Posted by: James L. Jalon on July 25, 2018*
FACTS:
Petitioner Elmer Gomez (Gomez) filed a complaint with the RTC for a sum of money and damages and payment of attorney's fees against Ma. Lita A. Montalban (Montalban). The Complaint alleged that the respondent obtained a loan from the petitioner in the sum of P 40,000.00 with a voluntary proposal on her part to pay 15% interest per month. When the loan became due, respondent failed to pay the loan despite several demands; thus, petitioner filed the Complaint praying for the payment of P 238,000.00, representing the principal loan and its interest charges plus the 25% of the amount to be awarded as attorney's fees, as well as the cost of the suit. Summons was served, but despite her receipt thereof, respondent failed to file her answer, resulting to a trial ex parte in favor of Gomez.
Upon the decision was penned, Montalban filed a Petition for Relief from Judgement allegeing that there was no effective service of summons upon her since there was no personal service of the same. The summons was received by one Mrs. Alicia dela Torre, who was not authorized to receive summons or other legal pleadings or documents on respondent's behalf. Respondent attributed his failure to file answer to fraud, accident, mistake or excusable negligence.
ISSUE:
Upon the decision was penned, Montalban filed a Petition for Relief from Judgement allegeing that there was no effective service of summons upon her since there was no personal service of the same. The summons was received by one Mrs. Alicia dela Torre, who was not authorized to receive summons or other legal pleadings or documents on respondent's behalf. Respondent attributed his failure to file answer to fraud, accident, mistake or excusable negligence.
ISSUE:
Whether or not the RTC has jurisdiction over this case for sum of money damages and attorney's fees where principal amount of obligation is only P40,000.00 but the amount of the demand per allegation of the complaint is P238,000.00.
HELD:
HELD:
There can be no doubt that the RTC in this case has jurisdiction to entertain, try, and decide the petitioners Complaint.
To this Court, it is irrelevant that during the course of the trial, it was proven that respondent is only liable to petitioner for the amount of P40,000.00 representing the principal amount of the loan; P57,000.00 as interest thereon at the rate of 24% per annum reckoned from 26 August 1998 until the present; and P15,000.00 as attorneys fees.Contrary to respondents contention, jurisdiction can neither be made to depend on the amount ultimately substantiated in the course of the trial or proceedings nor be affected by proof showing that the claimant is entitled to recover a sum in excess of the jurisdictional amount fixed by law. Jurisdiction is determined by the cause of action as alleged in the complaint and not by the amount ultimately substantiated and awarded.[23]
Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiffs cause of action.[24] The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.[25] The averments in the complaint and the character of the relief sought are the ones to be consulted.[26] Once vested by the allegations in the complaint, jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.[27]
Relief From Judgment
On the propriety of the granting by the RTC of respondents Petition for Relief from Judgment, the Court finds and so declares that the RTC did indeed commit an error in doing so.
First of all, a petition for relief under Rule 38 of the Rules of Court is only available against a final and executory judgment.[28] Since respondent allegedly[29] received a copy of the Decision dated 4 May 2004 on 14 May 2004, and she filed the Petition for Relief from Judgment on 28 May 2004, judgment had not attained finality. The 15-day period to file a motion for reconsideration or appeal had not yet lapsed. Hence, resort by respondent to a petition for relief from judgment under Rule 38 of the Rules of Court was premature and inappropriate.
Second, based on respondents allegations in her Petition for Relief before the RTC, she had no cause of action for relief from judgment.
Section 1 of Rule 38 provides:
SECTION 1. Petition for relief from judgment, order, or other proceedings. When a judgment or final order is entered, or any other proceeding is thereafter taken against a party in any court through fraud, accident, mistake, or excusable negligence, he may file a petition in such court and in the same case praying that the judgment, order or proceeding be set aside.
Under Section 1, Rule 38 of the Rules of Court, the court may grant relief from judgment only [w]hen a judgment or final order is entered, or any other proceeding is taken against a party in any court through fraud, accident, mistake, or excusable negligence x x x.
In her Petition for Relief from Judgment before the RTC, respondent contended that judgment was entered against her through mistake or fraud, because she was not duly served with summons as it was received by a Mrs. Alicia dela Torre who was not authorized to receive summons or other legal processes on her behalf.
Meaning of Mistake
As used in Section 1, Rule 38 of the Rules of Court, mistake refers to mistake of fact, not of law, which relates to the case.[30] The word mistake, which grants relief from judgment, does not apply and was never intended to apply to a judicial error which the court might have committed in the trial. Such errors may be corrected by means of an appeal.[31]This does not exist in the case at bar, because respondent has in no wise been prevented from interposing an appeal.
Meaning of Fraud
Fraud, on the other hand, must be extrinsic or collateral, that is, the kind which prevented the aggrieved party from having a trial or presenting his case to the court,[32]or was used to procure the judgment without fair submission of the controversy.[33]This is not present in the case at hand as respondent was not prevented from securing a fair trial and was given the opportunity to present her case.
Fraud, on the other hand, must be extrinsic or collateral, that is, the kind which prevented the aggrieved party from having a trial or presenting his case to the court,[32]or was used to procure the judgment without fair submission of the controversy.[33]This is not present in the case at hand as respondent was not prevented from securing a fair trial and was given the opportunity to present her case.
Meaning of Excusable Negligence
Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against.[34] Under Section 1, the negligence must be excusable and generally imputable to the party because if it is imputable to the counsel, it is binding on the client.[35] To follow a contrary rule and allow a party to disown his counsels conduct would render proceedings indefinite, tentative, and subject to reopening by the mere subterfuge of replacing counsel. What the aggrieved litigant should do is seek administrative sanctions against the erring counsel and not ask for the reversal of the courts ruling.[36]
Third, the certificate of service of the process server of the court a quo is prima facie evidence of the facts as set out therein.[37] According to the Sheriffs Return of Service,[38] summons was issued and served on respondent thru one Mrs. Alicia dela Torre, thus:
THIS IS TO CERTIFY that on June 25, 2003 at around 1:45 p.m. the undersigned sheriff caused the service of summons issued in the above-entitled case together with attached complaints and annexes for and in behalf of defendant [respondent] thru a certain Mrs. Alicia Dela Torre inside their compound at the given address who acknowledged receipt by signature and notation of said dela Torre appearing thereof.
Wherefore, this summons is respectfully returned to the Honorable Regional Trial Court, Branch 13, Davao City, duly SERVED for its records and information.
Finally, even assuming arguendo that the RTC had no jurisdiction over respondent on account of the non-service upon her of the summons and complaint, the remedy of the respondent was to file a motion for the reconsideration of the 4 May 2004 Decision by default or a motion for new trial within 15 days from receipt of notice thereof. This is also without prejudice to respondents right to file a petition for certiorari under Rule 65 of the Rules of Court for the nullification of the order of default of the court a quo and the proceedings thereafter held including the decision, the writ of execution, and the writ of garnishment issued by the RTC, on the ground that it acted without jurisdiction.[39]Unfortunately, however, respondent opted to file a Petition for Relief from the Judgment of the RTC, which, as the Court earlier determined, was the wrong remedy.
In Tuason v. Court of Appeals,[40] the Court explained the nature of a petition for relief from judgment:
A petition for relief from judgment is an equitable remedy that is allowed only in exceptional cases where there is no other available or adequate remedy. When a party has another remedy available to him, which may be either a motion for new trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to revive the right to appeal which had been lost thru inexcusable negligence.[ (Emphasis and underscoring supplied; citations omitted)
Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against.[34] Under Section 1, the negligence must be excusable and generally imputable to the party because if it is imputable to the counsel, it is binding on the client.[35] To follow a contrary rule and allow a party to disown his counsels conduct would render proceedings indefinite, tentative, and subject to reopening by the mere subterfuge of replacing counsel. What the aggrieved litigant should do is seek administrative sanctions against the erring counsel and not ask for the reversal of the courts ruling.[36]
Third, the certificate of service of the process server of the court a quo is prima facie evidence of the facts as set out therein.[37] According to the Sheriffs Return of Service,[38] summons was issued and served on respondent thru one Mrs. Alicia dela Torre, thus:
THIS IS TO CERTIFY that on June 25, 2003 at around 1:45 p.m. the undersigned sheriff caused the service of summons issued in the above-entitled case together with attached complaints and annexes for and in behalf of defendant [respondent] thru a certain Mrs. Alicia Dela Torre inside their compound at the given address who acknowledged receipt by signature and notation of said dela Torre appearing thereof.
Wherefore, this summons is respectfully returned to the Honorable Regional Trial Court, Branch 13, Davao City, duly SERVED for its records and information.
Finally, even assuming arguendo that the RTC had no jurisdiction over respondent on account of the non-service upon her of the summons and complaint, the remedy of the respondent was to file a motion for the reconsideration of the 4 May 2004 Decision by default or a motion for new trial within 15 days from receipt of notice thereof. This is also without prejudice to respondents right to file a petition for certiorari under Rule 65 of the Rules of Court for the nullification of the order of default of the court a quo and the proceedings thereafter held including the decision, the writ of execution, and the writ of garnishment issued by the RTC, on the ground that it acted without jurisdiction.[39]Unfortunately, however, respondent opted to file a Petition for Relief from the Judgment of the RTC, which, as the Court earlier determined, was the wrong remedy.
In Tuason v. Court of Appeals,[40] the Court explained the nature of a petition for relief from judgment:
A petition for relief from judgment is an equitable remedy that is allowed only in exceptional cases where there is no other available or adequate remedy. When a party has another remedy available to him, which may be either a motion for new trial or appeal from an adverse decision of the trial court, and he was not prevented by fraud, accident, mistake or excusable negligence from filing such motion or taking such appeal, he cannot avail himself of this petition. Indeed, relief will not be granted to a party who seeks avoidance from the effects of the judgment when the loss of the remedy at law was due to his own negligence; otherwise the petition for relief can be used to revive the right to appeal which had been lost thru inexcusable negligence.[ (Emphasis and underscoring supplied; citations omitted)
In the case at bar, there being no fraud, accident, mistake, or excusable negligence that would have prevented petitioner from filing either a motion for reconsideration or a petition for review on certiorari of the 4 May 2004 Decision of the RTC, her resort to a Petition for Relief from Judgment was unwarranted.
This Court also notes that when respondent was declared in default for her failure to file an Answer to the Complaint, she did not immediately avail herself of any of the remedies provided by law. Lina v. Court of Appeals[41] enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 [now Section 1] of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41). (Emphasis added)
Other Remedies Against Default Order
In addition, and as this Court earlier mentioned, a petition for certiorari to declare the nullity of a judgment by default is also available if the trial court improperly declared a party in default, or even if the trial court properly declared a party in default, if grave abuse of discretion attended such declaration.[42]
If respondent is really vigilant in protecting her rights, she should have exhausted all the legal remedies above-mentioned to nullify and set aside the order of default against her, and should no longer have waited for the judgment to be rendered. Respondent does not deny that she did receive the summons, although she alleges that it was not properly served upon her, yet she chose to sit on her rights and did not act immediately. For respondents failure to act with prudence and diligence in protecting her rights, she cannot now elicit this Courts sympathy.
This Court also notes that when respondent was declared in default for her failure to file an Answer to the Complaint, she did not immediately avail herself of any of the remedies provided by law. Lina v. Court of Appeals[41] enumerates the remedies available to a party declared in default:
a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now Sec. 3(b), Rule 9]);
b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 [now Section 1] of Rule 38; and
d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has been presented by him (Sec. 2, Rule 41). (Emphasis added)
Other Remedies Against Default Order
In addition, and as this Court earlier mentioned, a petition for certiorari to declare the nullity of a judgment by default is also available if the trial court improperly declared a party in default, or even if the trial court properly declared a party in default, if grave abuse of discretion attended such declaration.[42]
If respondent is really vigilant in protecting her rights, she should have exhausted all the legal remedies above-mentioned to nullify and set aside the order of default against her, and should no longer have waited for the judgment to be rendered. Respondent does not deny that she did receive the summons, although she alleges that it was not properly served upon her, yet she chose to sit on her rights and did not act immediately. For respondents failure to act with prudence and diligence in protecting her rights, she cannot now elicit this Courts sympathy.
Questions of Law vs. Questions of Fact
Section 2(c), Rule 41 of the Rules of Court categorically provides that in all cases where only questions of law are raised, the appeal from a decision or order of the RTC shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.
The distinction between questions of law and questions of fact has long been settled. A question of law exist when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of fact exist when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of witnesses, the existence and relevancy of specific surrounding circumstances, as well as their relation to each oher and to the whole and probability of the situation.
The issue raised in the present petition is one of Jurisdiction of the court over the subject matter- meaning, the nature of the cause of action and of the relief sought. Jurisdiction is the right to act or the power and authority to hear and determine a cause.
*With additions from WinLawSuites Team
Section 2(c), Rule 41 of the Rules of Court categorically provides that in all cases where only questions of law are raised, the appeal from a decision or order of the RTC shall be to the Supreme Court by petition for review on certiorari in accordance with Rule 45.
The distinction between questions of law and questions of fact has long been settled. A question of law exist when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts; or when the issue does not call for an examination of probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of fact exist when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of witnesses, the existence and relevancy of specific surrounding circumstances, as well as their relation to each oher and to the whole and probability of the situation.
The issue raised in the present petition is one of Jurisdiction of the court over the subject matter- meaning, the nature of the cause of action and of the relief sought. Jurisdiction is the right to act or the power and authority to hear and determine a cause.
*With additions from WinLawSuites Team
