ROGELIO GUEVARRA AND EDGARDO BANTUGAN, PETITIONERS, VS. SPOUSES ENGRACIO AND CLAUDIA BAUTISTA, JESUS DANAO AND CECILIA LACSON, RESPONDENTS.

Guevarra versus Bautista

The Case

This is a petition for review on certiorari brought by Rogelio Guevarra and Edgardo Bantugan against the spouses Engracio and Claudia Bautista, together with Jesus Danao and Cecilia Lacson. The spouses Bautista had sued the petitioners to recover money they had lent, and the trial court ordered the petitioners to pay. The petitioners lost their chance to appeal, and instead of appealing they asked the trial court to relieve them from the judgment. The Supreme Court's decision matters because it draws a hard line around the remedy of petition for relief from judgment: that remedy is equitable, exceptional, and cannot be used as a back door to revive an appeal that was lost through the negligence of one's own counsel.

Procedural History

The spouses Bautista filed a complaint for reimbursement of loan payments and collection of money with damages before the Regional Trial Court of Olongapo City, which was raffled to Branch 73. The petitioners in turn filed a third-party complaint against Jesus Danao and Cecilia Lacson, on the theory that the money borrowed was invested in the latter's project. After trial, the Regional Trial Court rendered judgment in favor of the spouses Bautista and against the petitioners, ordering them to pay the principal amount with interest, plus attorney's fees and litigation expenses. The petitioners moved for reconsideration, and the motion was denied. No appeal was taken. Instead, the petitioners filed a petition for relief from judgment, attributing their failure to appeal to the excusable negligence of their counsel. The Regional Trial Court denied the petition for relief for lack of merit, finding no fraud, accident, mistake, or excusable negligence.

The petitioners then appealed to the Court of Appeals. After they filed their appellants' brief, Cecilia Lacson moved to dismiss on the ground that the issues raised went to the merits of the collection case and not to the denial of the petition for relief. The Court of Appeals granted the motion and dismissed the appeal, holding that the appeal was filed beyond the reglementary period and that no appeal may be taken from an order denying a petition for relief from judgment. The petitioners' motion for reconsideration was denied. Hence, the petitioners came to the Supreme Court by petition for review on certiorari under Rule 45.

Facts

On June 9, 1988, the spouses Engracio and Claudia Bautista filed a complaint for reimbursement of loan payments and collection of money with damages against the petitioners Rogelio Guevarra and Edgardo Bantugan, and against the spouses Aguinaldo and Remegia Santos, before the Regional Trial Court of Olongapo City. The petitioners filed a third-party complaint against Jesus Danao and Cecilia Lacson, alleging that the amount borrowed was invested in the latter's project.

After trial, on January 5, 1996, the Regional Trial Court rendered judgment in favor of the spouses Bautista and against the petitioners, ordering the petitioners to pay jointly and severally the amount of 200,000 pesos with interest at 18 percent per annum from the date it was borrowed on February 20, 1987 until the full amount shall have been paid, within sixty days from receipt of the decision, plus 15,000 pesos as attorney's fees and 7,000 pesos as litigation expenses. The petitioners' motion for reconsideration was denied on June 4, 1996. No appeal was taken.

Instead, on July 15, 1996, the petitioners filed a petition for relief from judgment, claiming that they failed to seasonably appeal because of accident, honest mistake, and excusable negligence. They attributed their failure to appeal to the excusable negligence of their counsel, who, at the time of receipt of the decision, was busy preparing for a conference in Baguio City. They also raised anew the defenses they had set up in the collection case. On September 16, 1996, the Regional Trial Court denied the petition for relief for lack of merit, holding that the issues raised were the same ones already resolved in the motion for reconsideration, and that there was no showing of fraud, accident, mistake, or excusable negligence.

Issues

• Whether or not the Court of Appeals erred in dismissing the appeal interposed by the petitioners.
• Whether or not the trial court erred in declaring the petitioners civilly liable in the collection case.

Applicable Provisions

Section 1, Rule 41 of the Rules of Court, on appeal from the Regional Trial Court, 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 appeal may be taken from: (a) An order denying a motion for new trial or reconsideration; (b) An order denying a petition for relief or any similar motion seeking relief from judgment; (c) An interlocutory order; (d) An order disallowing or dismissing an appeal; (e) An order denying a motion to set aside a judgment by consent, confession or compromise on the ground of fraud, mistake or duress, or any other ground vitiating consent; (f) An order of execution; (g) A judgment for contempt or contempt proceedings, or a judgment or final order in a criminal case; or (h) A judgment or final order of the Regional Trial Court in an action for annulment of judgment or a petition for relief from judgment.

This provision is the basis for the Court of Appeals' holding that no appeal may be taken from the order denying the petition for relief, and it frames the Supreme Court's ruling that the appeal was properly dismissed.

Section 1, Rule 50 of the Rules of Court, on grounds for dismissal of appeal, provides:

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: (a) Failure of the appellant to take the necessary steps for the perfection of the appeal within the period prescribed by these Rules; (b) Failure to file the notice of appeal or the record on appeal within the period prescribed by these Rules; (c) Failure of the appellant to pay the docketing and other lawful fees as provided in Section 4 of Rule 46; (d) Unauthorized alterations, omissions or additions in the approved record on appeal as provided in Section 4 of Rule 44; (e) Failure of the appellant to serve and file the required number of copies of his brief or memorandum within the time provided by these Rules; (f) Absence of specific assignment of errors in the appellant's brief, or of page references to the record as required in Section 13, paragraphs (a), (c), (d) and (f) of Rule 44; (g) Failure of the appellant to show that the appeal was perfected within the reglementary period; and (h) Failure of the appellant to comply with the Rules or with any lawful order of the court.

This provision is the ground on which the Court of Appeals dismissed the appeal, having found that the appeal was perfected beyond the reglementary period.

Ruling

On the first issue, the Court held that the petition is without merit. Relief from judgment is a remedy provided by law to any person against whom a decision or order is entered through fraud, accident, mistake, or excusable negligence. It is a remedy equitable in character, allowed only in exceptional cases when there is no other available or adequate remedy. When a party has another remedy available to him, such as a motion for new trial or an appeal from an adverse decision, and he was not prevented by fraud, accident, mistake, or excusable negligence from filing such motion or taking such appeal, he cannot avail of the remedy of petition for relief.

The Court found that the petitioners' counsel received the order denying their motion for reconsideration, but failed to file a notice of appeal because the receipt of the order was not brought to his attention, as he was then busy preparing to leave for a conference in Baguio City. The Court held that negligence, to be excusable, must be such that ordinary diligence and prudence could not have guarded against it. Counsel's oversight could hardly be characterized as excusable, much less unavoidable. Clients are bound by the mistakes, negligence, and omission of their counsel, and the circumstances did not convince the Court to take the exception.

The Court emphasized that fraud, accident, mistake, or excusable negligence should first be established before relief from judgment can be granted. Relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence or that of his counsel; otherwise, the petition for relief can be used to revive the right to appeal which had been lost through inexcusable negligence. The Court warned that if relief were granted on the flimsy excuse that the failure to appeal was due to the neglect of counsel, all that a defeated party has to do to salvage his case would be to claim neglect or mistake on the part of his counsel, and there would then be no end to litigation.

On the second issue, the Court did not reach the merits of the collection case. Having found that the petition for relief was properly denied and that the appeal was properly dismissed, the Court affirmed the resolutions of the Court of Appeals.

Doctrine

A petition for relief from judgment is an equitable remedy, allowed only in exceptional cases when there is no other available or adequate remedy. It cannot be availed of to revive a lost appeal. The party seeking relief must first establish fraud, accident, mistake, or excusable negligence that prevented him from taking a motion for new trial or an appeal. Negligence, to be excusable, must be such that ordinary diligence and prudence could not have guarded against it. Clients are bound by the mistakes, negligence, and omission of their counsel. No appeal may be taken from an order denying a petition for relief from judgment, and an appeal that raises the merits of the original decision rather than the denial of the petition for relief is an appeal filed beyond the reglementary period and may be dismissed under Section 1, Rule 50 of the Rules of Court.

Disposition

The petition was denied, and the resolutions of the Court of Appeals dismissing the appeal were affirmed. The spouses Bautista prevailed.

Remember This

A petition for relief from judgment cannot be used to revive a lost appeal, and the negligence of counsel binds the client. Examiners use this case to test the requisites of relief from judgment, the rule that no appeal lies from an order denying such relief, and the doctrine that clients are bound by the mistakes and negligence of their counsel.