Viking Industrial Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Viking Industrial Corporation (petitioner) extended a loan to Jose L. Luison, Jr. (respondent) secured by a promissory note and real estate mortgage. Petitioner demanded a significantly higher amount than respondent believed was accurate. Respondent filed a petition for prohibition and declaratory relief with the RTC, Quezon City, questioning the computation of indebtedness and interest charges. Petitioner refused to answer, citing incorrect corporate name in the petition ('Viking Trading Corporation' instead of 'Viking Industrial Corporation'). Consequently, the RTC declared petitioner in default and allowed respondent to present evidence ex parte. Procedural History: The RTC rendered a judgment by default, modifying the principal amount, reducing the interest rate, making the injunction permanent until adjustments were made, and ordering payment of attorney's fees. Petitioner received the judgment but did not appeal. Upon respondent's motion, the RTC issued a writ of execution, which was fully satisfied according to the Sheriff's Return. Petitioner refused to acknowledge satisfaction, leading respondent to file motions to cancel the mortgage annotation and to enjoin the sale of the property. The RTC, under a different judge, initially denied these motions but then set aside the judgment by default, finding lack of jurisdiction due to improper service of summons. Upon respondent's motion for reconsideration, the RTC overturned its order, reinstated the judgment by default, and granted respondent's motions. Petitioner's motion for reconsideration was denied. The Court of Appeals dismissed petitioner's subsequent petition for certiorari, holding that the trial court did not commit grave abuse of discretion in reinstating the judgment by default, citing the proper service of processes on employees of Viking Industrial Corporation and the waiver of jurisdiction by petitioner's voluntary appearance and seeking affirmative reliefs. The Petition: Petitioner filed a petition for review on certiorari with the Supreme Court, assailing the Court of Appeals' decision finding grave abuse of discretion on the part of the RTC judge who granted petitioner's motion for new trial. Petitioner argued that its motion for new trial was filed seasonably as it only received the judgment by default on January 9, 1999. Respondent countered that petitioner was served a copy of the judgment on August 9, 1996, and that the issue of receipt date is a question of fact not reviewable by certiorari.
Issue(s)
Whether the motion for new trial was filed within the reglementary period. Whether the RTC judge committed grave abuse of discretion in granting the motion for new trial based on 'honest mistake'.
Ruling
The Supreme Court denied the petition, affirming the Court of Appeals' decision. The Court held that the motion for new trial was filed out of time and that the 'honest mistake' cited by the petitioner did not qualify as a valid ground for a new trial under Rule 37 of the Rules of Court, especially since the judgment had become final and executory.
Ratio Decidendi
On the timeliness of the motion for new trial: The Court reiterated that it is not a trier of facts and that pure questions of fact are not proper subjects of a petition for review on certiorari. The Court of Appeals' finding that petitioner received the judgment by default on August 9, 1996, was supported by the records, including the fact that petitioner had previously filed a petition for certiorari with the Court of Appeals and that the judgment had been executed. The Court found the petitioner's claim of receiving the judgment only on January 9, 1999, to be 'a lie, flimsy and frivolous.' Therefore, the motion for new trial filed on January 21, 1999, was clearly filed out of time. On the validity of 'honest mistake' as a ground for new trial: The Court found petitioner's reliance on 'honest mistake' to be misplaced. Section 1(a) of Rule 37 of the Rules of Court requires that the mistake must be one which 'ordinary prudence could not have guarded against.' The petitioner's failure to file an answer was based on a mistake of law, specifically its counsel's belief that the court lacked jurisdiction due to improper service of summons. The Court pointed out that counsel should have filed a motion to dismiss on the ground of lack of jurisdiction instead of ignoring the petition. This mistake of law, which could have been prevented by proper knowledge of the Rules of Civil Procedure (specifically Rule 10, Section 4 and Rule 16, Section 1), did not meet the standard of 'ordinary prudence.' Granting a new trial on such grounds would allow litigation to be prolonged indefinitely, contrary to the principle of interest reipublicae ut sit finis litium.
Main Doctrine
A motion for new trial based on 'honest mistake' requires a showing that ordinary prudence could not have guarded against it; a mistake of law, especially when counsel should have been aware of the rules, does not ordinarily qualify as an 'honest mistake' warranting a new trial, particularly when the judgment has already become final and executory.