Republic of the Philippines v. Court of Appeals
REITERATIONFacts
The Antecedents: Navotas Industrial Corporation (NIC) was awarded dredging contracts worth ₱194,454,000.00 by the Department of Public Works and Highways (DPWH). NIC claimed to have completed 95.06% of the work but was allegedly paid only 79.22%, leaving a balance of ₱30,799,676.00. NIC filed a collection case against the Republic of the Philippines, through DPWH, with the Regional Trial Court (RTC) of Malabon. Procedural History: The DPWH, after an audit, found NIC's contracts to be null and void, alleging that NIC commenced work before the award, that the contracts were awarded without public bidding, and that NIC connived with DPWH officials to falsify documents for work not performed, leading to the collection of ₱146,962,072.47. The DPWH filed a case with the Tanodbayan (now Special Prosecutor) against NIC's president and DPWH officials, which led to the filing of criminal cases (estafa thru falsification and violation of RA 3019) with the Sandiganbayan. The DPWH then moved to consolidate the civil case with the criminal cases, which the RTC denied. The Court of Appeals (CA) affirmed the RTC's denial. The Supreme Court granted a temporary restraining order, suspending the proceedings in the RTC. The Petition: The Republic of the Philippines, through DPWH, filed a petition for review with the Supreme Court, seeking to restrain the RTC from hearing the civil case and to dismiss it, arguing for the consolidation of the civil case with the criminal cases before the Sandiganbayan.
Issue(s)
Whether the petition was filed on time. Whether the Court of Appeals erred in not ordering the consolidation of Civil Case No. 1153-MN with Criminal Cases Nos. 16889-16900 with the Sandiganbayan as required by Section 4(b) of P.D. 1606.
Ruling
The petition is denied, and the Decision of the Court of Appeals is affirmed with modification. The counterclaim of petitioner in Civil Case No. 1153-MN is deemed abandoned. The RTC of Malabon is ordered to suspend the trial of Civil Case No. 1153-MN until the termination of the criminal cases filed with the Sandiganbayan.
Ratio Decidendi
On the timeliness of the petition: The Court ruled that the petition was filed on time. The last day for filing, September 11, 1994, fell on a Sunday. Pursuant to Section 1, Rule 22 of the Rules of Court, when the last day falls on a Sunday or legal holiday, the time shall not run until the next working day. Therefore, the filing on September 12, 1994, the next working day, was considered timely. On the consolidation of cases: The Court held that consolidation is a matter of discretion and becomes a matter of right only when certain requirements are met, primarily that the court has jurisdiction over all cases to be consolidated. The Court denied the consolidation for two main reasons. First, the Sandiganbayan lacks jurisdiction over the civil case for collection of a sum of money, as its jurisdiction is limited to specific graft and corruption cases and related offenses, not ordinary civil claims. Even if consolidated, the Sandiganbayan could not award any money judgment to NIC, necessitating a separate suit, thus defeating the purpose of consolidation. Second, the Rules of Court do not allow counterclaims or third-party complaints in criminal cases, and consolidating NIC's civil case would have the same effect, potentially complicating criminal proceedings. The Court cited Section 1, Rule 111 of the Rules of Court, which mandates that counterclaims must be litigated separately. Furthermore, the Court clarified that NIC's civil action, based on contracts allegedly illegal per se and in violation of the Anti-Graft and Corrupt Practices Act, cannot proceed independently under Article 31 of the Civil Code. Such a contract, if proven illegal, is void ab initio, and no valid obligation can arise from it. Therefore, the civil case must be suspended until the termination of the criminal cases before the Sandiganbayan to avoid conflicting decisions and to allow the Sandiganbayan to first determine the legality of the contracts.
Main Doctrine
The Sandiganbayan has no jurisdiction over a civil case for collection of sum of money, and a counterclaim in a criminal case is not allowed; thus, a civil collection case cannot be consolidated with criminal cases before the Sandiganbayan. Furthermore, a civil case based on a contract assailed as illegal per se, particularly when its execution is alleged to violate the Anti-Graft and Corrupt Practices Act, cannot proceed independently of the criminal action and must be suspended until the termination of the criminal cases.