Republic
of the
Supreme
Court
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MARICALUM
MINING |
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G.R.
No. 158332 |
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CORPORATION, |
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Petitioner, |
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Present: |
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YNARES-SANTIAGO, J., |
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Chairperson, |
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-
versus - |
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AUSTRIA-MARTINEZ, |
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NACHURA, and |
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REYES, JJ. |
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REMINGTON
INDUSTRIAL |
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SALES
CORPORATION, |
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Promulgated: |
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Respondent. |
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February 11, 2008 |
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D E C I S I O N
AUSTRIA-MARTINEZ, J.:
By way of Petition for Review on Certiorari
under Rule 45 of the Rules of Court, Maricalum Mining Corporation (petitioner)
assails before this Court the February 10, 2003 Decision[1] and May 21,
2003 Resolution[2] of the
Court of Appeals (CA) in CA-G.R. SP No. 65209.
The facts in Development Bank of
the Philippines v. Court of Appeals and Remington Industrial Sales Corporation[3] (hereinafter referred to
as “DBP v. CA”) and Philippine National Bank v. Court of Appeals and Remington
Industrial Sales Corporation[4] (hereinafter
referred to as “PNB v. CA”) are relevant to the present case.
Remington Industrial Sales Corporation
(private respondent) sued Marinduque Mining and Industrial Corporation
(Marinduque Mining) for payment of P921,755.95 worth of construction
materials and other merchandise. The
complaint, docketed with the Regional Trial Court of Manila, Branch 19 (RTC) as
Civil Case No. 84-25858, was amended four times to implead as co-defendants
Philippine National Bank (PNB), Nonoc Mining and Industrial Corporation (Nonoc
Mining), Development Bank of the Philippines (DBP), Asset Privatization Trust
(APT), Island Cement Corporation (ICC) and petitioner, on the ground that they
are assignees/ transferees of the real and personal properties, chattels,
machineries, equipment and other assets of Marinduque Mining. In particular, petitioner was impleaded
because “the properties, real and personal, chattels, machineries, equipment
and all other assets of the Marinduque Mining & Industrial Corporation at
Sipalay, Negros Occidental, mining projects at Rizal Province, which were
foreclosed by the Philippine National Bank and Development Bank of the
Philippines, were transferred to (petitioner) x x x.”[5]
On
WHEREFORE, judgment is hereby rendered in favor
of the plaintiff, ordering the defendants Marinduque Mining & Industrial
Corporation, Philippine National Bank, Development Bank of the Philippines,
Nonoc Mining and Industrial Corporation, Maricalum Mining Corporation
[petitioner], Island Cement Corporation and Asset Privatization Trust to pay ,
jointly and severally, the sum of P920,755.95, representing the
principal obligation, including the stipulated interest as of June 22, 1984,
plus ten percent (10%) surcharge per annum by way of penalty, until the amount
is fully paid; the sum equivalent to 10% of the amount due as and for
attorney's fees; and to pay the costs.
SO ORDERED.[6]
Petitioner and its co-defendants PNB,
DBP, Nonoc Mining, ICC and APT filed with the CA an appeal docketed as CA-G.R.
CV No. 27720.[7] The CA dismissed their appeal in a Decision[8] dated
DBP and PNB filed before the Court
separate appeals, docketed as G.R. Nos. 126200 and
122710, respectively.
On its own, petitioner also attempted
to institute an appeal with the Court by filing a motion for an extension of 30
days within which to file a petition for review on certiorari and to pay
the legal fees. However, for lack of an
affidavit of service as required under paragraph 2 of Supreme Court Circular
No. 1-88 and Administrative Circular No. 3-96, the Court denied its motion in
the Resolution[9]
of
Thus, on
6. With the finality of the Honorable Supreme
Court's resolution of denial of December 4, 1996 and the entry of said
resolution in the book of entries of judgment itself, the decision of the
Honorable Court of Appeals dated October 6, 1995 affirming the decision of this
Honorable Court dated April 10, 1990 has now
become final and executory, as far as [petitioner] is concerned,
for which reason, issuance of a writ of execution for its satisfaction would be
most proper at this stage against said [petitioner].[12] (Emphasis supplied.)
Over petitioner's objection,[13] the RTC granted the
Motion for Execution in an Order[14] dated
In the interregnum, the Court rendered
a Decision[20]
dated
WHEREFORE, the
petition is GRANTED. The decision of the Court of Appeals dated
SO ORDERED[21] (Emphasis supplied.)
which became final
on
In PNB v. CA, the Court
rendered a Decision[22] dated
WHEREFORE, the Court
REVERSES the decision of the Court of Appeals and in lieu thereof, enters
judgment DISMISSING the complaint of Remington Industrial Sales Corporation in
Civil Case No. 84-25858, Regional Trial Court, Branch 19, Manila, as against
defendants Philippine National Bank and Development Bank of the Philippines[sic].
No costs.
SO ORDERED,[23]
which became final
on
Thus, citing PNB v. CA,
petitioner filed in CA-G.R. No. 65209, a Manifestation[24] urging it to dismiss the
claim of private respondent and annul the March 9, 2001 and May 10, 2001 RTC
Orders.
The CA rendered the
Hence, petitioner is before the Court
yet again on the following grounds:
I
The Court of Appeals seriously erred in
affirming the orders dated March 9, 2001 and May 10, 2001 of Hon. Judge Zenaida
R. Daguna granting the motion for execution as against herein petitioner
Maricalum, a mere assignee/successor-in-interest of the Philippine National
Bank and Development Bank of the Philippines.
A. Petitioner
Maricalum is merely an assignee/successor-in-interest when it acquired
properties foreclosed by the Philippine National Bank (PNB, for brevity) and
the Development Bank of the
B. This
Honorable Court's Decision dated
C. By
virtue of this Honorable Court's Decision dated October 12, 2001 in G.R. No.
122710, respondent Remington has no more cause of action against petitioner
Maricalum, as said decision clearly and unequivocally declares that in Civil
Case No. 84-25858, “x x x the obligation remains with MMIC (Marinduque Mining
and Industrial Corporation). x x x”
II
The Court of Appeals seriously erred when it
declared that respondent Remington had acquired vested rights against herein
petitioner Maricalum, a mere assignee/successor-in-interest of PNB and DBP.
A. This
Decision dated October 12, 2001 of this Honorable Court in G.R. No. 122710 is
the law of the case and any right that respondent Remington may have acquired
as against petitioner Maricalum prior thereto is contrary to law.
B. The
Decision dated
C. The
assailed Decision dated
This time, petitioner's recourse is
not in vain.
Simplified, the issue is whether the
Court's Decisions in DBP v. CA and PNB v. CA inured to the
benefit of petitioner which was not a party to either case, as to bar execution
of the April 10, 1990 RTC Decision, as affirmed in the
October 6, 1995 CA Decision in CA-G.R. CV No. 27720, against it.
The CA ruled in the negative, thus:
It is a well-settled
rule that the perfection of an appeal in the manner and within the period
prescribed by law is not only mandatory but jurisdictional and the failure to
perfect the appeal has the effect of rendering the judgment final and
executory.
In the case at bench,
the failure of the defendants, among them the petitioner, to perfect their
appeal from the decision of this Court in CA-G.R. No. 27720, promulgated on 06
October 1995, affirming the decision of the trial court, rendered the said
decision of the Court final and executory except as against Philippine National
Bank and Development Bank of the Philippines.
The respective appeals filed by
the Philippine National Bank and the Development Bank of the Philippine did not
inure to the benefit of their co-defendants, including the petitioner, who did
not appeal nor can it be deemed to be an appeal of such co-defendants from the
judgment against them. Simply put, the appeals interposed by the
Philippine National Bank and Development Bank of the Philippines, in no way,
prevented the aforementioned decision of this Court from becoming final and
executory as against the petitioner and the other defendants
notwithstanding the fact that all of said defendants were held solidarily
liable in the said decision.
Once a decision
becomes final and executory, vested rights are acquired by the winning party.
As such, the winning party can have the said decision executed as a matter of
right, and the issuance of a Writ of Execution becomes a ministerial duty of
the court. By the same token, the sheriff's duty in the execution of a writ
issued by a court is likewise purely ministerial.[26] (Emphasis supplied.)
The Court holds otherwise.
Indeed, one party's appeal from a
judgment will not inure to the benefit of a co-party who failed to appeal; and as
against the latter, the judgment will continue to run its course until it
becomes final and executory.[27] To this general rule, however, one exception
stands out: where both parties have a commonality of interests, the appeal of
one is deemed to be the vicarious appeal of the other.[28] As the Court held in John Kam Biak Y. Chan, Jr. v. Iglesia ni Cristo:
The
modification made by this Court to the judgment of the Court of Appeals must
operate as against Yoro, for as fittingly held by the court a quo:
While
it is settled that a party who did not appeal from the decision cannot seek any
relief other than what is provided in the judgment appealed from, nevertheless,
when the rights and liability of the defendants are so interwoven and dependent
as to be inseparable, in which case, the modification of the appealed judgment
in favor of appellant operates as a modification to Gen. Yoro who did not
appeal. In this case, the liabilities of Gen. Yoro and appellant being
solidary, the above exception applies. [29]
In
Director of Lands v. Reyes,[30] the Court identified the
circumstances indicative of a commonality in the interests of the parties, such
as when: a) their rights and liabilities originate from only one source or
title; b) homogeneous evidence establishes the existence of their rights and liabilities;
and c) whatever judgment is rendered in the case or appeal, their rights and
liabilities will be affected, even if to varying extents.
In DBP v. CA and PNB
v. CA, the Court has conclusively adjudicated the commonality in the interests of DBP, PNB and
petitioner, in relation to private respondent.
To recall DBP v. CA, the
main issue resolved therein was whether Marinduque Mining and DBP and its
transferees, including petitioner, are one and the same corporate entity such
that the latter may be held liable for the obligations of the former. The contention of private respondent was that
such piercing of the corporate veil separating Marinduque Mining, DBP and its
transferees was warranted because DBP foreclosed on the mortgage of Marinduque Mining
and acquired the latter’s properties by auction sale but later dispersed said
properties to various corporations, including petitioner, all for the
fraudulent purpose of placing said properties beyond the reach of private respondent and thereby frustrating
its efforts
to collect on the
obligation
of Marinduque Mining.
The Court found the foregoing contention of private respondent
untenable and ruled that the acquisition by DBP of the properties of Marinduque
Mining was bona fide:
x x x In this case, however, we do not find
any fraud on the part of Marinduque Mining and its transferees to warrant the piercing of the corporate veil.
It
bears stressing that PNB and DBP are mandated to foreclose on the mortgage when
the past due account had incurred arrearages of more than 20% of the total outstanding obligation. Section 1 of Presidential
Decree No. 385 (The Law on Mandatory Foreclosure) provides:
It shall be mandatory for government financial institutions, after the
lapse of sixty (60) days from the issuance of this decree, to foreclose the
collateral and/or securities for any loan, credit accommodation, and/or
guarantees granted by them whenever the arrearages on such account, including
accrued interest and other charges, amount to at least twenty percent (20%) of
the total outstanding obligations, including interest and other charges, as
appearing in the books of account and/or related records of the financial
institution concerned. This shall be without prejudice to the exercise by the
government financial institution of such rights and/or remedies available to
them under their respective contracts with their debtors, including the right
to foreclose on loans, credits, accommodations and/or guarantees on which the
arrearages are less than twenty (20%) percent.
Thus, PNB and DBP did not only have a right, but
the duty under said law, to foreclose upon the subject properties. The banks
had no choice but to obey the statutory command.[31]
The Court further held that the subsequent transfer by DBP of the
properties of Marinduque Mining to several corporations, including petitioner,
was legitimate:
Neither
do we discern any bad faith on the part of DBP by its creation of Nonoc Mining,
Maricalum [petitioner] and Island Cement. As Remington [private
respondent] itself concedes, DBP is not authorized by its charter to engage in
the mining business. The creation of
the three corporations was necessary to manage and operate the assets acquired
in the foreclosure sale lest they deteriorate from non-use and lose their value.
In the absence of any entity willing to purchase these assets from the bank,
what else would it do with these properties in the meantime? Sound business
practice required that they be utilized for the purposes for which they were
intended.
[Private
respondent] also asserted in its third amended complaint that the use of Nonoc
Mining, [petitioner] and Island Cement of the premises of Marinduque Mining and
the hiring of the latter’s officers and personnel also constitute badges of bad
faith.
Assuming
that the premises of Marinduque Mining were not among those acquired by DBP in
the foreclosure sale, convenience and practicality dictated that the
corporations so created occupy the premises where these assets were found
instead of relocating them. No doubt, many of these assets are heavy equipment
and it may have been impossible to move them. The same reasons of convenience
and practicality, not to mention efficiency, justified the hiring by Nonoc
Mining, [petitioner] and Island Cement of Marinduque Mining’s personnel to
manage and operate the properties and to maintain the continuity of the mining
operations.[32] (Emphasis supplied.)
Based on the foregoing findings, the
Court concluded that private
respondent failed to discharge its burden of proving bad faith on the part of
Marinduque Mining and its transferees in the mortgage and
foreclosure of the subject properties as to justify the piercing of the
corporate veil.[33] More crucial, the Court ordered the dismissal
of the original complaint, noting that the proper remedy of private respondent
is to enforce its lien on the unpaid purchase price of the specific movable
properties it sold to Marinduque Mining through a liquidation proceeding
instituted in accordance with Article 2243 of the Civil Code.[34]
Likewise in PNB v. CA, the
Court held that private respondent had no cause of action against PNB because
its acquisition by foreclosure sale of the properties of Marinduque Mining was
legitimate and did not result in damage to private respondent.[35]
The adjudication rendered in DBP v. CA
and PNB v. CA is plain: private respondent has no cause of action
against DBP, PNB and their transferees, including petitioner, for they are
corporate entities separate and distinct from Marinduque Mining, and cannot be
held liable for the latter's obligations to private respondent. No compelling reason exists to discard the
veil of their corporate fiction because the acquisition through foreclosure
sale by DBP and PNB of the properties of Marinduque Mining was mandated by law,
and their transfer of said properties to various corporations, including
petitioner, for management and operation thereof was legitimate.
The foregoing adjudication is
conclusive even upon this Court, more so, the CA.[36]
Furthermore, the dismissal in DBP
v. CA of the complaint filed in Civil Case No. 84-25858 constitutes a
supervening event as it virtually blotted out the April 10, 1990 RTC Decision
rendered therein.[37] No vested right accrued from said RTC
Decision in favor of private respondent; no ministerial duty impelled the CA to
allow execution thereof.
WHEREFORE,
the petition is GRANTED. The February
10, 2003 Decision and the May 21, 2003
Resolution in CA-G.R. SP No. 65209 of the Court of Appeals are REVERSED
and SET ASIDE and the March 9, 2001 and May 10, 2001 Orders of
the Regional Trial Court in Civil Case No. 84-25858 are ANNULLED.
No costs.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice
WE
CONCUR:
CONSUELO
YNARES-SANTIAGO
Associate Justice
Chairperson
|
RENATO C. CORONA Associate Justice |
ANTONIO EDUARDO B.
NACHURA Associate Justice |
RUBEN T. REYES
Associate Justice
ATTESTATION
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.
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 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
* In lieu of Justice Minita V. Chico-Nazario, per Special
Order No. 484 dated
[1] Penned
by Associate Justice Perlita J. Tria Tirona and concurred in by Associate
Justices Roberto A. Barrios and Edgardo F. Sundiam; rollo, p. 12.
[2]
[3] 415
Phil. 538 (2001).
[4] 419
Phil. 480 (2001).
[5]
[6] Rollo, p. 123.
[7] CA
Decision in CA-G.R. CV No. 27720; id. at 124.
[8]
[9]
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18] CA
rollo, pp. 34, 44.
[19]
[20] Supra
note 3.
[21]
[22] Penned
by Justice Bernardo P. Pardo.
[23] Supra
note 4, at 493.
[24] CA
rollo, p. 94.
[25] Petition,
rollo, pp. 33-34.
[26] Rollo, pp. 15-16.
[27] Portes v. Arcala,
G.R. No. 145264,
[28] Republic
of the Philippines v. Institute for Social Concern, G.R. No. 156306, January 28, 2005, 449 SCRA 512, citing Tropical
Homes, Inc. v. Fortun, G.R. No. 51554, January 13, 1989, 169 SCRA 81, 90.
[29] G.R.
No. 160283,
[30] Director
of Lands v. Reyes and Alinsunurin v. Director of Lands, No. L-27594
and No. L-28144,
[31] Development
Bank of the
[32] Development
Bank of the
[33]
[34]
[35] Philippine
National Bank v. Court of Appeals, supra note 4, at 492-493.
[36] Dapar
v. Biascan, G.R. No. 141880, September 27, 2004, 439 SCRA 179; Heirs of Clemencia Parasac v.
Republic of the Philippines, G.R.
No. 159910, May 4, 2006, 489 SCRA 499.
[37] Megaworld
Properties and Holdings, Inc. v. Cobarde, G.R. No. 156200,