SPS. GO IT BUN AND CHOI PING TAI, PETITIONERS, VS. HON. BALTAZAR R. DIZON, AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF THE NATIONAL CAPITAL REGION, BRANCH CXIX, PASAY CITY…

This is a petition under Rule 65, Revised Rules of Court, seeking
this Court’s corrective hand of certiorari and mandamus in
setting aside public respondent’s^[1]
Orders of April 17, 1986^[2] and
May 23, 1986^[3]
denying petitioners’ Notice of Appeal of their Petition for Relief filed
therein on April 3, 1986 and (2) the motion for reconsideration of said order in Civil Cases Nos.
1149-P and 1164-P filed therein.

Petitioners allege that:

“On February 27, 1982 and February 13, 1981, respectively,
petitioners insured their buildings and furnitures and fixtures and fittings
including electrical appliances, kitchen utensils and personal effects of every
kind and description (excluding money and jewelry) contained therein with
private respondents Cathay Insurance Co., Inc. and Equitable Insurance
Corporation for a total amount of P1,750,000.00, that is P1,350,000.00 with Cathay
while P400,000.00 with Equitable. When
said insured properties were burned in a fire that happened last March 19,
1982, private respondents refused to make good their obligations under their
respective insurance contract so that a civil
case for sum of money and damages was filed against them by herein
petitioner before the Regional Trial Court of Pasay City, Branch CXII thereof,
which is presided (sic) by the public respondent. After private respondents were allowed to present evidence on
their Special and Affirmative Defenses as reflected in their respective
answers, an Order dated December 18, 1985 was issued by public respondent
dismissing the case filed before it without pronouncement as to costs. At the time material to this petition,
however, petitioners and their then counsel of record were already having a
misunderstanding, so that when Atty. Arthem Potian, petitioners’ former counsel
of record received a copy of said order on December 23, 1985, said counsel
failed to inform petitioners of the existence of said order and likewise failed
to interpose a timely appeal or motion for reconsideration to protect his
client’s interest. Petitioners were
informed of said order only when one of them (Choi Ping Tai) followed up their
case with the court after becoming suspicious of the long silence of
communication from their former counsel of record. But, even then, the period for filing a timely appeal or motion for reconsideration has
(sic) already lapsed. Within the
reglementary period, petitioners engaged the service of another counsel who
filed the Petition for Relief From the Order on February 17, 1986.”^[4]

The events which
transpired after the filing of said Petition for Relief and which led to the
filing of the instant petition are:

1.  On March 21, 1986, public
respondent, Judge Baltazar Dizon, issued an order denying the petition for
relief;^[5]

2.  On April 3, 1986,
petitioners filed a Notice of Appeal from said Order;^[6]

3.  On April 15, 1986,
private respondent Equitable Insurance Corporation filed a Motion to Dismiss
Appeal;^[7]

4.  On April 17, 1986, the
public respondent issued an order dismissing petitioners’ appeal, to wit:^[8]

“After a petition for relief for judgment was filed and
subsequently denied, the petitioner through counsel filed a notice of appeal. An opposition was interposed against the
said notice. This Court finds the
Motion to Dismiss Appeal to be meritorious, the denial of the petition for
relief from judgment being interlocutory in nature is not subject of an appeal.

WHEREFORE, the appeal being prayed for by the plaintiff is hereby
denied.

SO ORDERED.”

5.  On May 2, 1986,
petitioners filed a Motion for Reconsideration of said April 17, 1986 order;^[9]

6.  On May 23, 1986, the
public respondent issued an Order denying said motion for reconsideration.^[10]

7.  Hence, the instant
petition for certiorari filed September 22, 1986^[11]
alleging –

7.1 The public respondent’s order of March 21, 1986 is one
established with the imprint of finality and thus subject to appeal;

7.2 This appeal has been perfected by operation of law; and

7.3 That in
dismissing petitioners’ appeal, the public respondent unlawfully refused to
perform an act which the law specifically enjoins as a duty resulting from his
office.

Private respondent Equitable Insurance Corporation alleges that:

“On February 13, 1981, herein private respondent issued Fire
Insurance Policy No. F-33759 in favor of petitioner Choi Ping Tai, effective
from 4:00 p.m., March 29, 1981 to 4:00 p.m., March 29, 1982 over the following
properties:

Item 1 – P250,000.00
on the building only, of partly two and partly one-­lofty storey height,
constructed entirely on reinforced concrete on steel framework, under
galvanized iron roof on steel trustees,
occupied by the insured as biscuit factory with sections for storeroom,
packaging and partly residence.

Item 2 – P150,000.00
on the building only, of one-story height, constructed entirely of concrete,
under galvanized iron roof, occupied as office and dwelling quarters.

TOTAL – P400,000.00
in all, being the properties of the insured and/or for which he is responsible
in case of loss and/or damage during the currency of this policy, situated
within its own compound at No. 58 Interior Maisan Road, Valenzuela, Metro
Manila, Philippines, Block No. 37-A. x
x x.

MEMO: – Loss, if
any, under this policy is payable to Equitable Banking Corporation, Manila, as
their interest may appear, subject to the attached ‘Mortgage Clause’

“On March 19, 1982, the above-insured properties were burned,
hence, under date of March 31, 1982, petitioner Mr. Choi Ping Tai presented a
Sworn Statement of Fire Claim, x x x.

“The herein private respondent, acting on said petitioner’s
Sworn Statement of Fire Claim, investigated the claim through its
adjusters. It was discovered that the
above declaration was false, hence, the claim was fraudulent and that the
insured-petitioner Choi Ping Tai had no insurable interest on the property
insured based on the following:

a) That even before he applied for fire
insurance, there was an existing lien or encumbrance on the property which was
the mortgage of the insured properties in favor of Equitable Banking
Corporation dated March 27, 1979,
in the amount of P350,000.00.

b) Notice of Attachment/Levy issued by the
Deputy Sheriff of the Court of First Instance of Rizal, Seventh Judicial
District, Caloocan City, Metro Manila, Branch XXXIII (33) in Civil Case No.
8647 covering all the rights, title, interests, shares, claims and
participation of the defendant Choi Ping Tai (Note: herein petitioner) in the land herein described and also the
(P100,000.00) for the recovery by the (plaintiff) against the defendant
(Note: herein petitioner) dated
September 18, 1980.

c) Certificate of Sale in favor of Tan Hua
doing business under the name and style of ‘TH Wilson Manufacturing’ and
‘Wilson Printing Press’. Vendee: Covering the property described in this Certificate of Title, all the
rights, shares, claims, interests and participation for the sum of P154,410.00
in accordance with the Certification of Sale issued by the Deputy Sheriff of
the Court of First Instance of Rizal, Seventh Judicial District, Caloocan City,
Branch XXXIII (33) dated February 26,
1981.

xxx                               xxx                               xxx.”^[12]

While the other private respondent, Cathay Insurance Company,
Inc., alleges that:

“1. On March 27, 1979, petitioners mortgaged
their property covered by Transfer Certificate of Title (TCT) No. 15761 (Annex
‘A’ of the Complaint) to the Equitable Banking Corporation (‘Equitable’) to
secure a loan for P350,000.00. This
mortgage was registered with the Register of Deeds of Caloocan City on March
29, 1979.

“2. On November 10, 1980, Judge Marcelino Sayo
of the Court of First Instance of Caloocan City rendered judgment in Civil Case
No. C-8637 ordering the petitioners herein to pay Tan Hua the sum of
P100,000.00 plus interests and attorney’s fees.

“3. On February 24, 1981, all rights, title,
interest and participation of the petitioners herein over the property covered
by TCT No. 15761 including buildings and improvements thereon were sold to Tan
Hua, the highest bidder in the public auction sale, for P154,410.00. On the same day, Tan Hua executed a Deed of
Assignment, over the rights he thus acquired as highest bidder in the execution
sale of property covered by TCT No. 15761, in favor of Janeer Realty Corporation
(‘Janeer’).

“xxx               xxx                   xxx.

“5. On February 27,
1982, petitioners insured for a period of six (6) months, the building on the
property covered by TCT No. 15761, and the personal property therein, with
defendant for P1,350,000.00.

“6. On March 18,
1982, the redemption period of the Execution Sale ended without petitioners
exercising their right to redeem within the redemption period that began on
March 18, 1981 and ended on March 18, 1982, pursuant to Sec. 30, Rule 30 of the
Revised Rules of Court.

“7. On March 19, 1982, after the expiration
of the redemption period, fire gutted down petitioners’ building standing on
the property covered by TCT No. 15761.”^[13]

We vote to grant the Petition.

First of all, petitioners doggedly maintain that the public respondent’s
Order of April 17, 1986^[14]
dismissing their appeal was oppressive and arbitrary as his order of March 21,
1986 denying the Petition for Relief is final in nature and not interlocutory
as claimed by both private respondents Equitable and Cathay, and is, therefore, subject to appeal.

On this point, petitioners are correct as par. 2, Section 2, Rule
41 explicitly states that –

“A judgment denying relief under Rule 38 is subject to appeal,
and in the course thereof, a party may also assail the judgment on the merits,
upon the ground that it is not supported by the evidence or it is contrary to
law.”

which rule has been reaffirmed in the
recent case of Mateo vs. Court of Appeals^[15]
which held that the remedy of petitioners from a denial of the petition for
relief from judgment was to appeal. The
petition was denied due to the fact that the negligence of the petitioner
therein was not excusable, which, incidentally, is the same reason given by the
court a quo for the denial of the petition for relief in the case at
bar.

The petition for relief must be filed in the same court in
accordance with Section 2, Rule 38 of the Revised Rules of Court and as ruled
in the case of Service Specialists, Inc. v. Sheriff of Manila:^[16]

“In the case of Braca vs. Tan, this Court held:

“It is clear from the foregoing provisions of Rule 38 that the
petition for relief from a judgment of the Court of First Instance must be
filed in the same court that rendered the judgment and in the same cause
wherein the judgment was rendered; and that if the court finds the allegation
of the petition to be true, it shall set aside the judgment and try the
principal case upon its merits as if a timely motion for new trial had been
granted therein. (84 Phil. 582,
584-585)

“xxx               xxx                   xxx.

“In the case at bar, private respondent filed his petition for
relief also with the Regional Trial Court of Manila, but he did not file it in the same case; he filed it in
another case, No. 85-34098, Branch XII of the lower court to which Civil Case
No. 85-34098 was assigned could not take cognizance of the petition for relief,
because it was not the same branch of the court which rendered the judgment
from which relief was sought. It was
Branch L of the lower court which
could properly take cognizance of said petition and which, if it found the
allegations thereof to be true, could order the judgment complained of to be
set aside and proceed to hear and determine the case as if a timely motion for new trial had been granted (Sections 6 and 7 of
Rule 38).”

Petitioners’ second point is that their appeal has been perfected
by operation of law when they
filed their notice of appeal.

Section 23 of the Interim Rules and Guidelines promulgated by this Court to implement BP 129
clearly states:

“Sec. 23. Perfection of appeal. – In cases where appeal is taken, the
perfection of the appeal shall be upon expiration of the last day to appeal by
any party.”

The record, however, does not indicate at all when petitioners
received their copy of the Order of March 21, 1986 denying their Petition for
Relief. Neither respondent Equitable
nor respondent Cathay have indicated their respective dates of receipt of said
Order. In any case, petitioners filed
their Notice of Appeal thirteen (13) days from March 21, 1986. However, respondent Equitable filed a Motion
to Dismiss Appeal on April 15, 1986, which was erroneously granted. This should not have been the case because
under Section 13, Rule 41, an appeal can only be dismissed “[w]here the
notice of appeal, appeal bond or record on appeal is not filed within the
period of time herein provided. . .”

Since neither an appeal bond nor record on appeal are now
required,^[17]
and considering that petitioners filed their Notice of Appeal within the time
provided, the respondent judge should have denied outright private respondent’s
(Equitable) Motion to Dismiss Appeal since private respondent’s grounds are not
sanctioned by Sections 13 and 14 of Rule 41.

The appeal interposed by the petitioners should be given due
course. However, to remand the case to
the Court of Appeals would only delay the final disposition of the case. This Court has consistently ruled that the
remand of a case to a lower court for the reception of evidence is not
necessary when the Supreme Court itself could resolve the dispute based on the records before it.^[18]
In view of the long pendency of this case (March 1982 to the present), this
Court finds that the greater interest of justice demands that the case be
disposed of on the merits at this stage.

From the evidence presented by the parties, it appears that on
November 10, 1980, Choi Ping Tai lost in Civil Case No. 8637 before the then
Court of First Instance of Caloocan City and was ordered to pay the sum of
P100,000.00 to Tan Hua with interest and attorney’s fees. To satisfy the judgment in said case, a writ
of execution was enforced by the Sheriff of said Court, and on February 24,
1981, all the rights, title, interest and participation of Choi Ping Tai over
the property covered by TCT No. 15761, including the building and improvements
thereon, were sold to said Tan Hua, the highest bidder at the sheriff’s auction
sale, for P154,410.00. On the same
date, a Certificate of Sale was issued by the Sheriff to Tan Hua and registered
with the Register of Deeds of Caloocan City on March 18, 1981 under Entry No.
96260. On the same day also, Tan Hua
executed a Deed of Assignment in favor of Janeer Realty Corporation.^[19]

Choi Ping Tai, unfortunately, could not redeem said property by
the 18th of March, 1982 in accordance with Section 30, Rule 39, Rules of Court. He had, therefore, no more interest over said property, so much
so that when fire broke out on the property on the 19th of March, 1982, Choi
Ping Tai had no more insurable interest over the same.

But Choi Ping Tai claims, in his Petition for Relief that:

“It is therefore obviously clear that the question to be
resolved in order to know whether plaintiffs still have an insurable interest
over the subject property due to the alleged expiration of the redemption
period within which to redeem the property is when exactly did the date of the
redemption begin. Is it on March 18,
1981 when the Certificate of Sale in favor of Tan Hua was registered with the
Registry of Deeds of Caloocan City or on February 24, 1982 when the foreclosure
sale of the mortgaged property by the Equitable Banking Corporation was
registered with the Register of Deeds; although the mortgage in favor of said
banking institution over the same property was registered since March 27,
1979?”

Petitioner claims that the redemption period –­ and thus his
insurable interest over the property -­- must be counted from February 24, 1982
when the foreclosure sale of the mortgaged property was registered, bearing in
mind the protection accorded by the law to this March 27, 1979 mortgage which
was ahead of the execution sale of March 18, 1981.

Again, petitioner’s claim is not well-taken. By operation of law, Section 35, Rule 39,
Rules of Court, Tan Hua became the successor-in-interest of Choi Ping Tai when
Choi could not redeem his property (TCT 15176) bought by Tan Hua at the
aforementioned Sheriff’s auction sale. Equitable Banking Corporation’s interests in the mortgage are fully
protected since Tan Hua took Choi Ping Tai’s property subject to Equitable
Bank’s prior lien which he (Tan) has to satisfy.^[20]

Choi Ping Tai, therefore, had no insurable interest in the
property^[21]
as of the date of the fire — March 19, 1982 — since his last day to redeem the property pursuant to
Section 30, Rule 39 of the Rules
of Court expired on March 18, 1982.

Regarding petitioners’ claim that their negligence in not filing
their appeal from the December 18, 1985 decision dismissing their complaints
against private respondents was excusable as their former lawyer, Atty. Arthur
Potian, “willfully and fraudulently failed to inform” them about the same, this question has been disposed
of by the court a quo in its March 21, 1986 order dismissing petitioners’ petition for
relief as “notice to counsel is notice to his client and the failure of
counsel to notify his client of an adverse judgment would not constitute
excusable negligence and therefore binding to his client.”

Petitioners should have been forewarned when Choi Ping Tai
received a letter from Atty. Arthur Pontian that all is not well between the
latter and the former and which could have led to the non-filing of the appeal
from the December 18, 1985 decision.

At that point in time, petitioners should have taken steps to
already settle whatever misunderstanding they had with their lawyer or hire
another lawyer to handle their appeal. They cannot now claim excusable negligence as the negligence was their
own.

WHEREFORE, premises considered, the April 17, 1986 Order
denying petitioners’ notice of appeal from the Order of the court a quo
dated March 21, 1986 denying their Petition for Relief and the Order of May 23,
1986 denying petitioners’ Motion for Reconsideration of said April 17, 1986
Order are hereby REVERSED and SET ASIDE.

However, resolving the appeal of petitioners, the same is DISMISSED for lack of merit.

The March 21, 1986 Order of public respondent denying the
petition for relief, is AFFIRMED in
toto.

Costs against petitioners.

SO ORDERED.

Narvasa, C.J., (Chairman), Padilla, and Campos, Jr., JJ., concur.

Regalado, J., see separate opinion.

^[1]
The Hon. Baltazar R. Dizon, Presiding Judge, Regional Trial Court of Pasay City, Branch CXII.

^[2]
Rollo, p. 26.

^[3]
Rollo, p. 31.

^[4]
Rollo, pp. 102-103.

^[5]
Rollo, p. 21.

“Order

Before this Court is a petition for relief grounded on the following allegations:

‘I. PLAINTIFFS WERE NOT ABLE TO
FILE A TIMELY APPEAL TO THE ORDER OF THIS HONORABLE COURT DATED DECEMBER 18,
1985, DUE TO THE MALICIOUS AND FRAUDULENT ACT OF ATTY. ARTHUR M. POTIAN,
PLAINTIFFS’ FORMER COUNSEL OF RECORD AND/OR SAID COUNSEL’S MISTAKE AND/OR
NEGLIGENCE IN NOT INFORMING THEM OF THE EXISTENCE OF THE AFOREMENTIONED ORDER
DESPITE SAID FORMER COUNSELS RECEIPT OF SAID ORDER ON DECEMBER 23, 1985;

‘Il. PLAINTIFFS HAVE A GOOD AND
MERITORIOUS CAUSE OF ACTIONS:’

In a more intensive study of the record of the case leads to the
conclusion that this is a case where the petitioner is bound by the mistakes
and omissions of his counsel and he was not oppressively denied his day
in Court. And since the decision has
become final and executory when the petitioner filed the instant petition for
relief and as there is no clear showing that he was deprived of due process or
that said decision was procured by means of extrinsic or collateral fraud, it
can no longer be set aside. (See Gaba,
et al. vs. Judge Jose Castro, et al., 120 SCRA 505)

It must be stressed in this connection, that ‘notice to counsel is
notice to his client and the failure of counsel to notify his client of an adverse judgment would not constitute excusable negligence and
therefore binding to his client.’ (Seavan Carrier, Inc. vs. GTI
Sportswear Corp., 132 SCRA 308).

WHEREFORE, the petition for relief is hereby DENIED, for lack of merit.

SO ORDERED.”

^[6]
Rollo, p. 22.

^[7]
Rollo, p. 24.

^[8]
Rollo, p. 26.

^[9]
Rollo, p. 27.

^[10]
Rollo, p. 31.

^[11]
Rollo, p. 1.

^[12]
Private Respondent’s Memorandum, pp. 108-110.

^[13]
Rollo, pp. 141-142.

^[14]
Rollo, p. 26.

^[15]
196 SCRA 280 (1991)

^[16]
145 SCRA 139, 145, 146.

^[17]
Section 18, Interim Rules and Guidelines.

^[18]
Dimayuga vs. Philippine Commercial and Industrial Bank, 200 SCRA 143.

^[19]
Page 3, Decision, Civil Cases 1149-P and 1164­-P, December 18, 1985.

^[20]
Tizon vs. Valdez, 48 Phil. 911, 914, 915.

^[21]
Section 13 (P.D. 1460). Every interest in property, whether real or personal, or any relation thereto or
liability in respect thereof, of such a nature that a contemplated peril might
directly indemnify the insured, is an insurable interest.

109

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