Case Summary (G.R. No. L-14761)
Relevant Dates and Procedural History
- September 4, 2000: S.F. Naguiat, Inc. files collection suit at RTC Malolos, Bulacan.
- May 25, 2001: RTC rendered judgment ordering SB Traders and Samonte to pay jointly and severally.
- August 22, 2001: Samonte files petition for relief from judgment.
- December 21, 2001: RTC denies the petition for relief from judgment.
- March 26, 2004: Court of Appeals (CA) dismisses Samonte’s petition for certiorari challenging the RTC order.
- September 28, 2004: CA denies motion for reconsideration.
- October 2, 2009: Supreme Court issues final decision affirming the CA ruling.
Applicable Law and Legal Issues
The case is governed by the 1987 Philippine Constitution and procedural rules found in the Rules of Court, particularly Rule 38 on relief from judgment. The main legal issues revolve around whether petitioner can avail of relief from judgment under Rule 38 after failing to file timely appeal or motion for reconsideration from the RTC’s decision, and whether he can be held jointly liable despite the corporate personality doctrine.
Summary of Facts and Trial Court’s Ruling
Samonte denied personal liability, claiming he acted only on behalf of SB Traders, a separate legal entity distinct from himself. Despite this, the RTC found both liable, ruling that SB Traders was Samonte’s alter ego. Samonte failed to attend the pre-trial conference, was unable to contest the evidence, and judgment was rendered against him and the corporation for the principal amount, interest, exemplary damages, attorney's fees, and costs. He did not appeal immediately but later filed a petition for relief from judgment citing alleged errors in how the RTC appreciated evidence.
RTC’s Denial of Petition for Relief from Judgment
The RTC denied the petition for relief on December 21, 2001, for lack of merit, reasoning that the grounds raised by Samonte for relief—alleged judicial errors—should have been raised in a motion for reconsideration or appeal. The RTC noted the absence of allegations of fraud, accident, mistake, or excusable negligence as required by Rule 38, and emphasized that the petition improperly questioned the dispositive portion of the judgment rather than the proceedings themselves.
Court of Appeals’ Decision and Rationale
The CA affirmed the RTC’s denial, highlighting that once the RTC decision became final and executory due to the petitioner’s failure to file motion for reconsideration or appeal within the prescribed period, the petitioner lost the chance to challenge the judgment through Rule 38 petition. The CA observed that no affidavit of merit accompanied the petition to support claims of fraud, accident, mistake, or excusable negligence, a mandatory requirement under Section 3, Rule 38. The CA also found that the petitioner waived his right to present evidence in support of the petition for relief, thus not deprived of due process.
Supreme Court’s Analysis on Relief from Judgment
The Court explained that Rule 38 remedies are equitable and invoke exceptional relief only when no other adequate remedy exists. Relief under Rule 38 is limited to cases involving fraud, accident, mistake of fact (not judicial error or mistake of law), or excusable negligence that prevented filing of appeal or motion for new trial. Judicial errors or errors in appreciation of evidence, as argued by petitioner, do not constitute grounds for relief under Rule 38 as these are correctable by appeal or motion for reconsideration.
Corporate Personality Doctrine and Liability
The petitioner’s argument that he cannot be held personally liable because of the corporation's separate legal personality is recognized as a proper defense but one that should have been raised timely in a motion for reconsideration or appeal. The fact that these remedies were available and not pursued prevented review of the merits in the Rule 38 petition.
Petition for Relief Requirements and Failure to Comply
The Court emphasized the necessity of a verified petition for relief from judgment accompanied by affidavits establishing the grounds relied upon under Rule 38. The petitioner’s failure to verify the petition and submit affidavits constituted a fatal defect, justifying the dismissal of the petition and denial of relief. The absence of these formal requirements showed disregard of procedural rules.
Counsel’s
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Case Background and Procedural History
- 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 purchased Mobil products on credit from S.F. Naguiat, Inc. (private respondent), with an agreement to pay within 60 days of delivery.
- On September 4, 2000, S.F. Naguiat, Inc. filed a complaint for collection of sum of money against SB Traders and Romeo Samonte before the Regional Trial Court (RTC), Malolos, Bulacan, alleging an obligation of P1,105,143.27 for the oil products sold.
- The respondent corporation claimed that SB Traders was the alter ego of Samonte, operating for his sole benefit, holding petitioner personally solidarily liable.
- Petitioner denied such liability, asserting he acted only in behalf of SB Traders and that the corporation requested more time to settle accounts, issuing postdated checks towards payment.
- Petitioner and his counsel failed to appear at pre-trial conference, resulting in ex parte trial and judgment on May 25, 2001, ordering joint and several payment of the principal amount plus interest, exemplary damages, attorney’s fees, and costs.
- Petitioner did not appeal the judgment; execution writ was issued on July 30, 2001, upon motion of respondent.
- Petitioner filed a petition for relief from judgment on August 22, 2001, alleging serious and prejudicial errors in the RTC’s appreciation of evidence and asserting corporate personality as defense.
- The RTC denied the petition for relief on December 21, 2001, and subsequently denied the motion for reconsideration on February 12, 2002 for failure to comply with mandatory procedural rules and lack of merit.
- Petitioner then filed a petition for certiorari before the Court of Appeals (CA) to set aside the RTC’s denial of relief from judgment.
- The CA dismissed the petition on March 26, 2004, affirming finality of RTC judgment, absence of fraud, accident, mistake or excusable negligence, and procedural defects in petitioner’s case.
- Petitioner’s motion for reconsideration to the CA was denied on September 28, 2004.
- Petitioner elevated the case to the Supreme Court via a petition for review on certiorari.
Issues Presented
- Whether the Court of Appeals erred in dismissing petitioner’s petition for certiorari and denying his motion for reconsideration.
- Whether the petitioner’s failure to timely appeal made the RTC decision final and executory.
- Whether the petition for relief from judgment under Rule 38 of the Rules of Court was properly dismissed due to non-compliance with procedural requirements and absence of grounds such as fraud, mistake, accident, or excusable negligence.
- Whether procedural rules should yield to substantial justice for petitioner’s failure attributed to counsel’s negligence and alleged ignorance of law.