G.R. No. 227544 - Commissioner of Internal Revenue vs. Transitions Optical Philippines, Inc.

Romeo Samonte (Petitioner) is the President and General Manager of S.B. Commercial Traders, Inc. (SB Traders), a corporation engaged in retailing motor oils and lubricants.
SB Traders purchases Mobil products on credit from S.F. Naguiat, Inc. (Private Respondent), an authorized dealer of Mobil Oil Philippines in Bulacan, with an agreement to pay within 60 days from delivery.

On September 4, 2000, private respondent filed a complaint for collection against SB Traders and petitioner before the Regional Trial Court (RTC) Branch 9, Malolos, Bulacan, alleging SB Traders owed P1,105,143.27 for purchase of Mobil Oil products.
Petitioner was alleged to be the alter ego of SB Traders, operating for his sole benefit, and thus both should be held solidarily liable.
Petitioner denied all material averments, asserting he acted only on behalf of the corporation and that SB Traders acknowledged the debt but requested more time to pay. He claimed postdated checks were issued as part of payment.
Petitioner and counsel failed to appear at the April 20, 2001 pre-trial conference, resulting in ex parte presentation of evidence by private respondent.
On May 25, 2001, RTC rendered judgment ordering SB Traders and petitioner jointly and severally liable to pay P1,105,143.27 plus interests, exemplary damages of P10,000, attorney’s fees of 20%, and costs.

Petitioner did not appeal the RTC decision.
Private respondent moved for issuance of a writ of execution, issued on July 30, 2001.
On August 22, 2001, petitioner filed a petition for relief from judgment before the RTC, arguing serious errors in the appreciation of evidence and asserting the separate legal personality of the corporation absolves him of personal liability.
Private respondent opposed the petition.
On December 21, 2001, RTC denied the petition for relief from judgment for lack of merit.
Petitioner’s motion for reconsideration was denied on February 12, 2002 for failure to comply with procedural requirements and failure to raise issues warranting reversal.

Petitioner filed a petition for certiorari before the Court of Appeals (CA), reiterating grounds from the petition for relief from judgment and praying for a temporary restraining order or writ of preliminary injunction.
CA dismissed the petition on March 26, 2004 on ground that the RTC decision had become final and executory due to petitioner’s failure to appeal or file a motion for reconsideration.
CA observed petitioner did not allege fraud, accident, mistake, or excusable negligence, nor submit an affidavit of merit as required by Rule 38.
CA further noted petitioner did not challenge the trial proceedings but only sought to question the dispositive portion of the judgment.
CA denied petitioner’s motion for reconsideration on September 28, 2004.

Irreversible error in dismissing the petition for certiorari and denying reconsideration.
Grave error in strictly applying procedural rules over substantial justice.
Failure to rule on the merits of the case.

Whether the RTC gravely abused its discretion when it denied petitioner’s petition for relief from judgment.
Whether petitioner’s failure to appeal or file a motion for reconsideration rendered the RTC judgment final and executory.
Whether petitioner complied with the requirements of Rule 38 on petition for relief from judgment, particularly the necessity of an affidavit of merit.
Whether petitioner can validly invoke Rule 38’s relief given that the errors alleged are errors of law and that alternative remedies (appeal or motion for reconsideration) were available to him.
Whether petitioner can escape liability on the ground that the corporation has separate personality and he acted only as its officer.