G.R. No. 110610




Baguio City SECOND DIVISION G.R. No. 110610 April 18, 1997 ARTURO R. MACAPAGAL, petitioner, vs. HON. COURT OF APPEALS, HON. RAMON AM. TORRES and ESTEBAN YAU, respondents. G.R. No. 113851 April 18, 1997 RICARDO C. SILVERIO, SR., petitioner, vs. THE COURT OF APPEALS and ESTEBAN YAU, respondents. MENDOZA, J.: These are petitions for review of the decisions of the Court of Appeals in two related cases. The petition in G.R. No 110610 is for review of the decision rendered by the Fourteenth Division of the Court of Appeals on March 12, 1993 in CA-G.R. SP No. 30175, dismissing Arturo R. Macapagal's petition to set aside the decision of the Regional Trial Court of Cebu City and the writ of execution issued to enforce it. On the other hand, the petition in G.R. No. 113851 seeks a review of the resolution rendered by the appellate court's Special Eleventh Division on July 6, 1993 in CA-G.R. CV No. 33496, denying the petition for reinstatement of the appeal from the same decision of the Cebu Regional Trial Court, which petitioners Ricardo C. Silverio, Sr. and Arturo Macapagal had filed. These cases were consolidated because they arose out of the same facts set forth below. Private respondent in the two cases is Esteban Yau who filed a complaint on March 28, 1984 in the Regional Trial Court of Cebu, Branch 6, for recovery of the value of a promissory note and for damages. The case, docketed as Civil Case No. CEB-2058, was brought against the Philippine Underwriters Finance Corporation (Philfinance) and the members of its board of directors, among whom were Ricardo C. Silverio, Sr., Pablo C. Carlos, Jr., Arturo Macapagal, Florencio Biagan, Jr. and Miguel Angel Cano. Esteban Yau alleged that he purchased from Philfinance a promissory note purporting to have been issued by the Philippine Shares Corporation, Philfinance undertaking to return to him on March 24, 1981 his investment in the amount of P1,600,000.00, plus earnings in the total amount of P29,866.67. It was alleged that Philfinance issued three cheeks, all maturing on March 24, 1981, for P1,600,000.00, P24,177.78 and P5,688.89, but, when the checks matured and they were deposited in the bank, they were dishonored for insufficiency of funds. It was further alleged that when private respondent inquired from the Philippine Shares Corporation, the company denied that it had issued the promissory note in question. Summons were issued to petitioners at the Delta Motors Corporation at 2285 Pasong Tamo Extension, Makati, Metro Manila, but the sheriff's attempts to serve them at that address were unsuccessful. He was referred instead to the law office of Salva, Villanueva and Associates at the Philfinance Building on Benavidez St., Makati, and it was on that office that he was finally able to serve the summons on July 16, 1984. On July 24, 1984, the several defendants, among whom were herein petitioners Ricardo C. Silverio, Sr. and Arturo Macapagal, asked the court to declare void the service of summons on them through the law office on the ground that they had not authorized the law office to receive the summons for them "as they have their own separate offices empowered to receive service of summons upon said defendants." 1 The trial court denied petitioners' motion in its order dated August 13, 1984, after finding that the Salva law firm was the counsel of defendants and therefore was their agent for the purpose of service of summons. Petitioners filed a motion for reconsideration which the trial court denied on October 8, 1984. On November 8, 1984, the trial court declared petitioners in default for failure to file their answer. On the other hand, upon private respondent's motion, the complaint was dismissed as to the other defendants because of failure to serve summons on them. The defendants filed a petition for certiorari to set aside the August 13, October 8 and November 8, 1984 orders of the trial court on the ground that the court had not acquired jurisdiction over them and, therefore, the order of default which it had entered against them was void. The case was docketed as AC-G.R. No. 04835 in the Court of Appeals. On March 10, 1986, the Second Special Cases Division of the Intermediate Appellate Court dismissed 2 the petition, holding the service of summons on the counsel justified in view of the sheriff's failure to serve the summons on petitioners at their given address. The Court of Appeals noted that the Salva law office had accepted the summons together with copies of the complaint and held them for eight days before the defendants, including herein petitioners, complained of invalid service when the law firm could have returned the summons and complaint promptly or apprised the court of the error. The appellate court ruled that the filing by the Salva law office of a motion to declare the service on it invalid indicated that the defendants had been notified of the order to answer the complaint, otherwise they would be declared in default, so that for all intents and purposes the object of the summons had been accomplished. As no appeal had been taken by the defendants, the decision of the appellate court became final and executory on June 17, 1986 and entry of judgment was made on July 4, 1986. Accordingly, trial proceeded in the lower court, during which only one of the defendants, Pablo Carlos, Jr., who had filed an answer, took part, although he did not present evidence in his defense. On March 27, 1991 judgment was rendered for private respondent Esteban Yau. The trial court found the facts as follows: On January 2, 1981, the plaintiff [Esteban Yau] was enticed into purchasing from PHILFINANCE Cebu City Branch, Promissory Note No. 3447 purportedly issued by the Philippine Shares Corporation. The plaintiff paid PHILFINANCE the amount of One Million Six Hundred Thousand (P1,600,000.00) Pesos (Exhs. A and B). PHILFINANCE delivered to the plaintiff Confirmation of Sale No. 20432 dated January 22, 1981 and a written undertaking, also dated January 22, 1981 (Exh. D) in which PHILFINANCE guaranteed to return plaintiff's purchase or investment of P1,600,000.00 on March 24, 1981, plus earnings in the respective amounts of P21,911.11 and P5,158.56 on February 20, 1981, and, in the additional amounts of P24,177.78 and P5,688.89, respectively, on March 24, 1981. PHILFINANCE also delivered to the plaintiff the following post-dated checks: Check No. IBAA-10209324 for P1,600,000.00 dated March 24, 1981 (Exh. E) Check No. IBAA-11452715 for P5,688.89 dated March 24, 1981 (Exh. F), and Check No. IBAA-10209323 for P24,177.78 dated March 24, 1981 (Exh. G). However, the promissory note was never delivered to the plaintiff by PHILFINANCE on the pretext that it was allegedly in Manila, although Jose Amor Flores promised to deliver the same to the plaintiff upon its arrival from Manila. When the document still did not arrive, plaintiff's lawyer sent a letter of demand (Exh. H) on March 3, 1981, to PHILFINANCE in Makati, Metro Manila, without eliciting any reply. So, plaintiff sent two (2) telegrams (Exhs. I & J) to Philippine Shares Corporation. In its reply dated March 19, 1981 (Exh. K), Philippine Shares Corporation stated that the corporation has not issued or delivered to anyone the promissory note in question. On March 24, 1981, the plaintiff deposited in his account with the Pacific Banking Corporation, the three (3) checks (Exhs. E, F and G) issued and delivered to him by PHILFINANCE. Said checks were dishonored by the drawee bank for being drawn against insufficient funds (Exhs. E-6, F-6, and G-6). He re-deposited the same checks in his bank account but these were again dishonored for insufficient funds (Exhs. E-7, F-7 and G-7). On the basis of these facts, the trial court ordered: WHEREFORE, judgment is rendered in favor of the plaintiff and against the defendants Philippine Underwriters Finance Corporation, Ricardo C. Silverio, Sr., Pablo C. Carlos, Jr., Arturo Macapagal, Florencio Biagan, Jr. and Miguel Angel Caño, ordering the latter, jointly and severally, to pay the former the following: (a) The principal amount of One Million, Six Hundred Thousand (P1,600,000.00) Pesos, representing the principal amount of the plaintiff's investment; (b) The amount of Ten Million, Three Hundred Ninety Seven Thousand, Four Hundred Ninety Four Pesos and 03/100 (P10,397,494.03), representing the earnings which the plaintiff could have made on his investment, as of December 31, 1989, and thereafter, legal interest on the principal amount of P1,600,000.00, until fully paid; (c) The amount of One Hundred Thousand (P100,000.00) Pesos as, and for moral damages; (d) The amount of Fifty Thousand (P50,000.00) Pesos as, and for exemplary or corrective damages; (e) The amount of One Hundred Thirty Seven Thousand, Two Hundred Seven Pesos and 28/100 (P137,207.28) as attorney's fees; Forty Four Thousand, Eighteen Pesos and 33/100 (P44,018.33) as litigation expenses; and (f) The costs of the suit. The Counterclaims interposed by the defendant Pablo C. Carlos, Jr. in his Answer, are dismissed. 3 Petitioners appealed to the Court of Appeals, but their appeal (CA-G.R. CV No. 33496) was dismissed on November 27, 1991 because they did not pay the docket fees. The resolution 4 of the Special Eleventh Division dismissing the appeal became final on December 26, 1991 and judgment was entered on April 21, 1992. On July 31, 1992, the trial court ordered execution of its decision and, on September 17, 1992, issued the corresponding writ of execution. In December, 1992, the bank deposits of the defendants were garnished by the sheriff. As the judgment was only partially satisfied with the sale of a Manila Golf and Country Club share belonging to Ricardo C. Silverio, Sr., the writ of execution was enforced against the other defendants, including petitioner Arturo Macapagal. Silverio and Macapagal took two separate courses of action. On February 2, 1993, Macapagal filed through Atty. Renato J. Robles a petition for certiorari and prohibition, questioning the validity of the decision of the trial court, its order of execution and the writ of execution, while Silverio and Macapagal, through the law firm Quisumbing, Torres and Evangelista, asked the Court of Appeals to reinstate their appeal from the decision of the RTC of Cebu City and annul the writ of execution, on the ground that the dismissal of their appeal was due to the gross negligence of their former counsel. Macapagal's petition was filed in this Court, but it was referred by the Court to the Court of Appeals, where it was docketed as CA-G.R. SP No. 30175. On March 12, 1993, the appellate court's Fourteenth Division 5 dismissed the case. The court dismissed Macapagal's claim that he had not authorized the law office of Atty. Salva to represent him and that he only learned about the decision after the sheriff tried to enforce the writ of execution against him. The court could not believe that Macapagal did not authorize the Salva law firm to represent him considering that it had been doing so, rendering legal service to him for eight years, from July 24, 1984 up to Sept. 17, 1992, before the petition questioning Salva's authority was filed. The Court of Appeals held that the petition for certiorari and prohibition was barred, under the principle of res judicata, by its previous decision in AC-G.R. No. 04835, which upheld the validity of the service of summons on the Salva law office and the default order of the trial court. On the other hand, in CA-G.R. CV No. 33496, Silverio's petition for the reinstatement of the appeal and annulment of the writ of execution was denied by the Special Eleventh Division of the Court of Appeals on the ground that its resolution of November 27, 1991, dismissing the appeal from the decision of the RTC of Cebu City, had become final more than a year before. Hence, the petitions for review in these cases. G.R. No. 110610 Contending that there was improper service of summons upon him, petitioner Arturo R. Macapagal says that the summons should have been served on him personally or at his residence at 15 Avocado St., Valle Verde I, Pasig, Metro Manila; that he did not receive the summons and found out about it only after the writ of execution and notice of garnishment on his properties had been issued; that the service of summons on the Salva law office was improper because he had resigned from the board of directors of Philfinance on June 11, 1981 and from the board of directors of Delta Motors Corporation on March 1, 1984; and that he did not authorize anyone to receive summons for him. These contentions are without merit. The issues raised in this case have already been passed upon by the Intermediate Appellate Court in its decision of March 10, 1986 in AC-G.R. No. 04835, which is now final and constitutes res judicata on this case. In that case, the appellate court held: Section 13 of Rule 14 provides that if the defendant is a domestic corporation service of summons may be made on the president, manager, secretary, cashier, agent or any of its directors. Petitioners Silverio, Sr., Silverio, Jr., Biagan, Jr., Macapagal and Rodriguez are alleged to be directors of Philfinance with their address, as indicated in the summons, at "c/o Delta Motor Corporation, 2265 Pasong Tamo Extension, Makati, Metro-Manila." It is explicitly mandated in Section 13 of Rule 14 that summons on a domestic corporation may be made on any of its directors, and above-named petitioners are said to be directors of Philfinance and, therefore, any of said petitioners could be validly served with the summons addressed to Philfinance. It is reasonable to assume that the Sheriff did repair to the above-indicated address of petitioners-directors not only to serve summons upon them, but also to serve the summons on Philfinance, through any of said directors of the corporation. The Sheriff's Return makes clear the fact that the Sheriff made attempts to serve the summons and copies of the complaint on petitioners at the mentioned address of petitioners which, however, proved "fruitless." Nonetheless, he was referred to the law firm Salva Villanueva and Associates who received the summons in behalf of the petitioners. We are not persuaded by the submission of petitioners that Salva, Villanueva & Associates was not authorized by petitioners' corporation and directors to accept the summons in their behalf. That law firm admittedly received the summons on July 24, 1984 or after eight (8) days. If true, indeed, that said law firm was not authorized to represent the petitioners in the case, it would have forthwith filed a pleading with respondent court apprising the latter that the service was not properly or was mistakenly effected to its office by the sheriff and, better still, return said summons and copies of the complaint. Salva, Villanueva & Associates have not offered any explanation what they have done with the summons and the copies of the complaint. Thus, it is logical to assume that these were delivered to the petitioners. We are in accord with the view that the law firm may be regarded as an agent of Philfinance within the contemplation of Section 13 of Rule 14. xxx xxx xxx But even a rejection of the submission that said law firm may be deemed an agent of Philfinance will not help petitioner-corporation's cause, for this Court takes judicial notice of the certifications of Atty. Emerito M. Salva (senior partner of the law firm) in his capacity as corporate secretary of Philfinance, which are attached to the expediente of AC-G.R. SP No. 02806 entitled, "Philippine Underwriters Finance Corporation, et al., v. Securities and Exchange Commission." Since Atty. Salva is the corporate secretary of petitioner-corporation, the receipt of the summons by his law firm was valid and effective service on said corporation and, in consequence, the respondent court acquired jurisdiction over said corporation. In respect to the service of summons on petitioners-directors, the sheriff states in his return that he attempted such service on said petitioners at their indicated address, but he was referred to the law firm, Salva, Villanueva & Associates. We extend credence to said statement of the sheriff in the absence of clear proof to the contrary. There is no dispute that said law firm accepted the summons and copies of the complaint for petitioners-directors. It did not question the impropriety of the service until eight days later. We can logically assume, as adverted to, that the summons and the copies of the complaint were made known to the petitioners-directors. The object of summons is to inform the defendant in an action commenced against him directing him to answer the complaint within the reglementary period and giving notice that failure to answer shall result in judgment by default. . . . Although petitioner now claims that he did not authorize Atty. Salva or the latter's law office to receive the summons for him, the fact remains that the petition for certiorari and prohibition in AC-G.ℒαwρhi৷R. No. 04835 was filed by the Salva law office in his behalf, as was the special appearance made earlier, questioning the jurisdiction of the trial court over his person. Indeed, in asking the court to declare the service of summons on the Salva law office to be improper, petitioner did not claim that the Salva law office was not his counsel but only that, in accordance with Rule 14, §8 of the Rules of Court, service should have been effected either at his residence, on a person then living there, or in his office on a person in charge thereof. There can therefore be no question as to the validity of the decision in AC-G.R. No. 04835. It is noteworthy that petitioner has not sought the annulment of that judgment. For if it is true that the Salva law office simply entered upon the defense of Civil Case No. CEB-2058 without being authorized by petitioner to do so, then there was extrinsic fraud which renders the decision void. To show this requires the presentation of evidence at a trial which cannot be done by merely filing a petition for certiorari or prohibition. Nor did petitioner take action against the lawyers for their unauthorized representation until after eight years and only because the Court of Appeals stated in its decision in this case that petitioner's failure to file an administrative complaint against the lawyer showed that he did not feel genuinely aggrieved by the actions of the Salva law firm. Now petitioner explains that he had desisted from complaining "out of compassion . . . to spare the Salva law firm from the consequences of their willful and unauthorized appearance." 6 He thus unwittingly admits that, after all, he had acquiesced in the representation of the Salva law firm. Recall in this connection that, in the trial court, petitioner's theory was not that he had not authorized the Salva law office to represent him but only that he had not authorized it to receive the summons for him. What petitioner is now claiming is a very different kettle of fish. This brings us to the next case. G.R. No. 113851 In denying the motion for the reinstatement of the appeal filed by Silverio and Macapagal, the Court of Appeals noted that the previous dismissal of their appeal had become final on December 26, 1991, more than a year before the motion was filed on March 15, 1993. For this reason, the court ruled that it was "prevented by a total lack of jurisdiction and competence to entertain [the petitioner's motion]." 7 We agree with the foregoing ruling of the Court of Appeals. First. To be sure, petitioner does not question the representation of the Salva law office. What he claims is that, through gross negligence of aforesaid counsel, his appeal from the decision of the trial court in Civil Case No. CEB 2058 was dismissed by the Court of Appeals for failure to pay the docket fees. Silverio contends that because of his counsel's negligence he was deprived of his right to due process. But petitioner Silverio was himself guilty of neglect. He was aware of the complaint filed against him. His excuse that he failed to inquire about the case because he was busy constantly shuttling between Hongkong, Manila, and California in connection with his business is flimsy. Equally busy people have in one way or another learned how to cope with the same problem he had. Were we to accept his excuse, we would have to reopen cases decided many years ago on the ground that because of counsel's negligence they lost their case when the fact is that counsel's negligence is matched by the client's own negligence. Petitioner cites cases in which relief was granted for the gross negligence or incompetence of counsel. The flaw in this argument is that the resolution of the Court of Appeals in CA-G.R. CV No. 33496 is now final and that is the reason the records of the case were remanded to the trial court for the execution of its decision. Petitioner should have brought an action for the annulment of the resolution of the Court of Appeals, assuming that there was gross negligence on the part of his counsel which caused him prejudice, instead of merely asking for the reinstatement of his appeal. Not even a petition for certiorari will be an adequate remedy for the purpose of setting aside a final judgment whose invalidity is not patent on its face. 8 Second. It should be recalled that Cano, who had joined Silverio and Macapagal's petition to reinstate the appeal below, filed a separate petition for review in this Court. Docketed as G.R. No. 113830, his petition was dismissed by the First Division of this Court on the ground that there was no reversible error. The dismissal of the Cano petition compels a similar action in this case. The reason for this is stated in our decision in Philippine Interisland Shipping Association v. Court of Appeals:9 As already stated, from this decision, both the government and the intervenors separately brought petitions for review to this Court. In G.R. No. 100109, the government's petition was dismissed for lack of showing that the appellate court committed reversible error. The dismissal of the government's petition goes far to sustain the dismissal of the intervenors' petition in G.R. No. 100481 for the review of the same decision of the Court of Appeals. After all, the intervenors' petition is based on substantially the same grounds as those stated in the government's petition. It is now settled that the dismissal of a petition for review on certiorari is an adjudication on tile merits of a controversy. Such dismissal can only mean that the Supreme Court agrees with the findings and conclusions of the Court of Appeals or that the decision sought to be reviewed is correct. The petitions for review in these cases, while purporting to be directed only at certain acts of the RTC of Cebu City and the Court of Appeals, actually constitute attacks on the validity of decisions of the Court of Appeals which have long become final. Since there is total lack of evidence to sustain petitioner's allegations, we must affirm the principle that, even at the risk of occasional errors, judgments must at some point be regarded as final, otherwise, litigation will become interminable. WHEREFORE, the petitions in these cases are DISMISSED. SO ORDERED. Regalado, Romero, Puno and Torres, Jr., JJ., concur. Footnotes 1 CA Rollo, CA-G.R. SP No. 30175, p. 80. 2 Per Justice Jose F. Racela, Jr. and concurred in by Justices Carolina C. Griño-Aquino, Fidel P. Purisima and Jorge S. Imperial. 3 Rollo, G.R. No. 110610, pp. 61-62. 4 Per Justice Nathanael P. de Pano, Jr. and concurred in by Justices Salome A. Montoya and Fortunato A. Vailoces. 5 Per Justice Artemon D. Luna and concurred in by Justices Antonio M. Martinez and Buenaventura J. Guerrero. 6 Motion for reconsideration of the decision in CA G.R. SP No. 30175, Rollo, G.R. No. 110610, p. 98. 7 Resolution, July 6, 1993, p. 2. 8 See People v. Pareja, 189 SCRA 143 (1990). 9 G.R. No. 100481, January 22, 1997. The Lawphil Project - Arellano Law Foundation