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PHILIPPINE SUPREME COURT DECISIONS

THIRD DIVISION

[G.R. No. 139882. August 16, 2000.]

ORIENTAL ASSURANCE CORPORATION, Petitioner, v. SOLIDBANK CORPORATION, Respondent.

D E C I S I O N


PANGANIBAN, J.:


The retroactive application of procedural rules to pending cases is well settled. Hence, the 1997 Rules of Civil Procedure, which require the payment of docket fees upon the filing of the notice of appeal, applies to the present case.chanrob1es virtua1 1aw 1ibrary

The Case


Before us is a Petition for Review on Certiorari under Rule 45, assailing the March 8, 1999 1 and the June 4, 1999 2 Resolutions of the Court of Appeals (CA). The first Resolution reads as follows:jgc:chanrobles.com.ph

"The Court considers the appeal of Leonila Cui and Oriental Assurance Corporation ABANDONED and DISMISSED for their failure to pay the required docket fees (Section 1 [c], Rule 50 of the 1997 Rules of Civil Procedure, as amended.)" (emphasis in the original)

The second Resolution denied petitioner’s Motion for Reconsideration.

The Facts


Petitioner Oriental Assurance Corporation issued Fire Insurance Policy No. F-92/22733-D, insuring the stock of finished and/or unfinished products including raw materials, machinery and equipment belonging to Wear Me Garments Manufacturing, Inc. (Wear Me). The policy insured against loss and/or damage by fire from March 20, 1991 to March 20, 1992. The policy was subsequently renewed for another year from March 20, 1992 to March 20, 1993 under Renewal Receipt No. 40948. A Memorandum stating that the policy was" [m]ade further subject to MORTGAGEE CLAUSE in favor of ‘SOLIDBANK CORPORATION’" was typewritten on the face of the receipt.

On April 27, 1993, petitioner issued another Fire Insurance Policy (No. F-93-40690-D) insuring the same items of Wear Me from March 20, 1993 to March 20, 1994.

On July 12, 1993, a fire broke out at the factory of Wear Me, destroying a major portion of the insured properties. Wear Me submitted to petitioner and its co-insurers 3 a Notice of Loss for the value of the damaged properties. The claims were denied.chanrob1es virtua1 1aw 1ibrary

As holder of trust receipts over the burned goods, Solidbank Corporation sent an undated telegram to petitioner, asking the latter to pay the proceeds of Fire Insurance Policy No. F-92/22733-D. Petitioner refused to comply, because the Policy did not contain a mortgagee clause in favor of Solidbank.

Before the Regional Trial Court of Manila (RTC), 4 respondent then instituted Civil Case No. 94-70505 against petitioner and Wear Me; as well as Angelita Amparo Go and Arnold A. Go, Leonila Cui, and Prudential Guarantee and Assurance Inc. Acting favorably on respondent’s Motion for Summary Judgment, 5 the RTC rendered a Decision, 6 the dispositive part of which reads:jgc:chanrobles.com.ph

"WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendants as follows:chanrob1es virtual 1aw library

1.1 Holding that the plaintiff is entitled to be paid under the loan of P1.2 Million and under the five trust receipts the sum of P4,797,294.83, plus interests and other charges form December 29, 1992, until fully paid;

1.2 Holding defendant WEAR ME, Angelita Amparo Go and spouse, Arnold A. Go, jointly and severally liable to pay the plaintiff the above amounts;

1.3 Prudential Guarantee and Assurance, Inc., and Oriental Assurance Corporation, are held jointly and severally liable to pay the plaintiff, together with defendants WEAR ME, Angelita Amparo Go and her spouse, Arnold A. Go, the above amounts but limited to the extent of the insurance coverage representing the insurance coverage assigned to Solidbank Corporation under the two (2) fire insurance policies;chanrob1es virtua1 1aw 1ibrary

1.4 Leonila Cui is held jointly and severally liable to the plaintiff, together with all the other defendants, but only with respect to the loan of P1.2 million and the accrued interest and penalties. nad

2. Ordering all the defendants jointly and severally to pay the plaintiff a sum equal to 10% of the amounts above payable plus the costs of the suit." 7

On August 18, 1995, respondent filed a Motion for Execution pending appeal. It was opposed by petitioner, which filed a Motion for Reconsideration of the RTC Decision.

Subsequently, the trial court issued an Omnibus Order granting the Motion for Execution and denying the Motion for Reconsideration. On October 23, 1995, petitioner appealed the RTC Decision and Omnibus Order to the Court of Appeals. It should be added that before elevating the records of the case to the appellate court, the RTC granted respondent’s Motion to Stay Execution Pending Appeal Based on Supersedeas Bond.

As earlier mentioned, the CA denied petitioner’s appeal and subsequent Motion for Reconsideration.

Hence, this recourse to this Court. 8

The Issue


In its Memorandum, petitioner submits for the consideration of this Court this lone issue:jgc:chanrobles.com.ph

". . . [W]hether or not the Court of Appeals . . . committed reversible error in giving retroactive effect to Section 1 (c) of Rule 50 of the 1997 Rules of Civil Procedure [dismissing] petitioner’s appeal for failure of the petitioner to pay the appellate court docket and other lawful fees." 9

The Court’s Ruling


The Petition is devoid of merit.

Sole Issue:chanrob1es virtual 1aw library

Retroactive Effect of Rules of Procedure

According to both parties, the sole controversy is the retroactive application of Section 1 (c), Rule 50 of the 1997 Rules of Court, which provides:chanrob1es virtua1 1aw 1ibrary

"SECTION 1. Grounds for dismissal of appeal. — An appeal may be dismissed by the Court of Appeals, on its own motion or on that of the appellee, on the following grounds:chanrob1es virtual 1aw library

x       x       x


(c) Failure of the appellant to pay the docket and other lawful fees as provided in section 5 of Rule 40 10 and section 4 of Rule 41;"

Section 4 of Rule 41 in turn reads:jgc:chanrobles.com.ph

"SECTION 4. Appellate court docket and other lawful fees. — Within the period for taking an appeal, the appellant shall pay to the clerk of the court which rendered the judgment or final order appealed from, the full amount of the appellate court docket and other lawful fees. Proof of payment of said fees shall be transmitted to the appellate court together with the original record or the record on appeal."cralaw virtua1aw library

Petitioner contends that these Rules cannot be given retroactive effect because such action would impair its "vested" rights under the old Rules. 11 The latter required an appellant to pay the docket fees within fifteen days from the receipt of notice from the CA clerk of court that the record on appeal has been received.

The retroactive application of procedural rules to pending cases is undoubtedly well settled. 12 Petitioner even admits this in its efforts to reason out its case. 13 For this reason alone, the present Petition should be dismissed.

Even assuming that it is entitled to the aforecited right, the CA’s dismissal of the appeal still stands.

Counsel’s Negligence

In Arambulo v. CA, 14 a case in which the required notice invoked by herein petitioner was sent to the wrong counsel, we held:jgc:chanrobles.com.ph

"Both the Withdrawal of Appearance of Atty. Jimenez and the Appearance of Atty. Pineda are undeniably found in the original record of Civil Case No. 5301 and are explicitly referred to in the Summary Index in the record of CA-G.R. CV No. 32348. And since the withdrawal of Atty. Jimenez had taken effect upon its filing before the trial court on 12 February 1991, the notice to pay the docket and other fees sent to him by the Judicial-Records Division of the Court of Appeals on 4 March 1991 was thus void or otherwise ineffective. Receipt thereof by him did not operate as notice to the Arambulos. It is a fact on record that no notice to pay the docket fee was sent to and received by Atty. Pineda, therefore, the 15-day period to pay the required docket fee did not even commence to run." (Emphasis ours)chanrob1es virtua1 1aw 1ibrary

Even if we assume that petitioner is entitled to the notice mentioned in the old Rules, the appeal may be dismissed nonetheless, due to petitioner and its counsel’s negligence in inquiring on the status of the appeal. Again, Arambulo is illuminating, as shown below:jgc:chanrobles.com.ph

"Nevertheless, the appeal can be dismissed, not on the basis of the respondent Court of Appeals’ error but on a different ground for which Atty. Pineda must answer. As the new counsel for petitioners, it was incumbent upon him, consistent with his duty to serve his client with competence and diligence, to inquire either from the trial court or the appellate court about the status of the appeal since he had not received any notice to pay the docketing and other fees despite the lapse of several months from the time he entered his appearance. While he had every reason to expect that the office of the Clerk of Court of the Court of Appeals would faithfully comply with Sections 2(3) and 3, Rule 4 of the Revised Internal Rules of the Court of Appeals on the issuance of notice to the parties to pay the docketing and other fees, his failure to receive the notice for so long a time should have alarmed him to the possibility that something must have gone awry somewhere." (Emphasis ours)chanrob1es virtua1 1aw 1ibrary

Indeed, it is the duty 15 of petitioner’s counsel to check the status of a pending appeal. 16 This duty is even more compelling in this case because the appeal had been pending for over three years, 17 and counsel had not received any notice to pay the required docket and other lawful fees. These circumstances should have compelled to action petitioner’s counsel, whose reason for the delay was flimsy and unacceptable. Erroneous and irrelevant is the allegation that" [t]he long pendency of petitioner’s appeal was due to the filing by Prudential of the petition for certiorari and the filing by the respondent of the motion to dismiss the appeal." 18 We stress that the relevant matter is the failure of petitioner to check the status of its appeal. Under the circumstances, it is bound by the negligence of its counsel.

In view of the foregoing conclusion, the parties’ lengthy discussions of the merits of the appealed case need not be ruled upon.

WHEREFORE, the Petition is DENIED and the assailed Resolutions AFFIRMED. Costs against petitioner.

SO ORDERED.chanrob1es virtua1 1aw 1ibrary

Melo, Vitug, Purisima and Gonzaga-Reyes, JJ., concur.

Endnotes:



1. Rollo, p. 112; penned by Justice Angelina Sandoval Gutierrez and concurred in by Justices Romeo A. Brawner and Martin S. Villarama, Jr.

2. Rollo, p. 116.

3. Namely, Blue Cross Insurance, Inc., Central Surety & Insurance Co., Cibeles Insurance Corporation, Liberty Insurance Corporation, Philippine British Assurance Co., Philippine First Insurance Co., Commonwealth Insurance, Inc., Pioneer Asia Insurance Corporation, Prudential Guarantee & Assurance, Inc., Reliance Surety & Insurance Co., and Western Guaranty Corporation.

4. Branch 49, presided by Judge Salvador P. De Guzman, Jr.

5. This was actually a Supplemental Motion for Summary Judgment submitted together with an Omnibus Motion for Reconsideration of the Order dated February 23, 1995, denying the first Motion for Summary Judgment.

6. Dated July 27, 1995.

7. RTC Decision, p. 9; rollo, p. 90.

8. The case was deemed submitted for resolution on May 12, 2000, upon receipt by this Court of Respondent’s Memorandum, signed by Atty. Maximino Z. Banaga, Jr. of De los Reyes Banaga Briones & Associates. Petitioner’s Memorandum, signed by Atty. Alejandro P. Ruiz, Jr., was received earlier on April 28, 2000.

9. Memorandum for Petitioner, p. 7; rollo, p. 182.

10. The Supreme Court En Banc Resolution dated February 17, 1998 inserted "section 5 of Rule 40."cralaw virtua1aw library

11. These are § §4 and 5, Rule 46 of the old Rules of Court, which provide:jgc:chanrobles.com.ph

"SEC. 4. Notice of receipt of record. — The clerk upon receiving the record on appeal shall cause a notice of that fact to be served on the parties.

"SEC. 5. Duty of appellant upon receipt of notice. — It shall be the duty of the appellant, within fifteen (15) days from the date of the notice referred to in the preceding section, to pay to the clerk of the Court of Appeals the fee for the docketing of the appeal, and within sixty (60) days from such notice to submit to the court forty (40) printed copies of the record on appeal, together with proof of service of fifteen (15) printed copies thereof upon the appellee."cralaw virtua1aw library

12. See People v. Sumilang, 77 Phil 764, December 18, 1946; Alday v. Camilon, 120 SCRA 521, January 31, 1983; Lim Law v. Olympic Sawmill Co., 129 SCRA 439, May 28, 1984; Bernardo v. CA, 168 SCRA 439, December 14, 1988; Duremdes v. Commission on Elections, 178 SCRA 746, October 27, 1989; Ocampo v. CA, 180 SCRA 27, December 8, 1989; People’s Financing Corp. v. CA, 192 SCRA 34, December 4, 1990; Aris (Phil) Inc. v. NLRC, 200 SCRA 246, August 5, 1991; Asset Privatization Trust v. CA, 229 SCRA 627, February 3, 1994; Del Rosario v. CA, 241 SCRA 519, February 21, 1995; Diu v. CA, 251 SCRA 472, December 19, 1995.

13. Petitioner’s Memorandum, pp. 10-11; rollo, pp. 185-186.

14. 226 SCRA 589, 599, September 17, 1993, per Davide Jr., J. (Now CJ)

15. Canon 18 of the Code of Professional Responsibility provides: "A lawyer shall serve his client with competence and diligence."cralaw virtua1aw library

16. Arambulo v. CA, supra. See Estella v. CA, 185 SCRA 732, May 28, 1990, cited in respondent’s Memorandum.

17. The notice of appeal was filed on October 24, 1995 (October 23, 1995, according to respondent). The CA Resolution dismissing the appeal was received by petitioner on March 24, 1999.

18. Petitioner’s Memorandum, p. 13; rollo, p. 188.

19. Reyes v. CA, 189 SCRA 46, August 24, 1990.

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