Rustia v. Rivera
REITERATIONFacts
The Antecedents: Respondent Emerita Rivera filed a complaint for sum of money against Spouses Carlos and Teresita Rustia (petitioners) and Rosemarie F. Rocha for a loan of ₱130,000.00, payable within thirty (30) days with a five percent (5%) monthly interest. Petitioners executed a promissory note with Rocha as co-maker. Petitioners paid interest from January 1991 to March 1994. Thereafter, they failed to pay the principal or accrued interest despite written demands. Procedural History: The Metropolitan Trial Court (MeTC) ruled in favor of the respondent, ordering petitioners to pay the principal, accrued interest, and attorney's fees. The Regional Trial Court (RTC) affirmed the MeTC's decision. Petitioners filed a motion for reconsideration with the RTC, which was denied for lack of notice of hearing. The Court of Appeals denied their petition for review and subsequent motion for reconsideration. The Petition: Petitioners filed a Petition for Review on Certiorari with the Supreme Court, assailing the Court of Appeals' decision, primarily on the ground that their motion for reconsideration with the RTC was erroneously declared a mere scrap of paper, and that the Court of Appeals erred in upholding the award of interest despite the absence of written stipulation.
Issue(s)
Whether the Court of Appeals erred in holding that the motion for reconsideration filed with the RTC by petitioners is but a mere scrap of paper for lack of notice of hearing. Whether the Court of Appeals erred when it failed to apply Article 1956 of the Civil Code providing that no interest shall be due unless it has been expressly stipulated in writing.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals in toto. The Court held that the motion for reconsideration filed by the petitioners with the RTC was indeed a mere scrap of paper due to its non-compliance with the mandatory notice of hearing requirements under Rule 15 of the Rules of Civil Procedure. Furthermore, the Court found that there was a written stipulation for the payment of interest, as evidenced by a letter from petitioner Teresita Rustia, thereby upholding the award of interest.
Ratio Decidendi
On the first issue (Motion for Reconsideration): The Court held that Sections 4 and 5 of Rule 15 of the 1997 Rules of Civil Procedure are mandatory. Section 4 requires that every written motion, except those that can be acted upon without prejudicing the adverse party, shall be set for hearing. Section 5 mandates that the notice of hearing must specify the time and date. The Court reiterated its consistent ruling in numerous cases, including National Commercial Bank of Saudi Arabia v. Court of Appeals, that the lack of notice of hearing is fatal to a motion for reconsideration, rendering it a mere scrap of paper. Therefore, the Court of Appeals did not err in affirming the RTC's ruling that the petitioners' motion for reconsideration was procedurally infirm. On the second issue (Interest under Article 1956 of the Civil Code): The Court found that the petitioners' contention that there was no written stipulation for interest was contradicted by the evidence. The trial court, whose findings were affirmed by the RTC and the Court of Appeals, found that petitioner Teresita Rustia sent a letter to the respondent expressing difficulty in paying the 5% monthly interest on the ₱130,000.00 loan. This letter serves as proof of the express written agreement to pay interest, thus complying with Article 1956 of the Civil Code. The Court emphasized that findings of fact by the trial court, when affirmed by the appellate courts, are binding and conclusive upon the Supreme Court. Consequently, the respondent is entitled to the payment of accrued interest.
Main Doctrine
A motion for reconsideration is considered a mere scrap of paper and is fatally defective if it fails to comply with the mandatory requirements of Sections 4 and 5, Rule 15 of the 1997 Rules of Civil Procedure, specifically the inclusion of a notice of hearing specifying the time and place thereof.