SECOND DIVISION
PHILIPPINE
EXPORT
AND FOREIGN LOAN GUARANTEE CORPORATION,
Petitioner-Appellant, |
G.R.
No.
120384
January 13, 2004
-versus-
PHILIPPINE
INFRASTRUCTURES,
INC., PHILIPPINE BRITISH ASSURANCE CO., INC.,THE SOLID GUARANTY,
INC., B.F. HOMES, INC., PILAR DEVELOPMENT CORPORATIONAND TOMAS F. AGUIRRE,
Respondents-Appellees.
|
D E C I S I
O N
AUSTRIA-MARTINEZ,
J.:chanroblesvirtuallawlibrary
Before the Court is a petition
for review on certiorari
under Rule 45 of the Rules of Court filed by
Philippine
Export and Foreign Loan Guarantee Corporation. Petitioner corporation
seeks
to set aside the Decision[1]
of the Court of Appeals dated August 31, 1994, dismissing CA-G.R. SP
No.
31483; the Resolution dated May 18, 1995 denying petitioner’s motion
for
reconsideration; the Order of the Regional Trial Court (Branch 29) of
Manila,
dated December 7, 1992, dismissing Civil Case No. 86-38169[2]
and the Order dated April 12, 1993 denying the motion for
reconsideration
of said dismissal order.chanrobles virtuallaw libraryred
The antecedent facts
are as follows:
The case was commenced
at the Regional Trial Court on October 30, 1986, upon the filing by
herein
petitioner of a complaint for collection of sum of money against herein
respondents Philippine Infrastructures, Inc. (PII for brevity),
Philippine
British Assurance Co., Inc. (PBAC), The Solid Guaranty, Inc. (Solid),
B.F.
Homes, Inc. (BF Homes), Pilar Development Corporation (PDC) and Tomas
B.
Aguirre (Aguirre). The complaint alleges that: petitioner issued five
separate
Letters of Guarantee in favor of the Philippine National Bank (PNB) as
security for various credit accommodations extended by PNB to
respondent
PII; respondents PII, BF Homes, PDC and Aguirre executed a Deed of
Undertaking
binding themselves, jointly and severally, to pay or reimburse
petitioner
upon demand such amount of money or to repair the damages, losses or
penalties
which petitioner may pay or suffer on account of its guarantees; as
security
for prompt payment by respondent PII, the latter submitted to
petitioner,
surety and performance bonds issued by respondents PBAC and Solid; on
April
24, 1985, the PNB called on the guarantees of petitioner, and so, the
latter
demanded from respondent PII the immediate settlement of P20,959,
529.36,
representing the aggregate amount of the guarantees of petitioner
called
by PNB and the further sum of P351,517.57 representing various fees and
charges; PII refused to settle said obligations; petitioner likewise
demanded
payment from respondents Solid and PBAC but they also refused to pay
petitioner;
and because of the unjustified refusal of respondents to comply with
their
respective obligations, petitioner was constrained to secure the
services
of counsel and incur expenses for the purpose of prosecuting its valid
claims against the respondents. It is prayed in the complaint that
judgment
be rendered ordering respondents PII, BF Homes, PDC and Aguirre to pay
petitioner the amount of P21,311,046.93 plus interest and penalty
charges
thereon, ordering respondents Solid and PBAC to pay P5,758,000.00 and
P9,596,000.00,
respectively, under their surety and/or performance bonds and ordering
respondents to pay petitioner the sums of P2,000,000.00 as attorney’s
fees
and expenses of litigation and P50,000.00 as exemplary damages.cralaw:red
Respondent BF Homes
filed a Motion to Dismiss[3]
on the ground that it is undergoing rehabilitation receivership in the
Securities and Exchange Commission (SEC) and pursuant to P.D. 902-A,
the
trial court has no jurisdiction to try the case. Respondent PII also
filed
a Motion to Dismiss[4]
on the ground that the complaint states no cause of action since it
does
not allege that petitioner has suffered any damage, loss or penalty
because
of the guarantees petitioner had extended for and on behalf of
respondent
PII.cralaw:red
The other respondents
filed their respective responsive pleadings.chanrobles virtuallaw libraryred
On June 10, 1987, Judge
Roberto M. Lagman issued an Order[5]
suspending the case only as against respondent BF Homes and denying
respondent
PII’s motion to dismiss. Thereafter, hearing on the merits ensued. On
January
21, 1992, petitioner presented Rosauro Termulo, the treasury department
manager of petitioner, who testified that the amount of P19,035,256.57
was paid on July 28, 1990 by petitioner to the PNB through the account
of the National Treasury to cover the principal loan and interests, as
guaranteed by petitioner; and, Exhibit "LL," a debit memo issued by the
PNB, showing that the latter was paid by the National Treasurer in
behalf
of petitioner corporation. Consequently, on February 19, 1992,
petitioner
filed a Motion to Amend Complaint to Conform to Evidence[6]
pursuant to Section 5, Rule 10 of the Revised Rules of Court, seeking
to
amend Paragraph 17 and the pertinent portion of the prayer in the
complaint,
to read as follows:
17. Because of the unjustified
refusal of the defendants to comply with their respective obligations,
the plaintiff as guarantor has been constrained to pay the Philippine
National
Bank thru the account of the National Treasury the amount of Nineteen
Million
Thirty-five Thousand Two Hundred Fifty-six and 57/100 (P19,035,256.57)
on July 28, 1990 representing payment of principal loan of
P12,790,094.83
and interest of P6,245,111.54 due March 16, 1987 on the Philippine
Infrastructure,
Inc./Philguaranty loan under the PNB Expanded Loan Collection Program;
and which amount was deducted from the equity share of the National
Government
in Philguarantee. In view of defendants unwarranted failure and refusal
to settle their respective accountabilities plaintiff was likewise
constrained
to secure the services of counsel and incur expenses in the process of
prosecuting its just and valid claims against the defendants;
accordingly,
the defendants should be held liable, jointly and severally, to pay the
plaintiff attorney’s fees and expenses of litigation in the amount of
P2,000,000.00
or about ten (10%) percent of the guaranteed obligations.
PRAYER
(a) Ordering defendant
PII, BF Homes, PILAR and AGUIRRE to pay plaintiff, jointly and
severally,
the amount of P19,035,256.57 plus P351,517.57 extension guarantee fees
and amendment fees, plus interests and penalty charges thereon;[7]
Acting on the motion
to amend, the trial court, at that time presided by Judge Joselito J.
Dela
Rosa, issued the assailed Order dated December 7, 1992,[8]
dismissing the case without prejudice on the ground of failure of the
complaint
to state a cause of action, thus in effect, reversing the Order dated
June
10, 1987 issued by Judge Lagman five years earlier. Petitioner’s motion
for reconsideration of the order of dismissal was denied by Judge de la
Rosa per his Order[9]
dated April 12, 1993.cralaw:red
On June 9, 1993, a petition
for review on certiorari was filed by petitioner against the Regional
Trial
Court with this Court. On June 23, 1993, the Court issued a Resolution[10]
which reads:
Considering that under
Section 9 of Batas Pambansa Blg. 129, the Intermediate Appellate Court
(Court of Appeals) now exercises exclusive appellate jurisdiction over
all final judgments, decisions, resolutions, orders or awards of
Regional
Trial Courts and quasi-judicial agencies, instrumentalities, boards or
commissions, the Court Resolved to REFER this case to the Court of
Appeals,
for disposition.cralaw:red
The Court of Appeals
re-docketed the petition as CA-G.R. SP No. 31483.cralaw:red
On August 31, 1994,
the Court of Appeals promulgated the assailed Decision, dismissing the
petition on the following grounds:
FIRSTLY, an order of
dismissal, whether right or wrong, is a final order. If it is
erroneous,
the remedy of the aggrieved party is appeal. Hence, the same cannot be
assailed by certiorari, as in this case (Marahay vs. Malicor, 181 SCRA
811). Considering the Supreme Court Circular No. 2-90, paragraph 4
regarding
an appeal by wrong mode, the order of dismissal in this case was
therefore
correctly issued by the respondent court a quo.cralaw:red
SECONDLY, the real purpose
of petitioner herein in asking the respondent court a quo for leave to
amend its complaint was not ostensibly to make the complaint conform to
the evidence presented, as petitioner alleges, but to introduce a cause
of action then non-existing when the complaint was filed. The ruling in
the leading case of Surigao Mine Exploration Co. vs. Harris (69 Phil.
113)
does not allow such amendment.cralaw:red
Hence, the trial court
was correct in denying the amendment and instead it dismissed the case.cralaw:red
THIRDLY, in the case
at bar, the motion to dismiss was first denied but there is nothing in
the Rules of Court which prohibits the court from later on reversing
itself
and granting the motion to dismiss.cralaw:red
This ruling is supported
by earlier decisions of the Supreme Court in Lucas vs. Mariano, et al
(L-29157,
April 27, 1972) and Vda. De Haberer vs. Martinez, et al. (L-39386, Jan.
29, 1975) where the trial court dismissed the complaint, then set it
aside
and finally again ordered it dismissed.[11]
On May 19, 1995, the
appellate court issued a Resolution[12]
denying petitioner’s motion for reconsideration.chanrobles virtuallaw libraryred
Hence, on June 14, 1995,
petitioner filed the present petition for review on certiorari,
claiming
that the Court of Appeals committed the following errors:
I.
THE HONORABLE COURT
OF APPEALS’ AFFIRMATION OF THE REGIONAL TRIAL COURT JUDGE’S ORDER
DISMISSING
CIVIL CASE NO. 86-38169 MOTU PROPIO ON THE PREMISE THAT HIS PREDECESSOR
JUDGE WAS IN ERROR IN NOT GRANTING THE MOTION TO DISMISS FILED YEARS
BACK,
ALLEGEDLY BECAUSE "THERE WAS NO CAUSE OF ACTION AT THE TIME OF THE
FILING
OF THE COMPLAINT" IS CONTRARY TO LAW AND JURISPRUDENCE.
II.
THE HONORABLE COURT
OF APPEALS’ AFFIRMATION OF THE REGIONAL TRIAL COURT JUDGE’S ORDER IN
NOT
ALLOWING THE AMENDMENT OF THE COMPLAINT TO CONFORM TO THE EVIDENCE
PRESENTED
WITHOUT OBJECTIONS, IS CONTRARY TO LAW AND JURISPRUDENCE.
III.
THE HONORABLE COURT
OF APPEALS ERRED IN FINDING THAT THE REAL PURPOSE OF
PETITIONER-APPELLANT
IN ASKING FOR LEAVE TO AMEND ITS COMPLAINT WAS NOT TO MAKE THE
COMPLAINT
CONFORM TO THE EVIDENCE PRESENTED BUT TO INTRODUCE A CAUSE OF ACTION
THEN
NON-EXISTING WHEN THE COMPLAINT WAS FILED.
IV.
THE HONORABLE COURT
OF APPEALS ERRED IN NOT GIVING DUE COURSE TO PETITIONER-APPELLANT’S
PETITION
FOR REVIEW.[13]
Respondents, on the
other hand, asseverate that the petitioner went to the Court of Appeals
on a wrong remedy as the proper remedy was for it to appeal from the
order
of dismissal and not to file a petition for review on certiorari; and
that
the Court of Appeals committed no error in sustaining the lower court
as
the original complaint below failed to state a cause of action and the
real purpose of the amendment was to introduce a subsequently acquired
cause of action.cralaw:red
The Court will first
resolve the question whether an order dismissing a petition without
prejudice
should be appealed by way of ordinary appeal, petition for review on
certiorari
or a petition for certiorari. Indeed, prior to the 1997 Rules of Civil
Procedure, an order dismissing an action may be appealed by ordinary
appeal
as what happened in Lucas vs. Mariano[14]
and Vda. de Haberer vs. Martinez,[15]
cited by the Court of Appeals in its assailed decision. However, in the
advent of the 1997 Rules of Civil Procedure, Section 1(h), Rule 41
thereof
expressly provides that no appeal may be taken from an order dismissing
an action without prejudice. It may be subject of a special civil
action
for certiorari under Rule 65 of the Rules of Court, as amended by the
said
1997 Rules of Civil Procedure. Considering that the assailed decision
of
the Court of Appeals was promulgated in 1994, respondent appellate
court
could not have committed any grave abuse of discretion in dismissing
CA-G.R.
SP No. 31483.cralaw:red
Nevertheless, in the
higher interest of substantial justice and pursuant to the hornbook
doctrine
that procedural laws may be applied retroactively,[16]
the Court gives due course to the present petition and will resolve the
issue whether the Court of Appeals erred in affirming the lower court’s
order dismissing the complaint on the ground that petitioner failed to
state a cause of action for not alleging loss or actual payment made by
it to PNB under its guarantees.cralaw:red
The trial court issued
an order of dismissal in stead of granting a motion to amend complaint
to conform to evidence, pursuant to Section 5, Rule 10 of the Revised
Rules
of Court, to wit:chanrobles virtuallaw libraryred
Sec. 5. Amendment to
conform to or authorize presentation of evidence. – When issues not
raised
by the pleadings are tried by express or implied consent of the
parties,
they shall be treated in all respects, as if they had been raised in
the
pleadings. Such amendment of the pleadings as may be necessary to cause
them to conform to the evidence and to raise these issues may be made
upon
motion of any party at any time, even after judgment, but failure to
amend
does not affect the result of the trial of these issues. If evidence is
objected to at the trial on the ground that it is not within the issues
made by the pleadings, the court may allow the pleadings to be amended
and shall do so freely when presentation of the merits of the action
will
be subserved thereby and the objecting party fails to satisfy the court
that the admission of such evidence would prejudice him in maintaining
his action or defense upon the merits. The court may grant a
continuance
to enable the objecting party to meet such evidence.cralaw:red
It should be stressed
that amendment was sought after petitioner had already presented
evidence,
more specifically, the testimony of petitioner’s Treasury Department
Manager
and a debit memo from the PNB (Exhibit "LL") proving that petitioner
had
paid the PNB in the amount of P19,035,256.57 pursuant to the guarantees
it accorded to respondent PII.cralaw:red
Petitioner avers that
respondents did not raise any objection when it presented evidence to
prove
payment to PNB. Hence, as provided for in Section 5, Rule 10 of the
Revised
Rules of Court, when issues not raised by the pleadings are tried by
express
or implied consent of the parties, they shall be treated in all
respects,
as if they had been raised in the pleadings. A scrutiny of the
pleadings
filed by respondents reveal that none of them denied petitioner’s claim
that said evidence was presented before the trial court without
objections
having been raised by respondents. None of them claimed that they
raised
any objections at the time when petitioner presented its evidence to
prove
its payment to PNB. Respondents Pilar and Aguirre admitted the
presentation
of the said evidence.cralaw:red
Respondents contend
that since they had already alleged the failure of the complaint to
state
a cause of action as an affirmative defense in their answer, there was
no further need for them to raise an objection at the time the evidence
was introduced. This is not plausible. In Bernardo, Sr. vs. Court of
Appeals,[17]
respondents therein also put up in their answer the affirmative defense
of failure of the complaint to state a cause of action and the parties
went on to present their respective evidence. The Court did not
consider
the allegation of this affirmative defense in the answer as an
objection
to evidence presented by the plaintiffs. Furthermore, the Court ruled
that:
The presentation of
the contrariant evidence for and against imputations undoubtedly cured,
clarified or expanded, as the case may be, whatever defects in the
pleadings
or vagueness in the issues there might have been in the amended
complaint
It is settled that even
if the complaint be defective, but the parties go to trial thereon, and
the plaintiff, without objection, introduces sufficient evidence to
constitute
the particular cause of action which it intended to allege in the
original
complaint, and the defendant voluntarily produces witnesses to meet the
cause of action thus established, an issue is joined as fully and as
effectively
as if it had been previously joined by the most perfect pleadings.
Likewise,
when issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if
they
had been raised in the pleadings.[18]
Evidently, herein respondents’
failure to object to the evidence at the time it is presented in court
is fatal to their cause inasmuch as whatever perceived defect the
complaint
had was cured by the introduction of petitioner’s evidence proving
actual
loss sustained by petitioner due to payment made by it to PNB.cralaw:red
Thus, the contention
of respondents that the amendment would introduce a subsequently
acquired
cause of action as there was none at the time the original complaint
was
filed, is untenable.chanrobles virtuallaw libraryred
Furthermore, petitioner’s
cause of action against respondents stemmed from the obligation of
respondents
PII, BF Homes, PDC and Aguirre under their Deed of Undertaking that was
secured by the surety and performance bonds issued by respondents PBAC
and Solid. Said Deed of Undertaking, which was annexed to and made an
integral
part of the complaint, provides as follows:
NOW, THEREFORE, for
and in consideration of the foregoing premises, the OBLIGOR [PII] and
CO-OBLIGORS
[BF HOMES, PILAR, AGUIRRE] hereby promise, undertake and bind
themselves
to keep the OBLIGEE [PETITIONER] free and harmless from any damage or
liability
which may arise out of the issuance of its guarantee referred to in the
first "whereas" clause. By these presents, the OBLIGOR and CO-OBLIGORS
further bind themselves, jointly and severally, to pay or reimburse on
demand, such amount of money, or repair the damages, losses or
penalties
which the OBLIGEE may pay or suffer on account of the aforementioned
guarantees.
The OBLIGOR and CO-OBLIGORS further undertake to comply with and be
bound
by the aforementioned terms and conditions enumerated in the attached
Annex
"A" and to perform such other acts and deeds which the OBLIGEE may
impose
for the implementation of the aforementioned guarantees.cralaw:red
It is a condition of
this instrument that failure of the OBLIGOR and CO-OBLIGORS to comply
with
this undertaking and to make good the performance of the other
obligations
herein undertaken and/or promised, shall be sufficient cause for the
OBLIGEE
to consider such failure as an event of default which shall give to the
OBLIGEE the right to take such action against the OBLIGOR and/or
CO-OBLIGORS
for the protection of the OBLIGEE’s interests.[19]
A reading of the foregoing
provisions of the contract, specially the phrase "the OBLIGOR and
CO-OBLIGORS
hereby promise, undertake and bind themselves to keep the OBLIGEE free
and harmless from any damage or liability which may arise out of the
issuance
of its guarantee referred to in the first ‘whereas’ clause," shows that
the Deed of Undertaking is actually an indemnity against liability. In
Cochingyan, Jr. vs. R & B Surety and Insurance Co., Inc.,[20]
the Court held thus:
The petitioners lose
sight of the fact that the Indemnity Agreements are contracts of
indemnification
not only against actual loss but against liability as well. While in a
contract of indemnity against loss an indemnitor will not be liable
until
the person to be indemnified makes payment or sustains loss, in a
contract
of indemnity against liability, as in this case, the indemnitor’s
liability
arises as soon as the liability of the person to be indemnified has
arisen
without regard to whether or not he has suffered actual loss.chanrobles virtuallaw libraryred
(3) Petitioners are
indemnitors of R & B Surety against both payments to and liability
for payments to the PNB. The present suit is therefore not premature
despite
the fact that the PNB has not instituted any action against R & B
Surety
for the collection of its matured obligation under the Surety Bond.[21]
[Emphasis supplied]
In the present petition,
petitioner had become liable to pay the amounts covered by said
guarantees
when, as the original complaint alleges, the PNB called upon said
guarantees.
Respondents’ obligation under the Deed of Undertaking to keep
petitioner
free and harmless from any damage or liability then became operative as
soon as the liability of petitioner arose and there was no need for
petitioner
to first sustain actual loss before it could have a cause of action
against
respondents. The mere inclusion in petitioner’s original complaint of
the
allegation that the PNB had already called on the guarantees of
petitioner
is sufficient to constitute a cause of action against respondents.
Clearly
therefore, the original complaint, by itself, stated a valid cause of
action.cralaw:red
Verily, it was patently
erroneous on the part of the trial court not to have allowed the
amendments
as to make the complaint conform to petitioner’s evidence that was
presented
without any objection from respondents. The trial court likewise
patently
acted with grave abuse of discretion or in excess of its jurisdiction
amounting
to lack of jurisdiction when, acting on a mere motion to amend the
complaint,
it erroneously dismissed the complaint on the ground of failure to
state
a cause of action. Consequently, the Court of Appeals committed a
reversible
error in sustaining the trial court.cralaw:red
WHEREFORE, the petition
is GRANTED. The Decision of the Court of Appeals dated August 31, 1994
and its Resolution dated May 18, 1995 are REVERSED and SET ASIDE; and
the
Orders of the Regional Trial Court (Branch 29), Manila, dated December
7, 1992 and April 12, 1993 are NULL and VOID and SET ASIDE.cralaw:red
Let the original records
of Civil Case No. 86-38169 be REMANDED to the Regional Trial Court
(Branch
29), Manila, for continuation of the trial on the merits. The presiding
judge is directed to proceed with immediate dispatch upon receipt of
the
records of the case.chanrobles virtuallaw libraryred
Treble costs against
private respondents.cralaw:red
SO ORDERED.cralaw:red
Puno, J., (Chairman), Quisumbing,
Callejo, Sr., and Tinga, JJ.,
concur.
____________________________
Endnotes:
[1]
Penned by Justice Jainal D. Rasul, with Justices Arturo B. Buena and
Ramon
Mabutas, Jr. concurring.chanrobles virtuallaw libraryred
[2]
Entitled "Philippine Export and Foreign Loan Guarantee Corporation vs.
Philippine Infrastructures, Inc., Philippine British Assurance Co.,
Inc.,
The Solid Guaranty, Inc., B.F. Homes, Inc., Pilar Development
Corporation
and Tomas B. Aguirre"chanrobles virtuallaw libraryred
[3]
Records, pp. 123-125.chanrobles virtuallaw libraryred
[4]
Records, pp. 172-174.
[5]
Records, pp. 227-229.
[6]
Records, p. 605.chanrobles virtuallaw libraryred
[7]
Records, pp. 606-607
[8]
Rollo, pp. 38-39.
[9]
Rollo, p. 41.chanrobles virtuallaw libraryred
[10]
CA Rollo, p. 57.
[11]
CA Rollo pp. 106-107.
[12]
CA Rollo, p. 134.
[13]
Rollo, p. 13.chanrobles virtuallaw libraryred
[14]
44 SCRA 501 (1972).
[15]
62 SCRA 162 (1975).chanrobles virtuallaw libraryred
[16]
Pfizer, Inc. vs. Galan, 358 SCRA 240, 246 (2001).
[17]
263 SCRA 660 [1996].chanrobles virtuallaw libraryred
[18]
Id. at pp. 673-674.
[19]
Records, p. 25.
[20]
151 SCRA 339 [1987].
[21]
Id. at pp. 353-354. |