BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. FAR EAST MOLASSES CORPORATION, RESPONDENT.

Bank of the Philippine Islands versus Far East Molasses Corporation

The Case

This is a petition for review on certiorari brought by the Bank of the Philippine Islands against Far East Molasses Corporation. The Bank sued to recover a sum of money, won a judgment in the trial court, and then found itself defending that victory before the Court of Appeals, which set aside the order of execution and gave due course to the losing party's appeal. The case matters because it is a clean, memorable illustration of the iron rule on motions: a motion without a notice of hearing is a mere scrap of paper, it does not toll the period to appeal, and no after-the-fact pleading can breathe life into it once the judgment has become final.

Procedural History

The Bank filed a complaint for recovery of a sum of money with the Court of First Instance of Rizal, which later became the Regional Trial Court. After trial, the court rendered judgment in favor of the Bank against L and A Company and Far East Molasses Corporation, ordering them to pay jointly and severally. Far East Molasses received a copy of the decision on 7 July 1987, so it had until 22 July 1987 to appeal. On the morning of 22 July 1987, instead of filing a notice of appeal, it filed a motion for reconsideration that contained no notice of hearing. The trial court denied that motion on 27 July 1987. The Bank then moved for execution on the ground that the decision had already become final. The trial court at first denied execution, ruling that the defect had been cured by substantial compliance, but on reconsideration it reversed itself and granted execution. Far East Molasses went to the Court of Appeals on certiorari, and that court set aside the order of execution and gave due course to the appeal. The Bank's motion for reconsideration was denied, so it came to the Supreme Court by petition for review.

Facts

On 15 April 1976, the Bank of the Philippine Islands sued Far East Molasses Corporation and several other defendants to recover an aggregate amount of 575,043 pesos and 75 centavos, plus interest at 14 percent per annum and a service fee of 2 percent per annum from 16 March 1976 until full payment. After trial, the lower court rendered its decision on 26 June 1987, ordering L and A Company and Far East Molasses Corporation to pay the Bank jointly and severally, plus attorney's fees equivalent to 10 percent of the total amount due, and the costs of suit.

Far East Molasses received a copy of the decision on 7 July 1987. Counting from that date, it had until 22 July 1987 within which to appeal. Instead of filing a notice of appeal, it filed on the morning of 22 July 1987 a motion for reconsideration. That motion did not contain any notice of hearing. On the same day, supposedly to cure the defect, counsel for Far East Molasses allegedly mailed by ordinary mail a Manifestation and Motion incorporating a notice of hearing, claiming the notice had been inadvertently omitted. The trial court received that Manifestation and Motion only on 7 August 1987. The Bank denied ever receiving a copy, and the messenger's affidavit failed even to name the post office where it was supposedly mailed.

On 27 July 1987, the trial court denied the motion for reconsideration for lack of sufficient basis. On 3 August 1987, the Bank moved for execution, arguing that the decision had become final because the defective motion did not stop the running of the period to appeal. Also on 3 August 1987, Far East Molasses filed its notice of appeal. The trial court first denied execution, holding that the defect had been cured by substantial compliance, but on 24 August 1987 it reconsidered and granted execution. Far East Molasses challenged that order before the Court of Appeals, which ruled in its favor, set aside the order of execution, and gave due course to the appeal.

Issues

• Whether or not the notice of appeal of Far East Molasses Corporation was seasonably filed.
• Whether or not the trial court committed grave abuse of discretion in issuing its order granting the motion for execution of judgment.
• Whether or not the Court of Appeals correctly applied the rules and the settled jurisprudence on motions without notice of hearing.

Applicable Provisions

Section 4 of Rule 15 of the Rules of Court provides:

Notice of a motion shall be served by the applicant to all parties concerned at least three (3) days before the hearing thereof, together with a copy of the motion, and of any affidavits and other papers accompanying it. The court, however, for good cause, may hear a motion on shorter notice, specially on matters which the court may dispose of on its own motion.

This fixes the three-day notice requirement that the defective motion failed to meet.

Section 5 of Rule 15 of the Rules of Court provides:

The notice shall be directed to the parties concerned, and shall state the time and place for the hearing of the motion.

This is the provision the Court leans on heavily, because the notice in the Manifestation and Motion was addressed to the Clerk of Court, not to the adverse party.

Section 2 of Rule 37 of the Rules of Court provides:

The motion shall be made in writing stating the grounds therefor, a written notice of which shall be served by the movant on the adverse party.

This confirms that the duty to give notice rests on the movant, and it applies with equal force to a motion for reconsideration.

Ruling

On the first issue, the Court held that the notice of appeal was not seasonably filed. The motion for reconsideration filed on 22 July 1987 had no notice of hearing, and the settled doctrine is that such a motion is a mere scrap of paper. It presents no question that merits the attention of the court, and it does not toll the running of the period to appeal. The Court stressed that this requirement applies equally to a motion for reconsideration, and that a pro forma motion does not suspend the period to appeal. Since the motion did not stop the clock, the decision became final on 22 July 1987.

On the second issue, the Court held that the trial court committed no grave abuse of discretion when it granted execution. The alleged cure, the Manifestation and Motion, was itself a useless piece of paper. There was no showing that the Bank was furnished a copy, and the Bank denied receiving one. Worse, the notice was directed to the Clerk of Court, not to counsel for the Bank, and the rule expressly requires that the notice be directed to the parties concerned. The Court also noted that service was by ordinary mail when registered mail was available, and that the Manifestation and Motion must be deemed filed only on 7 August 1987, the day the court received it, which was beyond the period to appeal. It could not be given retroactive effect, for to do so would put a premium on negligence.

On the third issue, the Court held that the Court of Appeals misapplied the rules and the settled jurisprudence. It was extravagantly liberal to Far East Molasses, accepting an incredible claim of mailing and treating as valid a notice that the law did not recognize.

Doctrine

A motion that does not contain a notice of hearing is a mere scrap of paper. It presents no question which merits the attention and consideration of the court, and the clerk of court has no right to receive it. The absence of a notice of hearing is fatal, and in the case of a motion to reconsider a decision, the running of the period to appeal is not tolled by its filing or pendency. The notice must be directed to the parties concerned and must state the time and place of hearing, and the duty to give it rests on the movant, not on the court. A defect of this kind cannot be cured by a later pleading filed beyond the period to appeal, because such a pleading cannot be given retroactive effect.

Disposition

The Supreme Court granted the petition, reversed and set aside the decision of the Court of Appeals, and upheld the order of execution in favor of the Bank of the Philippine Islands.

Remember This

Memorize the line: a motion without a notice of hearing is a mere scrap of paper that does not toll the period to appeal. Examiners use this case to test the requisites of a valid motion under Rule 15 and the finality of judgments.