G.R. No. 158763 - Miranda vs. Tuliao

Case Summary (G.R. No. 158763)

Relevant Projects, Instruments and Amounts

DPWH-awarded projects to petitioner Nestor Rodriguez: Lanot‑Banga Road (Kalibo project) and Laua‑an Pandan Road. Respondent agreed (1998) to supply cement. Petitioners delivered to respondent LBP Check No. 6563066, signed but with amount and date left blank, as collateral/guaranty for 15,698 bags of cement (Official Receipt No. 1175) valued at P1,507,008.00. A year later respondent filled the blank check for P2,062,000.00 dated June 30, 1999. Petitioners claimed they paid P2,306,500.00 in total, asserting settlement of obligations; respondent maintained deliveries of 40,360 bags and asserted an outstanding balance of P2,062,000.00. The filled check was dishonored for being drawn against insufficient funds (DAIF).

Procedural Background and Pleadings

Petitioners filed an Amended Complaint (Dec. 9, 1999) for declaration of payment, cancellation of documents, and damages (Civil Case No. 25945, RTC Branch 31). Respondent answered and filed a compulsory counterclaim for recovery of P2,062,000.00 plus interest at 24% as actual damages. The RTC’s Pre‑trial Order (Jan. 28, 2000) narrowed the issues to, inter alia: whether petitioners’ obligation for the cement had been paid; whether the LBP check should be returned or declared cancelled; whether petitioners fully paid for cement used in the Kalibo project; entitlement to damages and fees; and whether dismissal should follow with the counterclaim proceeding.

RTC Decision (June 28, 2002)

Applying Section 14 of the Negotiable Instruments Law, the trial court concluded respondent filled the blank check beyond the authority granted and not within a reasonable time; it further found that the cement deliveries (23,360 bags valued at P2,167,340.00) subject to prior transactions had been fully paid. The RTC rendered judgment for petitioners, declaring the P2,062,000.00 LBP check null and void, dismissing respondent’s counterclaim, and awarding actual, moral damages, attorney’s fees, appearance fees, miscellaneous litigation expenses and costs. The judgment was entered and a copy received by respondent on July 26, 2002.

Notice of Appeal and Initial RTC Action

Respondent filed a Notice of Appeal on July 30, 2002. On August 5, 2002 the RTC issued an order giving due course to the notice and directed the Branch Clerk of Court to transmit the entire records to the CA.

Motion to Dismiss Appeal; RTC Order Dismissing Appeal and Issuance of Writ of Execution

On August 26, 2002 petitioners moved for reconsideration, to dismiss the appeal, and for issuance of writ of execution, asserting respondent failed to pay docket and other lawful appellate fees as required by Section 4, Rule 41, and appended a Clerk of Court certification that no appeal fees were paid. The RTC, in an Order dated September 23, 2002, dismissed respondent’s appeal for non‑payment of appellate fees and directed issuance of a writ of execution. The writ of execution was issued on October 2, 2002.

CA Proceedings and Grant of Preliminary Injunction

Respondent filed a petition for certiorari and prohibition with application for preliminary injunction (Oct. 7, 2002) to set aside the RTC’s dismissal of the appeal and to enjoin implementation of the writ of execution. The CA granted a temporary restraining order (Oct. 9, 2002), approved an injunction bond, and issued a writ of preliminary injunction (Aug. 20, 2003) enjoining execution of the RTC judgment. On June 23, 2004 the CA granted respondent’s petition, set aside the assailed RTC order and writ of execution, and ordered the RTC to assess appellate docket fees (if not already done) and allow respondent to pay such fees so the appeal could be given due course. Petitioners’ motion for reconsideration at the CA was denied (Resolution, Feb. 23, 2005).

Issue Before the Supreme Court

Whether the Court of Appeals erred in reversing the RTC’s dismissal of respondent’s appeal and in allowing respondent to belatedly pay the required appellate docket and other lawful fees, thereby depriving the RTC of the right to dismiss the appeal and to order execution of its judgment.

Governing Rules on Perfection of Appeal

The Court examined the Rules of Court (Rule 41) provisions invoked by the parties: Sections 2 and 3 requiring filing of notice of appeal within 15 days; Section 4 requiring payment of the full amount of appellate docket and other lawful fees to the clerk of the court of origin within the period for taking an appeal and transmission of proof of payment to the appellate court; Section 9 deeming an appeal perfected as to a party upon timely filing of the notice of appeal but specifying that the court of origin loses jurisdiction only upon perfection of appeals filed in due time and expiration of others’ time to appeal; and Section 13 authorizing the trial court, prior to transmittal of the record, to dismiss an appeal motu proprio or on motion for non‑payment of fees within the reglementary period.

Supreme Court’s Analysis of Applicability of Precedents and Facts

The Court rejected the CA’s reliance on Yambao v. Court of Appeals because, unlike that case, respondent here never made any payment or attempted to pay the appellate docket and other lawful fees within the 15‑day reglementary period. The Supreme Court reiterated the established rule (citing Far Corporation and related decisions) that the payment of appellate docket and other lawful fees within the prescribed period is mandatory and jurisdictional for perfection of ordinary appeals from the RTC to the CA. Failure to pay renders the appeal unperfected, deprives the appellate court of jurisdiction, and causes the RTC decision to become final and executory. The Court characterized respondent’s explanation (that the Branch Clerk of Court did not assess the fees) as insufficient and attributable to respondent’s counsel’s negligence, which is not excusable. Counsel’s ignorance or inattention to procedural requirements binds the client.

Jurisdictional Effect and Proper Action by the CA

The Supreme Court held that because respondent’s appeal was not perfected within the 15‑day period, it was as if no appeal had been taken; the RTC therefore retained jurisdiction to act on pending motions (including petitioners’ motion to dismiss the appeal and for issuance of writ of execution). The CA erred in tak

Case Syllabus (G.R. No. 158763)

Title, Citation and Bench

Reported at 670 Phil. 597, Third Division, G.R. No. 167398, decided August 9, 2011.
Decision penned by Justice Peralta; concurring Justices Carpio, Velasco, Jr. (Chairperson), Brion and Sereno. Additional member designations for Carpio, Velasco, Jr., and Sereno noted by special orders.
Petition for review on certiorari under Rule 45 of the Rules of Court seeking to set aside the Court of Appeals Decision dated June 23, 2004 and Resolution dated February 23, 2005 in CA-G.R. SP No. 73171 (Quirico Pe v. Hon. Rene Hortillo, et al.).

Parties and Their Roles

Petitioners: Augustus Gonzales and Spouses Nestor Victor Rodriguez and Ma. Lourdes Rodriguez (owners/actors connected with Greenland Builders and related pre-payment DPWH program).
Respondent: Quirico Pe (owner of Antique Commercial; supplier of cement).
Other entities and persons involved in the background: Department of Public Works and Highways (DPWH), Land Bank of the Philippines (LBP), Regional Trial Court (RTC), Court of Appeals (CA).

Factual Background — Contracts, Pre-payment Program and Blank Check

DPWH awarded two contracts in favor of petitioner Nestor Rodriguez for: (a) construction of Lanot-Banga Road (Kalibo Highway) km. 39+200 to km. 40+275 Section IV (Aklan side), and (b) concreting of Laua-an Pandan Road (Tibial-Culasi Section), Province of Antique.
In 1998 respondent agreed to supply cement for petitioner Spouses Rodriguez' construction projects.
Petitioner Nestor Rodriguez availed himself of the DPWH pre-payment program for cement for the Kalibo project; DPWH would give an advance payment upon presentation, among other things, of an official receipt for the amount advanced.
Petitioner Nestor Rodriguez delivered LBP Check No. 6563066 to respondent as collateral/guarantee for cement payment; the check was signed by co-petitioners (wife Ma. Lourdes Rodriguez and business partner Augustus Gonzales) but left blank as to amount and date.
The blank LBP check was delivered to respondent to guarantee payment for 15,698 bags of Portland cement valued at P1,507,008.00, covered by Official Receipt No. 1175 issued by respondent in favor of petitioner Nestor Rodriguez.
One year later respondent filled up the blank LBP Check No. 6563066 with the amount of P2,062,000.00 and the date June 30, 1999.
The LBP check was dishonored for being drawn against insufficient funds (DAIF).

Parties’ Allegations, Payments and Counterclaim

Petitioners alleged they entrusted the blank LBP check to respondent to facilitate Nestor Rodriguez’s DPWH pre-payment application; the check would serve as collateral and was to be returned after payment for 15,698 bags (P1,507,008.00).
Petitioners claimed they paid respondent the total of P2,306,500.00, which they asserted was P139,160.00 more than the amount of P2,167,340.00 (representing 23,360 bags of cement for the Kalibo project), and thus they were cleared of liability.
Respondent in his Answer averred he had delivered 40,360 bags of cement to petitioners who remitted P2,306,500.00, leaving an outstanding amount of P2,062,000.00.
Respondent maintained that when petitioners stopped bank-to-bank online payments to him, he filled up the check for P2,062,000.00 dated June 30, 1999.
By compulsory counterclaim respondent sought recovery of P2,062,000.00 with interest at 24% per annum from January 29, 1999 until fully paid as actual damages.

Pre-trial Order — Delimited Issues

The Pre-trial Order dated January 28, 2000 enumerated the issues as:
- Whether petitioners’ liability to respondent for 15,698 bags priced at P1,507,008.00 (subject of the pre-payment program and covered by blank check) had been paid.
- Whether LBP Check No. 6563066 should be returned by respondent or declared cancelled, null and void.
- Whether petitioners completely paid the price for 23,360 bags valued at P2,167,340.00.
- Whether petitioners were entitled to damages and attorney’s fees.
- Whether the case should be dismissed and the counterclaim proceed.

Trial Court Decision (RTC, June 28, 2002) — Findings and Disposition

The RTC applied Section 14 of the Negotiable Instruments Law regarding blanks and filling up of instruments.
The trial court found respondent’s filling up of LBP Check No. 6563066 for P2,062,000.00 was not strictly in accordance with the authority given by petitioner Nestor Rodriguez and that it was not filled within a reasonable time (one year had lapsed).
The RTC ruled the transaction concerning 23,360 bags of cement valued at P2,167,340.00 had been fully paid and considered the matter settled.
Dispositive portion of the RTC Decision (quoted in full in the record) rendered judgment in favor of plaintiffs and against defendant as follows:
- Declared plaintiffs’ obligation for cement supplied for the Kalibo project in the amount of P2,167,340.00 already and fully paid; plaintiffs no longer liable.
- Declared Land Bank Check No. 6563066 dated June 30, 1999 for P2,062,000.00 null and void and without legal effect.
- Ordered defendant to pay each plaintiff P100,000.00 as actual damages; P500,000.00 as moral damages; P200,000.00 as attorney’s fees; P2,000.00 per hearing as appearance fee; P50,000.00 as miscellaneous actual and necessary litigation expenses.
- Ordered costs.
- Dismissed defendant’s counterclaim.
RTC Decision received July 26, 2002.

Notice of Appeal, Initial RTC Action on Appeal and Petitioners’ Motion to Dismiss

Respondent filed a Notice of Appeal on July 30, 2002.
By Order dated August 5, 2002 the RTC gave due course to respondent’s appeal and directed the Branch Clerk of Court to transmit the entire records to the Court of Appeals.
Petitioners filed a Motion for Reconsideration, to Dismiss Appeal, and for Issuance of Writ of Execution on August 26, 2002, arguing the appeal was not perfected due to non-payment of docket and other lawful fees pursuant to Section 4, Rule 41 of the Rules of Court.
Petitioners appended a Certification dated August 19, 2002 from the Clerk of Court of the RTC Office certifying that no appeal fees in the case had been paid and received by the OCC.

RTC Order Dismissing Appeal and Writ of Execution (September–October 2002)

In an Order dated September 23, 2002, the trial court dismissed respondent’s appeal for non-payment of docket and other lawful fees and directed issuance of a writ of execution to implement the RTC Decision dated June 28, 2002.
The Clerk of Court