Republic of the
Supreme Court
SECOND DIVISION
|
Petitioner, - versus - GOODLAND
COMPANY, INC., Respondent. |
G.R.
No. 188051
Present: CARPIO MORALES, J.,* NACHURA,** Acting Chairperson, PERALTA, PEREZ,*** and MENDOZA, JJ. Promulgated: November
22, 2010 |
x------------------------------------------------------------------------------------x
DECISION
NACHURA, J.:
Petitioner assails the February 16,
2009 Decision[1] and the May
18, 2009 Resolution[2] of the
Court of Appeals (CA) in CA-G.R. SP No. 103304, annulling the August 23, 2007[3]
and February 15, 2008[4]
Orders of the Regional Trial Court (RTC) of Makati City, Branch 150, which in
turn denied due course to respondent Goodland Company, Inc.’s (GOODLAND) notice
of appeal for invalid substitution of counsel.
The
antecedents:
An Ex-Parte Application/Petition for the Issuance of Writ of Possession[5] was
filed by Asia United Bank (AUB) over a 5,801-square- meter lot located in
Makati City and covered by Transfer Certificate of Title (TCT) No. 223120 of
the Registry of Deeds of Makati in AUB’s name. The property was previously
registered in the name of GOODLAND under TCT No. 192674 (114645).
The
petition alleged that, on February 20, 2000, GOODLAND executed a Third Party
Real Estate Mortgage on the property in favor of AUB to secure the P202
million credit accommodation extended by the latter to Radiomarine Network
(Smartnet) Inc. (Radiomarine).
When
Radiomarine defaulted in the payment of its obligation, AUB instituted extrajudicial
foreclosure proceedings against the real estate mortgage. At the public auction sale held on December 4,
2006, AUB was declared the highest bidder. On the same date, a Certificate of
Sale was issued in its name and registered with the Registry of Deeds of Makati
City.
With
the expiration of the redemption period, AUB proceeded to execute an Affidavit
of Consolidation of Ownership, through its First Vice-President, Florante del
Mundo. AUB thereafter secured a Certificate Authorizing Registration from the
Bureau of Internal Revenue to facilitate the transfer of the title.
On December 8, 2006, TCT No. 192674
(114645) was cancelled and, in lieu thereof, TCT No. 223120 was issued in the
name of AUB.
GOODLAND, through its counsel, Atty.
Antonio Bautista (Atty. Bautista), opposed the petition, denying that it
executed the real estate mortgage. GOODLAND further averred that the signature
of the notary public appearing on the deed was a forgery, and that no technical
description of the property supposedly mortgaged was indicated therein.
Concluding that AUB’s title was derived from the foreclosure of a fake
mortgage, GOODLAND prayed for the petition’s denial.[6]
On
March 1, 2007, the RTC issued the writ of possession sought by AUB. It ratiocinated that, as the purchaser of the
property at the foreclosure sale and as the new title holder thereof, AUB’s
right of possession and enjoyment of the same had become absolute.[7]
GOODLAND,
through its counsel on record, Atty. Bautista, filed a motion for
reconsideration[8] and a
supplemental motion for reconsideration,[9]
but both were denied in the Order[10]
dated April 25, 2007, which was received by Atty. Bautista on June 15, 2007.[11]
Relentless, GOODLAND sought recourse
with the CA by initially filing a Notice of Appeal[12]
with the RTC, through a certain Atty. Lito Mondragon (Atty. Mondragon) of the
Mondragon & Montoya Law Offices. On
August 23, 2007, the RTC issued an Order[13]
denying due course to GOODLAND’s notice of appeal for being legally inutile due
to Atty. Mondragon’s failure to properly effect the substitution of former
counsel on record, Atty. Bautista. GOODLAND moved for reconsideration, but the
same was denied in the Order dated February 15, 2008.[14]
GOODLAND
elevated the incident to the CA by way of a special civil
WHEREFORE, the petition is hereby GRANTED. The assailed Orders dated August 23, 2007 and February 15, 2008 of the Regional Trial Court, Branch 150, Makati City are ANNULLED and SET ASIDE. The trial court is DIRECTED to give due course to petitioner’s Notice of Appeal.
SO
ORDERED.[15]
Aggrieved, AUB moved for
reconsideration, but the CA denied the motion in its Resolution dated May 18,
2009. Hence, the present petition for review on certiorari,[16]
praying for the reinstatement of the RTC Order.
The petition is meritorious.
Under Rule 138, Section 26 of the
Rules of Court, for a substitution of attorney to be effectual, the following
essential requisites must concur: (1) there must be a written application for
substitution; (2) it must be filed with the written consent of the client; (3)
it must be with the written consent of the attorney substituted; and (4) in
case the consent of the attorney to be substituted cannot be obtained, there
must at least be proof of notice that the motion for substitution was served on
him in the manner prescribed by the Rules of Court. [17]
The courts a quo were uniform and correct in finding that Atty. Mondragon
failed to observe the prescribed procedure and, thus, no valid substitution of
counsel was actualized. However, they
took divergent postures as to the repercussion of such non-compliance, thereby
igniting the herein controversy.
The RTC strictly imposed the rule on
substitution of counsel and held that the notice of appeal filed by Atty.
Mondragon was a mere scrap of paper.
However, relying on our pronouncement
in Land Bank of the Philippines v.
Pamintuan Development Co.,[18]
the CA brushed aside the procedural lapse and took a liberal stance on
considerations of substantial justice, viz.:
It is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice. Thus, substantial justice would be better served by giving due course to petitioner’s notice of appeal.[19]
AUB argues that the liberality
applied by the Court in Land Bank is
incompatible with the herein controversy, and that Pioneer Insurance and Surety Corporation v. De Dios Transportation Co.,
Inc.,[20] which
espouses the same view adopted by the RTC,
is more appropriate.
GOODLAND, on the other hand, insists
that the CA committed no reversible error in ordering that the notice of appeal
be allowed in order not to frustrate the ends of substantial justice.
We agree with AUB. A revisit of our
pronouncements in Land Bank and Pioneer is in order.
In
Land Bank, we held that the Department of Agrarian Reform Adjudication
Board gravely abused its discretion when it denied due course to the Notice of
Appeal and Notice of Entry of Appearance filed by petitioner’s new counsel for
failure to effect a valid substitution of the former counsel on record.
We clarified that the new counsel
never intended to replace the counsel of record because, although not so
specified in the notice, they entered their appearance as collaborating
counsel. Absent a formal notice of substitution, all lawyers who appear before
the court or file pleadings in behalf of a client are considered counsel of the
latter. We pursued a liberal application of the rule in order not to frustrate
the just, speedy, and inexpensive determination of the controversy.
In Pioneer, we adopted a strict posture and declared the notice of
withdrawal of appeal filed by appellant’s new counsel as a mere scrap of paper
for his failure to file beforehand a motion for the substitution of the counsel
on record.
Provoking such deportment was the absence of a
special power of attorney authorizing the withdrawal of the appeal in addition
to the lack of a proper substitution of counsel. More importantly, we found that
the withdrawal of the appeal was calculated to frustrate the satisfaction of
the judgment debt rendered against appellant, thereby necessitating a rigid
application of the rules in order to deter appellant from benefiting from its
own deleterious manipulation thereof.
The
emerging trend of jurisprudence is more inclined to the liberal and flexible
application of the Rules of Court. However, we have not been remiss in
reminding the bench and the bar that zealous compliance with the rules is still
the general course of action. Rules of procedure are in place to ensure the
orderly, just, and speedy dispensation of cases;[21]
to this end, inflexibility or liberality
must be weighed. The relaxation or suspension of
procedural rules or the exemption of a case from their operation is warranted
only by compelling reasons or when the purpose of justice requires it.[22]
As
early as 1998, in Hon. Fortich v. Hon.
Corona,[23] we
expounded on these guiding principles:
Procedural rules, we must stress, should be treated with utmost respect
and due regard since they are designed to facilitate the adjudication of cases
to remedy the worsening problem of delay in the resolution of rival claims and
in the administration of justice. The requirement
is in pursuance to the bill of rights inscribed in the Constitution which
guarantees that “all persons shall have a right to the speedy disposition of
their cases before all judicial, quasi-judicial and administrative bodies.”
The adjudicatory bodies and the parties to a case are thus enjoined to abide
strictly by the rules. While it is true
that a litigation is not a game of technicalities, it is equally true that
every case must be prosecuted in accordance with the prescribed procedure to
ensure an orderly and speedy administration of justice. There have been some instances wherein this
Court allowed a relaxation in the application of the rules, but this
flexibility was “never intended to forge a bastion for erring litigants to
violate the rules with impunity.” A
liberal interpretation and application of the rules of procedure can be
resorted to only in proper cases and under justifiable causes and circumstances.
In Sebastian v. Hon. Morales,[24]
we straightened out the misconception that the enforcement of procedural rules
should never be permitted if it would prejudice the substantive rights of
litigants:
Under
Rule 1, Section 6 of the 1997 Rules of Civil Procedure, liberal construction of
the rules is the controlling principle to effect substantial justice. Thus,
litigations should, as much as possible, be decided on their merits and not on
technicalities. This does not mean, however, that procedural rules are to be
ignored or disdained at will to suit the convenience of a party. Procedural law
has its own rationale in the orderly administration of justice, namely, to
ensure the effective enforcement of substantive rights by providing for a
system that obviates arbitrariness, caprice, despotism, or whimsicality in the
settlement of disputes. Hence, it is a mistake to suppose that substantive law
and procedural law are contradictory to each other, or as often suggested, that
enforcement of procedural rules should never be permitted if it would result in
prejudice to the substantive rights of the litigants.
x x x. Hence, rules of procedure must be faithfully
followed except only when for persuasive reasons, they may be relaxed to
relieve a litigant of an injustice not commensurate with his failure to comply
with the prescribed procedure. x x x.
Indeed, the primordial policy is a faithful observance of the Rules of
Court, and their relaxation or suspension should only be for persuasive reasons
and only in meritorious cases, to relieve a litigant of an injustice not
commensurate with the degree of his thoughtlessness in not complying with the
procedure prescribed.[25] Further, a bare invocation of “the interest of
substantial justice” will not suffice to override a stringent implementation of
the rules.[26]
A reading of the CA’s Decision
readily shows that the leniency it granted GOODLAND was merely anchored on
substantial justice. The CA overlooked GOODLAND’s failure to advance
meritorious reasons to support its plea for the relaxation of Rule 138, Section
26. The fact that GOODLAND stands to lose a valuable property is inadequate to dispense
with the exacting imposition of a rather basic rule.
More importantly, the CA
failed to realize that the ultimate consequences that will come about should
GOODLAND’s appeal proceed would in fact contravene substantial justice. The CA
and, eventually, this Court will just re-litigate an otherwise non-litigious
matter and thereby compound the delay GOODLAND attempts to perpetrate in order
to prevent AUB from rightfully taking possession of the property.
It is a time-honored legal precept that after the consolidation of titles in
the buyer's name, for failure of the mortgagor to redeem, entitlement to a writ
of possession becomes a matter of right.[27]
As the confirmed owner, the purchaser’s right to possession becomes absolute.[28]
There is even no need for him to post a bond,[29]
and it is the ministerial duty of the courts to issue the same upon proper
application and proof of title.[30] To accentuate the writ’s ministerial
character, the Court has consistently disallowed injunction to prohibit its
issuance despite a pending action for annulment of mortgage or the foreclosure
itself.[31]
The
nature of an ex parte petition for issuance of the possessory writ under Act No. 3135 has been described as a
non-litigious proceeding and summary in nature.[32]
As an ex parte proceeding, it is brought for the benefit of one party only,
and without notice to or consent by any person adversely interested.[33]
Subsequent proceedings in the
appellate courts would merely involve a reiteration of the foregoing settled
doctrines. The issue involved in the assailed RTC issuances is conclusively
determined by the above cited legal dictum, and it would be unnecessarily
vexatious and unjust to allow the present controversy to undergo protracted
litigation.
AUB’s right of possession is founded on its
right of ownership over the property which it purchased at the auction sale.
Upon expiration of the redemption period and consolidation of the title to the
property, its possessory rights over the same became absolute. We quote with
approval the pronouncement of the RTC, viz.:
As the purchaser of the property in the foreclosure sale to which new title has already been issued, petitioner’s right over the property has become absolute, vesting upon it the right of possession and enjoyment of the property which this Court must aid in effecting its delivery. Under the circumstances, and following established doctrine, the issuance of a writ of possession is a ministerial function whereby the court exercises neither discretion nor judgment x x x. Said writ of possession must be enforced without delay x x x.[34]
The law does not require that a
petition for a writ of possession be granted only after
documentary and testimonial evidence shall have been offered to and admitted by
the court.[35] As long
as a verified petition states the facts sufficient to entitle petitioner to the
relief requested, the court shall issue the writ prayed for.[36]
Given the foregoing, we are bound to
deny a liberal application of the rules on substitution of counsel and resolve
definitively that GOODLAND’s notice of appeal merits a denial, for the failure
of Atty. Mondragon to effect a valid substitution of the counsel on record.
Substantial justice would be better served if the notice of appeal is
disallowed. In the same way that the appellant in Pioneer was not permitted to profit from its own manipulation of
the rules on substitution of counsel, so too can GOODLAND be not tolerated to
foster vexatious delay by allowing its notice of appeal to carry on.
WHEREFORE, premises considered, the petition
is GRANTED. The February 16, 2009 Decision
and the May 18, 2009 Resolution of the Court of Appeals are hereby ANNULLED and SET ASIDE; and the August 23, 2007 and February 15, 2008 Orders of
the Regional Trial Court of Makati City, Branch 150, are REINSTATED.
SO ORDERED.
ANTONIO EDUARDO B. NACHURA
Associate Justice
Acting Chairperson
WE CONCUR:
CONCHITA CARPIO MORALES
Associate
Justice
|
DIOSDADO M. PERALTA Associate
Justice |
JOSE Associate
Justice |
JOSE CATRAL
Associate
Justice
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.
ANTONIO EDUARDO
B. NACHURA
Associate Justice
Acting Chairperson, Second Division
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 Acting 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.
RENATO C. CORONA
Chief Justice
* Additional member in lieu of Associate Justice Roberto A. Abad per Raffle dated August 4, 2010.
** In lieu of Associate Justice Antonio T. Carpio.
*** Additional member in lieu of Associate Justice Antonio T. Carpio per Raffle dated August 4, 2010.
[1] Penned by Associate Justice Magdangal M. de Leon, with Associate Justices Jose L. Sabio, Jr. and Ramon R. Garcia, concurring; rollo, pp. 57-66.
[2]
[3]
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
[13] The dispositive portion of the Order reads:
In view of all the foregoing, the notice of appeal is hereby disallowed and denied due course.
SO ORDERED. (Supra note 3, at 141.)
[14] The dispositive portion of the Order reads:
In view of all the foregoing, Goodland’s Motion for Reconsideration dated September 17, 2007 of the order dated August 23, 2007 is denied for lack of merit.
SO ORDERED. (Supra note 4, at 144.)
[15] Supra note 1, at 65.
[16] RULES OF COURT, Rule 45.
[17] Greater Metropolitan Manila Solid Waste Management Committee v. Jancom Environmental Corporation, G.R. No. 163663, June 30, 2006, 494 SCRA 280, 305-306; Santana-Cruz v. Court of Appeals, G.R. No. 120176, July 20, 2001, 361 SCRA 520, 532.
[18] 510 Phil. 839 (2005).
[19] Supra note 1, at 65.
[20] G.R. No. 147010, July 18, 2003, 406 SCRA 639.
[21] Heirs of Cesar Marasigan v. Marasigan, G.R. No. 156078, March 14, 2008, 548 SCRA 409.
[22] See Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.), G.R. No. 159593, October 16, 2006, 504 SCRA 484, 496.
[23] 359 Phil. 210, 220 (1998). (Citations omitted.)
[24]
445
Phil. 595, 605 (2003), as reiterated in Land
Bank of the Philippines v. Ascot Holdings and Equities, Inc., G.R. No.
175163, October 19, 2007, 537 SCRA 396, 405.
[25]
Lazaro v. Court of Appeals, 386 Phil. 412, 417 (2000).
[26]
[27] National Housing Authority v. Augusto Basa, Jr., Luz Basa and Eduardo S. Basa, G.R. No. 149121, April 20, 2010, citing Manalo v. Court of Appeals, 419 Phil. 215, 235 (2001).
[28] Motos v. Real Bank (A Thrift Bank), Inc., G.R. No. 171386, July 17, 2009, 593 SCRA 216, 226, citing Fernandez v. Espinoza, 551 SCRA 136, 149 (2008).
[29] Top Art Shirt Manufacturing, Incorporated v. Metropolitan Bank and Trust Company, G.R. No. 184005, August 4, 2009, 595 SCRA 323, 335, citing Sps. Ong v. Court of Appeals, 388 Phil. 857, 865-866 (2000).
[30] Top Art Shirt Manufacturing, Incorporated v. Metropolitan Bank and Trust Company, supra, at 336, citing F. David Enterprises v. Insular Bank of Asia and America, 191 SCRA 516, 523 (1990).
[31] National Housing Authority v. Augusto Basa, Jr., Luz Basa and Eduardo S. Basa, supra note 27, citing Chailease Finance Corp. v. Spouses Ma, 456 Phil. 498, 503 (2003); and Manalo v. Court of Appeals, supra note 27, at 235.
[32] Idolor v. Court of Appeals, 490 Phil. 808, 816 (2005).
[33] Sagarbarria v. Philippine Business Bank, G.R. No. 178330, July 23, 2009, 593 SCRA 645, 653.
[34] Supra note 7, at 159.
[35] Oliveros v. Presiding Judge, RTC, Br. 24, Bińan, Laguna, G.R. No. 165963, September 3, 2007, 532 SCRA 109, 120.
[36] Spouses