G.R. No. L-16860. July 31, 1963
ISHAR SINGH, PLAINTIFF AND APPELLEE VS. LIBERTY INSURANCE CORPORATION, DEFENDANT AND APPELLANT, LEONARDO ANNE, ET AL., THIRD PARTY DEFENDANTS AND APPELLEES.
DIZON, J.:
Municipal Court of Manila to recover from Liberty Insurance Corporation the sum of P1,000 allegedly due to
him under a fidelity bond executed by Leonardo Anne,
as principal, and said defendant, as surety, plus interest
thereon, attorneys fees and costs of suit.
On October 8, 1958, Liberty Insurance Corporation
filed, with leave of court, a third party complaint against
Leonarda Anne, Eliseo V. Garcia and Andres O. Payongayong, to enforce against them the indemnity agreement
they had executed in its favor in connection with the
fidelity bond already mentioned. The record does not
disclose whether the third party defendants filed an answer
to the third party complaint or net. On the other hand,
on December 22, 1958 the defendant filed its answer to
the complaint, denying its liability under the fidelity bond
aforesaid.
After trial, the Municipal Court rendered judgment
sentencing the defendant, Liberty Insurance Corporation,
to pay the plaintiff the sum of P1,000, plus attorneys fees
in the sum of P50.00, and costs, and likewise sentencing
the third party defendants to pay the defendant third
party plaintiff whatever amount the latter shall pay the
plaintiff pursuant to said decision.
The third party defendants appealed to the Court of
First Instance of Manila and subsequently filed their
answer to the complaint and the third party complaint,
in which, after denying the material averments thereof,
they alleged by way of affirmative defense that Anne had
not been guilty of negligence in the performance of his
duties and was not therefore liable under the fidelity
bond and the indemnity agreement relied upon in the
complaint and third party complaint, respectively.
The
defendant, Liberty Insurance Corporation, did not appeal, but on June
23, 1959,—within fifteen (15) days docketing of the case in the Court
of First Instance due to the appeal taken by the third party
defendants, answer to the complaint was filed on behalf of the
defendant. On September 9 of the same year, the plaintiff filed a
motion to strike out said answer on the ground that defendant not
having appealed from the decision of the Municipal Court, the latter’s
decision had become final and executory with respect to it. After due
hearing, the lower court granted the motion and ordered the case
remanded to the court of origin for purposes of execution with respect
to the defendant. Hence this appeal.
Appellant admits that it did not appeal from the decision of the Municipal Court but contends that the appeal
therefrom taken by the third party defendants insured to
its benefits; that said appeal vacated the decision not
only as far as the third party defendants wera concerned
but also with respect to the defendant, although it did
net appeal; that on appeal the case should be tried de
novo as if it had never been tried before, and finally, that
being an appellee itself because of the judgment in its
favor against the third party defendants, it did not have
to appeal from the decision of the Municipal Court.
It is true, as appellant claims, that an appeal from
the decision of an inferior court (Municipal Court) operates to vacate said decision, thereafter the case to stand
trial de novo in the Court of First Instance, but it seems
obvious that this applies only to the party who had taken
the appeal. As against other parties adversely affected
the decision who did not appeal, the decision must be
deemed to have become final and executory. A contrary
view would lead to indefensible results. Let us suppose
that the decision of the inferior court against several defendants was agreeable to one of them because it was
for an amount less than what the plaintiff claimed in his
complaint: that for this reason said defendant did not
appeal. Should it be held that the appeal taken by the
other defendants vacates the appealed judgment as far
as all the judgment debtors are concerned and the case
should be tried de novo against all of them, would not
prejudice the defendant who did not appeal against
whom the plaintiff might now secure judgment in the
Court of First Instance for a bigger amount but within
that claimed in the complaint? Another hypothetical case
may perhaps help drive home this point. Let us suppose
that one of several defendants in the inferior court confessed judgment and in view thereof the corresponding
judgment was rendered against him, and that thereafter
his co-defendant appealed from a similar judgment rendered against him after due trial. Why should the rule
be that said appeal vacates the judgment for both defendants, thus compelling him who had confessed judgment
to continue the litigation?
Whatever contradiction there might appear to be between the view herein expressed, on one hand, and
our decisions in Royal Shirt Factory, Inc. vs.
Co. etc. 94 Phil., 994, and Arambulo vs. Court of Appeals, G. R. No.
L-15669, February 28, 1962, on the other, are more apparent than real.
Our ruling in the Royal Shirt Factory case does not
apply to the present. That was an action for collection
where the principal issue was whether the sale by plaintiff to defendant of the three hundred fifty pairs of shoes
therein involved was an outright sale, as claimed by the
former, or a sale merely on consignment, as contended
by the latter. The Municipal Court held that the sale was
on consignment and decided the case accordingly. The
defendant appealed to the Court of First Instance of Manila who, after trial, held that the transaction involved
was an outright sale and, as a result, rendered judgment
on this basis. On appeal to Us, the defendant claimed
that the Court of First Instance had no jurisdiction to
review the question involving the nature of the sale, much
less to reverse the finding of the court of origin on this
matter, for the reason that the plaintiff did not appeal
from the decision of the latter court. We held this contention to be untenable because by reason of the appeal
interposed by the defendant himself, the decision of the
inferior court was vacated and the case was thrown open
for a trial de novo, upon the same issue or issues litigated
below. This being the effect of the appeal interposed
defendant himself, the fact that plaintiff did not appeal
was immaterial. As shown by the facts of said case,
there was no other defendant or third party defendant
involved and who did not appeal from the decision of the
inferior court. It is, therefore, manifest that our ruling
therein to the effect that the trial de novo shall be without
regard to the proof presented below or the conclusions
arrived at by the inferior court does not apply to the
present case. Neither did we hold in said case that the
appeal interposed by one of several defendants shall re-open the case for a trial de novo in the Court of First
Instance even for other defendants who had not appealed and has thus allowed the decision against them to become
final and executory.
In the Arambulo case, we have a situation similar to the one now before
us to a certain extent. It appears that on January 20,1956, Severino
Arambulo, after assuming office as Mayor of Calamba, Laguna, dismissed
from the service thirteen municipal patrolman of said municipality,
three of whom named Juan B. Isip, Pablo Palupit, and Cornelio Luna
appealed their case to the Provincial Governor. Because he was
threatened with suspension from office if he did not reinstate the
dismissed patrolmen, Mayor Arambulo immediately filed in the Court of
First Instance of Laguna an action for prohibition against the
Governor. After due hearing, said court found the dismissal of the
patrolmen and their replacement to be illegal and ordered their
reinstatement without, however, stating who was to pay their back
salaries during the period of their separation from the service. After
their reinstatement, the three patrolmen tried to collect their back
salaries from the Municipality of Calamba but the Provincial Auditor of
Laguna refused to pass in audit the payment thereof on the ground that
an unnumbered Provincial Circular issued on February 9, 1955 by the
Office of the President provided, inter alia, that salaries
corresponding to the period of illegal separation from the service of
civil service employees shall be personally paid by the Provincial
Governor or City or Municipal Mayor who caused the illegal separation
or removal, and on the further ground that on November 16, 1956, the
then Commissioner of Civil Service had rendered an opinion holding the
Municipal Mayor of Calamba responsible for the payment of the back
salaries of the three patrolmen. Consequently, on September 24, 1957,
the three patrolmen brought an action in the Justice of the Peace Court
of Calamba against Mayor Arambulo to collect from him, in his personal
capacity, the back salaries due them during the period of their illegal
separation, plus other amounts by way of damages, attorneys fees, and
expenses of litigation. On December 12, 1957, the defendant Mayor filed
his answer to the complaint as well as a third party complaint against
the Municipality of Calamba averring, among other things, that the
latter—not he— should pay the back salaries of the plaintiffs. On
December 16 of the same year, the Municipality of Calamba filed an
answer admitting its liability and stating further that its council had
passed a resolution dated October 6, 1956 appropriating the necessary
amount to pay such back salaries. The plaintiffs then moved for a
judgment on the pleadings, and on March the following year, the Justice
of the Peace Court rendered judgment absolving defendant Mayor Arambulo
but sentencing the Municipality of Calamba to pay the plaintiffs’ back
salaries. The plaintiffs appealed to the Court of First Instance of
Laguna in so far as the decision absolved the defendant Mayor. In the
Court of First Instance, the Mayor first filed a motion to dismiss the
appeal, but the same was denied. On September 15, 1958, the third party
defendant, Municipality of Calamba, filed a motion to set aside the
writ of execution which had been issued by the Justice of the Peace
Court of Calamba before the expiration of the period of appeal,
claiming that because of the appeal taken by the plaintiffs the
decision of the said Justice of the Peace Court was vacated and the
whole case was to be tried de novo in the Court of First Instance. Before this
motion could be acted upon, the Municipality of Calamba, on September
11, 1958, filed a motion to intervene with its answer as third party
defendant attached thereto. On November 3 of the same year, the Court
of First Instance denied both motions on the ground that, as to the
Municipality of Calamba, the decision of the Justice of the Peace Court
had become final and executory, not only because it did not appeal
therefrom but also because it could not have taken such appeal even if
it wanted to, the judgment rendered against it being one by confession.
Its motion for reconsideration having been denied, the Municipality of
Calamba, on December 15, 1958, filed in the Court of Appeals a petition
for certiorari and mandamus, with a prayer for a writ of preliminary
injunction. Said writ was granted, and after proper proceedings, on
June 24, 1959, the Court of Appeals rendered judgment ordering the
Court of First Instance of Laguna to grant the Municipality of
Calamba’s motion for intervention as well as its motion for tha setting
aside of the writ of execution. Thereupon, Mayor Arambulo, who was one
of the parties in the case, appealed to this court. In deciding said
appeal we said the following:
“The appeal from the judgment rendered by the Justice of the
Peace Court of Calamba to the Court of First Instance of Laguna
vacated the judgment of the former court not only as between
the plaintiffs patrolmen who have appealed and the petitioner
Mayor Severino Arambulo, who was absolved from the complaint,
but also as to the third-party defendant Municipality of Calamba
which has not appealed therefrom. Section 9, Rule 40, of the Rules
of Court, aforequoted, considers an appealed case from an inferior
court as though the same had never been tried before and had
been originally there commenced. In effect, it considers all the
proceedings in the interior court, including the judgment, inexistent.
Only the complaint is not vacated, which is deemed reproduced in
the Court of First Instance.[1] Such being the case, the appeal reopens
all issues or questions already passed upon by the inferior court,
regardless of whoever appeals.”
It must be observed that the action filed by the three
patrolmen in the Justice of the Peace Court of Calamba
was exclusively against Mayor Arambulo and upon the
claim that the latter was personally liable for the payment
on their back salaries during the period of their illegal
separation from the service. The defendant impleaded the
Municipality of Calamba as third party defendant and because the latter admitted its liability for the payment of
plaintiffs’ back salaries, the Justice of the Peace Court
absolved the defendant Mayor but sentenced the Municipality of Calamba to pay said back salaries. Considering
that the plaintiffs were the ones who appealed from said
decision, our views is that their appeal, although purportedly taken only from the portion of the decision of the
Justice of the Peace Court absolving the defendant Mayor,
had, of necessity, the effect of reopening the whole case.
Legally, the aggrieved patrolmen could have a case only
against either the Mayor personally or the Municipality
of Calamba. They never claimed that the two were liable
to them jointly and severally. In fact, their claim was
that it was only the Mayor who was liable. Consequently,
their insistence in demanding responsibility from the Mayor, in his personal capacity, necessarily meant that they
did not agree with the decision of the Justice of the Peace
Court in so far as it held the Municipality of Calamba to
be the party liable to them. Thus the issue on appeal was
or had to be whether the party liable was the Mayor,
personally, or the Municipality. The latter was, therefore,
entitled to intervene and defend itself.
Our conclusions, therefore, are: first, that because the
defendant Liberty Insurance Corporation did not appeal
from the adverse decision of the Municipal Court, it had
no right to file the answer in question, and second, that
the decision of the Municipal Court having become final
and executory as against said defendant, its execution was
in order. This notwithstanding, said defendant is still an active party in the appealed case because of the appeal
taken by the third-party defendants from the decision of
of the Municipal Court in so far as it was in favor of
said defendant as third party plaintiff.
WHEREFORE, the orders appealed from are affirmed, with
costs.
Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L.,
Paredes, Regala, and Makalintal, JJ. concur.
[1] Section 7, Rule 40, of the Rules of Court.