ATTY. ROGELIO E. SARSABA, PETITIONER, VS. FE VDA. DE TE, REPRESENTED BY HER ATTORNEY-IN-FACT, FAUSTINO CASTAÑEDA, RESPONDENTS.

Sarsaba versus Vda. de Te

The Case

This is a petition for review on certiorari brought directly to the Supreme Court by Atty. Rogelio E. Sarsaba against Fe Vda. de Te, represented by her attorney-in-fact Faustino Castañeda. The petitioner assails an order of the Regional Trial Court of Digos City denying his Omnibus Motion to Dismiss in a civil case for recovery of a motor vehicle. The case matters because it teaches the bar two enduring lessons: an order denying a motion to dismiss is interlocutory and cannot be appealed, and the death of a party does not necessarily extinguish a surviving action nor invalidate the proceedings already had.

Procedural History

The respondent filed a complaint for recovery of a motor vehicle with damages and prayer for delivery of the truck pendente lite before the Regional Trial Court, Branch 18, Digos City, Davao del Sur. The petitioner filed a Motion to Dismiss, which the trial court denied for lack of merit. The petitioner then filed an Answer. The National Labor Relations Commission and Sheriff Lavarez also filed their respective motions to dismiss, which the trial court likewise denied.

The case was transferred to Branch 19, then returned to Branch 18, and eventually retained by Branch 19. The respondent died during the pendency of the case. The petitioner then filed an Omnibus Motion to Dismiss on the grounds of lack of jurisdiction over one of the principal defendants and lack of legal personality of the respondent's attorney-in-fact. The trial court denied the Omnibus Motion in its Order dated March 22, 2006. The petitioner's Motion for Reconsideration was likewise denied. The petitioner then filed a petition for review on certiorari directly with the Supreme Court, raising pure questions of law.

Facts

On February 14, 1995, a Decision was rendered in a labor case finding Patricio Sereno to have been illegally dismissed and ordering Teodoro Gasing to pay him monetary claims. After the Writ of Execution was returned unsatisfied, an Alias Writ of Execution was issued directing Sheriff Fulgencio R. Lavarez to satisfy the judgment award. On July 23, 1996, Lavarez, accompanied by Sereno and his counsel, the petitioner Atty. Rogelio E. Sarsaba, levied a Fuso Truck which at that time was in the possession of Gasing. On July 30, 1996, the truck was sold at public auction with Sereno as the highest bidder.

Meanwhile, the respondent Fe Vda. de Te, represented by her attorney-in-fact Faustino Castañeda, filed a complaint for recovery of the motor vehicle against the petitioner, Sereno, Lavarez, and the National Labor Relations Commission. She alleged that she is the wife of the late Pedro Te, the registered owner of the truck; that Gasing merely rented the truck from her; that Lavarez erroneously assumed that Gasing owned the truck because he was in possession of the same; and that since neither she nor her husband were parties to the labor case, she should not be made to answer for the judgment award.

The petitioner filed a Motion to Dismiss, which the trial court denied. He then filed his Answer. The respondent died on April 12, 2005, during the pendency of the case. The petitioner then filed an Omnibus Motion to Dismiss, which the trial court denied in its Order dated March 22, 2006. The petitioner's Motion for Reconsideration was denied, prompting him to file the present petition directly with the Supreme Court.

Issues

• Whether or not the petitioner correctly availed of the mode of appeal under Rule 45 of the Rules of Court from an order of the Regional Trial Court denying his Omnibus Motion to Dismiss.
• Whether or not the failure to serve summons on Patricio Sereno, who died before service, is a ground for dismissing the complaint against all the defendants.
• Whether or not the death of the respondent during the pendency of the case extinguishes the action and renders the proceedings invalid.
• Whether or not the attorney-in-fact lost his legal personality to prosecute the case upon the death of the respondent.

Applicable Provisions

Section 1, Rule 41 of the Rules of Court provides:

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 or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims and third-party complaints, while the main case is pending, unless the court allows an appeal therefrom; and (h) An order dismissing an action without prejudice.

This provision bears on the case because it establishes that an interlocutory order, such as an order denying a motion to dismiss, is not appealable.

Section 16, Rule 3 of the 1997 Rules of Civil Procedure provides:

Whenever a party to a pending action dies, and the claim is not extinguished, the court shall forthwith order said legal representative or representatives to appear and be substituted within a period of thirty (30) days from notice.

This provision bears on the case because it governs the substitution of a deceased party and underscores that the rule is a requirement of due process, not a matter of jurisdiction.

Section 1, Rule 87 of the Rules of Court provides:

Actions to recover real or personal property or an interest thereon, actions to enforce liens thereon, and actions to recover damages for an injury to a person or a property, may be filed against the decedent's representatives.

This provision bears on the case because it enumerates the actions that survive the death of a party, and the action for recovery of the motor vehicle falls within its coverage.

Ruling

On the first issue, the Court held that the petitioner incorrectly availed of the mode of appeal under Rule 45. An order denying a motion to dismiss is interlocutory and is not appealable. The proper remedy is to file an answer, interpose the objections as defenses, proceed to trial, and then appeal the interlocutory order as part of the appeal from the final judgment. Alternatively, the aggrieved party may file a special civil action for certiorari under Rule 65, but only when the order was issued without or in excess of jurisdiction or with grave abuse of discretion. The Court stressed that allowing appeals from interlocutory orders would result in a counterproductive ping-pong to and from the appellate court and would cause multiplicity of appeals, delaying the trial on the merits.

On the second issue, the Court held that the failure to serve summons on Sereno, who died before service, is not a ground for dismissing the complaint against all the defendants. Jurisdiction over a party is acquired by service of summons. However, the failure to acquire jurisdiction over one's person is a defense personal to the person claiming it. Since Sereno died, he could no longer invoke it, and the petitioner could not invoke it on his behalf. The other defendants were validly served with summons and had submitted their responsive pleadings. Only the case against Sereno should be dismissed, and the same may be filed as a claim against his estate.

On the third issue, the Court held that the death of the respondent did not extinguish the action. The action for recovery of a personal property, a motor vehicle, is an action that survives pursuant to Section 1, Rule 87 of the Rules of Court. The rule on substitution is not a matter of jurisdiction but a requirement of due process. The failure of counsel to inform the court of the death of his client, such that no substitution is effected, will not invalidate the proceedings and the judgment rendered thereon if the action survives the death of such party. The trial court's jurisdiction over the case subsists despite the death of the party.

On the fourth issue, the Court held that the special power of attorney executed by the respondent in favor of Faustino Castañeda was constituted for the benefit solely of the principal. Agency is extinguished by the death of the principal. The exception is when the agency has been constituted in the common interest of the principal and the agent, or in the interest of a third person who has accepted the stipulation in his favor. Neither exception applies. However, the Court held that this ground does not cause the dismissal of the complaint because the action survives the death of the respondent.

Doctrine

An order denying a motion to dismiss is interlocutory and is not appealable. The proper remedy is to proceed to trial and appeal the interlocutory order as part of the appeal from the final judgment, or to file a special civil action for certiorari under Rule 65 when the order was issued without or in excess of jurisdiction or with grave abuse of discretion.

The failure to serve summons on one defendant is a defense personal to that defendant and does not warrant the dismissal of the complaint against the other defendants who were validly served.

The rule on substitution of parties is not a matter of jurisdiction but a requirement of due process. Non-compliance with the rule does not invalidate the proceedings if the action survives the death of the party.

An action for recovery of personal property survives the death of a party pursuant to Section 1, Rule 87 of the Rules of Court.

Agency is extinguished by the death of the principal, except when the agency has been constituted in the common interest of the principal and the agent, or in the interest of a third person who has accepted the stipulation in his favor.

Disposition

The petition was dismissed. The Court affirmed the order of the Regional Trial Court denying the petitioner's Omnibus Motion to Dismiss, and ordered that the case proceed with respect to the three other defendants.

Remember This

An order denying a motion to dismiss is interlocutory and cannot be appealed; the remedy is to proceed to trial and appeal the interlocutory order as part of the appeal from the final judgment. Examiners use this case to test the distinction between final and interlocutory orders, the proper modes of appeal under Rules 41, 42, 45, and 65, and the rules on substitution of parties and survival of actions.