RINCONADA TELEPHONE COMPANY, INC., PETITIONER, VS. HON. CARLOS R. BUENVIAJE, IRIGA TELEPHONE COMPANY, INC., AND FRANCISCO IMPERIAL, RESPONDENTS.

Rinconada Telephone versus Buenviaje

The Case

This is a petition for certiorari and mandamus filed by Rinconada Telephone Company against Judge Carlos Buenviaje, Iriga Telephone Company, and Francisco Imperial. Rinconada asks the Supreme Court to set aside the trial judge's order refusing to let it appeal from the dismissal of its two civil complaints, and to compel the judge to allow that appeal. The case matters because it is a clean illustration of two procedural rules that examiners love: who is the counsel of record upon whom notices must be served, and when a court may relax the rules of procedure in the interest of substantial justice.

Procedural History

Rinconada filed two civil cases before the then Court of First Instance of Iriga City, one for breach of contract with damages and one for annulment of a deed of sale with damages. Both were assigned to Judge Buenviaje. After Imperial was acquitted in a related criminal case for estafa, he moved to dismiss the civil cases on the ground of res judicata, and the trial judge granted the motion in two orders dated September 16 and 29, 1977. Rinconada, through a new lawyer, Attorney Benjamin Santos, sought reconsideration, but the judge refused to reconsider. Rinconada then filed a notice of appeal and an appeal bond. Imperial opposed the appeal as filed out of time, and in an order dated January 23, 1978 the trial judge denied the notice of appeal. Rinconada went directly to the Supreme Court by petition for certiorari and mandamus.

Facts

On July 30, 1971, Francisco Imperial orally conveyed to Rinconada Telephone Company a certificate of public convenience and necessity to operate a telephone company in Iriga City, in consideration of 12,500 pesos paid in the form of 125 shares of stock at 100 pesos per share. Rinconada began operating under that certificate, and on October 14, 1971 the parties executed the deed of sale embodying their earlier agreement.

On September 21, 1972, Imperial sold the same certificate to Iriga Telephone Company, and this second sale was approved by the then Public Service Commission. Rinconada charged Imperial with estafa before the Court of First Instance of Manila, and also filed the two civil actions in Iriga City. Imperial was acquitted in the criminal case because his guilt was not proven beyond reasonable doubt, and he then moved to dismiss the civil cases on the ground of res judicata.

The trial judge dismissed both civil cases. Rinconada's original counsel of record was Attorney Luciano Maggay, who received a copy of the dismissal order on October 11, 1977. Twenty eight days later, Attorney Benjamin Santos, another counsel for Rinconada, filed a motion for reconsideration, which the judge denied. The judge sent the order denying reconsideration to Attorney Maggay, not to Attorney Santos. Rinconada's notice of appeal and appeal bond were filed on April 19, 1978, and its record on appeal on June 7, 1978, both beyond the thirty day reglementary period counted from Attorney Maggay's receipt. The trial judge denied the appeal as filed out of time.

Issues

• Whether or not the trial judge gravely abused his discretion in denying Rinconada's notice of appeal on the ground that it was filed out of time.
• Whether or not the service of the order denying reconsideration upon Attorney Maggay, rather than upon Attorney Santos, was proper service that started the running of the period to appeal.
• Whether or not the rules of procedure may be relaxed in this case in the interest of substantial justice.

Applicable Provisions

Section 26 of Rule 138 of the Rules of Court governs substitution of counsel and provides:

Section 26. Change of attorneys. An attorney may retire at any time from any action or special proceeding, by the written consent of his client filed in court. He may also retire at any time from an action or special proceeding, without the consent of his client, should the court, on notice to the client and attorney, and on hearing, determine that he ought to be allowed to retire. In case of substitution, the name of the attorney newly employed shall be entered on the docket of the court in place of the former one, and written notice of the change shall be given to the adverse party.

This provision bears on the case because the Court held that no valid substitution of Attorney Maggay ever took place, so he remained the counsel of record for purposes of service.

Ruling

On the first issue, the Court held that the trial judge gravely abused his discretion amounting to lack of jurisdiction in denying the notice of appeal. The Court acknowledged the general rule that a client may terminate the services of his counsel at any stage, but held that any change or substitution must be made upon written application, with the written consent of the client, with the written consent of the attorney to be substituted, and, where that consent cannot be obtained, with at least proof of notice of the motion for substitution served upon him. Undisputedly there was no valid substitution, and Attorney Maggay never formally withdrew. He therefore remained counsel of record upon whom the court's processes were to be served.

On the second issue, the Court nevertheless found circumstances warranting a relaxation of that rule. The trial judge had himself recognized Attorney Santos as the new counsel, by sending him the order submitting the motion for reconsideration for resolution and by referring to Attorneys Maggay and Raneses as former counsels and to Attorney Santos as the new counsel in the order denying reconsideration. Having acknowledged Attorney Santos, the judge committed a clear case of negligence in not furnishing him a copy of the order denying reconsideration. The Court called the judge's sudden change of posture a whimsical and capricious exercise of discretion.

On the third issue, the Court stressed that while the Rules should be faithfully observed, courts should not be so strict about procedural lapses as to impair the administration of justice, especially when strict compliance was apparently relaxed by the trial court itself. The Court quoted with approval the rule that technicalities should not be resorted to in derogation of the intent and purpose of the rules, which is the proper and just determination of litigation, and that every party litigant should be afforded the amplest opportunity for the proper and just disposition of his cause, free from the constraints of technicalities.

Doctrine

First, a client may change or substitute counsel at any stage of the proceedings, but the substitution is valid only upon written application, with the written consent of the client, with the written consent of the attorney to be substituted, and, where that consent cannot be obtained, with at least proof of notice of the motion for substitution served upon him under Section 26 of Rule 138. Absent a valid substitution or formal withdrawal, the original counsel remains the counsel of record upon whom notices must be served, and notice to him is notice to the client.

Second, where the trial court itself has recognized the new counsel by serving orders upon him, it cannot later insist that the former counsel is the counsel of record; doing so is a whimsical and capricious exercise of discretion amounting to grave abuse of discretion. Procedural rules may be relaxed in meritorious cases, because there is no vested right in technicalities and the higher objective of the rules is the protection of the substantive rights of the parties.

Disposition

The Supreme Court granted the writs prayed for and ordered the trial court to allow Rinconada's appeal from the orders dismissing the two civil cases.

Remember This

The single line to memorize: no valid substitution or withdrawal means the old counsel remains the counsel of record, but a court that itself recognizes the new counsel cannot later deny him notice and then bar the appeal on a technicality. Examiners use this case for bar questions on substitution of counsel, service of notices, and the liberal construction of the Rules of Court in favor of substantial justice.