THIRD
DIVISION
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BANCO DE ORO-EPCI, INC. (formerly
Equitable PCI Bank), Petitioner, - versus
- JOHN TANSIPEK, Respondent. |
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G.R. No. 181235 Present: YNARES-SANTIAGO, J., Chairperson, CHICO-NAZARIO, VELASCO, JR., NACHURA, and PERALTA, JJ. Promulgated: July 22, 2009 |
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CHICO-NAZARIO, J.:
Before Us is a Petition for Review on
Certiorari assailing the Decision[1] of
the Court of Appeals in CA-G.R. CV No. 69130 dated
The facts of the case are as follows:
J. O. Construction, Inc. (JOCI), a
domestic corporation engaged in the construction business in P4,050,136.51 was not turned over to
JOCI. Instead, respondent Tansipek
endorsed said check and deposited the same to his account in PCIB, Wilson
Branch, P4,050,136.51),
P500,000.00 in attorney’s fees, P100,000.00 in expenses, P50,000.00
for costs of suit, and P500,000.00 in exemplary damages.
PCIB filed a Motion to Dismiss the
Complaint on the grounds that (1) an indispensable party was not impleaded, and
(2) therein plaintiff JOCI had no cause of action against PCIB. The RTC denied PCIB’s Motion to Dismiss.
PCIB filed its answer alleging as
defenses that (1) JOCI had clothed Tansipek with authority to act as its agent,
and was therefore estopped from denying the same; (2) JOCI had no cause of
action against PCIB ; (3) failure to implead Tansipek rendered the proceedings
taken after the filing of the complaint void; (4) PCIB’s act of accepting the
deposit was fully justified by established bank practices; (5) JOCI’s claim was
barred by laches; and (6) the damages alleged by JOCI were hypothetical and
speculative. PCIB incorporated in said Answer its counterclaims for exemplary
damages in the amount of P400,000.00, and litigation expenses and
attorney’s fees in the amount of P400,000.00.
PCIB likewise moved for leave for the
court to admit the former’s third-party complaint against respondent
Tansipek. The third-party complaint alleged
that respondent Tansipek was a depositor at its Wilson Branch, San Juan, Metro
Manila, where he maintained Account No. 5703-03538-3 in his name and/or that of
his wife, Anita. Respondent Tansipek had
presented to PCIB a signed copy of the Minutes of the meeting of the Board of
Directors of JOCI stating the resolution that –
Checks payable to J.O. Construction, Inc. may be
deposited to Account No. 5703-03538-3 under the name of John and/or Anita
Tansipek, maintained at PCIB, Wilson Branch.[2]
Respondent Tansipek had also
presented a copy of the Articles of Incorporation of JOCI showing that he and
his wife, Anita, were incorporators of JOCI, with Anita as Treasurer. In the third-party complaint, PCIB prayed for
subrogation and payment of attorney’s fees in the sum of P400,000.00.
PCIB filed a Motion to Admit Amended
Third-Party Complaint. The amendment consisted
in the correction of the caption, so that PCIB appeared as Third-Party
Plaintiff and Tansipek as Third-Party Defendant.
Upon Motion, respondent Tansipek was
granted time to file his Answer to the Third-Party Complaint. He was, however, declared in default for
failure to do so. The Motion to
Reconsider the Default Order was denied.
Respondent Tansipek filed a Petition
for Certiorari with the Court of
Appeals assailing the Default Order and the denial of the Motion for
Reconsideration. The Petition was
docketed as CA-G.R. SP No. 47727. On
Pre-trial on the main case ensued,
wherein JOCI and PCIB limited the issues as follows:
1. Whether or not the defendant bank erred
in allowing the deposit of Check No. 0302572 (Exh. “A”) in the amount of P4,050,136.51
drawn in favor of plaintiff JO Construction, Inc. in John Tansipek’s account
when such check was crossed and clearly marked for payee’s account only.
2. Whether the alleged board resolution
and the articles of Incorporation are genuine and a valid defense against plaintiff’s
effort to collect the amount of P4,050,136.51.
On
WHEREFORE, judgment is hereby rendered in
favor of the plaintiff [JOCI] and against the defendant bank [PCIB] ordering
the latter to pay to the plaintiff the sum of P4,050,136.51 with
interest at the rate of twelve percent (12%) per annum from the filing of this
complaint until fully paid plus costs of suit.
The other damages claimed by the plaintiff are denied for being
speculative.
On the third party complaint, third-party
defendant John Tansipek is ordered to pay the third-party plaintiff Philippine
Commercial and Industrial Bank all amounts said defendant/third-party plaintiff
shall have to pay to the plaintiff on account of this case.[3]
Respondent Tansipek appealed the
Decision to the Court of Appeals. The
case was docketed as CA-G.R. CV No. 69130.
Respondent Tansipek assigned the following alleged errors:
a) The trial court’s decision upholding
the order of default and the consequent ex-parte reception of appellee’s
evidence was anchored on erroneous and baseless conclusion that:
1)
The original
reglementary period to plead has already expired.
2)
The ten day
extended period to answer has likewise expired.
3)
There is no need
to pass upon a second motion to plead much less, any need for a new motion for
extended period to plead.
b) The trial court erred in utterly
depriving the appellant of his day in court and in depriving constitutional,
substantive and procedural due process premised solely on pure and simple
technicality which never existed and are imaginary and illusory.
c) The trial court erred in ordering the
third-party defendant-appellant John Tansipek to pay the third party
plaintiff-appellee PCIBank all amounts said bank shall have to pay to the
plaintiff-appellee by way of subrogation since appellant if allowed to litigate
in the trial court, would have obtained a favorable judgment as he has good,
valid and meritorious defenses.[4]
On
WHEREFORE, premises considered, the appeal
is GRANTED. The decision relative to the
third party complaint is REVERSED and SET ASIDE. The case is ordered REMANDED to the trial court
for further proceedings on the third party complaint.[5]
The Court of Appeals denied the
Motion for Reconsideration of PCIB in a Resolution dated
Petitioner Banco de Oro-EPCI, Inc.,
as successor-in-interest to PCIB, filed the instant Petition for Review on Certiorari, assailing the above Decision
and Resolution of the Court of Appeals, and laying down a lone issue for this
Court’s consideration:
WHETHER OR NOT THE COURT OF APPEALS CAN REVERSE ITS
DECISION HANDED DOWN EIGHT YEARS BEFORE.[6]
To recapitulate, upon being declared
in default, respondent Tansipek filed a Motion for Reconsideration of the
Default Order. Upon denial thereof,
Tansipek filed a Petition for Certiorari
with the Court of Appeals, which was dismissed for failure to attach the
assailed Orders. Respondent Tansipek’s
Motion for Reconsideration with the Court of Appeals was denied for having been
filed out of time. Respondent Tansipek
did not appeal said denial to this Court.
Respondent Tansipek’s remedy against
the Order of Default was erroneous from the very beginning. Respondent Tansipek should have filed a
Motion to Lift Order of Default, and not a Motion for Reconsideration, pursuant
to Section 3(b), Rule 9 of the Rules of Court:
(b) Relief from order of default.—A party declared
in default may at any time after notice thereof and before judgment file a
motion under oath to set aside the order of default upon proper showing that
his failure to answer was due to fraud, accident, mistake or excusable
negligence and that he has a meritorious defense. In such case, the order of
default may be set aside on such terms and conditions as the judge may impose
in the interest of justice.
A Motion to Lift Order of Default is
different from an ordinary motion in that the Motion should be verified; and
must show fraud, accident, mistake or excusable neglect, and meritorious
defenses.[7] The allegations of (1) fraud, accident,
mistake or excusable neglect, and (2) of meritorious defenses must concur.[8]
Assuming for the sake of argument,
however, that respondent Tansipek’s Motion for Reconsideration may be treated
as a Motion to Lift Order of Default, his Petition for Certiorari on the denial thereof has already been dismissed with
finality by the Court of Appeals. Respondent
Tansipek did not appeal said ruling of the Court of Appeals to this Court. The dismissal of the Petition for Certiorari assailing the denial of respondent
Tansipek’s Motion constitutes a bar to the retrial of the same issue of default
under the doctrine of the law of the case.
In People v. Pinuila,[9] we
held that:
“Law of the case” has been defined as the
opinion delivered on a former appeal.
More specifically, it means that whatever is once irrevocably
established as the controlling legal rule of decision between the same parties
in the same case continues to be the law of the case, whether correct on
general principles or not, so long as the facts on which such decision was
predicated continue to be the facts of the case before the court.
It may be stated as a rule of general
application that, where the evidence on
a second or succeeding appeal is substantially the same as that on the first or
preceding appeal, all matters, questions, points, or issues adjudicated on the
prior appeal are the law of the case on all subsequent appeals and will not be
considered or readjudicated therein.
x x x x
As a general rule a decision on a prior
appeal of the same case is held to be the law of the case whether that decision
is right or wrong, the remedy of the party deeming himself aggrieved being to
seek a rehearing.
Questions necessarily involved in the
decision on a former appeal will be regarded as the law of the case on a
subsequent appeal, although the questions are not expressly treated in the
opinion of the court, as the presumption is that all the facts in the case
bearing on the point decided have received due consideration whether all or
none of them are mentioned in the opinion.
(Emphasis supplied.)
The issue of the propriety of the
Order of Default had already been adjudicated in Tansipek’s Petition for Certiorari with the Court of
Appeals. As such, this issue cannot be
readjudicated in Tansipek’s appeal of the Decision of the RTC on the main
case. Once a decision attains finality,
it becomes the law of the case, whether or not said decision is erroneous.[10]
Having been rendered by a court of competent jurisdiction acting within its
authority, the judgment may no longer be altered even at the risk of legal
infirmities and errors it may contain.[11]
Respondent Tansipek counters that the
doctrine of the law of the case is not applicable, inasmuch as a Petition for Certiorari is not an appeal. Respondent Tansipek further argues that the
Doctrine of the Law of the Case applies only when the appellate court renders a
decision on the merits, and not when such appeal was denied due to
technicalities.
We are not persuaded.
In Buenviaje v. Court of Appeals,[12]
therein respondent Cottonway Marketing Corporation filed a Petition for Certiorari with this Court assailing the
Decision of the National Labor Relations Commission (NLRC) ordering, inter alia, the reinstatement of therein
petitioners and the payment of backwages from the time their salaries were
withheld up to the time of actual reinstatement. The Petition for Certiorari was dismissed by this Court. The subsequent Motion for Reconsideration was
likewise denied. However, the Labor
Arbiter then issued an Order limiting the amount of backwages that was due to
petitioners. The NLRC reversed this
Order, but the Court of Appeals reinstated the same. This Court, applying the Doctrine of the Law
of the Case, held:
The decision
of the NLRC dated
Furthermore, there is no substantial
distinction between an appeal and a Petition for Certiorari when it comes to the application of the Doctrine of the
Law of the Case. The doctrine is founded
on the policy of ending litigation. The
doctrine is necessary to enable the appellate court to perform its duties
satisfactorily and efficiently, which would be impossible if a question once
considered and decided by it were to be litigated anew in the same case upon
any and every subsequent appeal.[14]
Likewise, to say that the Doctrine of
the Law the Case applies only when the appellate court renders a decision on
the merits would be putting a premium on the fault or negligence of the party
losing the previous appeal. In the case
at bar, respondent Tansipek would be awarded (1) for his failure to attach the
necessary requirements to his Petition for Certiorari
with the Court of Appeals; (2) for his failure to file a Motion for
Reconsideration in time; and (3) for his failure to appeal the Decision of the
Court of Appeals with this Court. The
absurdity of such a situation is clearly apparent.
It is important to note that a party
declared in default – respondent Tansipek in this case – is not barred from
appealing from the judgment on the main case, whether or not he had previously
filed a Motion to Set Aside Order of Default, and regardless of the result of
the latter and the appeals therefrom.
However, the appeal should be based on the Decision’s being contrary to
law or the evidence already presented, and not on the alleged invalidity of the
default order.[15]
WHEREFORE, the
Decision of the Court of Appeals in CA-G.R. CV No. 69130 dated 18 August 2006 and
the Resolution of the same court dated 9 January 2008 are hereby REVERSED and SET ASIDE. The Decision of
the
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson
Associate
Justice Associate Justice
DIOSDADO M. PERALTA
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 Arcangelita M. Romilla-Lontok with Associate Justices Roberto A. Barrios and Mario L. Guariña III, concurring. Rollo, pp. 7-14.
[2] Rollo, p. 9.
[3] CA rollo, p. 60.
[4] Rollo, p. 11.
[5]
[6]
[7] Montinola, Jr. v. Republic Planters Bank, G.R. No. 66183, 4 May 1988, 161 SCRA 45, 54.
[8] Barraza v.
[9] 103 Phil. 992, 999 (1958).
[10] Enriquez
v. Court of Appeals, G.R. No. 83720,
[11]
[12] 440 Phil. 84 (2002).
[13]
[14] People v. Pinuila, supra note 9.
[15] See Lina v. Court of Appeals, 220 Phil. 311, 317 (1985); Cerezo v. Tuazon, 469 Phil. 1020, 1036-1037 (2004).