PHILIPPINE NATIONAL BANK AND DEVELOPMENT BANK OF THE PHILIPPINES, PETITIONERS, VS. PHILIPPINE MILLING CO., INC., HECTOR TORRES, FRANCISCO GOMEZ AND COURT OF APPEALS, RESPONDENTS.

Philippine National Bank and Development Bank of the Philippines versus Philippine Milling Co., Inc., Hector Torres, Francisco Gomez and the Court of Appeals

The Case

This is a special civil action brought before the Supreme Court by the Philippine National Bank and the Development Bank of the Philippines, whom we shall call the PNB and the DBP, against Philippine Milling Co., Inc., Hector Torres, Francisco Gomez, and the Court of Appeals. The banks ask the Court to annul certain resolutions of the Court of Appeals, to prohibit that court from assuming jurisdiction over two appealed cases, and to compel it to dismiss those appeals. The case matters because it settles a question every litigator must know: when an appellant fails to file his brief on time, does the Court of Appeals lose jurisdiction and become duty bound to dismiss the appeal, or does it retain discretion to grant a further extension? The Supreme Court answers that the power to dismiss is discretionary, not ministerial.

Procedural History

The case began in the Court of First Instance of Manila, in two civil cases. The first was Philippine Milling Co. against the Development Bank of the Philippines, the Philippine National Bank, and the Register of Deeds of the Province of Mindoro Occidental. The second was the Development Bank of the Philippines against Philippine Milling Co. and others. The trial court dismissed the first case. In the second case, it ordered the defendants, particularly the Secretary of Philippine Milling Co., to transfer in the stock book of the corporation, in the name of the DBP, the fifteen thousand shares covered by Certificate of Stock Number 32, then in the names of Hector Torres and Francisco Gomez, and to issue a new certificate in favor of the DBP. Costs were taxed against the defendants.

Philippine Milling Co., Francisco Gomez, Hector Torres, and Federico Santiago appealed to the Court of Appeals. After the printed record on appeal was filed, the appellants secured two extensions of time to file their brief, the last expiring on November 11, 1966. They moved for a third extension of fifteen days. On November 14, the Court of Appeals granted it, but for ten days only, expiring on November 21, 1966. On November 24, the appellants asked for a fourth extension of thirty days counted from November 26, 1966. On November 26, the DBP objected and moved to dismiss the appeal on the ground that the extension had been sought late. Without touching the opposition, the Court of Appeals, on November 28, granted the thirty-day extension counted from November 26. On December 1, the PNB also moved to dismiss. On December 2, the Court of Appeals denied both motions to dismiss. The DBP filed another motion on December 5 urging action on its motion, and the PNB filed a motion for reconsideration on December 7. Reconsideration was denied on December 9, 1966. The banks then commenced this original action in the Supreme Court, praying for certiorari, prohibition, and mandamus. The petition was given due course, but the prayer for a preliminary injunction was not granted.

Facts

The material facts are procedural and may be told as a short chronology. The appellants obtained two extensions to file their brief, the second expiring on November 11, 1966. They sought a third extension of fifteen days. The Court of Appeals granted it on November 14, but for ten days only, so that it expired on November 21, 1966. No motion for a further extension was filed on or before that date.

On November 24, 1966, the appellants asked for a fourth extension of thirty days counted from November 26, 1966. On November 26, the DBP objected and moved to dismiss, arguing that the extension had been sought late. On November 28, without ruling on the opposition, the Court of Appeals granted the thirty-day extension. The PNB then moved to dismiss on December 1, and on December 2 the Court of Appeals denied both motions to dismiss. After further motions, reconsideration was denied on December 9, 1966.

The banks then came to the Supreme Court, insisting that when the third extension expired on November 21, the Court of Appeals lost jurisdiction and had no choice but to dismiss the appeal and remand the case for execution.

Issues

• Whether or not the Court of Appeals lost jurisdiction over the appealed cases when the appellants failed to file their brief within the extended period, so that dismissal of the appeal became its ministerial duty.
• Whether or not the Court of Appeals committed grave abuse of discretion in granting a further extension and in denying the motions to dismiss the appeal.

Applicable Provisions

Section 1 of Rule 50 of the Rules of Court provides:

An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee.

Among the grounds for dismissal under that section is the failure of the appellant to serve and file the required number of copies of his brief within the reglementary period. The provision bears on the case because its use of the word may shows that dismissal is a power conferred on the appellate court, not a duty imposed upon it.

Ruling

On the first issue, the Court held that the premise of the petition is clearly untenable. Section 1 of Rule 50 provides that an appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, upon the ground, among others, of the failure of the appellant to serve and file the required number of copies of his brief within the reglementary period. The Court stressed the statutory language:

Manifestly, this provision confers a power and does not impose a duty.

What is more, the Court said, the provision is directory, not mandatory. The Court of Appeals therefore had discretion to dismiss or not to dismiss the appeal, contrary to the banks' assertion that on November 22, 1966 it became the court's ministerial duty to dismiss the appeal and remand the case for execution to the court of origin.

On the second issue, the Court held that although the discretion must be a sound one, exercised in accordance with the tenets of justice and fair play and having in mind the circumstances obtaining in each case, the presumption is that it has been so exercised. It was incumbent upon the banks, as actors in the case, to offset this presumption. Yet the record did not satisfactorily show that the Court of Appeals had abused its discretion, much less gravely. The banks' assertion of abuse rested solely on the alleged ministerial duty to dismiss, which the Court found devoid of legal foundation and inconsistent with its rulings in Viuda de Ordoveza versus Raymundo and Alquiza versus Alquiza.

Doctrine

The dismissal of an appeal for failure of the appellant to file his brief within the reglementary period is discretionary, not mandatory, on the part of the Court of Appeals. Section 1 of Rule 50 confers a power and does not impose a duty, and the provision is directory rather than mandatory. The appellate court may dismiss the appeal on its own motion or on that of the appellee, but it is not compelled to do so the moment the period lapses. The discretion must be sound, exercised in accordance with justice and fair play and the circumstances of each case, and the presumption is that it has been soundly exercised. A party who alleges grave abuse of discretion bears the burden of overcoming that presumption, and a bare claim of a ministerial duty to dismiss will not suffice.

Disposition

The Supreme Court dismissed the petition, denied the writs prayed for, and taxed the costs against the petitioners, the PNB and the DBP.

Remember This

Memorize the line: the power to dismiss an appeal under Section 1 of Rule 50 is discretionary and directory, not ministerial and mandatory. Examiners use this case to test whether a student knows that the Court of Appeals does not automatically lose jurisdiction when an appellant misses the deadline for his brief, and that grave abuse of discretion must be shown to overturn the grant of a further extension.