Samonte v. Naguiat, Inc.
REITERATIONFacts
The Antecedents: Petitioner Romeo Samonte was the President and General Manager of S.B. Commercial Traders, Inc. (SB Traders), a corporation that purchased motor oils and lubricants on credit from respondent S.F. Naguiat, Inc. The agreement stipulated payment within 60 days of delivery. The respondent filed a complaint for collection of a sum of money amounting to P1,105,143.27, alleging that SB Traders incurred this obligation for Mobil Oil products. The respondent further contended that SB Traders was merely an alter ego of the petitioner, operating for his sole benefit, and thus sought to hold both SB Traders and the petitioner solidarily liable. Procedural History: The Regional Trial Court (RTC), Branch 9 of Malolos, Bulacan, ruled in favor of the respondent, ordering SB Traders and Romeo Samonte to pay the sum of P1,105,143.27 with interest, exemplary damages, and attorney's fees. The petitioner failed to appeal this decision, which subsequently became final and executory. Thereafter, the RTC ordered the issuance of a writ of execution. The petitioner then filed a petition for relief from judgment with the RTC, arguing that the court made prejudicial mistakes in appreciating the evidence and that he should not be held solidarily liable due to the separate corporate personality of SB Traders. The RTC denied this petition for lack of merit and subsequently denied the petitioner's motion for reconsideration. The petitioner elevated the matter to the Court of Appeals (CA) via a petition for certiorari, which was also dismissed. The CA found that the petitioner failed to file a motion for reconsideration or an appeal from the RTC decision and did not provide reasons for this failure, nor did he allege fraud, accident, mistake, or excusable negligence. The CA also noted the absence of an affidavit of merit. The Petition: The petitioner filed a petition for review on certiorari with the Supreme Court, seeking to set aside the CA's decision dismissing his petition for certiorari and its subsequent resolution denying his motion for reconsideration. He argued that the CA committed an irreversible error in dismissing his petition and its subsequent denial, that the CA gravely erred in strictly applying procedural rules at the expense of substantial justice, and that the CA committed an irreversible error in not ruling on the merits of the case. The petitioner contended that the CA should have considered that his former counsel's actions bound him and that he should not be blamed for his counsel's alleged incompetence, ignorance, or inexperience. He further argued for a liberal construction of procedural rules to serve substantial justice.
Issue(s)
Whether the Court of Appeals committed an irreversible error in dismissing the Petition for Certiorari and denying the Motion for Reconsideration. Whether the Court of Appeals gravely erred in strictly applying the rules of procedure at the expense of substantial justice. Whether the Court of Appeals committed an irreversible error in not ruling on the merits of the case.
Ruling
The petition is denied. The Decision dated March 26, 2004 and the Resolution dated September 28, 2004 of the Court of Appeals in CA-G.R. SP No. 70213 are affirmed.
Ratio Decidendi
On the alleged irreversible error in dismissing the Petition for Certiorari and denying the Motion for Reconsideration: The Court of Appeals did not err in affirming the RTC's dismissal of the petition for relief from judgment. Rule 38 of the Rules of Court requires a petition for relief to be filed within sixty (60) days after learning of the judgment and not more than six (6) months after its entry, and must be accompanied by affidavits showing fraud, accident, mistake, or excusable negligence, and the facts constituting a good and substantial cause of action or defense. The petitioner failed to allege any fraud, accident, mistake, or excusable negligence that prevented him from filing an appeal. His arguments regarding the separate juridical personality of the corporation and his non-liability were issues that should have been raised in a motion for reconsideration or an appeal, not in a petition for relief. The RTC correctly noted that the petitioner questioned the dispositive portion of the decision, not the proceedings, which is an issue for appeal. The CA correctly observed that the petitioner did not offer any reason for his failure to appeal, nor did he assert that the decision was entered against him through fraud, accident, mistake, or excusable negligence. Therefore, the petition for relief was fatally flawed and properly dismissed. On the alleged grave error in strictly applying procedural rules at the expense of substantial justice: While rules of procedure are not cast in stone, strict compliance is indispensable for the prevention of needless delays and for the orderly and expeditious dispatch of judicial business. The petitioner's claim that his former counsel's incompetence should be a ground to set aside the rules is unavailing, as a client is bound by his counsel's conduct, negligence, and mistake. The petitioner failed to show that the negligence was so gross and palpable as to call for the exercise of equity jurisdiction. The petition for relief is an equitable remedy allowed only in exceptional cases where no other adequate remedy exists, which was not the situation here as an appeal was available. The CA correctly ruled that the RTC did not commit grave abuse of discretion in denying the petition for relief from judgment. On the alleged irreversible error in not ruling on the merits of the case: The CA did not err in not considering the merits of the case because the petition for relief was fatally flawed from the outset. Section 3 of Rule 38 requires the petition to be accompanied by affidavits of merit. While a verified petition can serve as an affidavit of merit if it contains the necessary allegations, the petition filed by the petitioner was not even verified. Thus, the CA correctly concluded that it could not consider the merits of the case due to the procedural defects in the petition for relief.
Main Doctrine
A petition for relief from judgment under Rule 38 of the Rules of Court is an equitable remedy allowed only in exceptional cases where there is no other available or adequate remedy, and it cannot be used to revive a lost remedy of appeal due to the party's own negligence or mistaken procedure. The petition must be accompanied by affidavits showing the fraud, accident, mistake, or excusable negligence relied upon, and the facts constituting a good and substantial cause of action or defense.