Republic Planters Bank v. Intermediate Appellate Court
REITERATIONFacts
The Antecedents: Spouses Nestor Dizon and Providencia Valencia obtained a P1,000,000.00 loan from Republic Planters Bank (RPB), secured by a mortgage on their real properties. For failure to pay, RPB initiated extra-judicial foreclosure proceedings. Procedural History: The spouses Dizon filed Civil Case No. 6000 against Percival Briñas and RPB, alleging misappropriation of loan proceeds by Briñas and seeking a restraining order against the foreclosure. The Court of First Instance (CFI) initially issued an ex-parte restraining order, but later dismissed the case for failure to state a cause of action against RPB. The spouses Dizon filed a motion for reconsideration and an amended complaint, but these were furnished to RPB over a month later. RPB moved to strike these pleadings, asserting the dismissal had become final. The CFI subsequently issued another ex-parte restraining order against the foreclosure and admitted the amended complaint. RPB filed a petition for certiorari with the Court of Appeals (CA), questioning the CFI's jurisdiction. While the CA issued a resolution directing respondents to desist from enforcing the questioned order, the spouses Dizon moved for the dismissal of Civil Case No. 6000, which the CFI granted without prejudice. RPB filed a supplemental petition alleging grave abuse of discretion. The spouses Dizon then refiled the complaint as Civil Case No. 6603 and obtained another ex-parte restraining order the day before the scheduled auction sale. RPB filed a motion for contempt. The Petition: RPB sought review of the CA's decision which dismissed their petition, holding the issues moot and academic due to the dismissal of Civil Case No. 6000. RPB argued that the trial court acted without or in excess of jurisdiction in issuing restraining orders and admitting an amended complaint in a case that had already become final, and in dismissing the case without prejudice despite the finality of the dismissal order. They also contended that the trial court's actions interfered with the CA's restraining order and constituted a departure from accepted procedure, denying due process.
Issue(s)
Whether the trial court acted without or in excess of its jurisdiction in issuing a restraining order and admitting an amended complaint in a case which had already been dismissed and the order of dismissal had become final and executory. Whether the trial court acted with grave abuse of discretion in dismissing Civil Case No. 6000 without prejudice after the order of dismissal had become final and definitive, and whether it acted with grave abuse of discretion in issuing a restraining order that interfered with and nullified a restraining order issued by the appellate court. Whether the appellate court's failure to rule on the first three issues sanctioned a departure from accepted judicial procedure, thereby denying petitioners their right to due process.
Ruling
The petition is GRANTED. The restraining order issued by the Court of First Instance of Pampanga, Branch III, dated October 13, 1982, is DISSOLVED and SET ASIDE. The trial court's order dated November 23, 1981, is declared FINAL and EXECUTORY. The decision of the Court of Appeals dated November 16, 1982, and its resolution dated April 6, 1983, are REVERSED and SET ASIDE. The temporary restraining order issued by the Supreme Court dated May 9, 1983, is made PERMANENT.
Ratio Decidendi
On the first assignment of error (Jurisdiction over final and executory orders): The Supreme Court agreed with the petitioner that the dismissal of the first complaint became final and executory after the period for appeal expired without a properly filed motion for reconsideration. The Court emphasized that a motion for reconsideration, to be valid and suspend the running of the period to appeal, must be accompanied by a notice of hearing. Without this, the motion is considered a "mere scrap of paper" and legally ineffective. The CFI erred in considering the motion for reconsideration and issuing a restraining order based on it, as it had already lost jurisdiction to do so. The Court noted that the amended complaint, while a matter of right to file, should have been dismissed because the original grounds for dismissal, namely the lack of a cause of action against the bank, still persisted on its face. The added allegation of negligence amounting to fraud by the bank was deemed insufficient to establish a cause of action against RPB, as the spouses Dizon themselves admitted authorizing Briñas to obtain the loan. On the second and third assignments of error (Grave abuse of discretion in dismissal and interference with appellate court's order): The Supreme Court found that the respondent Court of First Instance committed grave abuse of discretion. This was evident when it dismissed the amended complaint "without prejudice" despite the appellate court's resolution directing respondents to desist from further proceedings in Civil Case No. 6000. The lower court's failure to respect the orders of a superior court constitutes grave abuse of discretion, as only the superior court can recall its orders. The CFI's actions, including admitting the refiled complaint and issuing another restraining order, were seen as clear indications of grave abuse of discretion. These actions, particularly the withdrawal and subsequent refiling of the complaint just before the scheduled auction sale, were deemed to be for the sole purpose of delaying and frustrating the petitioner Bank's right to enforce its lien. On the fourth assignment of error (Departure from procedure and denial of due process): The Supreme Court sustained the petitioner's contention that there was a departure from accepted and usual judicial procedure, amounting to a denial of due process. This was based on the same grounds that supported the first three assignments of error. The trial court's disregard for the appellate court's orders and its actions that facilitated delay and frustrated the petitioner's legal rights demonstrated a clear deviation from the established norms of judicial conduct and the principles of due process.
Main Doctrine
A motion for reconsideration that fails to comply with the requirements of notice of hearing is a mere scrap of paper and does not suspend the finality of the judgment. Courts commit grave abuse of discretion in issuing restraining orders or admitting amended complaints in cases that have already become final and executory, especially when such actions are clearly for dilatory purposes.