CASE DIGEST: Panay Railways Inc vs. Heva Management and Development Corporation, et al

 


PANAY RAILWAYS INC., PETITIONER, VS. HEVA MANAGEMENT AND DEVELOPMENT CORPORATION, PAMPLONA AGRO-INDUSTRIAL CORPORATION, AND SPOUSES CANDELARIA DAYOT AND EDMUNDO DAYOT, RESPONDENTS.
[G. R. No. 154061 | January 25, 2012]

 

FACTS:

On 20 April 1982, petitioner Panay Railways Inc. executed a Real Estate Mortgage Contract covering several parcels of lands, including Lot No. 6153, in favor of Traders Royal Bank to secure P20 million worth of loan and credit accommodations.

Petitioner failed to pay its obligations to TRB, prompting the bank to extra-judicially foreclose the mortgaged properties including Lot No. 6153.

On 12 February 1990, TRB filed a Petition for Writ of Possession against petitioner.

It was only in 1994 that petitioner realized that the extrajudicial foreclosure included some excluded properties in the mortgage contract. Thus, on 19 August 1994, it filed a Complaint for Partial Annulment of Contract to Sell and Deed of Absolute Sale with Addendum; Cancellation of Title No. T-89624; and Declaration of Ownership of Real Property with Reconveyance plus Damages.

Meanwhile, respondents filed their respective Motions to Dismiss on these grounds: (1) petitioner had no legal capacity to sue; (2) there was a waiver, an abandonment and an extinguishment of petitioner's claim or demand; (3) petitioner failed to state a cause of action; and (4) an indispensable party, namely TRB, was not impleaded.

On 18 July 1997, the RTC granted respondents’ Motion to Dismiss. It held that the Manifestation and Motion filed by petitioner was a judicial admission of TRB's ownership of the disputed properties.

On 11 August 1997, petitioner filed a Notice of Appeal without paying the necessary docket fees. Immediately thereafter, respondents filed a Motion to Dismiss Appeal on the ground of nonpayment of docket fees.

On 29 September 1997, the RTC issued an Order dismissing the appeal citing Sec. 4 of Rule 41 of the Revised Rules of Court.

Petitioner thereafter moved for a reconsideration of the Order. On 25 November 1997, the RTC denied the Motion.

On 28 January 1998, petitioner filed with the CA a Petition for Certiorari and Mandamus under Rule 65 alleging that the RTC had no jurisdiction to dismiss the Notice of Appeal, and that the trial court had acted with grave abuse of discretion when it strictly applied procedural rules.

 The CA held that while the failure of petitioner to pay the docket and other lawful fees within the reglementary period was a ground for the dismissal of the appeal pursuant to Sec. 1 of Rule 50 of the Revised Rules of Court, the jurisdiction to do so belonged to the CA and not the trial court. Thus, appellate court ruled that the RTC committed grave abuse of discretion in dismissing the appeal and set aside the latter's assailed Order dated 29 September 1997.

Prior to the promulgation of the CA's Decision, the SC issued A.M. No. 00-2-10-SC which took effect on 1 May 2000, amending Rule 4, Sec. 7 and Sec. 13 of Rule 41 of the 1997 Revised Rules of Court. The circular expressly provided that trial courts may, motu proprio or upon motion, dismiss an appeal for being filed out of time or for nonpayment of docket and other lawful fees within the reglementary period. Subsequently, Circular No. 48-2000 was issued on 29 August 2000 and was addressed to all lower courts.

By virtue of the amendment to Sec. 41, the CA upheld the questioned Orders of the trial court.

The CA's action prompted petitioner to file a Motion for Reconsideration alleging that SC Circular No. 48-2000 should not be given retroactive effect. It also alleged that the CA should consider the case as exceptionally meritorious. The CA denied petitioner’s MR.

ISSUE:

Whether or not the CA erred in sustaining RTC’s dismissal of petitioner’s notice of appeal caused by petitioner’s failure to pay docket fees

RULING:

Statutes and rules regulating the procedure of courts are considered applicable to actions pending and unresolved at the time of their passage. Procedural laws and rules are retroactive in that sense and to that extent. The effect of procedural statutes and rules on the rights of a litigant may not preclude their retroactive application to pending actions. This retroactive application does not violate any right of a person adversely affected. Neither is it constitutionally objectionable. The reason is that, as a general rule, no vested right may attach to or arise from procedural laws and rules. It has been held that "a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure." More so when, as in this case, petitioner admits that it was not able to pay the docket fees on time. Clearly, there were no substantive rights to speak of when the RTC dismissed the Notice of Appeal.

The argument that the CA had the exclusive jurisdiction to dismiss the appeal has no merit. When the SC accordingly amended Sec. 13 of Rule 41 through A.M. No. 00-2-10-SC, the RTC's dismissal of the action may be considered to have had the imprimatur of the Court. Thus, the CA committed no reversible error when it sustained the dismissal of the appeal, taking note of its directive on the matter prior to the promulgation of its Decision.

Payment of the full amount of the docket fees is an indispensable step for the perfection of an appeal. The Court acquires jurisdiction over any case only upon the payment of the prescribed docket fees.

Moreover, the right to appeal is not a natural right and is not part of due process. It is merely a statutory privilege, which may be exercised only in accordance with the law.

The term "substantial justice" is not a magic wand that would automatically compel this Court to suspend procedural rules. Procedural rules are not to be belittled or dismissed simply because their non-observance may result in prejudice to a party's substantive rights. Like all other rules, they are required to be followed, except only for the most persuasive of reasons when they may be relaxed to relieve litigants of an injustice not commensurate with the degree of their thoughtlessness in not complying with the procedure prescribed.


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