BA FINANCE CORPORATION, PETITIONER, VS. COURT OF APPEALS, HON. PONCIANO C. INOPIQUEZ, PRESIDING JUDGE OF BRANCH XIV OF THE RE­GIONAL TRIAL COURT OF MANILA, AND WILSON SIY, RESPO…

The petitioner here asks us to review on certiorari a
Court of Appeals’ decision which affirmed a trial court order denying BA
Finance Corporation’s notice of appeal for having been filed beyond the
fifteen-day reglementary period.

On 15 June 1986, Yanky Hardware Company, Inc. (“Yanky”)
applied for and was granted by BA Finance Corporation (“BA Finance”),
a credit accommodation in the form of a discounting line under which the former
could from time to time discount with, and assign its trade receivables to, BA
Finance. To secure the payment of all
loans obtained or to be
obtained, Yanky executed a chattel mortgage^[1] over
its stock-in-trade or merchandise inventory in favor of BA Finance. To guarantee those loans, Antonio Ngui Yek
Siem, President and General Manager of Yanky, executed a continuing suretyship
agreement^[2] in favor of BA Finance.

On various occasions, Yanky drew on that credit accommoda­tion
and executed in favor of BA Finance separate deeds of assignment.

In time, BA Finance demanded from Yanky the payment of its
accumulated obligations which, as of
20 October 1981, had allegedly
reached the amount of P559,565.00, or the delivery of the mortgaged chattels
for purposes of extrajudicial
foreclosure.

On 21 October 1981, BA Finance filed with the then Court of First
Instance (“CFI”) a complaint
against Yanky and Antonio Ngui Yek Siem for replevin with damages or, in the
alternative, payment of the amount of P559,565.00 plus interest. BA Finance
contended that it had the right to take possession of the chattels described in
the chattel mortgage or to be paid the total amount of the loans plus interest
since Yanky had breached the conditions of the chattel mortgage by failing to
pay the amounts secured thereby.

On 26 October 1981, the CFI ordered the seizure of all the
merchandise inventories and other personal properties described in the chattel
mortgage. Sheriff Rolando Balingit
accordingly seized chattels found in the premises of Yanky and later transferred
these to BA Finance’s warehouse. Balingit submitted a sheriff’s receipt^[3]
dated 26 October 1981 containing a list of the properties seized, and a
sheriff’s return^[4]
dated 4 November 1981. But on 5
November 1981, sheriff Balingit filed another report^[5]
dated 5 November 1981 which according to him superseded the earlier list,
stating therein that this list was arrived at after he and some BA Finance
employees had conducted a re-inventory of the replevied chattels in BA
Finance’s warehouse.

Yanky and Antonio Ngui Yek Siem filed an answer claiming that
since not all of their obligations were due, BA Finance had as yet no cause of action against
them.

Meanwhile, Yanky came into deep financial difficulties. Rizal Commercial Banking Corporation
(“RCBC”), China Banking Corporation (“China Bank”) and
International Corporate Bank (“InterBank”) intervened in the replevin
case as creditors of Yanky. During a
pre-trial conference on 27 February 1984 RCBC moved for the sale at public auction of the replevied chattels in
order to prevent further depreciation of their value. BA Finance and the rest of the intervenors accepted^[6] that suggestion; on the same day, the CFI
accordingly issued an order stating among other things that:

“Considering that all lawyers appearing in this case have agreed to the sale of
the properties enumerated in the list of properties mortgaged, page 40 of
the record at public auction, under the supervision of the Deputy
Sheriff of this court, upon the joint motion of Atty. Noel Ebarle for plaintiff and Atty. Venerando Parungo
for intervenor RCBC, the pre-trial
conference is hereby reset to April 2, 1984 at 8:30 sharp. The court directs that the proceeds of the
auction sale be deposited in a government bank.

x x x                 x x x                x x
x.”^[7]

After having been
rescheduled twice, a public auction sale was finally conducted on 31 April 1984 at BA
Finance’s Warehouse in Epifanio de los Santos Ave., Mandaluyong, Metro
Manila. The highest bidder was private
respondent Wilson Siy whose winning bid was P60,000.00. After the sale, Deputy Sheriff Rodolfo P.
Torella submitted a Sheriff’s Report.^[8]
BA Finance, however, moved to
cancel the auction sale on the ground that while it (BA Finance) was ready to bid for the auctioned properties for P150,000.00,
it had been improperly deprived of its right to participate in the bidding by the sheriff who insisted that BA
Finance pay for its bid in cash. BA
Finance was thus forced to put together P150,000.00 in bills and since the
counting of the bills took sometime, its representative arrived late for the bidding. The trial court cancelled^[9]
the auction sale on the ground that the price realized was shockingly low, the
auction sale having been hastily conducted. Later, however, this order was reconsidered by the trial court after Siy
posted a bond in the amount of P140,000.00.

Siy then filed a Motion with the trial court seeking the
production and delivery of certain chattels allegedly sold in the auction sale
but not delivered by BA Finance to him. BA Finance countered that the chattels referred to by Siy as still
undelivered were those included in an inventory list attached to the sheriff’s
report dated 5 November 1981, which list had not been furnished to BA Finance
prior to the auction sale and which, more importantly, according to BA Finance,
listed not only chattels replevied by Yanky but also other personalty which had
been repossessed from BA Finance’s other clients. The trial court appointed a commissioner to look into the
matter. The first commissioner rendered
a report stating that BA Finance should produce or account for certain
undelivered personal properties. BA
Finance and the intervenor banks opposed this report and the court disapproved
it. A second commissioner was designated by the trial court. This commissioner similarly reported that
not all of the properties mortgaged and sold at a public auction had been delivered to Siy as highest bidder. The second report was approved by the trial
court in an order^[10] dated 11 June 1985.

BA Finance moved for reconsideration of this last order of the
trial court, without success. On 24
September 1985, the CFI issued an order the dispositive portion of which
required BA Finance to deliver the allegedly missing chattels or their value:

“WHEREFORE, subject to the modification as stated above, the
order of this Court dated July 31, 1985 is hereby reconsidered and modified
accordingly. The Motion for Issuance of
a Writ of Execution is denied.

The plaintiff is hereby directed to deliver to highest bidder
Wilson Siy the aforementioned list of properties or if not possible the
equivalent amount thereof. And for this purpose, Atty. Noel O. Ebarle is
hereby directed to manifest in writing within five (5) days from receipt hereof
his preference as to the basis of the price whether to follow the pricelist as already stated on page 40 of the records or the current price
in which case there is a necessity of appointing a committee to canvass the current price. And if the plaintiff chooses the latter, then this Court is hereby
appointing Atty. Francisco Sanchez III, legal researcher of this Court as
Chairman and one representative for the highest bidder, as members. And if the choice is
the former, then it is only a
matter of computation. In the event that there is no manifestation
from the plaintiff within five (5) days from receipt of this Order, then it is
understood that the price
list as stated on page
40 of the records (list of mortgaged properties) would be the basis for the
Court to determine the price of the undelivered properties.”^[11]
(Underscoring supplied)

This time, it was Siy who filed a Motion for Recon­sideration. He contended that because BA Finance was
depository of the chattels, it should be made liable to him for damages for
having failed to deliver the chattels listed in an inventory dated 27 October
1981. The Court issued an order dated 22 January 1986 which provided in
its dispositive portion as follows:

“WHEREFORE, the order of September 24, 1985 is hereby amended
and/or modified in that the plaintiff
[BA Finance] is hereby directed to deliver to the highest bidder, Wilson Siy, the properties appearing in
the list of inventory attached to the Sheriff’s report dated November 5, 1981
as appearing on pp. 188-200
of the record of this case minus the properties already delivered on
June 28, 1984 to Mr. Wilson Siy, and if this is not possible, to pay the
equivalent amount thereof. In
determining the amount of these properties, the Court hereby appoints a
committee to be chaired by Atty. Francisco Sanchez III, Legal Researcher of
this Court, and one representative each from the plaintiff and the highest
bidder, as
members, to canvass the current
price of the subject properties and to make a report thereon within twenty (20)
days from the date the committee is formed.”^[12]
(Underscoring supplied)

On 20 February 1986, i.e., twenty-three (23) days after its
receipt of the order last quoted above, BA Finance filed its notice of appeal
and a record on appeal with the CFI. The trial court, however, in an order dated 2 June 1986, disapproved the notice of appeal and record
on appeal as having been filed out of time. BA Finance’s Motion for Reconsideration of this order was denied.

BA Finance then went to the Court of Appeals on a Petition for Mandamus
and Certiorari, seeking to set aside the CFI’s orders of 2 June 1986 and
16 July 1986. Petitioner there urged
that the CFI order of 22 January 1986 had resolved, not the replevin case
itself but rather an incidental issue therein; that the case was one where
multiple appeals were proper; and that, therefore, the reglementary period for
appeal was thirty (30) days and not fifteen
(15) days.

The Court of Appeals dismissed^[13]
the Petition, ruling that since the order of the CFI dated 22 January 1986 had
fully disposed of the replevin case, the applicable reglementary period for
appeal was fifteen (15) days from BA Finance’s receipt of a copy of that
order. The Court of Appeals concluded
that petitioner’s notice of appeal had not been seasonably filed.

Thus, this Petition for Review.

Two (2) issues are raised here: the first relates to the character of the order of the trial court dated
22 January 1986; the second concerns the reglementary period applicable in respect of an appeal from that order of
the trial court.

1.  The principal case filed
by BA Finance against Yanky was, we already
noted, for replevin, and in the alternative, collection of the amount of the
loans, plus interest, owed by Yanky to BA Finance. Sections 9 and 10 of Rule 60 on “Delivery of Personal
Property,” of the Revised Rules of Court state that:

“SEC. 9. Judgment.
– After a trial of the issues
the court shall find in whom is the right of possession and the
value of the property and shall
render judgment in the alternative for the delivery thereof to the
party entitled to the same, or for the value in case delivery cannot be
made, and also for such damages as either party may prove, and for
costs.”

“SEC. 10. Judgment to
include recovery against sureties. – The amount, if any, to be awarded to
either party upon any
bond filed by the other in accordance with the provisions of this rule,
shall be claimed, ascertained, and granted under the same procedure as
prescribed in section 20 of Rule 57.” (Underscoring supplied)

The 22 January 1986 order of the trial
court merely directed BA Finance to turn over to Wilson Siy, as highest bidder
in the public sale, properties which had allegedly been sold at a public
auction but which had supposedly remained undelivered to the latter. That order never passed upon the right of
either of the original parties, BA Finance or Yanky Hardware, to take or keep
possession of the replevied items. That
order, moreover, did not resolve a claim by BA Finance that not all the
movables mortgaged under the chattel mortgage had in fact been replevied by the
sheriff from Yanky’s premises. Neither
did that order determine whether BA Finance was entitled to collect P559,565.00
as loans due and payable from Yanky and surety Antonio Ngui Yek Siem. We think it clear that what had been issued
by the trial court on 22 January 1986 was not a judgment which disposed
of the causes of action pleaded by BA Finance or the defenses raised by Yanky
and surety Antonio Ngui Yek Siem. Rather, that order resolved what was initially merely an incident of the
principal case but which, under the Court of Appeals’ decision, threatens to
overwhelm the parties to the original suit.

It must be recalled that Yanky’s creditor banks had intervened in
the replevin case and that upon the suggestion of one of the banks, the
chattels subject matter of the replevin suit were sold to avoid further
deterioration in value pending resolution of the main case. Respondent Wilson Siy was neither an
original party nor an intervenor in the
replevin case; he was a total stranger vis-a-vis the original
parties and the intervenors. Nonetheless, we must recognize that the 22 January 1986 order of the
trial court purported to resolve the right of Wilson Siy to receive the
disputed movable properties and accordingly BA Finance’s obligation to deliver
to Siy those same properties; to this limited extent, i.e., so far as concerns
the dispute between BA Finance and Wilson Siy, the trial court’s order was
clearly a final one.

It is a firmly settled rule that only a final order or judgment
on the merits may be the subject of an appeal. A judgment on the merits is one rendered after a determination of which
party is in the right and must prevail, as distinguished from a judgment
rendered upon some preliminary or formal or merely technical point.^[14]
In other words, after a final order or judgment, the court should have nothing
more to do in respect of the relative rights of the parties to the case. Conversely, “an order that does not finally
dispose of the case and does not end the Court’s task of adjudicating the
parties’ contentions in determining their rights and liabilities as regards
each other, but obviously indicates
that other things remain to be done by the Court, is interlocutory.”^[15]

2.  The second issue to be
resolved is: what was the applicable
reglementary period for appealing the 22 January 1986 order of the trial court
to the Court of Appeals?

Two (2) reglementary periods for perfecting appeals were
established by the Interim Rules and Guidelines promulgated by the Supreme
Court on 11 January 1983 for the implementation
of the Judiciary Reorganization Act of 1981 (B.P. Blg. 129), Section 19 of
which provides as follows:

“Section 19. Period on Appeals. —

(a) All
appeals, except in habeas corpus cases and in the cases referred to in
paragraph (b) hereof, must be
taken within fifteen (15) days from notice of the judgment, order,
resolution or award appealed from.

(b) In
appeals in special proceedings in accordance with Rule 109 of the Rules of
Court and other cases wherein multiple appeals are allowed, the period of
appeals shall be thirty (30) days, a record
of appeal being required.”

Under the above-quoted section, the
reglementary period to appeal is, not fifteen (15) days, but rather thirty (30)
days in: (1) appeals in special proceedings;
and (2) “other cases wherein multiple appeals are allowed.” In the
instant case, as already pointed out, the questioned order finally disposed of
the incident involving BA Finance and Wilson Siy and his claim to certain chattels stored in BA Finance’s
warehouse, but not the main action itself between BA Finance, Yanky
Hardware and the intervenor banks. The
principal action itself has not yet reached the trial stage, which trial would
relate not to the chattels that were disposed of or allegedly disposed
of by public sale but rather to the disposition of the proceeds (or whatever
proceeds are properly due from Wilson Siy)
of such sale, and to the alternative demand for payment of the
outstanding obligations of Yanky Hardware to BA Finance. We believe and so hold that given the actual
circumstances of the instant case, it must be regarded as falling within the
term “other cases wherein multiple appeals are allowed”. It follows
that the applicable reglementary period for appeal is thirty (30) days, the
record on appeal being required since the expediente of the case must remain with the trial court
so that the case may proceed to trial on the merits of the claims between the
principal parties and the intervenors.

We note also that prima facie, to prevent BA
Finance from appealing the order of the trial court dated 22 January 1986 may
result in a serious miscarriage of justice. Private respondent Wilson Siy submitted a bid for and paid the amount of
P60,000.00 which he presumably felt was the reasonable value of the
personal properties subjected to the public sale. The questioned order of the trial court requires BA Finance to deliver to Siy as vendee in the public sale chattels
with the total estimated value of P2.3 million which represents a truly
extraordinary rate of return of 3,800 percent on Wilson Siy’s original
investment. This circumstance by itself
suggests that somewhere a serious mistake of fact, or an eccentric interpretation
of the terms of the chattel mortgage contract or possibly even deliberate fraud
may have vitiated the proceedings below concerning Wilson Siy’s claims, to the
obvious prejudice of BA Finance, or Yanky Hardware and surety Antonio Ngui Yek
Siem, or the intervenor banks, or some or all of these. Equitable considerations thus support the conclusion reached above.

In the interest of orderly procedure, Wilson Siy should not have
been allowed by the trial court to introject himself in the principal case by
the filing of a motion for delivery of chattels allegedly sold but undelivered
to him by BA Finance at public auction. His proper recourse was to institute an independent suit against the
sheriff and BA Finance. As it is, the de
facto intervention of Wilson Siy in the proceedings between BA Finance
and Yanky Hardware and the intervenor banks has already resulted in undue delay
in such proceedings.

WHEREFORE, the Petition for Review on Certiorari is hereby GRANTED
and the Decision of the Court of Appeals dated 30 April 1987 and the Orders of
the trial court dated 2 June 1986 and 16 July 1986, are hereby REVERSED and SET ASIDE. The trial court is hereby DIRECTED to
approve the notice of appeal and the record on appeal filed by petitioner. Costs against private respondent.

SO ORDERED.

Fernan, C.J., (Chairman), Bidin, and
Cortes, JJ., concur.

Gutierrez, Jr., J., on leave.

^[1]
Record, pp. 56-59.

^[2]
Ibid, pp. 60-61.

^[3]
Ibid, pp. 67-68.

^[4]
Ibid, pp. 176-177.

^[5]
Ibid, p. 73.

^[6]
Rollo, Annex “A” of Petition, p. 31.

^[7]
Ibid, Annex “E” of Petition, p. 49;
underscoring supplied.

^[8]
Record, pp. 101-102.

^[9]
Ibid, pp. 103-105.

^[10]
Record, pp. 216-229.

^[11]
Ibid, p. 252.

^[12]
Ibid, pp. 263-264.

^[13]
Rollo, Annex “A” of Petition, pp. 29-33.

^[14]
Santos v. IAC, 145 SCRA 238
(1986); De Ocampo v. Republic, 9 SCRA 440 (1963).

^[15]
Investment, Inc. v. Court of
Appeals, 147 SCRA 334 at 340 (1987). See also Antonio v. Samonte, 1 SCRA 1072 (1961); Kapisanan ng mga
Manggagawa sa MRR v. Yard
Crew Union, 109 Phil. 1143 (1960); PLDT Employees Union v. PLDT Co. Free Telephone Workers Union, 97 Phil. 424 (1955); Hodges v.
Villanueva, 90 Phil. 255 (1951); Nico v. Blanco, 81 Phil. 213 (1948);
Rios v. Rios, 79 Phil. 243 (1947).