PHILIPPINE RESOURCES DEVELOPMENT CORPORATION, PETITIONER, VS. THE HONORABLE JUDGE GREGORIO S. NARVASA, ET AL., RESPONDENTS.

Philippine Resources Development Corporation versus Judge Narvasa

The Case

This is a petition for certiorari filed by Philippine Resources Development Corporation against Judge Gregorio S. Narvasa and Woodward and Dickerson, Incorporated. The petitioner asks the Supreme Court to annul two orders of the trial court: one dismissing its appeal, and another granting execution pending appeal in favor of the private respondent. The case matters because it is the classic authority on how strictly the rules on perfecting an appeal are applied, and on when a procedural lapse may be excused in the interest of substantial justice.

Procedural History

Woodward and Dickerson, Incorporated sued Philippine Resources Development Corporation for damages in the Court of First Instance of Manila. After trial, the court rendered judgment against the defendant corporation. The defendant filed its notice of appeal, an appeal bond, and a record on appeal, but it failed to serve a copy of the appeal bond on the plaintiff. The plaintiff opposed the record on appeal, then moved to dismiss the appeal, and also moved for execution pending appeal. The trial court issued two orders: one granting execution pending appeal, and another dismissing the appeal for failure to serve a copy of the appeal bond. The defendant corporation then filed this petition for certiorari before the Supreme Court, contending that the trial court acted with grave abuse of discretion.

Facts

On July 25, 1952, Woodward and Dickerson, Incorporated filed a complaint for damages consisting of unrealized profits against Philippine Resources Development Corporation. On the strength of an affidavit executed by Alfred Segal, a writ of preliminary attachment was secured against certain properties of the defendant. The defendant answered with a counterclaim and brought in as third party the firm Hinderson-Trippe (Philippines) Incorporated, which had acted as broker of the plaintiff in the contract involved in the litigation.

After the parties submitted their evidence, which consisted mainly of depositions of Americans residing in the United States, documents, and testimony on the acts of Alfred Segal, the trial court rendered judgment on April 8, 1957. It sentenced the defendant to pay the plaintiff the sum of 35,328.83 dollars, converted into pesos at the current rate of exchange on the date of payment, with legal interest from the filing of the complaint, plus an amount equal to the exchange tax due, 7,500 pesos as attorney's fees, and the costs of action.

On May 3, 1957, twenty days after receipt of the decision, the defendant filed a notice of appeal, an appeal bond of 60 pesos, and a record on appeal. Copies of the notice and record were furnished to counsel for the plaintiff, but no copy of the appeal bond was served. The plaintiff opposed the record on appeal, and later moved to dismiss the appeal on the ground that no copy of the appeal bond had been served within the reglementary period. The defendant replied, and then served a copy of the appeal bond which its counsel had overlooked to serve. The plaintiff also moved for execution pending appeal. On June 17, 1957, the trial court issued two orders: one granting execution pending appeal, and one dismissing the appeal for failure to serve a copy of the appeal bond.

Issues

• Whether or not the trial court acted with grave abuse of discretion in dismissing the defendant's appeal for failure to serve a copy of the appeal bond on the adverse party.
• Whether or not the trial court acted with grave abuse of discretion in granting execution pending appeal.

Applicable Provisions

Section 3 of Rule 41 of the Rules of Court provides:

An appeal may be taken by serving upon the adverse party and filing with the trial court within thirty days from notice of the judgment a notice of appeal, an appeal bond, and a record on appeal.

This is the provision the Court construes, and it requires both filing with the court and service upon the adverse party of all three documents within the thirty-day period.

Ruling

On the first issue, the Court held that the failure to serve a copy of the appeal bond did not affect any substantial right of the plaintiff. The Court reasoned that the section requires that not only shall the three documents be filed with the court within the period, but that copies thereof shall be served upon the adverse party, so that the adverse party may be notified of the appellant's intention and be given the opportunity to register his opposition. The Court acknowledged that the defendant had failed to comply with an important requirement, but asked whether that failure was of such a nature as to affect the substantial right or interest of the plaintiff, and answered in the negative. The bond consisted of only 60 pesos and was filed with the court within the reglementary period. The plaintiff never questioned the sufficiency of the bond, and did not even mention the failure when it opposed the record on appeal. The Court adopted the observation of the Court of Appeals:

Where non-compliance with service of the notice of appeal, appeal bond and record on appeal upon the adverse party does not cause an impairment of his right, it will not be considered a ground for dismissal and in such an event the court's discretion in giving due course to the appeal would be guided and tempered with the interest of justice.

The Court added that it would be most unfair if the appeal were defeated on a mere technicality, considering that the judgment condemned the defendant to pay an amount which under the circumstances may reach a total of 100,000 pesos, and considering the defenses set up by the defendant which disputed the findings of the trial court.

On the second issue, the Court held that the order granting execution pending appeal was improvident, because it was not supported by good reasons and the plaintiff had already secured an attachment of the properties of the defendant.

Doctrine

An appeal is perfected by filing with the trial court and serving upon the adverse party, within the thirty-day period, the notice of appeal, the appeal bond, and the record on appeal. The requirement of service exists so that the adverse party may be notified of the appellant's intention and may oppose any of the documents. However, where the failure to serve a copy of the appeal bond does not impair any substantial right of the adverse party, it is not a ground for dismissal, and the court's discretion in giving due course to the appeal is guided and tempered with the interest of justice. Execution pending appeal requires good reasons, and it is improvident where the judgment creditor has already secured an attachment of the debtor's properties.

Disposition

The petition was granted; the trial court was ordered to give due course to the defendant's appeal, with costs against the respondent corporation.

Remember This

Memorize the line that a procedural lapse which does not impair the adverse party's substantial right will not defeat an appeal, for the court's discretion is tempered with the interest of justice. Examiners use this case to test the relaxation of technical rules on perfecting an appeal and the requirement of good reasons for execution pending appeal.