Macapagal v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Arturo R. Macapagal (in G.R. No. 110610) and Ricardo C. Silverio, Sr. and Arturo Macapagal (in G.R. No. 113851) sought reconsideration of the Court's decision dated April 18, 1997. Petitioner Macapagal claimed he only learned of the case against him when a writ of execution was sought to be enforced, asserting he had no knowledge of the filing of the complaint, service of summons, filing of a manifestation and motion to declare service of summons improper, filing of a petition for certiorari, dismissal of the certiorari petition, his declaration in default, the decision ordering him and co-defendants to pay over P12M in damages, and the dismissal of their appeal. He argued he was deprived of due process and could prove no basis for his liability under §31 of the Corporation Code. Petitioner Silverio contended that the gross negligence of Atty. Salva in handling the case should not bar his petition, and his travels explained his failure to inquire about the case status. Procedural History: The Court of Appeals had previously ruled in AC-G.R. No. 04835 that service of summons on Atty. Emerito Salva's law firm was valid for acquiring jurisdiction over Philfinance and its officers, including petitioner Macapagal. Atty. Salva, who was also Philfinance's corporate secretary, had entered a special appearance to contest jurisdiction but later filed a petition for certiorari, which was dismissed. Subsequently, the Regional Trial Court declared Macapagal in default and rendered a decision against him and co-defendants. Atty. Salva's office filed a notice of appeal, but it was dismissed for failure to pay docket fees. The Petition: Petitioners sought reconsideration of the Supreme Court's decision, with Macapagal praying for annulment of the trial court's decision and all subsequent orders, or alternatively, for reception of evidence on whether Atty. Salva was authorized to represent him. Silverio argued Atty. Salva's negligence was the crux of his petition.
Issue(s)
Whether petitioner Macapagal was deprived of due process due to alleged lack of knowledge of the proceedings and improper service of summons. Whether a petition for certiorari is the proper remedy to annul a judgment rendered without proper service of summons, as opposed to an action for annulment of judgment. Whether petitioner Macapagal's resignation from Philfinance and Delta Motors Corporation prior to the service of summons on Atty. Salva's law firm rendered the service invalid. Whether the gross negligence of counsel, Atty. Salva, in handling the case, particularly in failing to pay docket fees for the appeal, constitutes a valid ground for reinstating the appeal or annulling the judgment. Whether the payment of docket fees by co-defendants inures to the benefit of petitioner Silverio.
Ruling
The motions for reconsideration are DENIED with FINALITY for lack of merit. The Court reiterated that the validity of service of summons had been settled by the Court of Appeals, finding service on Atty. Salva's law firm valid for acquiring jurisdiction over officers and directors. The Court found no merit in Macapagal's contentions regarding his resignation and the invalidity of service, deeming his evidence insufficient and his claim of ignorance improbable given his involvement in business circles and the widespread publicity of Philfinance's insolvency. The Court held that Macapagal's remedy should have been an action for annulment of judgment, not certiorari, as the issue of counsel's authority was factual. Regarding Silverio, the Court found no basis to attribute the failure to pay docket fees to Atty. Salva and ruled that Silverio's non-payment constituted abandonment of his appeal, rendering the decision final as to him.
Ratio Decidendi
On the issue of due process and service of summons for petitioner Macapagal: The Court found no merit in Macapagal's claim of being deprived of due process due to lack of knowledge and improper service of summons. It affirmed the Court of Appeals' finding that service of summons on Atty. Emerito Salva's law firm was valid for acquiring jurisdiction over Philfinance and its officers, including Macapagal. The Court found Macapagal's evidence of resignation from the corporations prior to service of summons to be insufficient and easily fabricated, especially since he did not deny holding office or that the places were his regular place of business, nor that Atty. Salva was counsel for the corporations and their officials. The Court also found it improbable that Macapagal, living in Manila and moving in business circles, would be unaware of Philfinance's legal problems, especially given the extensive media coverage and the company's placement under suspension of payments and receivership. The Court emphasized that Macapagal's claim of ignorance was unbelievable, considering his position as a former board member and close associate of Ricardo C. Silverio. On the proper remedy for alleged lack of jurisdiction due to improper service: The Court clarified that Macapagal's remedy should have been an action for annulment of judgment, not a petition for certiorari, as the core issue involved factual questions regarding whether Atty. Salva was authorized to represent him and whether he was aware of the proceedings. The Court distinguished the present case from those cited by Macapagal where the absence or invalidity of service was evident from the sheriff's return or clear violations of procedural rules. In this case, there was no evidence presented to show that Atty. Salva was no longer Macapagal's counsel at the time of service. The Court noted that Macapagal did not seek an opportunity to present evidence before the Court of Appeals and contented himself with bare allegations, making it inappropriate for the Supreme Court to review questions of fact. On the sufficiency of evidence for resignation and invalidity of service: The Court found Macapagal's claim that he had resigned from Delta Motors Corporation and Philfinance before summons was served on Atty. Salva's law office to be unsubstantiated. The resignation letters presented were deemed easily fabricated, and Macapagal did not provide further evidence or seek to present evidence to prove his claim. The Court reiterated that it is not its function to review questions of fact, especially in cases already on review. The Court also noted that Macapagal did not take action against Atty. Salva for alleged misrepresentation until much later, after the Court of Appeals pointed out his failure to do so. On the alleged gross negligence of counsel Atty. Salva for petitioner Silverio: The Court found no merit in Silverio's contention that Atty. Salva's gross negligence in handling the case should excuse his failure to pursue the appeal. The Court stated that it could not attribute the failure to pay docket fees to Atty. Salva without his explanation. More importantly, the Court ruled that by failing to pay the docket fees, Silverio effectively abandoned his appeal and accepted the trial court's decision, which consequently became final as to him. On the improbability of ignorance of the case: The Court found it highly improbable that Macapagal, a businessman residing in Manila and involved in business circles, would be completely unaware of the legal proceedings against Philfinance, a company he was formerly associated with as a director and close associate of Ricardo C. Silverio. The Court took judicial notice of the widespread publicity surrounding the "Philfinance caper" and its insolvency proceedings, including news reports and SEC actions. The Court concluded that it was unbelievable that Macapagal never inquired about the company's developments during the eight years between the filing of the complaint and the issuance of the writ of execution. The Court rejected the argument that the payment of docket fees by co-defendants should inure to his benefit, as his non-payment constituted an abandonment of his own appeal.
Main Doctrine
A motion for reconsideration reiterating claims of lack of knowledge of proceedings and deprivation of due process due to improper service of summons, when the core issue is factual (whether counsel was authorized to represent and whether petitioner was aware of the proceedings), is properly resolvable through an action for annulment of judgment, not a petition for certiorari, especially when the validity of service had been previously settled and evidence of resignation is deemed insufficient without further proof.