Philippine Commercial & Industrial Bank v. Court of Appeals
REITERATIONFacts
1. The Antecedents: Spouses Segundo and Febe Maravilla filed a civil case for damages against Philippine Commercial and Industrial Bank (PCIBank) in 1979. They obtained a favorable judgment in 1987, awarding them P326,470.38 in actual damages, plus moral damages, exemplary damages, and costs. PCIBank's appeal to the Court of Appeals was affirmed, and a subsequent petition for review to the Supreme Court was dismissed as untimely, rendering the trial court's judgment final and executory. 2. Procedural History: Enforcement of the judgment was stalled due to a dispute over the interest rate. The trial court initially reduced the interest to 6% per annum, but the Maravillas appealed this order. The Court of Appeals, in CA-G.R. CV No. 32983, reversed the trial court's order, reinstating the 12% interest rate on actual damages and further imposing legal interest on the interest itself, compounded periodically. PCIBank then sought clarification from the trial court regarding the total amount owed, leading to an order on June 2, 1993, setting the liability at P437,726.60. The Maravillas moved for reconsideration, which was denied on July 19, 1993, for lacking a notice of hearing. The Maravillas then filed a special civil action for certiorari with the Court of Appeals, arguing the trial court gravely abused its discretion by denying their motion and effectively barring their appeal. 3. The Petition: PCIBank filed this petition for review on certiorari under Rule 45 of the Rules of Court, assailing the Court of Appeals' decision in CA-G.R. SP No. 31816, which annulled the trial court's orders and declared that the interest should be compounded and capitalized periodically. PCIBank argues that the Court of Appeals erred in granting the writ of certiorari, finding grave abuse of discretion by the trial court, and in amending its own final and executory decision. The core of PCIBank's argument is that the Maravillas' motion for reconsideration was pro forma due to the lack of a notice of hearing, thus failing to toll the period for appeal, and that the Court of Appeals improperly resurrected and modified a final judgment.
Issue(s)
Whether the Court of Appeals committed a reversible error of law in granting the writ of certiorari. Whether the Court of Appeals erred in finding that the trial court acted with grave abuse of discretion in issuing its orders dated June 2, 1993, and July 19, 1993. Whether the Court of Appeals committed grave abuse of discretion when it amended its own decision, which had become final and executory, by ordering that interest should be compounded and capitalized periodically.
Ruling
The petition is GRANTED. The assailed Decision of the respondent appellate court dated October 28, 1994, and its Resolution dated May 18, 1995, in CA-G.R. SP No. 31816, are SET ASIDE. The Decision of the Court of Appeals dated May 29, 1992, in CA-G.R. CV No. 32983, is REINSTATED in full.
Ratio Decidendi
On the propriety of the writ of certiorari: The Supreme Court held that the appellate court erred in issuing the writ of certiorari. The trial court correctly denied the private respondents' motion for reconsideration because it was a pro forma motion, lacking the requisite notice of hearing. Such a defective motion does not toll the period to appeal. Therefore, the trial court's order of June 2, 1993, had become final and executory. The Court emphasized that a motion without a notice of hearing is considered a mere scrap of paper and that failure to comply with procedural requirements is fatal to the right to appeal. Since the private respondents had lost their right to appeal due to their procedural lapse, they still had recourse to a petition for relief from judgment under Rule 38, which is considered a plain, speedy, and adequate remedy. Thus, resort to certiorari under Rule 65 was improper as their ordinary legal remedies had not been exhausted. On the Court of Appeals' error in finding grave abuse of discretion: The Supreme Court held that the appellate court erred in issuing the writ of certiorari because the trial court correctly denied the private respondents' motion for reconsideration. The motion was pro forma, lacking the requisite notice of hearing, and thus did not toll the period to appeal. The trial court's order of June 2, 1993, had become final and executory. The Court emphasized that failure to comply with procedural requirements is fatal to the right to appeal. Since the private respondents had lost their right to appeal due to their procedural lapse, they still had recourse to a petition for relief from judgment under Rule 38, which is considered a plain, speedy, and adequate remedy. Thus, resort to certiorari under Rule 65 was improper as their ordinary legal remedies had not been exhausted. On the amendment of a final and executory decision: The Supreme Court found that the appellate court committed a reversible error of law when it amended its earlier decision in CA-G.R. CV No. 32983. The decision dated May 29, 1992, had become final and executory as neither party appealed it. The Court reiterated the principle that once a judgment becomes final and executory, it can no longer be attacked or modified, directly or indirectly, except for the correction of clerical errors or the making of nunc pro tunc entries that cause no prejudice, or if the judgment is void. The appellate court's order to compound and capitalize interest periodically substantially amended the fallo of its previous decision, which was impermissible. The Court stressed that even at the risk of an error or two, a judgment must attain finality, and once final, it becomes the law of the case.
Main Doctrine
A motion for reconsideration that lacks the requisite notice of hearing is considered a mere scrap of paper and does not suspend the running of the period to appeal. Consequently, a petition for certiorari under Rule 65 is not the proper remedy when the aggrieved party had recourse to a petition for relief from judgment under Rule 38. Furthermore, a final and executory judgment can no longer be amended or altered, even to correct perceived flaws in fact or law.