granting herein respondent SPAC’s
petition for certiorari in CA-G.R. SP No. 85324, as clearly the
assailed order, as effectively reiterated later, of the trial court granting the
writ and supplemental writ of execution against SPAC was issued in grave abuse
of discretion because the decision against Tuazon was
not yet final when that court granted the motion for execution against the
counter-bond. This disposition, it should be stressed, should be taken in the
above light, and not as exempting SPAC, as surety, or its counter-bond, from
the liability of the principal debtor.
WHEREFORE, the instant petition is DENIED
and the assailed decision of the Court of Appeals, dated
May 26, 2006, and its Resolution dated July 21, 2006 in CA-G.R. SP No. 85324 are AFFIRMED
in toto.
Costs against the
petitioner.
SO
ORDERED.
CANCIO
C. GARCIA
Associate
Justice
WE
CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
|
ANGELINA SANDOVAL-GUTIERREZ Associate Justice |
RENATO C. CORONA Associate Justice |
ADOLFO S. AZCUNA
Associate Justice
C E R T I F
I C A T I O N
Pursuant to Section 13,
Article VIII of the Constitution, 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.
REYNATO S. PUNO
Chief Justice
[1] Penned by Associate Justice Hakim S. Abdulwahid,
with Associate Justices Remedios Salazar- Fernando
and Sesinando E. Villon concurring; rollo, pp. 86 et seq.
[2]
[3]
[4]
[5]
[6]
[7] Per Secretary Certificate dated
[8]
[9]
[10] CA Decision, p. 3; id. at 88.
[11] CA Decision, p. 10; id. at 95.
[12]
[13] CA Decision, p. 10; rollo, p. 95.
[14]
[15]
[16]
[17] Supra note 14.
[18] Supra note 9.
[19] Rollo,
pp. 278-280.
[20]
[21] Supra note 16.
[22] Rollo, pp. 298 et seq.
[23]
[24] Annex “RR” of the Petition, id. at 375
et seq.
[25] Supra note 1.
[26] Supra note 2.
[27] Philippine
Woman’s Christian Temperance Union, Inc. v. Abiertas House Of Friendship, Inc.,
G.R. No. 125571, July 22, 1998, 292 SCRA 785.
[28] Victronics Computers, Inc. v. Regional Trial
Court of Makati, G.R. No. 104019, January 25, 1993, 217 SCRA 517.
[29] Rigor v. 10th Division of the
Court of Appeals, G.R. No. 167400,
[30] Ligon
v. Court of Appeals, G.R. No. 127683,
[31] Rollo, p. 77.
[32] Pages 10 & 11 of the CA’s Decision; id. at 95-96.
[33] Vanguard Assurance v. CA, G.R. No.
L-25921,
[34] Pages 11-12 of the CA’s Decision; rollo, pp. 96-97.