Banco de Oro-EPCI, Inc. v. Tansipek
REITERATIONFacts
The Antecedents: J. O. Construction, Inc. (JOCI) filed a complaint against Philippine Commercial and Industrial Bank (PCIB) for failing to remit a PNB Check amounting to P4,050,136.51, payable to JOCI, which was allegedly deposited by respondent John Tansipek, JOCI's authorized collector, into his personal account. PCIB allowed the deposit despite the check being crossed for payee's account only and despite alleged lack of authority of Tansipek to endorse it. Procedural History: PCIB filed a Motion to Dismiss, which was denied. PCIB filed an Answer, asserting defenses including JOCI's alleged authorization of Tansipek and lack of cause of action. PCIB also filed a third-party complaint against Tansipek, who was declared in default for failure to file an Answer. Tansipek's Petition for Certiorari assailing the default order was dismissed by the Court of Appeals for failure to attach assailed orders, and his subsequent Motion for Reconsideration was denied for being filed out of time. The RTC ruled in favor of JOCI on the main case and ordered Tansipek to pay PCIB whatever amount PCIB would pay JOCI. Tansipek appealed to the Court of Appeals, which reversed the decision relative to the third-party complaint and remanded the case for further proceedings. The Petition: Petitioner Banco de Oro-EPCI, Inc., as successor-in-interest to PCIB, filed a Petition for Review on Certiorari, assailing the Court of Appeals' decision and resolution, questioning whether the Court of Appeals could reverse its earlier decision.
Issue(s)
Whether the Court of Appeals can reverse its decision handed down eight years prior. Whether the doctrine of the law of the case applies to issues previously adjudicated in a certiorari proceeding dismissed on technicalities. Whether a party declared in default can appeal the judgment on the main case based on the invalidity of the default order.
Ruling
The Supreme Court reversed and set aside the Decision and Resolution of the Court of Appeals, and reinstated the Decision of the Regional Trial Court.
Ratio Decidendi
On the issue of whether the Court of Appeals can reverse its decision handed down eight years prior: The Court held that the doctrine of the law of the case applies. Whatever is irrevocably established as the controlling legal rule of decision between the same parties in the same case continues to be the law of the case. The issue of the propriety of the Order of Default had already been adjudicated in Tansipek's Petition for Certiorari with the Court of Appeals, and its dismissal constituted a bar to the retrial of the same issue. Once a decision attains finality, it becomes the law of the case, whether or not it is erroneous, and may no longer be altered. On the applicability of the doctrine of the law of the case to issues previously adjudicated in a certiorari proceeding dismissed on technicalities: The Court found no substantial distinction between an appeal and a certiorari petition when applying the doctrine of the law of the case. The doctrine is founded on the policy of ending litigation. Allowing Tansipek to re-litigate the issue of default after his certiorari petition was dismissed for failure to attach necessary requirements and his motion for reconsideration was filed out of time would put a premium on his fault or negligence. On whether a party declared in default can appeal the judgment on the main case based on the invalidity of the default order: The Court clarified that a party declared in default is not barred from appealing from the judgment on the main case, whether or not they filed a motion to set aside the order of default. However, such an appeal must be based on the decision being contrary to law or the evidence already presented, and not on the alleged invalidity of the default order itself. Tansipek's appeal to the Court of Appeals was based on the alleged erroneous default order, which was improper.
Main Doctrine
A party declared in default is not barred from appealing the judgment on the main case, but the appeal must be based on the decision being contrary to law or evidence, not on the invalidity of the default order. The doctrine of the law of the case applies to issues already adjudicated in a prior certiorari proceeding, even if dismissed on technicalities, preventing their re-adjudication.