G.R. No. 186063 - Philippine National Bank vs. San Miguel Corporation

On July 1, 1996, San Miguel Corporation (SMC) entered into an Exclusive Dealership Agreement with Rodolfo R. Goroza, granting him the right to trade, deal, market, or otherwise sell its various beer products.
As part of the agreement, Goroza applied for a credit line with SMC and, fulfilling the requirement of possessing a letter of credit, obtained such letter from Philippine National Bank (PNB) in the amount of P2,000,000.00.

On August 1, 1996, Goroza availed himself of his credit line with PNB and commenced selling SMC’s beer products based on the dealership agreement.
On February 11, 1997, Goroza applied for an additional credit line and was granted a one-year revolving credit being not to exceed P2,400,000.00, bringing his total credit line to P4,400,000.00.

Initially, Goroza met his payment obligations; however, by January 1998, he began to default on his payments.
SMC, having demanded payment for a total of P3,722,440.88, later filed a Complaint for collection of sum of money against both Goroza and PNB before the Regional Trial Court (RTC) Branch 3 in Butuan City on April 23, 2003.
In the RTC proceedings, Goroza was declared in default due to his failure to respond, whereas PNB filed an Answer.

During trial, SMC presented its evidence, including a formal offer of exhibits which were admitted by the trial court.
On May 10, 2005, the RTC rendered a Decision against Goroza, ordering him to pay:

The principal amount of P3,722,440.00;
Interest at 12% per annum from January 27, 1998, until execution of the judgment;
Attorney’s fees of P30,000.00;
Litigation expenses originally at P20,000.00.

Subsequent to the initial Decision, Goroza filed a Notice of Appeal, while SMC filed a Motion for Reconsideration.

On July 14, 2005, the RTC granted SMC’s motion for reconsideration and enhanced the award for litigation expenses to P90,652.50.
On July 25, 2005, the RTC issued an Order acknowledging:

The Notice of Appeal by Goroza was timely filed with due payment of the appeal fee.
That while the present record (pertaining to Goroza) was to be forwarded to the Court of Appeals (CA), the proceedings against PNB—which was not declared in default—would continue.

Further, on October 14, 2005, a Supplemental Judgment was issued to insert the phrase “without prejudice to the decision made against the other defendant PNB” into the dispositive portion of the May 10, 2005 Decision.
On the same day, the RTC amended its earlier Order to explicitly state that the appeal applied only to Goroza.

PNB filed an Urgent Motion to Terminate Proceedings on September 27, 2005, arguing that the RTC Decision already found Goroza solely liable; however, the RTC denied this motion on October 11, 2005.
PNB then moved for reconsideration of the Supplemental Judgment and Amended Order on which the RTC again denied relief on July 6, 2006.
Dissatisfied with the RTC’s handling, PNB elevated the case by filing a special civil action for certiorari before the Court of Appeals.
On June 17, 2008, the CA affirmed the RTC’s Decision and Resolution, a ruling which was later met with a Motion for Reconsideration by PNB that was ultimately denied.

The petition for review on certiorari was brought before the Supreme Court, wherein the assignment of errors focused on the procedural issue of proceeding with the case against PNB despite the perfection of Goroza’s appeal.
The Supreme Court, through its Decision dated January 15, 2014, held that the RTC did not lose jurisdiction over PNB and that separate judgments against Goroza and PNB were proper under the Rules of Court.
Accordingly, the petition was denied and the CA’s Decision and Resolution were affirmed.

Whether the perfection of Goroza’s appeal resulted in the RTC losing jurisdiction over the entire case, thereby rendering the Supplemental Judgment and Amended Order void.
PNB contended that since Goroza’s appeal was perfected, the RTC should have been precluded from issuing further orders affecting both parties.

Whether proceedings could legitimately continue against PNB after a judgment had been rendered finding Goroza solely liable for the debt.
PNB argued that the complete adjudication of relief in favor of SMC on Goroza precluded further proceedings against the bank, effectively alleging that pursuing PNB would amount to double recovery for SMC.

Whether the trial court was proper in adopting a procedure that resulted in rendering separate judgments against Goroza and PNB, despite the intertwined nature of the underlying transactions.
The issue also involved whether the issuance of several judgments complies with the provisions set out in Section 4 and Section 5 of Rule 36 of the Rules of Court.