ANDY QUELNAN, PETITIONER, VS. VHF PHILIPPINES, INC. AND VICENTE T. TAN, RESPONDENTS.

Quelnan versus VHF Philippines

The Case

This is a petition for review on certiorari brought by Andy Quelnan against VHF Philippines, Incorporated and Vicente Tan. Quelnan had sued the respondents in the Makati Regional Trial Court for rescission of an alleged verbal contract of sale and for damages, but his complaint was dismissed when neither he nor his counsel appeared at the pre-trial. He now asks the Supreme Court to reverse the Court of Appeals, which had refused to compel the trial court to give due course to his notice of appeal. The case matters for two reasons: it clarifies when an order denying a motion for reconsideration may itself be the subject of an appeal, and it restates the rule that mandamus will not lie to compel a discretionary act.

Procedural History

Quelnan filed his complaint for rescission and damages before Branch 142 of the Makati Regional Trial Court in October 1994. After the respondents answered, pre-trial was repeatedly reset to allow a possible amicable settlement. On January 17, 1997, neither Quelnan nor his counsel appeared, and the trial court dictated in open court an order declaring him non-suited and dismissing the complaint. His counsel filed a manifestation and motion to set aside that order, which was denied. Quelnan then filed an omnibus motion, which was likewise denied by an order dated March 12, 1997. He filed a notice of appeal on March 20, 1997. The trial court initially gave the notice due course and directed the elevation of the records, but later set that order aside on the ground that the notice of appeal was filed out of time. His motion for reconsideration was denied.

Quelnan then filed a petition for mandamus before the Court of Appeals, praying that the trial court be commanded to reinstate its order giving due course to his appeal. The Court of Appeals treated the petition as one for certiorari, since in essence it alleged grave abuse of discretion, but denied it. The appellate court held that the March 12, 1997 order denying the omnibus motion was not appealable, and that the January 17, 1997 order of dismissal, which should have been appealed but was not, had become final and executory. Hence this petition for review on certiorari before the Supreme Court.

Facts

Quelnan claimed that in 1989 he bought a condominium unit from the respondents and overpaid by 270,000 pesos. He alleged that he and the respondents verbally agreed that he would instead buy another unit, Unit 20-G, for 3,250,000 pesos, with the overpayment debited, leaving a balance of 2,980,000 pesos payable before the end of June 1991 without interest. He took possession and made several payments. In May 1991, when he offered to settle the balance, he was told the unit was mortgaged to Philippine Trust Company and that he was being charged the interest and penalties on the mortgage.

The respondents told a different story. They claimed they merely leased Unit 20-G to Quelnan at a monthly rental of 25,500 pesos plus 1,500 pesos for parking. When he failed to pay rentals, they filed an ejectment complaint before the Metropolitan Trial Court of Manila. Quelnan did not answer, and the court rendered a decision of ejectment in November 1992. He did not appeal, and he was in fact ejected from the unit.

Close to two years later, in October 1994, Quelnan filed his complaint for rescission and damages before the Makati Regional Trial Court. Pre-trial was repeatedly reset. On January 17, 1997, neither Quelnan nor his counsel appeared. His counsel later explained that he had forgotten to transfer the pre-trial entry from his 1996 diary to his 1997 diary. The trial court dismissed the complaint, and the subsequent motions for reconsideration were denied.

Issues

• Whether or not mandamus was the proper remedy to compel the trial court to give due course to the notice of appeal.
• Whether or not the notice of appeal was filed within the reglementary period.
• Whether or not an order denying a motion for reconsideration of an order dismissing a complaint is appealable.
• Whether or not the failure of counsel to record the pre-trial date in his diary constitutes excusable negligence.

Applicable Provisions

Section 9 of Rule 37 of the Rules of Civil Procedure provides:

Section 9. Remedy against order denying a motion for new trial or reconsideration. An order denying a motion for new trial or reconsideration is not appealable, the remedy being an appeal from the judgment or final order.

This provision is the textual anchor of the Court's ruling that only interlocutory orders denying reconsideration are shielded from appeal.

Section 1 of Rule 41 of the same Rules provides:

Section 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable. No order may be taken from: (a) an order denying a motion for new trial or reconsideration; x x x In all the above instances where the judgment or final order is not appealable, the aggrieved party may file an appropriate special civil action under Rule 65.

The Court read this provision together with Section 9 of Rule 37 to confirm that the proscription applies only to interlocutory orders, not to final orders of dismissal.

Ruling

On the first issue, the Court held that mandamus will lie only to compel the performance of a ministerial duty, not a discretionary one, and that the petitioner must show a well defined, clear and certain right. The timeliness of the notice of appeal determines whether giving due course to it is ministerial. If the notice is filed within the reglementary period, it becomes the ministerial duty of the trial court to give it due course; if not, the court cannot be compelled by mandamus.

On the second issue, the Court held that the notice of appeal was timely. Quelnan's counsel received the January 17, 1997 order on February 12, 1997. When he filed the manifestation and motion on January 24, 1997, before receiving the order, the fifteen-day period had not yet begun to run, because that period is reckoned from notice of the judgment or final order and is interrupted by the timely filing of a motion for reconsideration. When he received the order on February 12, 1997, twelve days of the period had elapsed. The filing of the omnibus motion on February 24, 1997 interrupted the period, which began to run again when counsel received the March 12, 1997 order on March 19, 1997. The notice of appeal filed on March 20, 1997 was thus on the thirteenth day of the fifteen-day period, and therefore timely.

On the third issue, the Court re-examined the rules and held that the proscription against appealing from an order denying a motion for reconsideration refers to an interlocutory order, not to a final order or judgment. The denial of a motion for reconsideration of an order dismissing a complaint is not interlocutory, but a final order, because it puts an end to the particular matter resolved and leaves nothing for the trial court to do but execute. Such an order is effectively an appeal of the order of dismissal itself. The Court thus deemed the notice of appeal's reference to the March 12, 1997 order as a reference to the January 17, 1997 order of dismissal.

On the fourth issue, the Court held that, technicality aside, the case fails on the merits. The failure of counsel to record the pre-trial date in his 1997 diary cannot amount to excusable negligence. To constitute excusable negligence, the absence must be due to a failure to take proper steps at the proper time, not in consequence of carelessness, inattention or willful disregard of the process of the court, but in consequence of some unexpected or unavoidable hindrance or accident. Counsel's omission reflected his carelessness. Pre-trial is mandatory, and being mandatory, the trial court has discretion to declare a party non-suited. Absent a showing of grave abuse of discretion, appellate courts will not interfere.

Doctrine

First, mandamus will lie only to compel a ministerial duty, not a discretionary one, and the petitioner must show a well defined, clear and certain right. The timeliness of a notice of appeal determines whether giving due course to it is ministerial.

Second, the fifteen-day period to appeal is reckoned from notice of the judgment or final order and is interrupted by the timely filing of a motion for new trial or reconsideration.

Third, under Section 9 of Rule 37 and Section 1 of Rule 41, the proscription against appealing from an order denying a motion for reconsideration applies only to interlocutory orders. An order denying a motion for reconsideration of an order dismissing a complaint is a final order and is effectively an appeal of the order of dismissal itself.

Fourth, the failure of counsel to record a pre-trial date in his diary is carelessness, not excusable negligence. Pre-trial is mandatory, and the trial court has discretion to declare a party non-suited.

Disposition

The petition was denied for lack of merit, and the decision of the Court of Appeals was upheld.

Remember This

The single line worth memorizing is that the proscription against appealing an order denying a motion for reconsideration applies only to interlocutory orders, not to a final order of dismissal. Examiners use this case to test the distinction between ministerial and discretionary duties in mandamus, the reckoning and interruption of the appeal period, and the standard for excusable negligence in pre-trial.