Title
Asia Traders Insurance Corp. vs. Court of Appeals
Case
G.R. No. 152537
Decision Date
Feb 16, 2004
Cabever sued Cua for ejectment; Asia Traders contested a fake bond, but courts upheld rulings due to procedural and substantive defects in its petition.
ejectment case
supersedeas bond
motion for reconsideration
A

Case Summary (G.R. No. 127624)

Factual Background

Cabever instituted the ejectment case against Eduardo Cua before the MTC in Manila in July 1994. The MTC’s decision on December 6, 1994 required Cua to vacate the property and to pay back rentals. Cua appealed to the RTC and, to perfect the appeal, deposited a supersedeas bond covering rentals in arrears. The bond in the amount of P62,600 was undertaken by Asia Traders.

When the RTC affirmed the MTC decision on June 26, 1995, Cabever filed a motion to withdraw the supersedeas bond on August 4, 1995. The RTC granted the motion on August 9, 1995, directing release of the bond within three days from notice, with an express consequence of execution against the bond if compliance was not achieved.

Cua did not cause the bond’s release within the ordered period. Cabever then moved for the issuance of a writ of execution on September 8, 1995. The RTC granted the motion and issued the writ of execution against Asia Traders. Upon receipt of the writ, Asia Traders filed a motion for reconsideration asserting that it had not issued the bond and claiming it to be fake and spurious, prompting it to ask that the writ be recalled or set aside for lack of factual or legal basis. The RTC denied Asia Traders’ motion for reconsideration and later denied a second motion for reconsideration, after which notice of levy and sale of Asia Traders’ property proceeded.

Proceedings Before the Court of Appeals

Asia Traders filed with the Court of Appeals, on January 10, 1996, a petition for certiorari with application for preliminary injunction and restraining order. It impleaded as respondents the Presiding Judge of the RTC and the Branch Sheriff. The Court of Appeals denied the petition in a resolution dated January 20, 1999, citing two grounds: first, as to form, the petition failed to implead Cabever as one of the respondents; and second, as to substance, the Court found that the material allegations and arguments in the petition were not substantiated.

Asia Traders filed a motion for reconsideration on February 5, 1999, which the Court of Appeals denied on February 21, 2002 for lack of merit. After that denial, Asia Traders instituted the present petition for review on certiorari.

Issues on Review and the Parties’ Positions

In its Supreme Court petition, Asia Traders assigned three errors: (I) that the Court of Appeals erred in dismissing the petition for purported formal and substantial defects; (II) that it erred when it reached a conclusion unsupported by evident evidentiary facts; and (III) that it failed to find grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC judge.

Cabever filed a comment challenging all assigned errors and added that the Supreme Court petition should be dismissed because Asia Traders failed to implead Cabever as an indispensable party. Cabever pointed out that Asia Traders had only impleaded the Court of Appeals as respondent, thus allegedly failing to comply with Section 4(a) of Rule 45 of the Rules of Court.

Asia Traders replied that dismissal was not warranted because Cabever was not indispensable and the issues could be resolved even without Cabever’s participation, as the questions concerned errors of law and procedural rules allegedly committed by the Court of Appeals. Later, on March 28, 2003, Asia Traders moved to admit an amended petition so as to implead Cabever as respondent, and it advanced the view that Cabever was indispensable. It also insisted that its earlier failure to implead Cabever was merely a technical defect curable at any stage. Cabever moved on May 22, 2003 to be dropped as respondent, and Asia Traders opposed on June 5, 2003.

Before addressing the merits, the Supreme Court first resolved whether the petition should be dismissed for formal defects tied to the impleading of parties.

Disposition of the Formal Defect Under Rule 45

The Supreme Court examined the petition’s title and the “THE PARTIES” section and found that only the Court of Appeals was impleaded as respondent. It held that Section 4(a) of Rule 45 requires the petition to state the full names of the appealing party as petitioner and the adverse party as respondent, and it does not permit impleading the lower courts or judges thereof either as petitioners or respondents. The Court thus recognized two formal defects: failure to implead the adverse party and the erroneous impleading of the appellate court as respondent.

The Supreme Court acknowledged that such formal defects are not uncommon and noted prior cases where it had merely called attention to the defects and proceeded to resolve the case on the merits. It emphasized that while it possesses discretion to dismiss a defective petition, sound policy favors adjudication on the merits rather than on technicalities, which may cause injustice. It also found that no prejudice would result because Cabever had been an original party in the lower courts and had been furnished all pleadings and resolutions in the petition.

Accordingly, the Court granted Asia Traders’ Motion to Admit the Amended Petition and denied Cabever’s motion to be dropped as respondent. The Court, however, admonished Asia Traders to be more circumspect in its pleadings, noting that Asia Traders previously encountered dismissal in the Court of Appeals due to failing to implead Cabever, yet repeated the same omission before the Supreme Court. The Court then proceeded to review the substantive assignments of error.

The Court of Appeals’ Substantive Findings on the Bond

On the merits, Asia Traders claimed that the Court of Appeals rendered judgment without clearly and distinctly stating the facts and the law. The Supreme Court reviewed the relevant portion of the Court of Appeals decision, which found the petition unsubstantiated.

The Court of Appeals ruled that first, the bond filed in court was in a printed form of Asia Traders, and that while Asia Traders had submitted a sample copy of another bond (Bond No. 6 (16) -1442), both bonds were printed forms attributable to Asia Traders. Second, it found that Asia Traders’ alleged genuine bond bore no signature of General Manager Susana Fong, and therefore no comparison could be made with the subject bond, which bore the signature of Ms. Fong. The appellate court further noted that there was no affidavit executed by Ms. Fong asserting that her signature appearing on Bond No. 0062 was falsified. Third, it recognized that a Supreme Court clearance had been attached to Bond No. 0062, which supported a presumption that the ordinary course of business had been followed, and it found no evidence that such clearance was spurious. Fourth, it observed that Asia Traders’ assertion that the series number in Bond No. 0062 was not the series used by it was unsupported by proof, and it noted that a sworn statement from the bond manager or responsible officer would have been more credible.

Based on these findings, the Court of Appeals stated that it did not see grave abuse of discretion by the RTC judge in ruling against Asia Traders regarding the bond. It also explained the high threshold for certiorari—grave abuse of discretion characterized as capricious, arbitrary, and whimsical exercise of power.

The Supreme Court held that Asia Traders’ contention that the decision lacked statement of facts and law was refuted by the record. It noted that the Court of Appeals’ decision was organized and structured: it recited findings of fact and then applied the relevant legal conclusions. It further observed that Asia Traders itself had identified and discussed the four factual findings in its petition, which demonstrated comprehension and refuted the claim of absence of distinct factual and legal basis.

Alleged Denial of Due Process and Right to Present Evidence

Asia Traders further argued that the trial court failed to recognize its right to present evidence to dispute the validity of the bond. It asserted that the factual submission in its motion for reconsideration should have prompted the trial court to conduct an evidentiary hearing rather than denying the motion outright based only on the pleadings. It framed this refusal as deprivation of its right to due process.

The Supreme Court rejected the claim. It stated that the burden of proving that the bond was spurious rested on Asia Traders, consistent with the principle that he who alleges a fact has the burden of proving it. It stressed that the evidence required to prove fraud must be clear, positive, and convincing. It found that after reviewing the documents before it, the RTC concluded that the evidence was insufficient to prove that the bond was fake or falsified, and it held that the RTC correctly denied reconsideration.

The Court also reasoned that Asia Traders, by not requesting an evidentiary hearing, was deemed to have agreed to resolve the motion based on pleadings. If the allegations and annexes were insufficient, Asia Traders could not later fault the trial court for deciding on that basis. The Court characterized Asia Traders’ plea to reopen the case as an afterthought. It noted that during the certiorari proceedings before the Court of Appeals, Asia Traders had already believed it had sufficient proof of the bond’s spurious nature and had prayed for release from liability. Only before the Supreme Court did Asia Traders change its positio

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