ASIA TRADERS INSURANCE CORPORATION, PETITIONER, VS. THE HONORABLE COURT OF APPEALS, RESPONDENT.

Asia Traders Insurance versus Court of Appeals

The Case

This is a petition for review on certiorari brought by Asia Traders Insurance Corporation against the Court of Appeals. The dispute traces back to an ejectment case in which a supersedeas bond, purportedly issued by Asia Traders, was levied upon to satisfy a judgment. Asia Traders insists the bond is fake and spurious, and it asks the Supreme Court to undo the rulings that held it bound. The case matters for two reasons: it is a working lesson on how the Supreme Court treats formal defects in petitions, and it is a firm statement on who bears the burden of proving that a bond is falsified, and on the consequences of failing to ask for an evidentiary hearing.

Procedural History

Cabever Realty Corporation filed an ejectment case against Eduardo Cua before the Metropolitan Trial Court of Manila. The trial court ruled for Cabever, ordering Cua to vacate the property and to pay back rentals. Cua appealed to the Regional Trial Court of Manila, and as a condition of that appeal he posted a supersedeas bond in the amount of 62,600 pesos, undertaken by Asia Traders.

The Regional Trial Court affirmed the decision of the Metropolitan Trial Court. Cabever then moved to withdraw the supersedeas bond, and the trial court granted the motion, ordering Cua to cause the release of the bond within three days from notice, failing which a writ of execution would issue against the bond. When Cua did not comply, Cabever moved for execution, and a writ of execution was issued against Asia Traders.

Asia Traders filed a motion for reconsideration, claiming it never issued the bond and that the bond was fake and spurious, and asking that the writ be recalled. The trial court denied the motion, and denied a second motion for reconsideration, which led to a notice of levy and sale of Asia Traders' property. Asia Traders then went to the Court of Appeals on certiorari with a prayer for a preliminary injunction and restraining order, impleading the presiding judge of the Regional Trial Court and the branch sheriff as respondents. The Court of Appeals denied the petition, both because it failed to implead Cabever as a respondent and because the material allegations were not substantiated. Reconsideration was denied, and Asia Traders came to the Supreme Court by petition for review.

Facts

Sometime in July 1994, Cabever filed an ejectment case against Eduardo Cua before the Metropolitan Trial Court of Manila. On December 6, 1994, the trial court ordered Cua to vacate the property and to pay back rentals. Cua appealed to the Regional Trial Court, and to perfect that appeal he posted a supersedeas bond of 62,600 pesos, undertaken by Asia Traders.

On June 26, 1995, the Regional Trial Court affirmed the trial court. Cabever then moved to withdraw the supersedeas bond, and the trial court granted the motion, directing Cua to cause the release of the bond within three days from notice, otherwise a writ of execution would issue against the bond. Cua failed to comply, so Cabever moved for execution, and a writ of execution was issued against Asia Traders.

Served with the writ, Asia Traders immediately moved for reconsideration, insisting that it never issued the bond, which it claimed was fake and spurious, and asking that the writ be recalled or set aside. The trial court denied the motion, and denied a second motion for reconsideration, opening the way for the notice of levy and sale of Asia Traders' property. Asia Traders then sought relief from the Court of Appeals, which denied the petition, and denied reconsideration. Hence this petition.

Issues

• Whether or not the petition should be dismissed for its formal defects, namely, the failure to implead Cabever as the adverse party and the erroneous impleading of the Court of Appeals as respondent.
• Whether or not the Court of Appeals erred in denying the petition for certiorari on the ground that its material allegations and arguments were not substantiated.
• Whether or not the Court of Appeals rendered a decision that failed to state clearly and distinctly the facts and the law on which it is based.
• Whether or not the trial court deprived Asia Traders of its right to due process by denying its motion for reconsideration without giving it an opportunity to present evidence that the bond was spurious.

Applicable Provisions

Section 4, paragraph a, of Rule 45 of the Rules of Court provides:

The petition shall state the full names of the appealing party as the petitioner and the adverse party as the respondent, without impleading the lower courts or judges thereof either as petitioners or respondents.

This is the provision the petition violated twice over: it failed to implead the adverse party, and it wrongly made the appellate court a respondent.

Ruling

On the first issue, the Court acknowledged that the petition indeed suffered from two defects, since only the Court of Appeals was impleaded as respondent. But the Court held that formal defects in petitions are not uncommon, and that while it has the discretion to dismiss, sound policy dictates that it is far better to dispose of cases on the merits rather than on a technicality, which may result in injustice. No prejudice would be caused to Cabever, which was an original party below and had been furnished all the pleadings and resolutions. The Court therefore granted the motion to admit the amended petition and denied Cabever's motion to be dropped as respondent, while admonishing Asia Traders to be more circumspect, noting that it had committed the very same omission before the Court of Appeals and then again before the Supreme Court.

On the second issue, the Court found that the Court of Appeals did not err in denying the petition for certiorari. It reviewed the appellate court's four findings: that the bond was in Asia Traders' own printed form; that the alleged genuine bond did not bear the signature of General Manager Susana Fong, and no affidavit from her attested that her signature on the subject bond was falsified; that a Supreme Court clearance attached to the bond lent credence to the presumption that the ordinary course of business was followed, with no evidence that the clearance was spurious; and that the bare allegation that the series number was not theirs was unsupported by proof. The Court restated the standard for certiorari:

For certiorari to lie there must be a capricious, arbitrary and whimsical exercise of power, the very antithesis of judicial prerogative in accordance with centuries of both civil law and common law traditions.

On the third issue, the Court held that the assailed decision did state clearly and distinctly the facts and the law. It was well organized and structured, reciting point by point its findings of fact followed by the applicable legal conclusion, and Asia Traders itself was able to point out and discuss each of the four findings, which refuted the contention that the decision was devoid of any statement of fact or law.

On the fourth issue, the Court held that the claim of denial of due process was not tenable. Proving that the bond is spurious rests with the petitioner, based on the principle that he who alleges a fact has the burden of proving it, and the evidence must be clear, positive and convincing. The trial court found the evidence insufficient, and so correctly denied the motion for reconsideration. By failing to ask for an evidentiary hearing, Asia Traders was deemed to have agreed to submit the motion for resolution based only on the pleadings. The plea to reopen the case appeared to be an afterthought, and it was too late in the day to ask for reopening. The Court closed with this rule:

Piecemeal presentation of evidence is not in accord with orderly justice.

Doctrine

First, formal defects in a petition for review, such as the failure to implead the adverse party or the erroneous impleading of the lower court or the Court of Appeals, do not automatically warrant dismissal. The Supreme Court may liberally treat the defect, allow amendment, and resolve the case on the merits, especially where no prejudice is caused to the adverse party, consistent with Section 4, paragraph a, of Rule 45.

Second, certiorari lies only where there is a capricious, arbitrary and whimsical exercise of power, the very antithesis of judicial prerogative.

Third, a decision that recites its findings of fact point by point, followed by the applicable legal conclusion, sufficiently complies with the requirement that it state clearly and distinctly the facts and the law.

Fourth, he who alleges that a bond is spurious bears the burden of proving it, and the evidence must be clear, positive and convincing. A party who submits a motion for resolution without asking for an evidentiary hearing is deemed to have agreed to submit it on the pleadings, and cannot later complain that it was not heard, for piecemeal presentation of evidence is not in accord with orderly justice.

Disposition

The petition for review was denied, and the decision and resolution of the Court of Appeals were affirmed, with no costs.

Remember This

The one line to memorize is that piecemeal presentation of evidence is not in accord with orderly justice, and that he who alleges a bond is spurious must prove it with clear, positive and convincing evidence. Examiners like to use this case on the liberal treatment of formal defects under Rule 45, on the burden of proving falsified bonds, and on the waiver of the right to an evidentiary hearing.