Cunada v. Drilon
REITERATIONFacts
The Antecedents: This case originated from an action filed by Planters Products, Inc. against petitioner spouses Victor B. Cuñada and Hedy V. Cuñada for the recovery of a deficiency arising from the extrajudicial foreclosure of a mortgage executed by the petitioners in favor of the private respondent. The foreclosure was initiated on February 11, 1981, with the Regional Trial Court, Branch 41, Bacolod City, presiding over the recovery proceedings. Procedural History: The proceedings in the trial court were protracted, with pre-trial concluded on March 29, 1982, and the plaintiff resting its case on February 10, 1986. Petitioner Victor Cuñada began his direct testimony on October 29, 1991, but failed to complete it due to his and his wife's prolonged absence in the United States, which prevented the proper service of notices for subsequent hearings. Consequently, on December 7, 1992, the trial court struck out his testimony and considered the case submitted for decision. After several judge changes, the trial court rendered a decision in favor of Planters Products, Inc. on October 15, 2001. A motion for new trial or reconsideration was denied on April 23, 2003. The Petition: The petitioners filed a Petition for Certiorari with this Court, which was dismissed on September 17, 2003, for failing to submit a verified statement of material dates, for being the wrong remedy in lieu of appeal, and for violating the doctrine of judicial hierarchy. The petitioners then filed a Motion for Reconsideration, with an attached Amended Petition, on November 11, 2003, which was received by the Court on March 15, 2004. While the Court recalled the Entry of Judgment due to the timely filing of the motion for reconsideration, it denied the motion itself, finding no substantial grounds, and noted the Amended Petition without action.
Issue(s)
Whether the petitioners' Motion for Reconsideration was seasonably filed, and whether the Supreme Court's Resolution dated September 17, 2003, dismissing the Petition for Certiorari, had attained finality. Whether the Petition for Certiorari was sufficient in form and substance. Whether the Petition for Certiorari was the proper remedy, and whether the petitioners disregarded the judicial hierarchy. Whether the petitioners were denied due process by the trial court. Whether a deficiency judgment is permissible in an extrajudicial foreclosure of mortgage.
Ruling
The Entry of Judgment dated November 12, 2003, is RECALLED. However, the Motion for Reconsideration is DENIED with FINALITY. The Amended Petition is NOTED WITHOUT ACTION. Entry of Judgment shall be made in the ordinary course.
Ratio Decidendi
On the timeliness of the Motion for Reconsideration and finality of the Resolution: The Court found that the petitioners seasonably filed their Motion for Reconsideration on November 11, 2003, one day before the expiration of the prescribed 15-day period. Although the motion was received by the Court much later due to postal delays, its timely posting with the post office was sufficient to prevent the September 17, 2003 Resolution from attaining finality. Consequently, the Entry of Judgment made on November 12, 2003, was recalled. This demonstrates that the Court gives due consideration to timely filings even with subsequent receipt delays, provided the posting is within the reglementary period. On the sufficiency of the Petition for Certiorari: The Court reiterated that a Petition for Certiorari must comply with the requirements of the Rules of Court, specifically Section 4 of Rule 65 in relation to Section 3 of Rule 46. This includes the mandatory submission of a verified statement of the material dates, such as the date of receipt of the judgment or order, the date of filing of a motion for reconsideration, and the date of receipt of the denial thereof. The failure to provide this verified statement is a sufficient ground for the outright dismissal of the petition. The Court noted that subsequent compliance, such as filing an Amended Petition, does not warrant reconsideration of the dismissal. On the propriety of the remedy and disregard of judicial hierarchy: The Court emphasized that a Petition for Certiorari under Rule 65 is a special civil action available only when there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. In this case, the assailed decision of the trial court was a final determination of the parties' rights, making appeal the proper remedy, not certiorari. Furthermore, the petitioners violated the doctrine of judicial hierarchy by directly filing the petition with the Supreme Court, bypassing the Court of Appeals, which shares original jurisdiction over such writs. Direct resort to the Supreme Court is permissible only under exceptional and compelling circumstances, which were absent in this case. On the alleged denial of due process: The Court found no denial of due process. The petitioners were given the opportunity to present their defense, including completing the direct examination of Victor Cuñada. However, they failed to complete their evidence and make themselves available for cross-examination, particularly due to their prolonged stay abroad and the inability to serve hearing notices. The trial court's action of striking off the incomplete testimony and deeming the case submitted for decision was a consequence of the petitioners' own failure to prosecute their defense diligently. The case had been pending for a considerable time, and the petitioners' invocation of due process was deemed a maneuver to delay the judgment. On the permissibility of deficiency judgment: The Court affirmed the well-settled jurisprudence that a creditor is allowed to recover the deficiency from the debtor in cases of extrajudicial foreclosure of mortgage where the proceeds of the sale are insufficient to cover the debt. Act No. 3135, as amended, does not expressly or impliedly prohibit such recovery. In the absence of a statutory provision denying this right, the creditor is not precluded from seeking the unpaid balance on the principal obligation. Therefore, even if the petitioners had completed their evidence, their defense on this point would have failed.
Main Doctrine
A motion for reconsideration filed seasonably, even if received late by the Court due to postal delays, prevents a resolution from attaining finality. However, such motion will be denied if it lacks cogent reasons or substantial arguments. Failure to comply with the material dates requirement, the use of certiorari as a wrong remedy in lieu of appeal, and disregard of judicial hierarchy are sufficient grounds for dismissal of a petition.