G.R. No. 142950 - Equitable PCI Bank vs. Ku

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G.R. No. 142950: Equitable PCI Bank vs. Ku

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Title Source: Supreme Court: Equitable PCI Bank vs. Ku

Case: G.R. No. 142950

Decision Date: Mar 26, 2001

A property mortgaged by Rosita Ku was foreclosed after default. Her father, Ku Giok Heng, lost an ejectment case, and the Supreme Court ruled Rosita, though not a party, was bound by the decision as his daughter, upholding eviction.

Case Digest (G.R. No. 142950)
Expanded Legal Reasoning Model

Facts:

Background of the Parties and Transaction

Petitioner: Equitable PCI Bank (formerly Equitable Banking Corporation).
Respondent: Rosita Ku, acting as treasurer of Noddy Dairy Products, Inc.
Interest in a mortgage transaction:

On February 4, 1982, respondent Rosita Ku and Ku Giok Heng (Vice-President/General Manager of Noddy Dairy Products, Inc.) mortgaged a residential house and lot located in La Vista, Quezon City.
The mortgage secured a loan obtained by Noddy Dairy Products, Inc. from the bank.
The property was registered in the name of respondent Rosita Ku.

Foreclosure and Transfer of Title

Noddy Dairy Products, Inc. defaulted on the loan.
Equitable PCI Bank foreclosed the mortgage extrajudicially.

The bank became the winning bidder in the foreclosure sale and was issued a certificate of sale.
Respondent failed to redeem the property.

On December 10, 1984, the Register of Deeds cancelled the Transfer Certificate of Title in the respondent’s name and issued a new title in the bank’s name.

Ejectment Proceedings

On May 10, 1989, the bank instituted an ejectment action before the Quezon City Metropolitan Trial Court (MeTC) against Ku Giok Heng.

The lawsuit was based on an alleged agreement allowing Ku Giok Heng to remain on the premises, provided he paid rent.
Ku Giok Heng denied the existence of any lease agreement.

On December 8, 1994, the MeTC rendered a decision in favor of the bank.

The court ordered Ku Giok Heng to vacate the premises, finding no basis for his continued possession.
The decision referenced the legal principle that a buyer in a foreclosure sale acquires absolute ownership once the redemption period lapses and title is reissued.

Ku Giok Heng did not appeal the MeTC decision.

Subsequent Actions by the Respondent

On December 20, 1994, respondent Rosita Ku, together with her father Ku Giok Heng, filed an action before the Regional Trial Court (RTC) to nullify the MeTC decision.

The RTC found no merit in the complaint and, on September 13, 1999, dismissed the nullification action.
The RTC also ordered the execution of the MeTC decision.

Respondent then elevated the issue to the Court of Appeals (CA) by filing a special civil action for certiorari.

Her contention was that she was not joined as a party in the ejectment suit and was thus deprived of due process.
On March 31, 2000, the CA issued a decision enjoining the eviction of respondent from the premises.

Filing of the Petition for Review and Service Controversy

On May 10, 2000, Equitable PCI Bank filed a motion for a 30-day extension to file its petition for review of the CA decision.

The motion alleged that the bank had received the CA decision on April 25, 2000.
However, evidence, including a certification from the Manila Central Post Office, indicated that the decision was actually received on April 24, 2000.

A subsequent Affidavit by Joel Rosales explained:

He routinely received and processed mail for the bank, including for counsel.
An error in recording the receipt date in his logbook led to the discrepancy between April 24 and April 25, 2000.
The error was deemed honest and inadvertent.

Petitioner argued that:

There was no need to name respondent Rosita Ku in the ejectment action since she was neither residing in nor in possession of the property.
Even as a non-party, respondent is bound by the ejectment judgment due to her relation to the defendant (as his daughter).
Service on the counsel, even though obtained by an agent not officially designated, should be deemed effective under the Rules of Court.

Arguments on Timeliness and Due Process

The petitioner asserted that the actual receipt by counsel should be considered as April 27, 2000.

Citing precedents, the petitioner argued that effective service occurred only when counsel’s office received the decision.

Petitioner acknowledged the petition was one day late but maintained that:

The error in the receipt date was due to an honest mistake.
Suspension of strict reglementary periods was justified in the interest of justice, citing prior cases where late filings were cured.

The bank referenced previous cases involving late filings—ranging from delays of one day to several days—to support allowing their petition.

Issues:

Whether an ejectment decision rendered in an action where a person (respondent) was not joined as a party can nevertheless bind her.

The argument centered on whether due process was violated by not joining respondent Rosita Ku in the ejectment suit.
The discussion involved the principle that non-parties, particularly those related or privy to the defendant, may still be bound by a judgment.

Whether the service of the CA decision on the bank’s counsel was properly effected.

The issue involved the discrepancy in the alleged date of receipt (April 25, 2000) versus the actual receipt date (April 24 or April 27, 2000).
The validity of using an agent’s receipt (Joel Rosales) who was not formally designated as counsel’s agent was questioned.

Whether the petition for review, filed slightly beyond the reglementary period, should be excused in light of the circumstances.

The petitioner argued that an extension of one day, given the honest mistake and the interest of justice, warranted the acceptance of the petition.
Past jurisprudence on suspending strict reglementary periods was cited for support.

Ruling:

(Subscriber-Only)

Ratio:

(Subscriber-Only)

Doctrine:

(Subscriber-Only)

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END