Land Bank v. Ascot Holdings
REITERATIONFacts
The Antecedents: Land Bank of the Philippines (Land Bank) purchased 75,000,000 Philippine Airlines (PAL) shares. Respondents, along with other entities, formed PR Holdings Inc. (PR Holdings) to purchase 67% of PAL's capital stocks. Land Bank, along with others, owned 33% of PAL shares, while respondents and other PR Holdings stockholders owned the remaining 67%. Minority stockholders of PR Holdings filed a case seeking the distribution of PR Holdings' PAL shares. Subsequently, the parties agreed to dissolve PR Holdings and distribute its assets. However, respondents proposed to increase PAL's capital stock, which was agreed upon. A Stockholders' Agreement was executed, wherein Land Bank and others had a put-option to sell their PAL shares to respondents at ₱5.00 per share on the sixth year, with the obligation guaranteed by Fortune Tobacco Corporation and Asia Brewery Inc. A Guaranty Agreement was executed by Fortune Tobacco Corporation and Asia Brewery Inc. to guarantee the respondents' obligation. Procedural History: Respondents filed a complaint against Land Bank and others with the Regional Trial Court (RTC) of Makati, seeking to be released from their obligation to buy PAL shares under the Stockholders' Agreement, invoking the doctrine of rebus sic stantibus due to alleged unforeseen events. The RTC ruled in favor of the respondents, releasing them from their obligation. Land Bank filed a motion for reconsideration, which was denied. Land Bank then filed a motion for extension of time to file a petition for review with the Court of Appeals (CA). The CA denied the motion for extension, citing that the filing of a motion for reconsideration did not toll the reglementary period to appeal, and the period had already lapsed. The Petition: Land Bank filed a petition for certiorari and mandamus with the Supreme Court, seeking to annul the CA's resolutions denying its motion for extension of time and motion for reconsideration, arguing that the CA committed grave abuse of discretion. Land Bank contended that the RTC's judgment upholding the release of respondents from their obligation created a dangerous precedent.
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in denying Land Bank's motion for extension of time to file a petition for review. Whether the filing of a motion for reconsideration of the RTC's judgment in an intra-corporate controversy tolls the reglementary period to appeal.
Ruling
The petition is DISMISSED. The Court of Appeals did not commit grave abuse of discretion in denying Land Bank's motion for extension of time to file a petition for review.
Ratio Decidendi
On the issue of whether the Court of Appeals committed grave abuse of discretion in denying Land Bank's motion for extension of time to file a petition for review: The Court held that the assailed "Judgment" in Civil Case No. 02-843 was issued by the RTC in the exercise of its special jurisdiction over intra-corporate controversies under R.A. No. 8799. Therefore, the case was governed by the Interim Rules of Corporate Rehabilitation and the Interim Rules of Procedure Governing Intra-Corporate Controversies under R.A. No. 8799, as well as A.M. No. 04-9-07-SC. Under Section 8(3), Rule 1 of the Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799, prohibited pleadings include motions for new trial, reconsideration of judgment or order, or reopening of trial. Consequently, the filing by petitioner of a motion for reconsideration before the trial court did not toll the reglementary period to appeal the judgment via a petition for review under Rule 43 of the 1997 Rules of Civil Procedure, as amended. As a consequence, the CA has no more jurisdiction to entertain the petition for review which Land Bank intended to file before it, much less to grant the motion for extension of time for the filing thereof. The prohibited motion for reconsideration filed by the petitioner with the trial court did not suspend the period to appeal the RTC’s "Judgment" of March 15, 2006. Consequently, that "Judgment" became final and executory 15-days thereafter. When petitioner filed a motion for extension to file a petition for review in the CA on July 25, 2006, or one hundred twenty four (124) days after it received the RTC "Judgment," there was no more period to extend. Given these undeniable facts, the CA cannot be faulted for denying petitioner’s motion for extension. There is no abuse, much less grave abuse, of discretion, to speak of. On the issue of whether the filing of a motion for reconsideration of the RTC's judgment in an intra-corporate controversy tolls the reglementary period to appeal: The Court reiterated that procedural rules, especially those prescribing the time for filing appeals, are generally inviolable and must be strictly followed. Appeal is a statutory privilege, not a constitutional right, and parties must comply with the rules to avail of it. The requirements for perfecting an appeal within the reglementary period are mandatory and jurisdictional. Failure to perfect an appeal renders the judgment final and executory. The bare invocation of "the interest of substantial justice" is not sufficient to suspend procedural rules. While rules of procedure may be relaxed in exceptionally meritorious cases to relieve a litigant of an injustice not commensurate with their failure to comply, this case does not warrant such relaxation. The petitioner's claim of substantial investment loss was deemed imaginary, as its shares in PAL were not taken away, and it continued to own them. The Court emphasized that procedural rules are not to be belittled or dismissed simply because their non-observance may have resulted in prejudice to a party's substantive rights; they are essential for the orderly administration of justice.
Main Doctrine
A prohibited pleading, such as a motion for reconsideration filed in cases governed by the Interim Rules of Procedure Governing Intra-Corporate Controversies Under R.A. No. 8799, does not toll the reglementary period to appeal. Consequently, the appellate court loses jurisdiction to entertain a motion for extension of time to file a petition for review if the period to appeal has already lapsed.