RIZAL COMMERCIAL BANKING CORPORATION, PETITIONER, VS. HON. GUARDSON LOOD, JUDGE OF THE COURT OF FIRST IN­STANCE OF RIZAL, RAUL P. GARAY AND MARCELO. B. GARAY, RESPONDENTS.

Petition for certiorari and prohibition, with preliminary
in­junction, to annul and set aside an order granting a petition for relief
from judgment.

The record shows that on October 4, 1966, the herein private
respondents Raul Garay and Marcelo Garay executed two (2) promis­sory notes in
favor of the herein petitioner, Rizal Commercial Banking Corporation, for the
amounts of P13,000.00 and P3,000.00, payable by them jointly and severally
within one (1) year from exe­cution thereof, with interests thereon at the rate
of 12% and 14% per annum,
respectively, and an amount equivalent to 10% of the total amount due as
attorney’s fees in case of default. Upon its maturity demands were made for payment thereof and when the
promis­sors failed to pay, the petitioner filed an action against the pri­vate
respondents on February 24, 1970 before the Court of First In­stance of Rizal,
docketed therein as Civil Case No. 12888, for the collection of a sum of
money. The private respondents jointly
filed their Answer after a previous motion to dismiss was denied by the trial
court and, thereafter, the case was set for pre-trial on various dates
including September 28, 1973 on which last date the trial court, upon motion of
the private respondents, cancelled further pre-trial, without prejudice to the
filing of an amicable settlement, and set the hearing on the merits on November
12, 1973, later reset to December 3, 1973. On this latter date, the peti­tioner began presenting its evidence and
Roberto V. Marquez, an employee of the petitioner bank took the witness stand
and cross examination of said witness was deferred to February 22, 1974 to
enable him to produce the records of the private respondents with the
petitioner bank. The hearing, however,
was reset, by agree­ment of the parties, to May 24, later postponed by the
respondents to July 26 and reset further to September 30, the respondents
manifesting that they would settle the case amicably. But, the hearing was again reset to November 18, then December
13, 1974. Before the hearing could
proceed on the latter date, counsel for the herein private respondent, with the
conformity of his clients, filed a motion to withdraw as counsel. The motion was granted and the hearing was
reset to February 24, 1975 to enable the re­spondents to secure the services of
new counsel. On this date, the private
respondent Raul Garay filed an urgent motion to postpone the hearing but the
same was vigorously objected to by the petitioner and consequently the motion
was denied and the petitioner thereafter rested its case and submitted the case
for decision. On April 7, 1975, a
decision was rendered on the case, the dispositive portion of which reads:

WHEREFORE IN VIEW OF THE FOREGOING, judgment is hereby rendered in
favor of the plaintiff and against the defendants, ordering the latter to pay
the former the sum of P13,000.00 from October 4, 1966 with interest at 12% per annum plus a sum equivalent to 10%
of the amount due by way of attorney’s fees, until fully paid; furthermore,
ordering the defendant to pay the plaintiff the sum of P3,000.00 with interest
at the rate of 14% per annum from
October 4, 1966 plus a sum equivalent to 10% of the amount due by way of
attorney’s fees, until the same amounts have been paid, and to pay the
costs.”^[1]

On May 22, 1975, the respondents Garay filed a motion for
extension praying that “they be granted an extension of thirty (30) days
from 26th May 1975 within which to either (1) seek the reconsideration of the
decision herein dated 7 April 1975 or (2) appeal the same, that is, file their
notice of appeal, deposit their appeal bond, and submit their record on
appeal.” The respondents alleged therein that their “inability to
attend to this case after the withdrawal of their previous counsel is due to
the fact that defendant Marcelo B. Garay (father of the defendant Raul Garay)
who is in charge hereof, has been ailing since late 1974, resulting in his
hospitalization on 3 to 11 February and 21 Feb­ruary to 13 March, 1975.^[2]

The herein petitioner opposed the motion on the grounds that the
thirty (30) days period within which to perfect an appeal from the judgment
rendered on April 7, 1975 had long expired and there is no more period to
extend since copies of the decision of April 7, 1975 were sent to the
respondents by registered mail and first notice was served upon the addressees
on April 11, 1975, but who failed to claim the same from the post office; and
that the motion for extension had not been set for hearing so that it was a
mere scrap of paper which may be ignored. The petitioner prayed for the issuance of a writ of execution of the
decision of April 7, 1975.^[3]

On June 25, 1975, the herein respondents filed a Reply Oppo­sition
and Motion to set aside Decision claiming that their motion for extension of
time had been filed, seasonably because the respondent Raul Garay was informed
of the decision of April 7, 1975 only on or about May 26, 1975, while the
respondent Marcelo received a copy of the decision not later than May 15, 1975,
and they had at least until June 18, 1975 within which to do so. The herein respondents alleged therein the
following:

“1.    That defendant Raul Garay was never made
aware of the decision herein until informed thereof by his father defendant
Marcelo B. Garay on or about 26 May 1975;

“2.    That defendant Marcelo G. Garay received his
copy of the decision herein (without case number) not earlier than 15 May 1975,
which fact must be now appear in the record of the case;

“3.    That defendants’ motion for extension dated
22 May 1975 is therefore seasonable, as they had at least until 14 June 1975
within which to do so;

“4.    That as a necessary consequence, plain­tiff’s
motion for execution is premature, the judg­ment herein not being final;

“5.    That defendants have never received any
order considering the case submitted for decision, and the statement in the
decision to that effect will not be borne out by the record;

“6.    That the failure of defendants to appear at
the hearing of 24 February 1975 was, as shown in the hospital certificate
dated 7 May 1975 submitted to the court on 23 May 1975, due to the fact that
defendant Marcelo B. Garay underwent major surgery the previous day, 23 May
1975, for Cholecystectomy with operative Chiolangrogram and Cardiac
Monitoring Cdc, Sphincteroplasty;

“7.    That defendant Marcelo B. Garay was there­after
in the intensive care unit of the Metropolitan Hospital for eleven days,
hovering between life and death literally, and his wife and children, defend­ant
Raul Garay among the latter, had to be with him, together immediately after the
surgery and by turns later;

“8.    That defendants were thus prevented from
attending to this case at all;

“9.    That the interests of justice demand that
defendants should have their day in court, allowed to cross-examine plaintiff’s
witness, object too its documentary evidence, and present evidence in their
defense;

“10.  That it would not constitute abuse of dis­cretion
on the part of the court to set aside its de­cision herein, in the light of the
foregoing, especially because defendants have a good defense, as may be seen
from Pars. 8 to 13 of their answer;”

and prayed that (1) the decision dated
April 7, 1975 be set aside, the defendants allowed to cross-examine plaintiff’s
witness, object to its documentary evidence, and present their evidence; (2)
plaintiff’s motion for execution be denied; and (3) in case of denial thereof,
they be afforded ample time to seek relief in a higher tribunal.^[4]

Acting upon the motion and the opposition thereto, as well as the
Reply Opposition and Motion to Set Aside Decision the respondent Court issued
an order on July 1, 1975, as follows:

“ORDER

“The Motion dated 22 May 1975 filed by the defendant praying
for an extension of thirty (30) days within which to (1) seek the
reconsideration of the Decision dated April 7 or (2) appeal the said decision,
is hereby granted.

“The Motion To Set Aside Decision filed by the defendant is
hereby denied. The Motion for Execution
is held in abeyance until further orders.”^[5]

However, on July 23, 1975, the respondent Court issued another
order giving due course to a petition for relief from judgment which order
reads, as follows:

“ORDER

“The Petition for Relief from Judg­ment filed by the
defendants dated 12 July 1975 appearing to be sufficient in form and substance,
let a copy thereof be furnished the plaintiff which is hereby given ten (10)
days from receipt of a copy thereof within which to file its answer
thereto,”^[6]

and on September 5, 1975, it issued the
controverted order setting aside the decision of April 7, 1975, the dispositive
portion of said order reads, as follows:

“WHEREFORE, IN VIEW OF THE FOREGOING, the petition is granted
hereby setting aside the Decision dated April 7, 1975 for the purpose of
allowing the defendants to present their evidence in their defense. Let hearing be set on any available date in
the calendar of this Court. Consequently, motion of Attys. Umali & Tagle for defendants is granted.”^[7]

The herein petitioner filed a motion for the reconsideration of
the order upon the grounds that: (1) petitioner was not furnished with a copy
of the petition for relief despite its manifestation in the Supplemental Motion
for Execution, filed on August 13, 1975,^[8]
so that the issues raised in the said petition for relief were never joined and
no valid action could have been taken thereon; (2) the petition for relief was
filed beyond the reglementary period for the filing of petitions for relief
under Rule 38 of the Revised Rules of Court; (3) the petition for relief cannot
be a substitute for the remedy of a motion for new trial or of an appeal, which
were available to the herein respondents; (4) the said order was issued beyond
the jurisdiction of the court since the order was in effect a revival of the
case where the judgment had already become final and unappealable; (5) the
evidence to be presented by the herein respondents in support of their defense
is flimsy and will not alter the result already reached; and (6) the filing of
the petition for relief is a dilatory tactic aimed at preventing an early
recovery by the petitioner bank of its rightful claim against the respondents;^[9]
but the motion was denied by the respondent court.^[10]
A second motion for reconsideration was filed,^[11]
but the motion was again denied.^[12]
Hence, the present recourse. As prayed
for, a temporary restraining order was issued on February 25, 1976, restraining
the respondent Court from further proceeding with Civil Case No. 12888.^[13]

The petitioner contends that in issuing the order of September 5,
1975, which granted the petition for relief from judgment and set aside the
Decision of April 7, 1975, and the orders dated October 16, 1975 and January
28, 1975, which denied the motions for reconsidera­tion of the controverted
order of September 5, 1975, the respondent Court acted without or in excess of
its jurisdiction and there being no appeal, nor any plain, speedy and adequate
remedy in the ordinary course of law, the orders complained of should be
annulled and set aside. In support
thereof, the petitioner argues that the remedy of relief from judgment is
available only to a party who had no opportunity to seek a new trial under Rule
37 or to interpose an appeal under Rule 41 due to causes mentioned in Section 2
of Rule 38 of the Revised Rules of Court, and not to a party, like the
respondents in this case, who were given and had the opportunity to seek a new
trial, or reconsideration, or to appeal from the judgment and had in fact
sought a new trial which was denied by the respondent Court.

There is merit in the petition. The herein private respondents have, indeed, filed a pleading
denominated Reply, Opposition and Motion to Set Aside Decision which amounts to
a motion for new trial under Rule 37 and which was denied by the respondent
Court, so that the remedy of relief from judgment under Rule 38 of the Revised
Rules of Court may not be availed of by the private respondents upon the denial
of said motion. It is a well-known rule
that the relief provided for by Rule 38 of the Revised Rules of Court is of
equitable character and is allowed only in exceptional cases where there is no
other available or adequate remedy. It
is not regarded with favor and the judgment would not be voided where the party
com­plaining has or, by exercising proper diligence, would have had an adequate
remedy at law or by proceedings in the original action, by motion, petition or
the like to open, vacate, modify, or otherwise obtain relief against the
judgment.^[14]
Instead of filing a petition for relief, what the respondents Garay and their
counsel should have done in the court below was to appeal from the denial of
their motion to set aside the decision.

Besides, it appears that the herein petitioner had not been
furnished with a copy of the petition for relief from judgment despite its
manifestation contained in its Supplemental Motion for Resolution filed on
August 13, 1975, and the order of the respondent Court, dated July 23, 1975,
directing that the petitioner should be furnished with a copy of the petition
for relief, such that the petitioner had been deprived of the opportunity to
controvert the petition. For lack of
notice, the order in question is defective.

Furthermore, reading the allegations of the herein private
respondents as to their good and convincing evidence to support their defense,
quoted in the disputed order of the respondent Court, dated September 5, 1975,
it would appear that the said respondents have no real defense. The said respondents have admitted their
liability and there is little, if any, prospect that their evidence if
presented and considered, can alter or reverse the conclusion already reached
by the respondent Court in its decision rendered on April 7, 1975. The private respondents merely claim that their
obligation is subject to extension or renewal and that the herein petitioner
had not given them notice that it would no longer extend the period for the
payment thereof. Demand for payment,
however, was made in a letter to the private respondents on May 30, 1969,
receipt of which was acknowledged by the respondent Raul Garay in his Reply
dated June 7, 1969. Peti­tioner’s
counsel again wrote the said petitioners reiterating pay­ment of the
obligation, and when the said private respondents failed to pay, the present
action was initiated in court. Private
respondents cannot, therefore, plead lack of notice that the petitioner was no
longer extending the period for the payment of the obligation. As previously ruled, “if the defendant
has no real defense to the action or intends only a technical plea, there would
be no justice in permit­ting the case to be reopened and subject plaintiff to
further delay and expense for the mere purpose of rendering judgment in regular
manner.^[15]

WHEREFORE, the petition is granted and the orders issued
by the respondent Court on September 5, 1975, October 16, 1975, and January 28,
1976, in Civil Case No. 12888 of the Court of First In­stance of Rizal,
entitled: “Rizal Commercial Banking Corporation, plaintiff, versus
Raul P. Garay and Marcelo B. Garay, defendants,” should be, as it is
hereby, ANNULLED and SET ASIDE. The
respondent judge is hereby directed to issue a writ for the execution of the
Decision rendered on April 7, 1975. The
temporary restraining order heretofore issued is hereby made permanent. With costs against the private respondents
Raul P. Garay and Marcelo B. Garay.

SO ORDERED.

Barredo, (Chairman), Aquino, Abad Santos, De Castro, Ericta, and Escolin, JJ., concur.

^[1]
Rollo, pp. 15-18.

^[2]
Id., p 19.

^[3]
Id., pp. 21-22.

^[4]
Id., pp. 23-25.

^[5]
Id., p. 26.

^[6]
Id., p. 27.

^[7]
Id., p. 33.

^[8]
Id., p. 30.

^[9]
Id., pp. 37-43.

^[10]
Id., pp. 49.

^[11]
Id., p. 50.

^[12]
Id., p. 65.

^[13]
Id., p. 85.

^[14]
Palomares vs. Jimenez, 90 Phil. 773.

^[15]
Coombs vs. Santos, 24 Phil. 446’