Radiant Products v. Metropolitan Bank
REITERATIONFacts
The Antecedents: Philippine Radiant Products, Inc. (PRPI) initiated a complaint against Aurora Textile Finishing Company (ATFC), Philippine Savings Bank (PSB), and Metropolitan Bank & Trust Company, Inc. (MBTC) for specific performance and damages. PRPI alleged that it had been ordering medical plaster cloth backing from ATFC since 1990. For payment, PRPI opened accounts with PSB and a Letter of Credit with MBTC, through which payments were remitted to ATFC. A dispute arose when a shipment of 35,000 yards of medical plaster cloth backing, ordered by PRPI and accepted by ATFC, arrived at the port of Manila but was discovered to be not vinyl coated, contrary to the agreement. PRPI informed the banks and ATFC of the discrepancy. ATFC promised to send a technician for vinyl coating, but demanded payment for the shipment. PRPI sought injunctive relief to prevent PSB and MBTC from paying ATFC. Procedural History: The Regional Trial Court (RTC) of Tagum City initially issued an order enjoining PSB and MBTC from suspending payment. MBTC filed an answer, asserting it had already paid under the Letter of Credit and counterclaimed for attorney's fees. Separately, MBTC filed a collection case against PRPI in the RTC of Davao City for the unpaid import bills related to the Letter of Credit. The Davao City RTC dismissed MBTC's complaint on the ground of litis pendentia, which MBTC appealed. Meanwhile, the Tagum City RTC ruled in favor of PRPI in the original case, ordering MBTC and ATFC to pay substantial damages and attorney's fees. MBTC filed a motion for reconsideration, which the RTC partially granted by deleting actual damages and reducing attorney's fees. The RTC also granted PRPI's motion for partial execution pending appeal. MBTC filed a notice of appeal, but PRPI opposed it, claiming it was filed out of time. The Tagum City RTC denied MBTC's appeal, declaring its decision final and executory. MBTC then filed a petition for certiorari with the Court of Appeals (CA) seeking to nullify the RTC's orders. The CA initially dismissed this petition due to technical deficiencies, prompting MBTC to withdraw it and refile a similar petition. The RTC denied MBTC's motion for reconsideration and issued a writ of execution. MBTC filed another petition for certiorari and mandamus with the CA, which eventually annulled the RTC's order denying MBTC's appeal, ruling that the service of the order on MBTC's branch manager was not proper service on its counsel. The Petition: Philippine Radiant Products, Inc. (PRPI), as petitioner, seeks a review on certiorari of the Court of Appeals' decision that annulled the RTC's order denying MBTC's appeal. PRPI argues that MBTC's petition before the CA was barred by a prior CA resolution dismissing its earlier petition with prejudice, that MBTC engaged in forum shopping by refiling its petition and by filing multiple actions, and that the RTC decision had become final and executory, precluding the use of certiorari and mandamus to revive a lost right to appeal. PRPI contends that the CA erred in ruling that the service of the RTC's order on MBTC's branch manager was not proper service on its counsel, and that the Sheriff's testimony regarding the service was unreliable. The core of PRPI's argument is that MBTC's procedural missteps, including alleged forum shopping and improper appeals, should have led to the dismissal of its petition before the CA, thereby upholding the finality of the RTC's decision.
Issue(s)
Whether the Court of Appeals erred in ruling that the service of the August 22, 2002 Order on MBTC's branch manager and general manager did not constitute valid notice to MBTC for purposes of filing an appeal. Whether MBTC was guilty of forum shopping in refiling its petition for certiorari and mandamus after its initial petition was dismissed and subsequently withdrawn. Whether the RTC of Tagum City committed grave abuse of discretion amounting to excess or lack of jurisdiction in denying MBTC's notice of appeal and declaring its decision final and executory.
Ruling
The petition is denied for lack of merit. The Supreme Court affirmed the decision of the Court of Appeals, holding that the RTC of Tagum City committed grave abuse of discretion in denying MBTC's notice of appeal. The Court found that service of the August 22, 2002 Order on MBTC's branch manager and general manager did not constitute valid notice to MBTC, as service should have been made on its counsel of record, absent any court order directing otherwise. Consequently, MBTC's appeal was deemed timely filed. The Court also found that MBTC was not guilty of forum shopping.
Ratio Decidendi
On the validity of service of notice and the timeliness of the appeal: The Court held that service of the August 22, 2002 Order denying MBTC's motion for reconsideration on MBTC's branch manager and general manager, Patricia Uy and William Vidanes, respectively, did not constitute valid notice to MBTC for the purpose of reckoning the period to appeal. The Court emphasized that MBTC was represented by its counsel, Atty. Emmanuel Galicia, whose office was in Davao City. Under the Rules of Civil Procedure, service of orders should be made on the counsel of record, unless the court directs otherwise. The testimony of the sheriff regarding Atty. Galicia's alleged instruction to leave the order with Uy was found to be unreliable and contradicted by Atty. Galicia's own testimony and the postmaster's certification confirming receipt of the order by mail on August 30, 2002. Therefore, the appeal period should be reckoned from August 30, 2002, making MBTC's notice of appeal timely filed. The RTC's denial of the appeal based on the erroneous reckoning of the period constituted grave abuse of discretion. On the issue of forum shopping: The Court found that MBTC was not guilty of forum shopping. The initial petition filed with the CA (CA-G.R. SP No. 73241) was dismissed due to technical defects, specifically the lack of a Special Power of Attorney authorizing the branch manager to sign the verification and certification against forum shopping, and the submission of mere machine copies of certain orders. MBTC then filed a notice of withdrawal of this petition, explicitly stating it was without prejudice to refiling, and subsequently refiled its petition (CA-G.R. SP No. 73432) with the necessary corrections. The Court cited Executive Secretary v. Gordon to support the principle that withdrawing a defective petition and refiling it, especially before any adverse ruling on the merits, does not constitute forum shopping, as the intent was to correct technical deficiencies and not to seek a favorable disposition in multiple forums. The Court also noted that the RTC's denial of MBTC's motion ex abundanti cautelam for the quashal of the writ of execution was justified given the precipitate enforcement by the Sheriff despite the pendency of the CA petition, and that seeking relief in both the RTC and CA under such circumstances was a reasonable measure to protect MBTC's rights. On the RTC's denial of the notice of appeal: The RTC of Tagum City committed grave abuse of discretion amounting to excess or lack of jurisdiction in denying MBTC's notice of appeal. This denial was predicated on the erroneous finding that MBTC had been properly served with the August 22, 2002 Order on August 27, 2002, and that its subsequent appeal was filed out of time. As established, the service on the branch manager and general manager was invalid notice to MBTC. The actual notice to MBTC's counsel of record occurred on August 30, 2002, when Atty. Galicia received the order by registered mail. Therefore, the notice of appeal filed on August 30, 2002, was within the reglementary period. The RTC's insistence on the sheriff's testimony over the clear rules of procedure and evidence, leading to the denial of the appeal, constituted a grave abuse of discretion.
Main Doctrine
Service of court orders on a party's branch manager, and not on its counsel of record, does not constitute valid notice for purposes of reckoning the period to appeal, absent a court order directing such service on the party directly.