PHILIPPINE PORTS AUTHORITY, PETITIONER, VS. SARGASSO CONSTRUCTION & DEVELOPMENT CORP., PICK& SHOVEL, INC., ATLANTIC ERECTORS, INC. (JOINT VENTURE), RESPONDENTS.

Philippine Ports Authority versus Sargasso Construction and Development Corporation

The Case

This is a petition for review on certiorari brought by the Philippine Ports Authority against the joint venture of Sargasso Construction and Development Corporation, Pick and Shovel, Incorporated, and Atlantic Erectors, Incorporated. The respondents sued the Authority for specific performance, asking the trial court to compel it to execute a supplemental contract for a reclamation project at the port of San Fernando, La Union. The case matters for two reasons. First, it is a procedural ruling on when a notice of appeal is deemed filed, and on when the Supreme Court will relax the mandatory period to appeal in the higher interest of substantial justice. Second, it is a warning to the Office of the Government Corporate Counsel about the consequences of its own negligence.

Procedural History

The respondents filed a complaint for specific performance with the Regional Trial Court of Manila, Branch 14. After trial, the court rendered judgment in favor of the respondents, ordering the Authority to execute the reclamation contract for 30,794,230.89 pesos and to pay the costs, and dismissing the counterclaim. The Authority, through the Office of the Government Corporate Counsel, moved for reconsideration, which was denied. It then filed a notice of appeal, which the trial court gave due course. In the Court of Appeals, the respondents moved to dismiss the appeal on the ground that the notice of appeal was filed six days late. The Court of Appeals granted the motion and dismissed the appeal, and it denied the Authority's motion for reconsideration. The Authority then came to the Supreme Court by petition for review on certiorari.

Facts

The Philippine Ports Authority undertook the development of the northwest ground quadrangle at the port of San Fernando, La Union, including the construction of a rock causeway and Pier 2. The pier and causeway project was awarded after public bidding to the consortium of Sargasso, Pick and Shovel, and Atlantic Erectors, which began work in August 1990. A separate component, the reclamation of 4,280 square meters adjacent to Pier 2, was not bid out. Instead, the General Manager of the Authority decided to negotiate the reclamation contract, subject to conditions, among them the completion of the installation of rubber dock fenders at Pier 2 and at the port of Tobaco.

In October 1992 the respondents offered to complete the reclamation as extra work for 36,294,857.03 pesos. The Authority's Assistant General Manager for Engineering replied that the proposal was not acceptable, but that if the price were lowered to 30,794,230.89 pesos, the project may be awarded subject to the approval of higher authority. The respondents agreed to the reduced price. In August 1993 the General Manager issued a Notice of Award conditioned on the completion of the fendering works, and the respondents accepted the condition.

After the fenders were installed, the General Manager presented the contract to the Board of Directors in September 1994. The Board rejected the contract and directed management to bid the project, noting that there was no basis to award it through negotiation because the pier project and the reclamation were not comparable. The respondents asked that the matter be reconsidered, but the Authority never advised them of any action on that request. In June 1997 the respondents filed their complaint for specific performance.

Issues

• Whether or not the Court of Appeals gravely abused its discretion in dismissing the petitioning Authority's appeal as filed out of time, when the copy of the trial court's decision was served on its Legal Services Department and not on the Office of the Government Corporate Counsel as lead counsel of record.
• Whether or not the case warrants the reinstatement of the appeal so that it may be resolved on the merits rather than on a technicality.

Applicable Provisions

Section 2 of Rule 13 of the Revised Rules of Court, as amended, governs service of pleadings and orders on a party represented by counsel:

SEC. 2. Filing and service, defined. — Filing is the act of presenting the pleading or other paper to the clerk of court. Service is the act of providing a party with a copy of the pleading or paper concerned. If any party has appeared by counsel, service upon him shall be made upon his counsel or one of them, unless service upon the party himself is ordered by the court. Where one counsel appears for several parties, he shall only be entitled to one copy of any paper served upon him by the opposite side.

This provision is the basis for the ruling that notice to any one of several counsel on record is notice to all, and starts the running of the period to appeal.

Section 4 of Rule 129 of the Revised Rules of Court governs judicial admissions:

SEC. 4. Judicial admissions. — An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that no such admission was made.

This provision binds the Authority to its admission in its brief that it received the trial court's decision on June 22, 1998.

Section 1, paragraph b, of Rule 50 of the Rules of Court authorizes the dismissal of an appeal for failure to file the notice of appeal within the prescribed period:

SECTION 1. Grounds for dismissal of appeal. — An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds: x x x (b) Failure to file the notice of appeal or the record on appeal within the period prescribed by these Rules; x x x

This provision supports the appellate court's authority to dismiss the appeal even without a motion by the appellee.

Ruling

On the first issue, the Court ruled against the Authority. The records showed that the Authority was represented in the trial court by the Office of the Government Corporate Counsel in collaboration with its Legal Services Department, through Atty. Francisquiel Mancile, under a special power of attorney appointing both offices through any of their lawyers. Hence, copies of the trial court's orders and decision could be served on the Authority through either office. The Court quoted its earlier ruling that notice to any one of several counsel on record is equivalent to notice to all, and such notice starts the time running for appeal notwithstanding that the other counsel on record has not received a copy of the decision. The Court acknowledged that the Office of the Government Corporate Counsel is the principal law office of government-owned corporations and was not itself served with the decision. But the Authority, through that Office, admitted in its brief that it received the decision on June 22, 1998. That admission was conclusive under the rule on judicial admissions. The Court also noted that the Authority never raised the defective service in its motion for reconsideration, and raised it only after the motion to dismiss was filed. The blame for the late notice of appeal lay with the Office of the Government Corporate Counsel, which received the order denying reconsideration and filed the notice only on the tenth day, beyond the five days remaining.

On the second issue, the Court ruled in favor of the Authority. It stressed that the right of appeal is statutory, and that perfection within the reglementary period is mandatory and jurisdictional. Nevertheless, it held that where strong considerations of substantive justice are manifest, the Court may relax the strict application of the rules. A six-day delay did not warrant outright dismissal. The Court noted that the respondents themselves offered no objection to the plea, and that the core issue was whether the award of the reclamation project for 30,794,230.89 pesos without public bidding and without the approval of the Board of Directors was contrary to law. Both parties had already filed their briefs in the appellate court. The Court therefore set aside the resolutions of the Court of Appeals and remanded the case for resolution of the appeal on the merits.

Doctrine

First, when a party has appeared by counsel, service upon any one of its counsel of record is service upon all, and such service starts the running of the period to appeal. Second, a party's admission in its brief that it received a copy of the decision on a stated date is a judicial admission, conclusive on it absent a showing of palpable mistake. Third, the perfection of an appeal within the reglementary period is mandatory and jurisdictional, and failure to perfect it renders the judgment final and executory. Fourth, in exceptional cases, where strong considerations of substantive justice are manifest, the Supreme Court may relax the strict application of the rules of procedure and give due course to an appeal filed late, especially where the delay is short, the appellate court has already obtained jurisdiction, and the case involves public interest.

Disposition

The petition was granted. The resolutions of the Court of Appeals dismissing the appeal were set aside, and the records were remanded to the Court of Appeals for further proceedings on the merits, without costs.

Remember This

Memorize this line: notice to any one of several counsel on record is notice to all, and it starts the period to appeal. Examiners use this case to test the interplay between the mandatory and jurisdictional nature of the appeal period and the Court's power to relax the rules in the higher interest of substantial justice.