G.R. No. L-26364. May 29, 1968
MARIANO A. ALBERT, PETITIONER, VS. THE COURT OF FIRST INSTANCE OF MANILA (BR. VI), UNIVERSITY PUBLISHING CO., INC., AND JOSE M. ARUEGO, RESPONDENTS.
REYES, J. B. L., J.:
This case is a veritable legal marathon. Originally docketed in 1949, within a span of
19 years, the legal dispute has come to this Court four times:
(1)
L-9300, promulgated April 18, 1958;
(2)
L-15275, promulgated October 24, 1960;
(3)
L-18350, dismissed May 17, 1961; and
(4)
L-19118, promulgated January 30, 1965 (Resolution on
Defendant’s Motion for Reconsideration denied on June 16, 1965).
The present petition for certiorari is
the fifth. The time is long past when
courts of justice must write finis to this case. For,
“Public policy and sound practice
demand that, at the risk of occasional errors, judgments of courts should
become final at some definite date fixed by law. The very object for which courts were
instituted was to put an end to controversies.”[1]
The factual setting necessary to a clear understanding of the
instant petition for certiorari needs to be restated. Plaintiff Albert sued University Publishing
Company, Inc. for breach of contract.
Albert died before the case proceeded to trial, and Justo
R. Albert; his estate’s administrator, was substituted. Finally, defendant’s liability was determined
by this Court in L-15275. Plaintiff was
to recover P15,000.00 with legal interest from
judicial demand.
From the inception of the suit below up to the time the Judgment
in L-15275 was to be executed, the corporate existence of University Publishing
Company, Inc. appears to have been taken for granted, and was not then put in
issue. However, when the Court of First
Instance of manila issued on July 22,
1961 an order of execution against University Publishing Company,
Inc., a new problem cropped up. By
virtue of this writ, plaintiff’s counsel and the Sheriff of the City of Manila
went to see Jose M. Aruego who signed the contract
with plaintiff on behalf and as President of University Publishing Company,
Inc. They then discovered that no such entity exists. A verification made at the Securities and
Exchange Commission confirmed this fact.
On July 31, 1961,
said Commission issued a certification “that the records of this Commission
do not show the registration of UNIVERSITY PUBLISHING CO., INC., either as a
corporation or partnership.”[2]
This triggered a verified petition in the court below on August 10, 1961 for the issuance of a writ of
execution ordering the Sheriff of Manila to cause the satisfaction of the
judgment against the assets and properties of Jose M. Aruego
as the real defendant in the case.
All along, Jose M. Aruego and his law
firm were counsel for the University Publishing Company, Inc.
Instead of informing the lower court that it had in its possession
copies of its certificate of registration, its articles of incorporation, its
by-laws and all other papers material to its disputed corporate existence,
University Publishing Company, Inc. chose to remain silent. On August
11, 1961, University Publishing Company, Inc., by counsel Aruego, Mamaril and Associates
(the law firm of Jose M. Aruego aforesaid) merely
countered plaintiff’s petition for execution as against Aruego
with an unsworn manifestation in court that
“said Jose M. Aruego is not a party to this
case,” and, therefore, plaintiff’s petition should be denied.[3]
Respondent court, presided over by His Honor, Judge Gaudencio Cloribel, on September 9, 1961, came up with an
order, which reads thus:
“It appearing that Jose M. Aruego
against whom the judgment rendered herein is sought to be enforced is not a
party to this case, plaintiff’s motion filed on August 10, 1961 is hereby denied.”[4]
Plaintiff appealed to this Court on this sole issue: “The lower court erred in denying the
plaintiff-appellant’s petition praying that the Judgment rendered against the
alleged corporation, the above-named defendant-appellee,
be executed against the personal assets and properties of Jose M. Aruego, the real party to this case.”
In an extended opinion written by Mr. Justice Jose P. Bengzon, this Court in L-19118, on January 30, 1965, resolved the issue as follows:
“The fact of non–registration of University
Publishing Co., Inc. in the Securities and Exchange Commission has not been
disputed. Defendant would only raise the
point that ‘University Publishing Co., Inc.’ and not Jose M. Aruego, is the party defendant; thereby assuming that
University Publishing Co., Inc. is an existing corporation with an independent
juridical personality. Precisely,
however, on account of the non-registration it cannot be considered a
corporation, not even a corporation de facto (Hall vs. Piccio,
86 Phil. 603). It has therefore no
personality separate from Jose M. Aruego; it cannot
be sued independently.
“The corporation-by-estoppel
doctrine has not been invoked. At any
rate, the same is inapplicable here. Aruego represented a non-existent entity and induced not
only the plaintiff but even the court to believe in such representation. He signed the contract as ‘President’ of
‘University Publishing Co., Inc. stating that this was ‘a corporation duly
organized and existing under the laws of the Philippines,
and obviously misled plaintiff (Mariano A. Albert) into believing the same. One who has induced another to act upon his
willful misrepresentation that a corporation was duly organized and existing
under the law, cannot thereafter set up against his victim the principle of
corporation by estoppel (Salvatiera
vs. Garlitos, 5 6 0. G. 3609)
“‘University Publishing Co., Inc. purported to come to court,
answering the complaint and litigating upon the merits. But as stated, ‘University Publishing Co.,
Inc. has no independent personality; it is Just a name Jose M. Aruego was, in reality, the one who answered and litigated,
through his own law firm as counsel. He was in fact, if not in name, the defendant.
“Even with regard to corporations duly organized and existing
under the law, we have in many a case pierced the veil of corporate fiction to
administer the ends of justice. (Arnold
vs. Willits & Patterson, Ltd., 44 Phil. 634; Koppel (Phil.), Inc. vs. Yatco, 77 Phil. 496; La Campana
Coffee Factory, Inc. vs. Kaisahan ng
mga Manggagawa sa La Campana, 9 3 Phil. 160;
Marvel Building Corporation vs. David, 94 Phil. 376; Madrigal Shipping Co.,
Inc. vs. Ogilvie, L-8431, Oct. 30, 1958; Laguna
Transportation Co., Inc. vs. S.S.S., L-14606, April 28, 1960; McConnel vs. C.A., L-10510, Mar. 17, 1961; Liddell &
Co., Inc. vs. Collector of Internal Revenue, L-9687, June 30, 1961; Palacio vs. Fely Transportation
Co., L-15121, August 31, 1962). And in Salvatiera vs. Garlitos, supra,
p. 3073, we ruled: ‘A person acting or
purporting to act on behalf of a corporation which has no valid existence
assumes such privileges and obligations and becomes personally liable for
contracts entered into or for other acts performed as such agent.’ Had Jose M. Aruego
been named as party defendant instead of, or together, with, ‘University
Publishing Co., Inc.’ there would be no room for debate as to his personal
liability. Since he was not so named,
the matters of ‘day in court’ and ‘due process’ have arisen.
“In this connection, it must be realized that parties to a
suit are persons who have a right to control the proceedings, to make defense,
to adduce and cross-examine witnesses, and to appeal from a decision’ (67
C.J.S. 887) – and Aruego was, in reality, the person
who had and exercised these rights.
Clearly, then, Aruego had his day in court as
the real defendant; and due process of law has been substantially observed.
“By due process of law we mean ‘a law which hears before it
condemns; which proceeds upon inquiry, and renders Judgment only after
trial. x x x’
(4 Wheaton, U.S. 518, 581); or, as this Court has said, ‘Due process of law’
contemplates notice and opportunity to be heard before judgment is rendered,
affecting one’s person or property.’ Lopez vs. Director of
Lands, 4 7 Phil. 23, 32).’ (Sicat vs. Reyes, 100
Phil., 505; 54 Off. Gaz. [17] 4945.) And it
may not be amiss to mention here also that the ‘due process’ clause of the
Constitution is designed to secure Justice as a living reality; not to
sacrifice it by paying undue homage to formality. For substance must prevail over form,
It may now be trite, but none the less apt, to quote what long ago we said in
Alonso vs. Villamor, 16 Phil. 315, 321-322:
‘A litigation is not a game of
technicalities in which one, more deeply schooled and skilled in the subtle art
of movement and position, entraps and destroys the other. It is, rather, a contest in which each
contending party fully and fairly lays before the court the facts in issue and
then, brushing aside as wholly trivial and indecisive all imperfections of form
and technicalities of procedure, asks that Justice be done upon the
merits. Lawsuits, unlike duels, are not
to be won by a rapier’s thrust.
Technicality, when it deserts its proper office as an aid to Justice and
becomes its great hindrance and chief enemy, deserves scant consideration from
courts. There should be no vested rights
in technicalities.’
“The evidence is patently clear that Jose M. Aruego, acting as representative of a non-existent
principal, was the real party to the contract sued upon; that he was the one
who reaped the benefits resulting from it, so much so that partial payments of
the consideration were made by him; that he violated its terms, thereby precipitating
the suit in question; and that in the litigation he was the real
defendant. Perforce, in line with the
ends of Justice, responsibility under the judgment falls on him.
“We need hardily state that should there be persons who under
the law are liable to Aruego for reimbursement or
contribution with respect to the payment he makes under the judgment in
question, he may, of course, proceed against them through proper remedial
measures.
“PREMISES CONSIDERED, the order appealed from is hereby set
aside and the case remanded ordering the lower court to hold supplementary
proceedings for the purpose of carrying the judgment into effect against
University Publishing Co., Inc. and/or Jose M. Aruego.”
It is to be observed that even as this case was elevated to this
Court in L-19118, University Publishing Company, Inc. or its president and
counsel chose to withhold pertinent documents and papers in its possession and
control. But when the foregoing judgment
came, the University Publishing Company, Inc., in its motion for
reconsideration thereof, asked that it be afforded opportunity to prove its
corporate existence. It submitted with
that motion for reconsideration, its certificate of registration, articles of
incorporation, by-laws, and a certificate of reconstitution of records issued
by the Securities and Exchange Commission, which was procured only from the
Securities and Exchange Commissioner on April
1, 1965 – after the decision in L-19118 was promulgated.
Jose M. Aruego, the president and
counsel of University Publishing Company, Inc., for the first time appeared in
propria persona before this
Court as a “member of the Philippine Bar, private citizen.” He
pointedly stated that he did not submit to the jurisdiction of this Court. He wanted, though, that his side of the case
be heard. He formally joined hands with
University Publishing Company, Inc. on the plea of due process in his
favor. He insisted that he was not a
party to this litigation.
The resolution of this Court, on June 16, 1965, extensively dwelt
on the dur process plea of Jose M. Aruego, thus:
“It may be worth noting again that Jose M. Aruego
started the negotiation which culminated in the contract between the parties,
signing said contract as president of University Publishing Co., Inc. Likewise he was the one who made partial
payments up to the amount of P7,000.00 for and in
behalf of University Publishing Co., Inc.
He also appeared not only as a witness but as lawyer, signing some
pleadings or motions in defense of University Publishing Co., Inc., although in
other instances it is one of his associates or member of his law firm who did
so. Known is the fact that even a duly
existing corporation can only move and act through natural persons. In this case it was Jose M. Aruego who moved and acted as or for University Publishing
Co., Inc.
“It is elemental that the courts can only decide the merits of
a given suit according to the records that are in the case. It is true that in the two previous cases
decided by this Court, the first, awarding damages (L-9300), the second,
clarifying the amount of P15,000.00 awarded as such (L-15275), the corporate
existence of University Publishing Co., Inc., as a legal entity was merely
taken for granted.
“However, when the said issue was squarely presented before
the court, and University Publishing Co., Inc. chose to keep the courts in the
dark by withholding pertinent documents and papers in its possession and
control, perforce this Court had to decide the points raised according to the
records of the case and whatever related matters necessarily included therein. Hence, as a consequence of the certification
of the Securities and Exchange Commission that its records do not show the
registration of University Publishing Co., Inc., either as a corporation or
partnership’ this Court concluded that by virtue of its non-registration it
cannot be considered a corporation. We
further said that it has therefore no personality separate from Jose M. Aruego and that Aruego was in
reality the one who answered and litigated through his own law firm as
counsel. Stated otherwise, we found that
Aruego was in fact, if not in name, the defendant
(Decision, P. 6). Indeed, the Judge of
the court of first instance wrote in his decision thus: ‘Defendant Aruego
(all along the judge who pens this decision considered that the defendant here
is the president of the University Publishing Co., Inc. since it was he who
really made the contract with Justice Albert).’ (Decision of CFI, p. 9, quoted
in plaintiff-appellant’ s brief, p. 10). And this portion of the decision made by the
court a quo was never questioned by the defendant.
“The above statement made by the court a quo in
its decision compelled this Court to carefully examine the facts surrounding
the dispute starting from the time of the negotiation of the business
proposition, followed by the signing of the contract considered the benefits
received; took into account the partial payments made, the litigation
conducted, the decisions rendered and the appeals undertaken. After thus considering the facts and
circumstances, keeping in mind that even with regard to corporations shown as
duly registered and existing, we have in many a case pierced the veil of
corporate fiction to administer the ends of justice, (Arnold vs. Willits &
Patterson, Ltd. 44 Phil. 634; Koppel (Phil.), Inc. vs. Yatco,
77 Phil. 496; La Campana Coffee Factory, Inc. vs. Kaisahan ng mga
Manggagawa sa La Campana, 93 Phil. 160; Marvel Building Corporation vs.
David, 94 Phil. 376; Madrigal Shipping Co., Inc. vs. Ogilvie,
L-8431, Oct. 30, 1958; Laguna Transportation Co., Inc. vs. S.S.S., 107 Phil.,
833; McConnel vs. C.A., 59 Off. Gaz
(250 3925; Liddell & Co., Inc. vs. Collector of Internal Revenue, L-9687,
June 30, 1961; Palacio vs. Fely
Transportation Co., L-15121, August 31, 1962)we held Aruego
personally responsible for his acts on behalf of University Publishing Co.,
Inc.
“Defendant would reply that in all those cases where the Court
pierced the veil of corporate fiction the officials held liable were made party
defendants. As stated, defendant-appellee could not even pretend to possess corporate
fiction – in view of its non-registration per the evidence -so that from the
start Aruego was the real defendant. Since the purpose of formally impleading a party is to assure him a day in court, once
the protective mantle of due process of law has in fact been accorded a
litigant, whatever the imperfection in form, the real litigant may be held
liable as a party. Jose M. Aruego definitely had his day in court, and due process of
law was enjoyed by him as a matter of fact as revealed by the records of the
case. (Decision, p.
6).
“The dispositive portion of the
decision the reconsideration of which is being sought is the following;
‘Premises considered, the order appealed from is hereby set aside and the case
remanded ordering the lower court to hold supplementary proceedings for the
purpose of carrying the judgment into effect against University Publishing Co.,
Inc. and/or Jose M. Aruego.’
“According to several cases a litigant is not allowed to
speculate on the decision the court may render in the case. (Rodriguez
vs. Treasurer of the Philippines, 45 O.G. 4457 (Resolution); Arnault vs. Nazareno, 87Phil., 29;
Howden vs. Collector of Internal Revenue, L-19392,
April 14, 1965). The University
Publishing Co., Inc. speculated on a favorable decision based on the issue that
Jose M. Aruego not being a formal party defendant in
this case a writ of execution against him was not in order. It therefore preferred to suppress vital
documents under its possession and control rather than to rebut the
certification issued by the Securities and Exchange Commission that according
to its records University Publishing Co., Inc. was not registered. If the lower court’s order is sustained,
collection of damages becomes problematical.
If a new suit is filed against Aruego,
prescription might be considered as effective defense, aside from the prospect
of another ten years of pending litigation.
Such are the possible reasons for adopting the position of speculation
of our decision. Our ruling appeared to
be unfavorable to such speculation. It was only after the receipt of the adverse decision promulgated
by this Court that University Publishing Co., Inc. disclosed its registration
papers. For purposes of this case
only and according to its particular facts and circumstances, we rule that in
view of the late disclosure of said papers by the University Publishing Co.,
Inc., the same can no longer be considered at this stage of the
proceedings.”
And on the issue of whether or not the certificate of registration,
the articles of incorporation, the by-laws and the certificate of the
reconstitution of the records proffered by the University Publishing Company,
Inc. should be admitted, this Court, in the said resolution of the motion for
reconsideration, in part, said:
“Defendant-appellee could have
presented the foregoing papers before the lower court to counter the evidence
of non-registration, but defendant-appellee did not
do so. It could have reconstituted its
records at that stage of the proceedings, instead of only on April 1, 1965, after decision herein
was promulgated.
x x x x
“As far as this case is concerned, therefore, University
Publishing Co., Inc. must be deemed as unregistered, since by defendant-appellee‘ s
choice the record shows it to be so.
Defendant-appellee apparently sought to delay
the execution by remaining unregistered per the certification of the
Securities and Exchange Commission. It
was only when execution was to be carried out, anyway, against it and/or its
president – and almost 19 years after the approval of the law authorizing
reconstitution – that it reconstituted its records to
show its registration, thereby once more attempting to delay the payment of
plaintiff’s claim, long since adjudged meritorious. Deciding, therefore, as we must, this
particular case on its record as submitted by the parties, defendant-appellee’s proffered evidence of its corporate existence
cannot at this stage be considered to alter the decision reached herein. This is not to preclude in future cases the
consideration of properly submitted evidence as to defendant-appellee’s corporate existence.
“WHEREFORE, the motion for reconsideration and for leave to
file original papers not in the record, is hereby
denied.”
Armed with the aforementioned decision and
resolution of this Court in L-19118, petitioner returned to the lower court on
July 2 8, 1965 with a motion for execution and approval of the bill of costs
and asking specifically for the issuance of the corresponding writ against Aruego to satisfy the judgment.
On July 30, 1965, Aruego moved to
intervene with an opposition in intervention to the motion for execution. Alleging that the Judgment of this Court in
L-19118 dated January 30, 1965, which reads: –
“PREMISES CONSIDERED, the order appealed from is hereby set
aside and the case remanded ordering the lower court to hold supplementary
proceedings for the purpose of carrying the Judgment into effect against
University Publishing Co., Inc. and/or Jose M. Aruego,”
should be construed in the sense that
“the supplementary proceedings mentioned in the aforequoted
diapositive portion of the Supreme Court Decision
means no other than a proceeding to show cause why the Judgment should be
carried into effect against either the University Publishing Co., Inc. and/or
Jose M. Aruego, as the case may be” and that
until such supplementary proceedings was had petitioner could not ask for the
execution of the Judgment against Jose M. Aruego as a
matter of course, Aruego falls back on his
averment(made in his manifestation already ruled out by this Court in L-19118)
that he had never been a party to the case and that the judgment sought to be
executed was solely against University Publishing Company, Inc.
On February 21, 1966, Judge Gaudencio Clbribel, upon consideration of this motion for execution
and for approval of the bill of costs, the opposition thereto by Aruego, and the reply to the opposition, granted the motion
for execution and directed that a writ of execution “be issued
accordingly”.
Aruego came back with a motion for
reconsideration, adamant in his resolve that he would not pay as he was not a
party to the suit. This was opposed by
plaintiff.
On March 5, 1966, Judge Gaudencio Cloribel reconsidered his order of February 21, 1966, and
denied the motion for a writ of execution against Jose M. Aruego
– upon the ground that “said Jose M. Aruego has
never been a party to the case and that the judgment sought to be executed is
not against him.”
On April 4, 1966, it was petitioner’s turn to file a motion for
reconsideration for the reason that the question of whether or not an order of
execution could issue against Aruego had already been
resolved by this Court in its final judgment in L-19118.
On April 20, 1966, Jose M. Aruego
opposed the motion for reconsideration and prayed for supplementary proceedings
to allow him as intervenor to present evidence in
support thereof, alleging that the execution of the judgment against him was
not sanctioned by law and procedure and that had intervenor
been impleaded or given his day in court, he could
have easily proven the legitimate and due existence of the University
Publishing Company, Inc. as a bona fide corporation. He attached thereto the very same argicles of incorporation, certificate of registration,
by-laws and certificate of the Securities and Exchange Commission in the reconstitution
of its records – documents which were rejected by this Court in its resolution
of June 16, 1965 in L-1918.
On April 28, 1966,
petitioner filed his reply to Aruego’s opposition
upon the ground that these are matters concluded in the decision and
resolution of this Court, and that respondent court
cannot admit said documents without going against this Court’s clear mandate.
Resolution on plaintiff’s motion for reconsideration was, by
Judge Gaudencio Cloribel’s
order of May 20, 1966, held in abeyance until the termination of the
supplementary proceedings, which the court thereupon granted, to allow Aruego to present evidence in support of his opposition to
the motion for reconsideration.
On May 28, 1966, Aruego presented in
evidence the documents heretofore mentioned, and in addition, the certificate
dated February 17, 1965 signed by a majority of the directors of the University
Publishing Company, Inc. declaring that the corporation still exists and that
the articles of incorporation have not been amended or modified.
On July 13, 1966, notwithstanding plaintiff’s opposition to the
admission of the documents just mentioned, and his claim that the matter
involved in the execution had long been finished and decided by this Court,
Judge Gaudencio Cloribel
denied plaintiff’s motion for execution.
Hence, this petition for a writ of certiorari
and mandamus.
1. When this case was
elevated to this Court for the fourth time in L-19118, we made it abundantly
clear in the decision therein rendered and in the resolution issued thereafter,
that the judgment rendered against University Publishing Company, Inc. could
and should be enforced against respondent Jose M. Aruego. Our language in the dispositive
portion is clear. It reads:
“PREMISES CONSIDERED, the order appealed from is hereby set
aside and the case remanded ordering the lower court to hold supplementary
proceedings for the purpose of carrying the Judgment into effect against
University Publishing Co., Inc. and/or Jose M. Aruego.”
The judgment does not contemplate of any
proceeding other than for the purpose of carrying into effect the judgment
against University Publishing Company, Inc. and/or Jose M. Aruego
– which is the proceeding on execution.
It does not admit of any other interpretation such as that which is
advocated by Aruego that such proceeding “is to
show cause why the judgment should be carried into
effect against either the University Publishing Co., Inc. and/or Jose M. Aruego.” Indeed, the issue of whether or not the judgment
rendered against University Publishing Company, Inc. could be enforced against
Jose M. Aruego had already been definitely decided in
that case, L-19118. Even worse, all the
arguments and evidence presented by Aruego before the
respondent court resulting in the orders that gave rise to the present
proceedings had been previously adduced before this Court and decided adversely
against him in the January decision and the June resolution of 1965 in
L-19118. There can be no clearer case
for the principle of conclusiveness of judgment to apply. Thus, in certiorari and prohibition
proceedings brought by the Manila Underwriters Insurance Co., Inc. against
Judge Bienvenido A. Tan, L-17445, November 27, 1964,
this Court ruled:
“On August 15, 1960, respondent Borja
filed another motion in the same case asking the court to require petitioner
again to show cause why it should not be made liable
under its bond, and thereafter to issue a writ of execution against it. Petitioner opposed the motion on the ground that our decision in 107 Phil., 911; had finally
disposed of the issue raised therein.
Despite this, the respondent judge, on August 30, 1960 issued an order
citing petitioner to appear before it and show cause
why it should not be held liable under its bond, and on September 10 of the
same year, his honor also denied petitioner’s motion for reconsideration of
said order. Thereupon, the present action
was filed.
“Upon the undisputed facts stated heretofore, it appears
abundantly clear that the respondent judge seriously erred in issuing the
orders complained of. The question of
whether petitioner could still be held liable upon its bond must be deemed
finally settled by our decision in 107 Phil., 911; and any attempt to hold
petitioner liable upon the bond already mentioned must necessarily be deemed as
an improper attempt to reopen a case already finally adjudicated.
“WHEREFORE, the orders complained of are hereby declared void
and of no legal force and effect. The
writ of preliminary injunction issued in this case on October 26, 1960 is
hereby made final. Costs
against respondent Borja.”
The liability of Aruego
has been established so plainly in the decision and resolution in L-19118 that
there could not be any quibbling as to the import of the words there used. Case L-19118 was brought into being because
precisely Judge Cloribel ruled that execution could
not be issued against Jose M. Aruego upon the ground,
so he said in his appealed order, that Aruego was not
a party to the action. This Court there
reversed Judge Gaudencio Cloribel.
In the circumstances of this case, we are constrained to
articulate a number of possibilities:
that judge Gaudencio Cloribel
either (1) did not read our decision in L-19118, January 30, 1965, and our
resolution in the same case promulgated on June 16, 1965; or (2) having read,
did not comprehend their import; or (3) having read and understood, wantonly
ignored them. It is the thinking of this
Court, however, that Judge Gaudencio
Cloribel simply shunted aside our said decision and
resolution. He could not have overlooked
the fact that it was his own order of September 9, 1961 denying execution –
because Aruego is not a party to this case – which
was appealed to this Court. That very
question of whether execution should issue against Aruego
was squarely presented and as squarely resolved in the affirmative by this
Court in L-19118. That Judge Gaudencio Cloribel should have
insisted in his opinion after his attention to this Court’s decision and
resolution adverse thereto had been repeatedly called by plaintiff, is
an act which deserves unsympathetic and unqualified condemnation.
Judge Gaudencio Cloribel
need not be reminded that the Supreme Court, by tradition and in our system of
judicial administration, has the last word on what the law is; it is the final
arbiter of any Justiciable
controversy. There is only one Supreme
Court from whose decisions all other courts should take their bearings.[5]
Judge Gaudencio Cloribel
should have known that “[a] becoming modesty of inferior courts demands
conscious realization of the position that they occupy in the interrelation and
operation of the integrated Judicial system of the
nation.”[6]
So it is, that in Martiniano
P. Vivo vs. Hon. Gaudencio Cloribel,
et al64 Off. Gaz. (29)
7328; (18 Supreme Court Reports Anno. 713, 726), this
Court stressed the need for trial Judges to take cognizance of the rulings of
the Supreme Court. We there reproduced
the following from People vs. Santos, 56 O.G. 3546, 3552-3553, viz.:
“Now, if a Judge of a lower Court feels, in the fulfillment of
his mission of deciding cases, that the application of a doctrine promulgated
by this Superiority is against his way of reasoning, or against his conscience,
he may state his opinion on the matter, but rather than disposing of the case
in accordance with his personal views he must first think that it is his duty
to apply the law as interpreted by the Highest Court of the Land, and that any
deviation from a principle laid down by the latter would unavoidably cause, as
a sequel, unnecessary inconveniences, delays and expenses to the
litigants. And if despite of what is
here said, a judge, still believes that he cannot follow Our rulings, then he
has no other alternative than to place himself in the position that he could
properly avoid the duty of having to render Judgment on the case concerned
(Art. 9, C.C.), and he has only one legal way to do that.”[7]
We rule that because of the foregoing circumstances, Judge Gaudencio Cloribel acted with
grave abuse of discretion and certiorari lies.[8]
2. We now come to the cry of injustice proffered by respondent Jose
M. Aruego.
Even upon a cursory examination of his gripe, his position at once loses
leverage; the potency of his arguments vanishes.
As we look in retrospect at the facts, we find that it was Aruego who executed the contract as president of the
University Publishing Company, Inc. He
is a lawyer. At the time he executed the
contract with plaintiff, he should have known that the possibility existed
that the records of the corporation had been destroyed. For, it is a matter of public knowledge that
buildings which kept public records in the City of Manila had been razed by
fire during the last war. He should have
at least inquired whether the records of the corporation in the Securities and
Exchange Commission had been saved. Of
course, he knew and should have known that persons dealing with corporations
are wont to look to records of the Securities and Exchange Commission for the
existence or non-existence thereof. In
this particular case, from the documents he himself presented in the court
below (after he had knowledge of the fact that admission thereof was denied by
this Court in L-19118), he is practically the corporation itself. Because out of the capital stock of P2,000.00, he subscribed to P1,600.00, and out of the paid
subscription of P500.00, he contributed the sum of P450.00, leaving but P50.00
to be spread amongst the minor stockholders.
This case was filed and concluded as against the
corporation. When finally, plaintiff’s
counsel and the Sheriff came to him as president (and incidentally counsel) of
University Publishing Company, Inc. for execution of that judgment, he sought
to stave off satisfaction thereof. Then,
plaintiff’s counsel and the Sheriff came to know that the corporation did not
legally exist. Aruego
could have very easily caused the corporation to pay. Or did he think that the corporation could
evade payment, since the records of the corporation in the Securities and
Exchange Commission had not yet been reconstituted? The resultant effect is
that after long years of litigation, plaintiff is still left holding the
bag. As this Court noted in L-19118, it
would be too late for the plaintiff to file suit against Aruego
personally. For, by then prescription
has set in.
Canon 22 of the Canons of Legal Ethics is a constant reminder to
the members of the Bar that the conduct of a lawyer before the court
“should be characterized by candor and fairness”; and it is”
unprofessional and dishonorable to deal other than candidly with the facts x x x in the presentation of
causes.” When the question of whether execution should issue against Jose
M. Aruego, a
(member of the Bar, did emerge before the lower court in the proceedings for
execution of the judgment, candor and fairness should have impelled him to tell
the court that the representation of counsel for plaintiff that University
Publishing Company, Inc. is not a corporation, was not true, and that the
corporation had the papers and documents to show otherwise. He should not have kept this fact under wraps
for so long a time while the execution proceedings were still with the lower
court and before judgment on the appeal taken by plaintiff in L-19118. He has failed in these. Literally, he laid an ambush. It was only after he realized that this Court
considered him as the real party in interest that he presented the fact of
corporate existence to this Court to overturn the decision rendered in
L-19118. Where a party “has taken a
position with regard to procedure, which has been acted or relied on by his
adversary or by the court,” he must be held to be in estoppel
“from taking an inconsistent position respecting the same matter in the
same proceeding, to his adversary’s prejudice.”[9]
This is not the first time that this Court has ordered the
execution of a judgment against a person who was not formally named as party
defendant in the action. In a series of
cases, substantial in number,[10]
this Court’s stand has been consistent that the judgment for payment of back
salaries of officers entitled to reinstatement may, in effect, be enforced
against the city or municipality, although not by name impleaded
in the suit. Reasons therefor
are concretely expressed in Mangubat vs. Osmeña, supra, in this wise:
“The necessity of making the City a respondent herein is based
upon its right to defend itself, as demanded by the requirements of due
process. However, these requirements
have been substantially complied with in the case at bar. The parties herein have handled the case, and
the same was heard and decided in the lower court, as if the City had been
named respondent in the pleadings. The
officer required by law to cause ‘to be defended all suits against the City’,
namely, its mayor (Sec. 8, Commonwealth Act No. 58), is respondent in his
official capacity. The officer charged
with the duty to represent the City ‘in all civil cases wherein the city x x x is a party’ – to wit, its
city attorney (Sec. 17, Commonwealth Act No. 58) – is counsel for respondents
herein. In addition thereto, the
auditor, the treasurer and even the municipal board of the City of Cebu, are parties respondents.
“There is no reason to believe that these officers and the
City Mayor would have exerted greater efforts than those already displayed by
them, in protecting the interests of the City of Cebu,
were it formally a respondent ‘herein.
Indeed, it is only logical to expect that, having been individually
named as respondents, said officers must have taken as much concern, if not
more, in warding off petitioners’ claim.
Under the foregoing circumstances, we would be subordinating the
substance to the form if the action for mandamus -insofar as the claim for back
salaries is concerned – were either dismissed or remanded to the lower court,
for the corresponding amendment of the pleadings and a repetition of the
proceedings held for the last five (5) years, in order to reach the same
decision rendered by the lower court and the same conclusions set forth in this
decision, as regards the substantive rights of the parties. It is our considered opinion, therefore, that
the ends of justice and equity would be served best if the inclusion of the
City of Cebu, as one of the respondents herein, were
considered a mere formality and deemed effected, as if a formal amendment of
the pleadings had been made.”
A recent case, whose factual situation has great relevance to the
present, is Torres vs. Caluaq, 64
Off. Gaz., (6) 1296. There,
petitioner Torres was not a party defendant in a suit to recover possession of
land instituted against defendant Conocido who
declared that he was a mere tenant of Torres.
Judgment was rendered against Conocido, and a
writ of execution was issued ejecting Torres from the property. On writ of certiorari and prohibition to this
Court to nullify the writ of execution aforesaid, we pronounced that when
petitioner Torres testified in the court below, she had her day in court and
had laid squarely before said court the issue of ownership. We then explicitly stated that the fact that
petitioner was not formally made a party defendant is a mere technicality that
does not serve the interest of justice.
In the end, we find it pertinent to quote from the early case of Herrera
vs. Barretto, 25 Phil. 245, 271, thus:
“x x x The office of the writ of certiorari has been reduced to the
correction of defects of Jurisdiction solely and cannot legally be used
for any other purpose. It is truly an
extraordinary remedy and, in this jurisdiction, its use is restricted to truly
extraordinary cases – cases in which the action of the inferior court is wholly
void; where any further steps in the case would result in a waste of time and
money and would produce no result whatever; where the parties, or their
privies, would be utterly deceived; where a final judgment or decree would be nought but a snare and a delusion, deciding nothing, protecting
nobody, a judicial pretension, a recorded falsehood, a standing menace. It is only to avoid such results as these
that a writ of certiorari is issuable; and even here
an appeal will lie if the aggrieved party prefers to prosecute it.”
FOR THE REASONS GIVEN, the petition for certiorari and
mandamus prayed for herein is hereby granted; and
(a) the orders of Judge Gaudencio Cloribel of March 5, May 20, and July 13, 1966 are hereby
set aside and declared null and void; and
(b) The Court a quo is hereby directed forthwith to
issue a writ of execution against respondent University Publishing Company,
Inc. and/or Jose M. Aruego.
Treble costs shall be paid by respondent Jose M. Aruego.
SO ORDERED.
Concepcion, C.J., Dizon,
Makalintal, Zaldivar,
Sanchez, Castro, and Angeles, JJ., concur.
[1] Dy Cay vs. Crossfield
& O’Brien, 38 Phil. 521, 526.
[2] Record on Appeal in G. R. No. L-19118, pp. 5-6.
[3] Record on Appeal in G. R. No. L-19118, pp. 6-8.
[4]
Record on Appeal in L-19118, pp. 8-9.
[5]
People vs. Aquino, L-1857, January 19, 1949.
[6]
Laurel, J. in People vs. Vera, 65 Phil. 56, 82.
[7] At p. 726.
[8]
Where the lower court alters or modifies its decision which has become final
and executory (Henderson vs. Tan, 87 Phil.
466; Jabon vs. Alo,
91 Phil. 750; Villoria vs. Piccio,
95 Phil. 802; Aurelio vs. First National Surety & Ass. Co., 102 Phil. 714; Samson vs.
Montejo, L-18605, October 31, 1963; Socco vs. Vda.
de Leary, L-19461, October 31, 1964; Ocampo vs.
Caluag, L-21113, April 27, 1967), or the decision of
an appellate court (Doliente vs. Blanco, 87
Phil. 670; Manila Underwriters Insurance Co., Inc. vs. Tan, supra;
Republic vs. Angeles, L-2 6112, June 30, 1967), certiorari lies.
[9] 31 C.J.S., p. 380.
[10]
Mission vs. del Rosario, 94 Phil. 483; Abella vs.
Rodriguez, 95 Phil. 289; Uy vs. Rodriguez, 95
Phil. 493; Meneses vs. Lacson,
97 Phil. 857; Mangubat vs. Osmeña,
L-12837, April 30, 1959; City of Cebu vs. Piccio, L-14876, Dec. 31, 1960; Arcel
vs. Osmeña, L-14956, Feb. 27, 1961; Sison vs. Pajo, L-18443,
May 31, 1965.