Arra Realty v. Paces Industrial
REITERATIONFacts
The Antecedents: ARRA Realty Corporation (ARRA) and Paces Industrial Corporation (Paces) entered into an agreement where Paces would share two floors of a proposed 5-storey building to be constructed by ARRA on ARRA's lot. The consideration was ₱6,211,676.00, payable on a deferred plan. Paces paid ₱2,774,992.02 and took possession of the 3rd and 4th floors, spending ₱1,312,935.00 for improvements. ARRA obtained a loan from China Banking Corporation (CHINABANK), mortgaging the property. The property was foreclosed and later sold by ARRA to Guarantee Development Corporation and Insurance Agency (GUARANTEE) for ₱22,000,000.00, with a condition to deliver the property free of occupants by May 15, 1987. ARRA used the proceeds to redeem the property from CHINABANK, and title was transferred to GUARANTEE. Paces filed a complaint against GUARANTEE and ARRA for annulment of sale, title, and recovery of property. Paces and GUARANTEE entered into a Compromise Agreement, leading to a Partial Decision where Paces turned over possession of the floors to GUARANTEE for ₱2,000,000.00. Paces then filed an Amended Complaint against ARRA and its officers, praying for damages. Procedural History: The Regional Trial Court (RTC) ruled that Paces did not acquire ownership due to non-payment of the full contract price and ordered ARRA to reimburse Paces the amount paid (₱2,774,992.02) with legal interest. Both parties appealed to the Court of Appeals (CA). The CA modified the RTC decision, ruling that Paces obtained ownership of the floors and ordered ARRA to pay Paces ₱4,723,316.00 with legal interest. The Petition: Petitioners (ARRA and its officers) filed a Petition for Review on Certiorari with the Supreme Court, assailing the CA Decision and Resolution. A key issue was whether the CA Decision had become final and unappealable due to petitioners' alleged failure to receive the decision within the reglementary period for filing a motion for reconsideration.
Issue(s)
Whether the Decision of the Court of Appeals (CA) had become final and executory due to the failure of the petitioners' counsel to file a formal notice of change of address with the court.
Ruling
The Supreme Court denied the Petition for Review on Certiorari. The Court affirmed the Decision of the Court of Appeals dated April 11, 2005, and the Resolution dated September 13, 2005. The CA Decision was deemed final and executory.
Ratio Decidendi
On Issue 1: The Supreme Court emphasized that the doctrine of finality of judgment is grounded on fundamental considerations of public policy and sound practice, ensuring an end to litigation. Once a judgment attains finality, it becomes immutable and unalterable, and may no longer be modified even by the highest court of the land to correct perceived errors of fact or law. In this case, petitioners' counsel failed to file a formal notice of change of address with the Court of Appeals (CA), meaning his official address remained the one on record in Tanauan, Batangas. Applying the ruling in Philippine Airlines, Inc. v. Heirs of Bernardin J. Zamora, the Court held that service is deemed complete at the address of record unless a formal change is filed, and non-receipt due to a move is the counsel's responsibility. The Court further clarified that notifying the Postmaster of a forwarding address cannot substitute for the requirement of notifying the court. Consequently, constructive service was completed five days after the postmaster's first notice on April 15, 2005, rendering the CA Decision final and executory as of May 5, 2005.
Main Doctrine
A party who fails to file a notice of change of address with the court is deemed to have received notices sent to their last known address of record, and the period for filing motions for reconsideration or appeals commences from the date of constructive service, five days after the first notice. Failure to file a motion for reconsideration within the reglementary period renders the judgment final and executory.