G.R. No. 216436. December 02, 2015


This is a petition for review on certiorari seeking to reverse and set aside the Resolutions, dated June 30, 2014,[1] and January 13, 2015,[2] of the Court of Appeals (CA) in CA-G.R. CV No. 101581, which deemed the appeal of petitioner Reliance Surety & Insurance Corporation (Reliance) abandoned for the failure to file its appellant's brief. For said reason, the CA dismissed it.

The Antecedents

Respondent Sta. Barbara Food Manufacturing Corporation (Sta. Barbara) procured separate fire insurance policies from Reliance, Malayan Insurance Corporation and Capital Insurance for its warehouse building, machineries and stocks located at Bo. Matik-Matik, Sta. Barbara, Pangasinan.

Consequently, Reliance issued Fire Insurance Policy No. DG-FIRE-01-00010 for the total insured amount of Eight Million Pesos (P8,000,000.00). According to Reliance, it was not informed of the existing co-insurance. Sta. Barbara, however, claimed that it reported orally to the agents of the insurer the fact that it had secured other fire insurance policies from other insurers.[3]

On March 24, 2001, fire gutted the insured building resulting to the destruction of the building, its stocks and other properties.[4] SF03 Amado Palisoc (Palisoc) and FO3 Wenceslao Mangonon (Mangonon) investigated the incident. Palisoc issued a certification stating that the fire was due to the accidental overheating of the electrical conductor. On the other hand, Mangonon issued a sketch pinpointing the eastern part of the building to be the only seat of fire.[5]

Unsatisfied, Reliance hired Jaime Dela Merced (Dela Merced) to conduct the investigation relative to the fire. Dela Merced found out that Sta. Barbara violated the following: Policy No. 3 (notice to the company of any insurance or insurances already effected), Policy No. 15 (fraudulent claims) and Policy No. 21 (Section 6 of P.D. No. 1613 or Arson Law).[6] As a result, Reliance denied Sta. Barbara's claim citing violation of reinsurance, finding of prima facie evidence of arson and multiple seats of fire as reasons for its denial.[7]

Thereafter, the adjusters of the insurers also hired forensic chemist Aini Ling Jun Chung (Ling)[8] Ling discovered physical evidence indicating that fire had been intentionally started in various locations.[9] She also stated that it was impossible to determine the exact number of fire seats or the manner in which the fire was ignited.[10]As efforts to settle the case before the Insurance Commission were unsuccessful, Sta. Barbara filed a complaint for specific performance and damages based on breach of contract against Reliance before the Regional Trial Court of Dagupan City, Branch 42 (RTC).[11]

The RTC Ruling

In its decision,[12] dated August 20, 2008, the RTC rendered judgment in favor of Sta. Barbara and ordered Reliance to pay the insurance claim with interest in the amount of P32,384,034.53.[13] The RTC was of the view that there was no violation of the insurance policy. It opined that there was only one seat of fire as pinpointed by Mangonon. It added that there was no evidence of fraud because there was no intentional placing of combustible materials in the building.[14] Finally, on the issue of lack of written notice of co-insurance, the RTC held that oral notices to the agents of the insurers would suffice[15] because notice to the agents bound the principal insurers.[16]

Aggrieved, on September 16, 2008, Reliance, through its then counsel Reyes and Reyes Law Offices, elevated the case before the CA, where it was docketed as CA-G.R. CV No. 101581. which is the subject of the present case.

Meanwhile, Sta. Barbara filed a motion for issuance of writ of execution on September 15, 2008. On November 11, 2008, the RTC granted Sta. Barbara's motion for execution and, on December 19, 2008, the RTC ordered the issuance of a writ of execution.

CA-G.R. SP No. 106861

Reliance filed a separate petition for certiorari with prayer for issuance of temporary restraining order and preliminary injunction before the CA, docketed as CA-G.R. SP No. 106861. assailing the November 11, 2008 and December 19, 2008 orders of the RTC.

On March 3, 2009, Reyes and Reyes Law Offices filed a notice of withdrawal of appearance as Reliance's counsel in CA-G.R. SP No. 106861.[17] On March 13, 2009, the CA noted the withdrawal of Reyes and Reyes Law Offices and the entry of appearance of Astorga and Repol Law Office as Reliance's new counsel.[18]

In its decision in CA-G.R. SP No. 106861, dated May 31, 2010, the CA granted Reliance's petition for certiorari and annulled the orders of execution of the RTC. Sta. Barbara questioned the CA decision before the Supreme Court through a petition for certiorari. In a minute resolution, the Court dismissed the petition for being the wrong mode of judicial review. The said resolution became final and executory on November 22, 2011.

CA-G.R. CVNo. 101581

Returning to CA-G.R. CV No. 101581, Astorga and Repol Law Office filed before the RTC a manifestation with request to transmit the records of the case to the CA.

On January 21, 2014, the Chief of the Judicial Records Division of the CA (JRD) sent a letter[19] to Arty. Rica Rivera-Lumibao (Atty. Rivera-Lumibao) of the Reyes and Reyes Law Offices directing her to complete the records of the RTC case within 30 days from receipt. In response, Atty. Rivera-Lumibao sent a letter,[20] dated February 6, 2014, to the JRD stating that her law office had long withdrawn its appearance as Reliance's counsel.

In a letter,[21] dated April 2, 2014, the JRD sent a notice to Reliance at 8th Fir., Equitable Bank Building, 262 Juan Luna Street, Binondo, Manila, directing the latter to file its appellant's brief before the CA within 45 days from receipt of notice. Notably, the said notice was not received by Reliance at the given address and the envelope containing the notice was marked with "RTS/Moved out."[22]

The CA Ruling

On June 30, 2014, the CA issued the assailed resolution in CA-G.R. CV No. 101581 dismissing Reliance's appeal outright because it was deemed abandoned. The appellate court found that Reliance failed to file its appellant's brief in spite of proper service of notice, which was a ground for dismissal under Section l(e), Rule 50 of the Rules of Court.

Reliance filed a motion for reconsideration, through the Astorga and Repol Law Office, but the same was denied by the CA in its assailed resolution, dated January 13, 2015.

Hence, this petition.
Reliance argues that the notice to file the appellant's brief was not served to its formal counsel, Astorga and Repol Law Office; that, although such law office only entered its appearance in CA-G.R. SP No. 106861, the said entry was part of the records of CA-G.R. CV No. 101581 which should have prompted the CA to send the subsequent notices to it after Reyes and Reyes Law Offices withdrew its appearance; and that the notice to file the appellant's brief was erroneously sent to Reliance's old address at 8th Fir., Equitable Bank Building, 262 Juan Luna Street, Binondo, Manila, when it had long corrected its new address to 8th Floor, Cu-Unjieng Center, 208 Dasmarinas cor. Quintin Paredes St., Binondo, Manila.

In its Comment,[23] Sta. Barbara countered that the appeal in CA-G.R. CV No. 101581 was improper because Reliance belatedly filed its notice of appeal; and that there was neither misrepresentation nor fraud employed in claiming the insurance proceeds from Reliance.

In its Reply,[24] Reliance averred that the subject matter of the present appeal was the failure of the CA to send the notice to file appellant's brief to its counsel and its proper address and not the timeliness of the notice of appeal; and that the condition in the insurance policy was violated because Sta. Barbara failed to submit a written notice of co-insurance to its insurers.

The Court's Ruling

The case must be remanded to the CA for the determination of the case on the merits.

Section 7, Rule 44 of the Rules of Court provides that "[i]t shall be the duty of the appellant to file with the court, within forty-five (45) days from receipt of the notice of the clerk that all the evidence, oral and documentary, are attached to the record xxx." Consequently, under Section 1 (e), Rule 50 of the Rules of Court, the CA may dismiss an appeal when no appellant's brief is filed within the reglementary period prescribed by the rules. The power conferred upon the CA to dismiss an appeal is discretionary and directory and not ministerial or mandatory. The failure of an appellant to file his brief within the reglementary period does not have the effect of causing the automatic dismissal of the appeal.[25]

In this case, the CA dismissed the case outright because Reliance failed to file its appellant's brief within the reglementary period. A perusal of the records, however, reveals that there was no valid notice given to the appellant.

The first oversight committed by the CA was when it initially sent the notice to file the appellant's brief to the Reyes and Reyes Law Offices. The CA should have instead sent the said notice to Reliance, the appellant itself. The rules require the notice to file brief to be given to the party appellant. The reason is that after taking an appeal, the party may change attorney for purposes of the appeal. Hence, the notice must be given to the party appellant.[26]

Even assuming that service of the notice to file the appellant's brief to the counsel of record would constitute as substantial compliance, the same was not sufficiently observed in the case at bench. When the Reyes and Reyes Law Offices replied that it had long withdrawn its appearance as counsel, the CA should have checked who its substitute was. If the CA only checked the records, it would have learned that Astorga and Repol Law Office had filed before the RTC a manifestation with request to transmit the records of the case to the CA;[27] that the entry of appearance of Astorga and Repol Law Office in CA-G.R. SP No. 106861 was attached to the records of the case;[28] and that the same law office filed a motion for reconsideration on Reliance's behalf before the CA.[29]

Based on the foregoing circumstances, even without the formal appearance of Astorga and Repol Law Office as Reliance's counsel, the CA should have, at the very least, verified whether the said law office was authorized to appear on behalf of Reliance. It has been held that as a logical corollary of the presumption that a lawyer is authorized to appear for the party he represents, it is also presumed that the lawyer is authorized by, and has conferred with, his client regarding the case before he files an important responsive pleading for and on behalf of the latter.[30]

The second oversight committed by the CA was when it sent the notice to file the appellant's brief to the old address of Reliance. When Reyes and Reyes Law Offices withdrew its appearance, the CA opted to serve the notice to file the appellant's brief to Reliance. Regrettably, the said notice was sent to its old address of Reliance at 8th Fir., Equitable Bank Building, 262 Juan Luna Street, Binondo, Manila. As expected, the said notice was returned to sender with a notation of "moved-out."

In the Complaint[31] of Sta. Barbara, the address it indicated was the old place of business of Reliance. When Reliance itself, however, filed its Answer[32] with the trial court, it provided its true and updated address at 8th Floor, Cu-Unjieng Center, 208 Dasmarifias cor. Quintin Paredes St., Binondo, Manila, and its subsequent pleadings consistently depicted the said new address.[33]

Generally, while the courts have no strict obligation to determine the proper address of the parties, the circumstance of the present case should have prompted the CA to exercise its discretion. When the said notice was unserved, the CA could have easily determined the proper address of Reliance by simply scanning the records. Alternatively, the appellate court could have either required Sta. Barbara or Reliance's old counsel to provide its proper address. Unfortunately, the appellate court chose to haphazardly give up on the service of the notice to Reliance even though its proper address was within its disposal.

In fine, as Reliance was not properly served with the notice to file the appellant's brief, the dismissal of the appeal was in violation of its right to due process. For the said reason, the 45-day period to file said brief had not commenced and the appeal could not be dismissed outright. Neither could the CA invoke the substituted service of notice under Section 8, Rule 13 of the Rules of Court[34] because the address of the party was known and readily available.

While the court has discretion to dismiss or not to dismiss an appellant's appeal, the discretion must be a sound one, to be exercised in accordance with the tenets of justice and fair play, having in mind the circumstances obtaining in each case.[35] In this case, Reliance would be made to pay an amount of P32,384,034.53 despite the fact that the dismissal of its appeal was without due process, the CA having disregarded the facts on record regarding its new counsel and its new address. It is simply not fair to leave intact an award of a hefty amount due to a technicality, which has no solid basis.

At any rate, the rule is that it is a far better and more prudent course of action for the court to excuse a technical lapse and afford the parties a review of the case on appeal to attain the ends of justice rather than dispose of the case on technicality and cause a grave injustice to the parties, giving a false impression of speedy disposal of cases while actually resulting in more delay, if not a miscarriage of justice.[36]

WHEREFORE, the Resolutions, dated and June 30, 2014 and January 13, 2015, of the Court of Appeals in CA-G.R. CV No. 101581 are REVERSED and SET ASIDE. The case is REMANDED to the Court of Appeals for appropriate proceedings and decide the case on the merits.

Further, Reliance Surety & Insurance Co., Inc. is DIRECTED to file its Appellant's Brief before the Court of Appeals within forty-five (45) days from receipt of this Resolution. (Carpio, J., on official leave; Del Castillo, J., designated Acting Chairperson per Special Order No. 2281 and Velasco, Jr., J., designated Acting Member per Special Order No. 2282, both dated November 13, 2015; Brion, J., on official leave; Perez, J., designated Acting Member, per Special Order No. 2301, dated December 1, 2015.


[1] Rollo pp. 69-71, penned by Associate Justice Danton Q. Bueser, Associate Justice Rebecca De Guia- Salvador and Associate Justice Ramon R. Garcia.

[2] Id. at 67-68.

[3] Id. at 80.

[4] Id. at 72.

[5] Id. at 76.

[6] Id. at 81.

[7] Id. at 73.

[8] Id. at 79.

[9] Id. at 83.

[10] Id. at 84.

[11] Id. at 78.

[12] Id. at 72-97.

[13] Id. at 97.

[14] Id. at 91-92.

[15] Id. at 93.

[16] Id. at 94.

[17] Id. at 101. "

[18] Id. at 109.

[19] Id. at 111.

[20] Id. at 112.

[21] Id. at 114.

[22] Id. at 115.

[23] Id. at 120-168.

[24] Id. at 182-199.

[25] Government of Kingdom of Belgium v. CA, G.R. No. 164150, April 14, 2008.

[26] Aguam v. Court of Appeals, 388 Phil. 587-596 (2000).

[27] Records, pp. 1010-1014.

[28] Id. at 724.

[29] Rollo, pp. 98-99.

[30] Cebu Stevedoring Co., Inc. v. Ramolete, 193 Phil. 780 (1981).

[31] Records, p. 1.

[32] Id. at 17.

[33] Rollo, p. 64.

[34] Sec. 8. Substituted service. - If service of pleadings, motions, notices, resolutions, orders and other papers cannot be made under the two preceding sections, the office and place of residence of the party or his counsel being unknown, service may be made by delivering the copy to the clerk of court, with proof of failure of both personal service and service by mail. The service is complete at the time of such delivery.

[35] Phil. Bank of Communications v. Yeung, G.R. No. 179691, December 4, 2013, 711 SCRA 490, 500.

[36] Asia United Bank v. Goodland Co., Inc., 650 Phil. 174, 182 (2010).