PHILIPPINE COMMERCIAL AND INDUSTRIAL BANK, PETITIONER, VS. HON. RODOLFO ORTIZ, ROGELIO MARA­VILES AND QUEZON CITY SHERIFF, RESPONDENTS.

The case at bar, described by petitioner as simple both as to the
facts involved and as to the issue,^[1]
principally relates to the well known rule that service of notices, pleadings,
motions and other papers, to be valid and efficacious, shall he made on the
party’s attorney of record and not on the party himself, unless the court shall
otherwise direct.^[2]

The party directly affected by the rule is the petitioner,
Philippine Commercial and Industrial Bank, hereafter simply referred to as
PCIB, defendant in Civil Case No. Q-23275 of the Court of First Instance at
Quezon City The action was instituted by one of its depositors, Rogelio
Maraviles, for the recovery of damages resulting from the dishonor of two (2)
of his checks on account of the negligence of employees of PCIB.1

The law firm of Ledesma Saludo & Associates appeared
for PCIB in the suit, and gave its address as 3rd Floor, LTR Building,
5548 South Superhighway, Makati, Metro Manila.2 Holding
office in the same LTR Building,
at the ground floor, was
a corporation known as Commercial Exponent Philippines, Inc., COMMEX, for short.3

After Maraviles had presented his evidence, the trial was reset
for the reception of PCIB’s proofs, but the latter’s lawyers failed to appear
at the appointed time. Consequently,
the Trial Court dictated an Order dated June 23, 1978 considering the case
submitted for decision, and on June 28, 1978, rendered judgment for the
plaintiff, ordering the payment to him
by PCIB of P20,000.00 as moral damages: P5,000.00 as exemplary damages: and P2,500.00 as attorneys
fees.4

PCIB’s lawyers filed on August 15, 1978 a Motion for Reconsideration (RE: Order dated June 23, 1978 and/or Decision).5 They argued that the award of damages was exorbitant,6 and
proferred the following explanation for their non-appearance at the
continuation of trial on June 23, 1978, viz:

The failure of Atty Segundo Mangohig, associate lawyer of the **
Firm who was personally handling the ** case to appear at the June 23, 1978
hearing is explained by the fact that in the middle of June 1978 Atty. Mangohig suddenly resigned
from the law firm. As is the usual
procedure, Atty. Mangohig was required to submit a list of his pending cases
accounts with their respective status. Atty. Mangohig did submit a report. Unfortunately, the present case was
not listed in his report. Thus,
the present case was not reassigned in time for another lawyer to attend the
June 23 1978 hearing.7

An opposition was presented by Maraviles,8 in which he asserted (1) that judgment had already
become final, notice thereof having been served on PCIB, thru COMMEX, on July
15, 1978, and the fifteen-day period to appeal therefrom had already lapsed
when PCIB’s motion for reconsideration was filed on August 15, 1978; and (2)
Mangohig’s failure to include the case in his report did not constitute
excusable negligence warranting relief, and clients are bound by their counsels
mistakes. PCIB replied,1 arguing that (1) service of the judgment on COMMEX on July 15,
1978 was inefficacious, and the period for appeal should be reckoned only from
July 17, 1978 when COMMEX delivered the notice to PCIB’s lawyers; and (2) there
was no need to append an affidavit of merits to its motion for reconsideration,
this being required only when the motion for new trial was based on grounds
other than excessive award of damages. Maraviles submitted a rejoinder,2 pointing out that (1) the notice of
the judgment was received on July 15, 1978 by precisely the same person who had
received the notice of the Order of June 23, 1978; (2) an afidavit of merits
was in fact indispensable because PCIB’s lawyers were invoking excusable
negligence as ground to set aside the Order of June 23, 1978 considering the
case submitted for decision.

Thereafter, the Trial Court denied PCIB’s motion for
reconsideration by Order dated September 18, 1978.3 Respecting the issue of whether the motion for
reconsideration was filed seasonably, the Court first drew attention to the
fact that Atty. Mangohig had received (1) copy of the Order re-setting the
hearing on June 23, 1978 “thru COMMEX” on May 9, 1978; (2) copy of the Order of
June 23, 1978 (declaring the case submitted for decision) “thru COMMEX on
JULY 13, 1978”; and (3) copy of the judgment of June 28, 1978, also
“thru COMMEX on July 15, 1978.” It then said:

“From these antecedents, this Court is not persuaded by the
soundness of the submission of defendant’s counsel that they received a copy of
the decision only on July 17, 1978, as shown by the stamped ‘RECEIVED’ of the
Ledesma, Saludo & Associates appearing on ** (PCIB’s copy) of the
decision. ** For, as the
records will show, Atty ** Mangohig ** had been receiving notices of hearing
and orders, from this Court, thru COMMEX. In fact, the notices of hearing (of) January 3, 1978, and April 25, 1978,
sent to Atty ** Mangohig were also received by him thru COMMEX. Defendant having filed its motion for reconsideration only on August 15, 1978, or
one (1) day after the judgment had become final and executory on August 14,
1978, clearly, said motion was
filed out of time.

“Moreover, ** the failure of ** Atty. Mangohig to appear at
the trial on June 23, 1978 ** is not constitutive of excusable negligence. And ** well-settled is the rule that clients
are not excused from and are bound by the mistakes and negligence of their
attorneys.

“More importantly, it appears in the answer of the defendant
that it has no good and valid
defenses which might change or alter the judgment of this Court ** even as the defendant
failed to state this in an affidavit of merit which is required ** to be
attached to the defendant’s motion for reconsideration which is also
undoubtedly based upon the alleged excusable negligence of defendant’s
lawyer”

By Order dated September 20, 1978, the Court decreed the issuance
of a writ of execution at Maraviles instance, “judgment ** being already
final and executory.”1 But when
PCIB attempted to perfect an appeal, and filed at the same time a second motion
for reconsideration, as shall shortly be narrated, the Court ordered the
sheriff “to desist, in the meantime, from the enforcement of the Writ of Execution, until after
the resolution of the pending incidents.”2

Now, the records do not show when and how notice of the Order of September 18, 1978 (denying PCIB’s
motion for reconsideration) was served on PCIB’s lawyers. These lawyers do not state this material
fact anywhere in their pleadings. Be
this as it may, as aforestated they filed with the Trial Court on September 25,
1978 a notice of appeal, an appeal bond, a record on appeal.3 And on the same day they also filed a second Motion
for Reconsideration, insisting that
service of notice of the judgment should be reckoned not as of July 15, 1978
(when COMMEX received it), but July 17, 1978 (when COMMEX gave the notice to
PCIB’s lawyers).4

Without awaiting service of notice of the resolution of its
second motion for reconsideration, but expressing the fear that execution of
the judgment might render the issues moot.5 PCIB
instituted in this Court on November 7, 1978 the instant special civil action
for certiorari praying for the annulment of the Trial Court’s Orders dated
September 18, 1978 –­ denying its first motion for reconsideration and
declaring the judgment final and executory — and September 20, 1978 —
granting execution — as well as the anticipated order denying its
second motion for reconsideration.

To complete the narration of the relevant facts, it should be
mentioned that the Trial Court did indeed subsequently deny PCIB’s second
motion for reconsideration. This it did
by Order dated November 6, 1978 in which it ruled –

” ** (1) that defendant’s counsel had been receiving orders
and notices of hearing from this court, in this case, through COMMEX, whose
authority to do so the defendant is now estopped from denying, and (2) that
even granting arguendo, that defendant’s first Motion for
Reconsideration” dated August 15, 1978 was filed on time, the same did not
interrupt the period of appeal, since
it was not accompanied by an affidavit of merit, as required by the rules,
neither does the motion itself, although verified, state the good and valid
defenses, if any, of the defendant which, as ruled by this Court in its order
dated August 15, 1978, do not exist even in defendant’s answer itself **.”1

The chief issue is indeed simple, as petitioner intimates, and is
quickly resolved. While it is true that
the address of record of PCIB’s counsel is entered as the “3rd Floor, LRT Building,” which
is different from that of COMMEX, which is on the “Ground Floor, LRT Building,” it is equally
true that notices served on the latter had been reaching the former and that,
in any event, the PCIB lawyers had never protested such service on them thru
COMMEX. The only single instance of
protest was as regards the particular instance of service of notice of the
judgment on COMMEX on July 15, 1978. Thus, as shown by the record, and not at all disputed by PCIB, service
was accepted by its lawyers “thru COMMEX” without demur, of the court
notices for (1) the hearing of January 3, 1978,
(2) the hearing of April 25, 1978, and (3) the hearing of June 23, 1978.

It is of course the rule that notices, pleadings, motions and
papers should be served on a party’s counsel of record, at the latter’s given
address. But it is certain that the
counsel is entirely at liberty to change his address, for purposes of service, or expressly or impliedly
adopt one different from that initially
entered in the record. When he does
this, he cannot afterwards complain that the person who received the
notice, pleading, motion or paper at such new address did not promptly deliver
the same to him or bring it to his
attention. This is what happened in
this case. PCIB s attorney’s had acquiesced to and impliedly adopted a
different address for service of notices
to them. They had accepted service at this place, three floors down from the
address originally given by them, without objection of any sort. They cannot now disown this adopted address
to relieve them from the effects of their negligence, complacency or
inattention. Service, therefore, on
July 15, 1978 of the notice of judgment at the Ground Floor, LRT Building, should be deemed as effective service on PCIB’s attorneys. The failure of the receiving clerk to
deliver the notice to them on the same day, and what is worse, the
lawyers’ omission to inquire of said receiving clerk exactly when the notice
was received, and their blithe assumption that service was effected on July 17,
1978 since this was the day that the notice was handed over to them, is arrant
imprudence and cannot in any sense be deemed to constitute that excusable
negligence as would warrant reconsideration under Section 1 [a], Rule 37 of the
Rules of Court.

Moreover, the Trial Court’s ruling that as “appears in the
answer,” PCIB “has no good and valid defenses which might change or alter
the judgment of this Court if it were to set (it) aside and ** (reopen the
case) to allow the defendant to cross examine the plaintiff and to present its
evidence”,1 appears to be correct. A perusal of PCIB’s unverified answer in the
Court a quo discloses that is made up mostly of denials “for lack of
knowledge”2 and an averment of “special and
affirmative defenses” consisting in the insinuation that the dishonor of
Maraviles checks was due to “mechanical and human errors which are
expected and inevitable” and for which “reasonable allowance” should
be made; and that Maraviles should verify the amount of his deposit before
issuing any check against it.3 In the
light of its express admission that Maraviles did indeed have a sufficient
deposit at the time of the issuance of the checks in question, these defenses are patently unsubstantial and
unmeritorious. It furthermore appears
that no other defense has been asserted by PCIB, whether in an affidavit of
merit attached to its two (2) motions for reconsideration or otherwise. It would thus really make no sense, as the
Court a quo opines, to set aside the judgment, reopen the case and allow
PCIB to present evidence of defenses which are inconsequential, and would not
at all negate or mitigate its liability.

Two more points need be dealt with before this opinion is ended.

It is true that when fraud, accident, mistake or excusable
negligence is invoked as ground
of a motion for new trial,4 it should
be proved in the manner provided for proof of motions,”5 i.e., by “affidavits or depositions”
unless the court should direct that “the matter be heard wholly or partly
on oral testimony or depositions.”6 It is
also required that “affidavits of merits” be attached to the motion.1 A motion for new trial grounded on fraud, accident,
mistake or excusable negligence should thus ordinarily be accompanied by two
(2) affidavits: one, setting forth the
facts and circumstances alleged to constitute such fraud, accident, mistake or
excusable negligence; and the other, an affidavit of merits, setting forth the
particular facts claimed to constitute the movant’s meritorious cause of action
or defense.2 The reason for the first is
quite obvious: it is to enable the
court to determine if the movant’s claim of fraud, etc., is not a mere
conclusion but, is indeed borne
out by the relevant facts. The reason
for the second is equally evident: it
would be useless, a waste of time, to set aside the judgment and reopen the
case to allow the movant to adduce evidence when he has no valid cause of
action or meritorious defense.3

Where, therefore, a motion for new trial on the ground of fraud,
etc., is unaccompanied by either or both affidavits, the motion is pro forma a scrap of
paper, as it were, and will not interrupt the running of the period of appeal.4 But where, as here, the motion for new trial is
founded not only on fraud, accident, mistake or excusable negligence, but also
on the ground of “award of excessive damages,”5 as to which no affidavit of fraud, etc., or of
merits is required, what being required of the movant being to “point out
specifically the findings or conclusions of the judgment demonstrating the
invoked ground, the motion cannot be denied as pro forma simply
because no affidavit of merits is appended thereto, provided there be a
specification of the findings or conclusions of the judgment alleged to be
erroneous because awarding excessive damages. The tenability of the grounds is dependent upon different premises. The untenability of one does not of itself,
render the other unmeritorious.

Finally, it bears stressing that the filing of a proper motion
for new trial interrupts the running of the period of appeal which begins to
run again from receipt of notice by the movant of the order denying his
motion. In this situation, the party adversely
affected has only the balance of the period of appeal within which to
perfect his appeal, the balance being the number of days remaining of the
reglementary period after deducting the time during which the motion was
pending; i.e., from the date when the motion was filed to the date when notice
of the order of denial was served on the movant.1 If the
motion for new trial was filed on the last day of the reglementary appeal
period, the movant may appeal within the day following service on him of the
notice of the order denying his motion.2 It is
well to also emphasize, in this connection, that the requirement for the
perfection of an appeal within the time prescribed is mandatory and
jurisdictional, that the lapse of said period without an appeal being taken
operates to divest the court of all jurisdiction over the case and leaves it
with no alternative but to order, on motion, the execution of the judgment.3

In fine, it not being possible under the facts to ascribe the
commission of an act with grave abuse of discretion to the Trial Court, none
having been shown by the petitioner, the verdict must go against the latter.

WHEREFORE, the petition is dismissed, with costs against
petitioner.

Yap, (Chairman), Melencio-Herrera, Cruz, Gancayco, and Sarmiento, JJ., concur.

Feliciano, J., on leave.

^[1]
Rollo, p. 13

^[2]
Sec 2, Rule 13 Rules of Court

1 Rollo, pp 23,
111

2 ld., p. 31

3 Id., p. 14

4 Id., pp 32-29

5 Id., pp. 40-48

6 Id., pp. 44-45

7 Id., p 41

8 Id., pp. 50-53

1 Id., pp. 54-59

2 Id., pp. 60-62

3 Id., pp. 63-64

1 Id., p. 68

2 Annex O, petition, rollo, p. 73

3 See Annex O, petition, rollo, p. 73

4 Rollo, pp. 65-67

5 Id., p. 3

1 Id., p. 82

1 Order, Sept 18, 1978, rollo, pp. 63, 64

2 As regards e.g., pars. 1, and 6 to 17, inclusive, of the complaint rollo,
pp. 28-29

3 Rollo, pp. 29-30

4 Sec. 1 (a), Rule 37, Rules of Court

5 Sec. 2 (second par.), Rule 37

6 Sec. 7, Rule 133

1 Sec. 2 (third par.), Rule 37

2 See Feria, Civil Procedure, 1969 ed., pp. 514-515, Moran, Comments on
the Rules, 1979 ed., Vol. 2. pp. 214-215

3 See Feria, op. cit., p.
514, Moran, op cit., p 215

4 Sec 3, Rule 41; Feria,
op. cit., pp. 515-516, Moran, op.
cit., pp. 216-218

5 Sec. 1 (c), Rule 37

1 Sec. 3, Rule 41, providing
in part that “The time during which a motion to set aside the judgment or
order or a motion for new trial has been pending shall be deducted, unless such
motion fails to satisfy the requirements of Rule 37.”

2 Sec 3, second par., Rule
41, Rules of Court; Lloren v. de Veyra 4 SCRA 637

3 Galima, et al. v. C.A., 16 SCRA 140, 143-144, citing Garganta v.
C.A., 56 O G, 4323, 4327: Espartero v.
Ladaw, 92 Phil 704; Remorin v. Valles, 92 Phil. 991 (and cases therein
cited), Miranda v. Guanzon, 92 Phil 168 Valdez v. Acumen,
L-13526, Jan 28, 1960, Gov’t v. Luis Antonio, et al, L-23736, Oct 19,
1965.