JOSE LEE DY PIAO, PLAINTIFF AND APPELLEE, VS. PAZ TY SIN TEI, ALIAS GUE KUY, DEFENDANT AND APPELLANT.

Jose Lee Dy Piao, claiming to be the only child of the late Dy Lac, by the
latter’s first marriage, filed Civil Case No. 25736 in the Court of First
Instance of Manila on March 19, 1955, to compel defendant Paz Ty Sin Tei to
deliver or reconvey certain properties allegedly belonging to his late father Dy
Lac, but unlawfully donated by the latter on 1938 to defendant Paz Ty while the
latter maintained extra-marital relations with the deceased. Plaintiff further
averred that the donations were based on illegal consideration and were, besides
inofficious, being in excess of the free part of Dy Lac’s estate; but that Paz
Ty, who is the executrix named in Dy Lac will, refused to bring said properties
into the estate. On April 11, 1955, defendant pleaded by way of answer that she
had been married to Dy Lac in 1942, and denied any impairment of plaintiff’s
legitime as a result of the questioned donations ; and counterclaimed for
damages.

Up to the filing of the answer to defendant’s .counterclaim, plaintiff had
been represented by Attorney Ignacio Lugtu. However, on June 7, 1955, Attorneys
Felipe S. Abeleda and Felipe T. Ang entered an appearance for plaintiff “in
collaboration with Attorney Ignacio Lugtu”.

On October 6, 1955, the court set the case for hearing on November 18, 1955,
and the clerk of court served notice of said hearing on Attorneys Abeleda and
Ang for plaintiff. When the date of the trial came, neither plaintiff nor any of
his counsel appeared; and upon defendant’s motion, the lower court dismissed the
case “with prejudice.”

On December 1, 1955, plaintiff, through Attorney Felipe S. Abeleda, filed a
motion for reconsideration, claiming that Attorney Ignacio Lugtu was and had
always been the principal counsel of record for plaintiff, the undersigned
counsel having entered his appearance in the case only in collaboration with
him; that Abeleda, a member of Congress, was in Occidental Mindoro from
September 1 to November 23, 1955 in connection with the campaign for the
elections of November 8, 1955, and came to know of the notice of the hearing of
the case only on November 26, 1955, when he returned to Manila and was informed
by his assistant that said notice was received; that while counsel for defendant
had always served copies of previous pleadings on plaintiff’s principal counsel
Attorney Ignacio Lugtu, he did not serve copy of his motion to set the case for
hearing on said counsel, and the clerk of court likewise failed to serve notice
of the hearing on said lawyer; that plaintiff failed to appear at the hearing
because of illness at the time, as shown by medical certificate attached to the
records of another case pending in the same court; and that unless plaintiff is
given ample opportunity to prove his allegations, his interests in Special
Proceedings No. 5541 would be jeopardized. This motion for reconsideration was,
on December 15, 1955, denied by the court, first, because it was not in due
form, and second, because service of notice upon one of the attorneys of record
in a case is sufficient and binding upon the party represented.

On December 23, 1955, Attorney Ignacio Lugtu, in behalf of plaintiff, asked
for leave to file a second motion for reconsideration, which was granted; and on
January 7, 1955, said counsel filed a second motion for reconsideration,
specifically charging defendant’s counsel with having procured the hearing of
November 18, 1955 by fraud, stealth or strategy calling attention to the fact
that all notices prior to that of the hearing of November 18, 1955 had been
served on the principal counsel of Ignacio Lugtu, and not on the collaborating
attorneys. In spite of vigorous opposition on the part of defendant, the lower
court, on January 19, 1956, amended its previous order of November 18, 1955
making the dismissal of the case “without prejudice”. Having failed to obtain
reconsideration of this last order, defendant appealed to this Court.

Appellant contends that since both motions were substantially identical, and
because the fraud averred in the second motion must have existed already when
the first motion was filed, the second did not interrupt the period for
appealing; and as said period had already elapsed when the court entered its
order amending that of November 18, 1955 (dismissing the action with prejudice),
said order had become final, and hence, that the amendatory order of January 19,
1956, was void as issued without jurisdiction.

After mature consideration of the peculiar circumstances obtaining in the
present case, we have reached the conclusion that the action of the court below
should be sustained.

Defendant appellant’s position that the two motions for reconsideration are
identical is not warranted, for the first motion for reconsideration of December
1, 1955, merely alleged excusable negligence, while that of December 23, 1955,
relied upon fraud or malice on the part of appellant’s counsel. This charge
necessarily injected a new fact, not theretofore averred or presented in the
first motion for the court’s consideration, and one that caused a substantial
difference between the two petitions, to wit: that the failure to notify the
principal counsel of the motion to set the case for trial was intentional and
calculated to take advantage of the absence of collaborating counsel upon whom
the motion to set was served. Consequently, the second motion for
reconsideration being on a materially different ground than the first, suspended
the period for appeal and the court retained jurisdiction to consider and decide
it.

It is a recognized rule that in matters of fraud, the cause of action arises
not upon the commission of the deception, but upon its discovery by the injured
party, and this principle applies under the peculiar circumstances of the case.
While it may be true that whatever deceit existed must have been practiced upon
appellee before the issuance of the order of November 18, 1955, there is nothing
on. record to positively show that such fraud had been discovered on the day the
first motion to reconsider was filed, either by appellee or attorney Abeleda who
filed the same. Furthermore, a charge of fraud is one not to be lightly made;
and we are not inclined to penalize appellee, by a final bar against his causes
of action, simply because his counsel did not immediately and recklessly jump
into conclusions and make a charge of fraud, but exercised proper restraint and
refrained from doing so until he felt reasonably certain of its existence.

Considering that the merits of the case have not been in any way inquired
into; and that a dismissal with prejudice would, under the facts of record in
the present case operate to bar appellee’s claim through mere technicality, we
do not believe that the action of the court, in converting such dismissal into
one without prejudice, exceeded the bounds of judicial discretion.

Wherefore, in the interest of equity and justice, the order appealed from is
affirmed, with costs against appellant.

So ordered.

Paras, C.J., Bengzon, Padilla, Montemayor, Reyes A., Bautista Angelo,
Labrador, Concepcion, Endencia, and Felix, JJ., concur.