Republic v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Republic of the Philippines filed a complaint for rescission of a deed of sale, cancellation of transfer certificates of title, reconveyance, and damages against spouses Rolando Abadilla and Susan Samonte, Harold M. Hernando, and the Register of Deeds of Laoag City. The complaint stemmed from an expropriation case where a compromise agreement was entered into on January 24, 1985, fixing just compensation at P1,454,859.00, which was paid by the petitioner. Subsequently, Harold M. Hernando, as attorney-in-fact for the Quetulio heirs, executed an affidavit revoking the compromise agreement on November 29, 1985. Later, Hernando, again representing the Quetulios, sold the property to the Abadilla spouses for P1,000,300.00, which the petitioner alleged was null and void as the lots were already owned by the Republic and the vendees acted in bad faith. Procedural History: The Regional Trial Court (RTC), Branch 16, Laoag City, dismissed petitioner's complaint. The RTC reasoned that petitioner failed to file a reply or opposition to the "Comment/Answer/Motion to Dismiss" filed by respondent Hernando, thereby admitting the genuineness and due execution of the annexed instruments (Affidavit of Revocation and Rescission of Compromise Agreement), which were considered actionable documents. Petitioner's motion for reconsideration was denied. Petitioner then filed a petition for certiorari with the Supreme Court, which was referred to the Court of Appeals (CA). The Petition: The Court of Appeals dismissed the petition for certiorari, treating it as an ordinary appeal filed out of time. The CA ruled that the reglementary period to file an appeal from the RTC's dismissal order had already expired. The Republic filed the present petition for review on certiorari, arguing that the CA erred in denying due course to its petition for certiorari and that the RTC committed grave abuse of discretion.
Issue(s)
Whether the Court of Appeals erred in denying due course to the petition for certiorari on the ground that it was filed out of time. Whether the Regional Trial Court committed grave abuse of discretion in dismissing the petitioner's complaint based on an affidavit of revocation and rescission of compromise agreement, considering the petitioner was not a party to these instruments and respondent Hernando was under suspension from the practice of law.
Ruling
The petition is granted. The case is reinstated before the Regional Trial Court of Laoag City, Branch 16, and the court a quo is ordered to proceed with the hearing and resolution of the case with dispatch.
Ratio Decidendi
On the propriety of certiorari and the timeliness of the petition: The Supreme Court held that the Court of Appeals erred in dismissing the petition for certiorari as an ordinary appeal filed out of time. The Court emphasized that while certiorari is generally not a substitute for a lapsed appeal, it may be allowed when strict application of the rules would result in a miscarriage of justice or when there is grave abuse of discretion by the lower court. The RTC's dismissal of the complaint was found to be based on a starkly erroneous ground and involved grossly irresponsible acts, warranting the extraordinary writ of certiorari. The Court noted that the RTC did not rule on the motion to declare respondents in default, allowed a suspended lawyer to appear and file pleadings, and considered instruments to which the petitioner was not a party as admissions of genuineness and due execution. On the RTC's dismissal of the complaint: The Supreme Court found the RTC's dismissal of the complaint to be erroneous. The Court reiterated that a judicial compromise, once approved by the court, has the effect of res judicata and is immediately executory. It cannot be unilaterally revoked by an affidavit. The RTC erred in considering the "Affidavit of Revocation" and "Rescission of Compromise Agreement and Deed of Conveyance" as grounds for dismissal, especially since the petitioner was not a party to these instruments. Furthermore, the Court pointed out that Section 8 of Rule 8 of the Rules of Court explicitly states that the genuineness and due execution of an instrument are deemed admitted only when the adverse party is a party to the instrument, which was not the case here. The Court also highlighted the impropriety of respondent Hernando's participation in the case, as he was under suspension from the practice of law at the time, constituting gross misconduct and wilful disregard of the suspension order. Even assuming, arguendo, that the petitioner was a party to the questioned instruments, the dismissal was still incorrect. The Court clarified that failure to deny the genuineness and due execution of an actionable document under oath does not preclude a party from arguing against it by evidence of fraud, mistake, compromise, payment, statute of limitations, estoppel, and want of consideration, or from proving at the trial that there was a mistake or imperfection in the writing, or that it does not express the true agreement of the parties, or that the agreement is invalid. This is in accordance with Section 9, Rule 130 of the Rules of Court. Therefore, the RTC's conclusion that the petitioner admitted the genuineness and due execution of the instruments, thereby admitting its claim, was a misapplication of the law.
Main Doctrine
A petition for certiorari under Rule 65 is the proper remedy to assail a trial court's order dismissing a complaint due to grave abuse of discretion, even if the period for ordinary appeal has lapsed, especially when strict adherence to procedural rules would result in a miscarriage of justice. A judicial compromise, once approved by the court, has the effect of res judicata and cannot be unilaterally revoked by an affidavit; its validity can only be assailed through a motion to set aside on grounds provided by law.