Source: http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/43798
Timestamp: 2019-04-21 04:39:28+00:00

Document:
VICTORY LINER, INC., PETITIONER, VS. RESPONDENT.
This case finds its origin from a vehicular collision that occurred in La Union on 19 March 1996 between a bus owned by petitioner Victory Liner, Inc. and an Isuzu Truck used by respondent Michael Malinias. Nobody died, but both vehicles were damaged from the accident. A complaint for sum of money and damages was instituted by respondent against petitioner and the bus driver, Leoncio Bulaong, alleging pecuniary damage to the truck in the amount of P47,180.00, representing lost income for the non-use of the truck as it underwent repairs in the amount of P15,000.00. Claims for exemplary damages and attorney’s fees were also lodged in the complaint, which was filed with the Municipal Trial Court (MTC) of La Trinidad, Benguet. After pre-trial, the bus driver was dropped as defendant in the case after summons could not be served on him and respondent agreed to waive his cause of action against said driver.
scheduled date of 27 October 1997, no appearance was made for the bus company. Respondent thus immediately moved that petitioner be declared to have waived its right to adduce evidence in its favor and that the case be deemed submitted for judgment. The MTC found merit in respondent’s contention, and ordered the case be deemed submitted for decision as of 27 October 1997. On 13 January 1998, the MTC rendered judgment in favor of respondent, awarding him the sum of P82,180.00.
Through its new counsel, petitioner filed a Motion for Reconsideration. The Notice of Hearing therein stated: “Please submit the foregoing Motion for Reconsideration for hearing before the Honorable Court at a schedule and time convenient to this Honorable Court and the parties.” The MTC ruled in an Order dated 23 February 1998 that the notice did not conform with the mandatory requirements of Section 5, Rule 15 of the 1997 Rules of Civil Procedure, and that the motion was thus a mere scrap of paper which did not suspend the period to appeal. Accordingly, the MTC declared that its earlier judgment dated 13 January 1998 had become final and executory. In the same order and upon the same predicates, the MTC also granted the Motion for Issuance of Writ of Execution filed by respondent.
What then followed was a series of unsuccessful attempts by petitioner to have the lower courts set aside or stay the now-final judgment against it. First, petitioner filed a Petition for Relief from Judgment with the MTC on 25 October 1999. This was denied by the MTC in an Order dated 13 March 2000 on the ground that it had been filed out of time. The MTC explained that the petition for relief from judgment must have been filed either within sixty (60) days from the date petitioner’s new counsel learned of the judgment, or sixty (60) days after learning that the Motion for Reconsideration had been denied for having been filed out of time. Neither circumstance was met by petitioner. Subsequently, the MTC likewise denied a Motion for Reconsideration filed by petitioner.
Second, petitioner filed on 26 June 2000 a petition for certiorari under Rule 65 with the Regional Trial Court (RTC) of La Trinidad, Benguet, imputing grave abuse of discretion to the MTC, and seeking to annul four (4) of the MTC’s rulings, namely: the original 1998 judgment against petitioner; the 1999 order which declared that the Notice of Appeal was filed out of time; and the two orders dismissing the Petition for Relief from Judgment. The petition for certiorari was dismissed by the RTC in an Order dated 21 November 2000. The RTC agreed with the MTC that the Petition for Relief from Judgment had been belatedly filed. The RTC also reiterated the consistent ruling that the judgment in question had already become final in February of 1998. Thus, the RTC could not ascribe grave abuse of discretion to the MTC.
Third, petitioner filed on 17 July 2001 with the Court of Appeals a “Petition for Certiorari to Annul Judgment” under the aegis of Rule 47 of the 1997 Rules of Civil Procedure. Interestingly, based on the first paragraph and the express relief prayed for in this petition, the “judgment” sought to be annulled was not the final and executory judgment of the MTC, but rather, the two orders of the RTC which successively dismissed the special civil action for certiorari, and directed the issuance of a writ of execution in favor of respondent. However, in explaining the “nature of the petition,” petitioner claimed that it was seeking to annul the judgment and orders of both the RTC and the MTC, although the issues identified in the petition pertain only to “serious errors” and “grave abuse of discretion” on the part of the RTC. There is a general allegation that the acts of the RTC in granting the motion for execution even before petitioner’s motion for reconsideration was acted upon constituted an extrinsic fraud, but no particular arguments were offered to explain why that was so.
Petitioner filed a Motion for Reconsideration where it pointed out that it had simultaneously filed with its petition for annulment of judgment a Motion for Extension to submit the certificate of authority to file the petition. The day after the petition was filed, or on 18 July 2001, petitioner filed with the Court of Appeals the said Certificate of Authority. The Certificate of Authority prepared by petitioner’s corporate secretary, dated 17 July 2001, certified that on 10 July 2001, petitioner’s board of directors authorized counsel for petitioner to file “the necessary action, petition or any other pleadings necessary in any and all hierarchy of courts” with respect to the instant case.
Nonetheless, the Court of Appeals, on 5 December 2001, issued a Resolution denying the Motion for Reconsideration. The appellate court observed that in petitioner’s Motion for Extension to submit the certification of authority, it was explained that petitioner’s counsel was constrained to sign the verification and certification against forum shopping because “the certificate of authority granted to the petitioner’s station manager in Baguio City has been misplaced.” The Court of Appeals thus concluded that “the one really authorized to represent the petitioner is Operations Manager Rogelio Ortega stationed in Baguio City, but whose authority has been misplaced or lost, as in fact, the latter signed the certification on non-forum shopping in the petition filed before the [RTC].” The Court of Appeals also reiterated that subsequent compliance such as petitioner’s counsel’s subsequent submission of her authority to represent the petitioner, would not excuse petitioner’s failure to comply with the required certification against forum-shopping in the first instance.
Two sets of arguments are raised. The first concerns the errors ascribed to the Court of Appeals in dismissing outright the petition for annulment of judgment. The second concerns the alleged grave abuse of discretion on the part of the RTC in directing the issuance of the writ of execution even without resolving petitioner’s motion for reconsideration.
As indicated in the 5 December 2001 Resolution of the Court of Appeals, the two main grounds relied upon for dismissing the petition for annulment of judgment were petitioner’s failure to comply with the requirements in the execution of the verification and certification against forum-shopping, and the petition’s reliance on the ground of extrinsic fraud which could have been raised or availed of in a motion for new trial or petition for relief. We turn our attention to the first ground.
It is of importance that, as borne by the Certificate of Authority executed by petitioner’s Corporate Secretary, counsel for petitioner had been authorized by petitioner’s Board of Directors to prepare and file with the Court of Appeals the petition herself as of 10 July 2001, or seven (7) days before the petition was indeed filed. We fail to understand the significance attached by the Court of Appeals on the prior authority of the Baguio station manager to perform the same acts. The impression left by the disquisition of the appellate court is that such prior authority was beyond recall by petitioner’s Board of Directors, and that no new person could be similarly authorized by the corporation to perform such acts.
the rule on substantial compliance. The same characteristics hold true as to the verification requirement.
We hold and so rule that the appellate court’s utilization on petitioner’s belated submission of the complete verification and certification requirements as anchor for the dismissal of the petition for annulment of judgment does not merit affirmance.
From the timeline, it appears that petitioner’s woes began after the motion to withdraw as counsel filed by its former lawyer was not allowed by the MTC due to the absence of the written conformity thereto of the petitioner. At the next hearing date, when petitioner was to commence its presentation of evidence, nobody appeared in its behalf, causing the MTC, upon motion, to consider as waived petitioner’s right to present its evidence. The subsequent rendition of the MTC Judgment without considering the evidence of petitioner would form its initial cause of distress.
Thus, the MTC judgment became final and executory despite the filing of the Motion for Reconsideration thereto, as said motion did not toll the period for filing an appeal therefrom. Yet that did not mean that petitioner was left bereft of further remedies under our Rules. For one, petitioner could have assailed the MTC’s denial of the Motion for Reconsideration through a special civil action for certiorari under Rule 65 alleging grave abuse of discretion amounting to lack of jurisdiction on the part of the MTC in denying the motion. If that remedy were successful, the effect would have been to void the MTC’s denial of the Motion for Reconsideration, thus allowing petitioner to again pursue such motion as a means towards the filing of a timely appeal.
Another remedy for the petitioner is found under Rule 38 of the 1997 Rules of Civil Procedure, which governs petitions for relief from judgment. Indeed, Section 2, Rule 38 finds specific application in this case, as it provides that “[w]hen a judgment or final order is rendered by any court in a case, and a party thereto, by fraud, accident, mistake, or excusable negligence, has been prevented from taking an appeal, he may file a petition [for relief from denial of appeal] in such court and in the same case praying that the appeal be given due course.” Such petition should be filed within sixty (60) days after the petitioner learns of the judgment or final order, and not more than six (6) months after such judgment or final order was entered. The facts of this case indicate that petitioner could have timely resorted to this remedy.
The apposite reaction on the part of petitioner would have been to seek the reversal of the MTC Order which disregarded its motion for reconsideration, through either of the remedies we explained above. Certiorari has as its object the nullification of the MTC Order on the basis that it was rendered with grave abuse of discretion, while a petition for relief seeks that the MTC allow the appeal despite the finality of judgment on the ground that petitioner was prevented from taking an appeal due to fraud, accident, mistake, or excusable negligence. Either remedy would have had the benefit of intellectual honesty, as they recognized the MTC declaration that the judgment had become final. At the same time, either remedy provides the appropriate recourse to the petitioner in the face of such declaration, since both petitions for certiorari and for relief from judgment would be aimed at setting aside the adverse ill-effects of the MTC’s pronouncement.
Within this context, it does not even really matter whether petitioner’s legal rights were unduly impaired by the MTC’s abject refusal to recognize its motion for reconsideration, thus giving rise to the finality of the judgment in question. Even if the petitioner has the right to feel aggrieved over the MTC’s action in this case, it should not have pretended that its right to appeal remained undiminished and viable by filing the notice of appeal. It should have instead undertook first to remove the cloud that hovered on its right to appeal. As earlier explained, our procedural rules give ample guidance and method as to how petitioner could have removed such cloud. A notice of appeal under these circumstances is unresponsive to the main impediment to petitioner’s cause – the prevailing finality of the MTC judgment.
Truth be told, the fact that the MTC had taken more than eighteen (18) months before it acted on the Notice of Appeal is close to scandalous, even if such delay was caused in part by the inhibition of the original judge who heard the case. Still, the delay could not have extenuated the defunctness of appeal as a remedy available to petitioner. A notice of appeal presupposes that appeal still exists as a right to the appellant, hence the use of the term “notice,” since the function of the submission is merely to notify the trial court that the appellant was availing of the right to appeal, and not to seek the court’s permission that it be allowed to pose an appeal. In the same vein, the “denial” or refusal to take cognizance of a notice of appeal is predicated on a finding that the right to appeal did not or no longer existed, and not on the refusal of the trial court to allow the appellant to pursue the appeal.
Municipal Trial Court shall be filed in the Regional Trial Court having jurisdiction over the former,” and not with the Court of Appeals. Considering the periods prescribed under Rule 47 for the filing of an action for annulment of judgment are quite broad or capable of discretionary appreciation, the petitioner could have filed such action for annulment of the MTC’s judgment with the RTC which would not have been lightly disregarded with timeliness as premise.
Still, it was the RTC rulings which were subject of the petition for annulment filed with the Court of Appeals which had jurisdiction over such actions. This recourse was ill-advised, to say the least, for varied reasons. For one, the RTC rulings dismissing petitioner’s special civil action for certiorari could have been the subject of an ordinary appeal to the Court of Appeals under Section 1, Rule 41 of the 1997 Rules of Civil Procedure, since such dismissals partake of a final order that completely disposed of the original petition filed with the RTC. It may have been that petitioner was threatened by the impending execution of the adverse MTC decision, despite the fact that it had a pending motion for reconsideration of the RTC’s dismissal of its certiorari petition. That notwithstanding, annulment of judgment still stands as a most incongruous remedy if such impending execution did impel an active recourse on the part of the petitioner.
We do have to offer some clarification regarding the citation by the Court of Appeals as ground for dismissing the petition for annulment the fact that “the ground raised by petitioner is extrinsic fraud, which ground petitioner has already availed of in its petition for relief from judgment in the Municipal Trial Court.” Section 2 of Rule 47 does disqualify extrinsic fraud as a valid ground “if it was availed of, or could have been availed of, in a motion for new trial or petition for relief,” and such provision would have found incontestable relevance had the clear object of the petition for annulment been the MTC judgment. But petitioner’s action for annulment of judgment did not provide clarity in that regard, and in fact does devote considerable effort in imputing errors on the part of the RTC with the objective of annulling, in particular, the RTC decision. If that were so, reliance on Section 2 of Rule 47 would have been misplaced, since the judgment subject of the petition for relief was different from the decision subject of the action for annulment of judgment. Still, given the confused nature of the petition for annulment of judgment, blame could hardly be attributed to the RTC.
 The registered owner of the truck was Lina Malinias, presumably a relation of the respondent. The trial court would rule Michael as the “user or a usufructuary of the truck.” See rollo, p. 122.
 See id. at 72-102. The petition’s “prayer” expressly sought the annulment of “the questioned Orders (Annexes ‘BB’ to ‘DD’), id. at 102, said annexes being identified in the petition as, respectively, the RTC Order dated 4 December 2000 (Annex “BB”) dismissing the petition for certiorari, id. at 87; the Motion for Reconsideration (Annex “CC”) filed by petitioner with the RTC, id. at 87; and the 21 June 2001 RTC Order (Annex “DD”) directing the issuance of the writ of execution, id. at 88.
 See Iglesia ni Cristo v. Hon. Ponferrada, G.R. No. 168943, 27 October 2006. “The substantial compliance rule has been applied by this Court in a number of cases: Cavile v. Heirs of Cavile, where the Court sustained the validity of the certification signed by only one of petitioners because he is a relative of the other petitioners and co-owner of the properties in dispute; Heirs of Agapito T. Olarte v. Office of the President of the Philippines, where the Court allowed a certification signed by only two petitioners because the case involved a family home in which all the petitioners shared a common interest; Gudoy v. Guadalquiver, where the Court considered as valid the certification signed by only four of the nine petitioners because all petitioners filed as co-owners pro indiviso a complaint against respondents for quieting of title and damages, as such, they all have joint interest in the undivided whole; and DAR v. Alonzo-Legasto, where the Court sustained the certification signed by only one of the spouses as they were sued jointly involving a property in which they had a common interest.” Citations omitted.
 “The requirement regarding verification of a pleading is formal, not jurisdictional. Such requirement is simply a condition affecting the form of pleading, the non-compliance of which does not necessarily render the pleading fatally defective. Verification is simply intended to secure an assurance that the allegations in the pleading are true and correct and not the product of the imagination or a matter of speculation, and that the pleading is filed in good faith. The court may order the correction of the pleading if verification is lacking or act on the pleading although it is not verified, if the attending circumstances are such that strict compliance with the rules may be dispensed with in order that the ends of justice may thereby be served.” Valdecantos v. People, supra; citing Uy v. Land Bank of the Philippines, 391 Phil. 303, 312 (2000).

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