Ereñeta v. Asian Bank Corp.

FIRST DIVISION

[G.R. No. 217034. July 24, 2019.]

ENYA EREÑETA, petitioner, vs.ASIAN BANK CORPORATION, respondent.

[G.R. No. 221032. July 24, 2019.]

ASIAN BANK CORPORATION [NOW METROPOLITAN BANK & TRUST CORPORATION], petitioner,vs.ENYA E. EREÑETA, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution dated July 24, 2019which reads as follows:

"G.R. No. 217034 (Enya Ereñeta v. Asian Bank Corporation) and G.R. No. 221032 (Asian Bank Corporation [Now Metropolitan Bank & Trust Corporation] v. Enya E. Ereñeta). — Before Us are consolidated petitions 1 for review on certiorari assailing two separate but interrelated rulings of the Court of Appeals (CA) Eight and Twelfth Divisions, in CA-G.R. SP No. 126806 and CA-G.R. CV No. 103372, respectively. In these petitions, We reiterate the rule that in the absence of proof that the debt contracted by the debtor-spouse redounded to the benefit of the conjugal partnership, the non-debtor spouse (who was not a party to the suit but whose conjugal property was executed on account of the debt) is considered a stranger to the suit, and can therefore avail of the remedy provided for in Section 16, Rule 39 of the Rules of Court.

On various dates in 1997, Edge Sales Corporation (ESC) loaned and received from Asian Bank Corporation (Asian Bank) a total of P1,500,000.00 as evidenced by five promissory notes. To secure the obligation, Miguel P. Ereñeta (Miguel), Ma. Theresa R. Young, and Ritchie Augusto V. Marabut (collectively, sureties) executed a Deed of Suretyship binding themselves jointly and severally liable with ESC for the payment of the loan. ESC failed to pay despite repeated demands. Hence, Asian Bank filed a complaint for recovery of sum of money against ESC and its sureties. The case was raffled to the Regional Trial Court of Pasig-Branch 162 (Pasig RTC) and docketed as Civil Case No. 67030 (collection suit). 2 In its Decision dated February 1, 2000, the Pasig RTC ruled in favor of Asian Bank, the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff ordering defendants to pay jointly and severally the following: CAIHTE

1. For PN No. 0997-8171 — P300,000 with interest of 26% per annum;

For PN No. 0997-8149 — P300,000 with interest at 26% per annum;

For PN No. 0997-8139 — P800,000 with interest at 26% per annum;

For PN No. 1097-8232 — P50,000 with interest at 32% per annum;

For PN No. 1097-8219 — P50,000 with interest at 24% per annum;

2. 20% percent of the amount due as attorney's fees and

3. Cost of suit.

The counterclaim is hereby dismissed.

SO ORDERED. 3

Miguel then appealed to the CA which affirmed the Pasig RTC in toto. 4 When he elevated the case to this Court, We affirmed the CA in Our Resolution dated February 20, 2008. We denied Miguel's motion for reconsideration with finality in Our Resolution dated August 1s3, 2008. 5

Consequently, the Pasig RTC issued a writ of execution. Sheriff Romeo L. De Guzman (Sheriff De Guzman) levied upon the real property and all its improvements (the property) covered by Transfer Certificate of Title (TCT) No. 16461 located in Parañaque. The property is registered in the name of "Miguel F. Ereñeta married to Enya E. Ereñeta." 6

Thereafter, Enya, the wife of Miguel, filed a Motion for Intervention and Motion to Quash Writ of Execution and Notice of Levy (motion for intervention and motion to quash) before the Pasig RTC. She claimed that the property levied upon is not the exclusive property of her husband, but of their conjugal partnership because it was acquired during their marriage. She argued that Miguel was neither an officer, employee, stockholder, nor investor of ESC, and that she was unaware of the execution of the surety agreement. Even assuming that Miguel signed as a surety of ESC, the loan is personal to him and did not in any way benefit the family or the conjugal partnership. 7 As such, the conjugal property cannot be held liable for the debt of Miguel.

On April 14, 2009, the property was sold at public auction to Asian Bank as the highest bidder at the price of P6,180,000.00. 8 The Pasig RTC denied the motion for intervention and the motion to quash. It ruled that intervention may be filed only before the rendition of judgment and not after. Furthermore, as stated in the "Sheriff's Partial Report," the property claimed by Enya as conjugal had already been sold insofar as the "exclusive share" of Miguel is concerned. Hence, the right sought to be protected by the would-be intervenor as regards her share on the property had been sufficiently protected, making the prayers in her motions moot and academic. 9

Aggrieved, Enya filed a separate action for cancellation and nullification of the levy, Notice of Sheriff's Auction Sale, and Certificate of Sale (nullification case) against Asian Bank, the Office of the Clerk of Court, and Sheriff De Guzman before the Parañaque RTC. The case was docketed as Civil Case No. 10-0145. 10 Enya alleged that the suit is in the nature of a third-party claim under the second paragraph 11 of Section 16, Rule 39 of the Rules of Court. She reiterated substantially the same arguments raised in her motion for intervention and motion to quash — that the property levied and sold is conjugal property, and as such it cannot answer for the personal debt of Miguel. 12 She added that Asian Bank has the burden to prove that the debt was contracted for the benefit of the conjugal partnership. 13

Asian Bank filed a Motion to Dismiss 14 on the ground of lack of jurisdiction over the subject matter of the complaint. It argued that the Parañaque RTC had no power to interfere with the judgment of a co-equal court. The determination of whether the levy and sale of the property in execution of a judgment was valid falls within the jurisdiction of the court that rendered the judgment and issued the writ of execution, which in this case is the Pasig RTC. 15 Moreover, Asian Bank contended that Enya did not present any proof that that property was acquired during her marriage with Miguel. That the property was registered in the name of "Miguel P. Ereñeta married to Enya E. Ereñeta" is not sufficient to establish the conjugal nature of the property. Asian Bank asserted that Enya is not a stranger to the suit, thus she cannot file an independent action to nullify the execution of the property. 16 DETACa

The Parañaque RTC denied the motion to dismiss. 17 It ruled that it has jurisdiction over the case because: (1) the action before it is different from the suit in the Pasig RTC; (2) Enya was not a party to that case in Pasig; and (3) the principal issue in the case, which was not an issue in the case at Pasig, is whether Enya's alleged right over the property was violated. Asian Bank moved for reconsideration which the Parañaque RTC denied. 18

Thus, Asian Bank elevated the case to the CA via a petition for certiorari with prayer for the issuance of temporary restraining order and/or writ of preliminary injunction. The case was raffled to the Eighth Division and docketed as CA-G.R. SP No. 126806. No restraining order was issued against the Parañaque RTC, 19 hence it continued with the trial of the case. The Parañaque RTC rendered judgment in favor of Enya, to wit:

WHEREFORE, the Notice of Levy, Sale on Auction and Certificate of Sale covering Transfer Certificate of Title No. 16461 registered in the name of Miguel P. Ereñeta married to Enya E. Ereñeta in the Registry of Deeds, Parañaque Branch are hereby canceled and nullified.

Respondent Bank is ordered to pay plaintiff attorney's fees in the amount of P50,000.00.

IT IS ORDERED. 20

The Parañaque RTC held that property in the case is considered a conjugal property of Enya and Miguel regardless of whether it was paid from the salary of the husband alone because they acquired it during their marriage. 21 The property is not liable to the personal debt contracted by Miguel unless the debt redounded to the benefit of the family. However, Asian Bank did not present any evidence proving that the debt benefited Enya's family. The Deed of Suretyship did not have the signature of Enya. No one testified that Enya knew nor conformed to its execution. In fact, she strongly denied of ever benefiting therefrom. Thus, Asian Bank had no lawful authority to take the property through levy on execution of judgment for the payment of Miguel's obligation. 22 The Parañaque RTC also said that the present procedural inconvenience would have been obviated had Asian Bank included Enya as defendant in the collection suit before the Pasig RTC. Under Section 4, Rule 3 of the Rules of Court, a husband and wife shall sue or be sued jointly, except as provided by law. 23

Aggrieved, Asian Bank filed a Notice of Appeal with the Parañaque RTC. 24

In the meantime, the CA Eight Division, in its Decision dated July 28, 2014, 25 granted Asian Bank's petition for certiorari. It ruled that the Parañaque RTC should have dismissed the nullification case for lack of jurisdiction. It explained that Enya cannot be considered as a stranger to the collection suit against her husband in the Pasig RTC. Hence, Enya correctly filed a motion for intervention and motion to quash in that court. 26

Enya moved for reconsideration, but the CA Eight Division denied it. 27 She then filed a petition for review on certiorari before this Court docketed as G.R. No. 217034. 28

Meanwhile, the Parañaque RTC approved Asian Bank's Notice of Appeal and elevated the case to the CA, and was raffled to the CA Twelfth Division. 29 The CA Twelfth Division directed Asian Bank to file its appellant's brief. 30 Instead of complying with the order, Asian Bank filed a Manifestation and Motion to Dismiss Appealed Case. Asian Bank stated that it did not file the required appellant's brief because the CA Eight Division declared that the Parañaque RTC has no jurisdiction over the nullification case. This intervening decision should be obeyed and respected. Thus, the appealed case must be dismissed. 31 For her part, Enya filed a Motion to Dismiss Appeal of Appellant Asian Bank for Refusal to File Appellant's Brief. 32

The CA Twelfth Division considered the case abandoned and dismissed it accordingly. 33 Asian Bank sought reconsideration, but the CA denied it. 34 It held that the grant of Asian Bank's petition for certiorari by the CA Eight Division did not excuse Asian Bank from filing its appellant's brief. 35

Consequently, Asian Bank filed a petition for review on certiorari before Us, challenging the Resolutions of the CA Twelfth Division. The case was docketed as G.R. No. 221032. We consolidated G.R. No. 221032 with G.R. No. 217034 in Our Resolution dated August 24, 2016. 36 aDSIHc

We resolve the consolidated issues in this wise, to wit:

(1) In G.R. No. 217034, We rule that the Parañaque RTC has jurisdiction over the nullification case; and

(2) In G.R. No. 221032, We rule that the CA Twelfth Division was correct in dismissing Asian Bank's appeal for failure to file an appellant's brief.

I.

The second paragraph of Section 16, Rule 39 of the Rules of Court allows third-party claimants of properties under execution to vindicate their claims to the property in a separate action with another court, viz.: 37

SEC. 16. Proceedings Where Property Claimed by Third Person. — If the property levied on is claimed by any person other than the judgment obligor or his agent, and such person makes an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serves the same upon the officer making the levy and a copy thereof upon the judgment obligee, the officer shall not be bound to keep the property, unless such judgment obligee, on demand of the officer, files a bond approved by the court to indemnify the third-party claimant in a sum not less than the value of the property levied on. In case of disagreement as to such value, the same shall be determined by the court issuing the writ of execution. No claim for damages for the taking or keeping of the property may be enforced against the bond unless the action therefor is filed within one hundred twenty (120) days from the date of the filing of the bond.

The officer shall not be liable for damages for the taking or keeping of the property, to any third-party claimant if such bond is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separate action, or prevent the judgment obligee from claiming damages in the same or a separate action against a third-party claimant who filed a frivolous or plainly spurious claim. (Emphasis supplied)

A third-party claimant refers to a person other than the judgment debtor or one who is a stranger to the suit. 38

In Borlongan v. Banco De Oro, 39 the conjugal property of the spouses was attached as a consequence of the suretyship agreement signed by the wife to secure a corporate debt. The non-debtor husband discovered the attachment only after the finality of the decision of the court. Similar to the case before Us, he filed a separate complaint to annul the levy on execution of the conjugal property on the ground that the surety agreement did not redound to the benefit of the family. In that case, We ruled in favor of the non-debtor husband, and held that that a non-debtor spouse, who is not a party to the suit, but whose conjugal property was executed on account of the other spouse's debt, is considered a stranger to the action filed against the debtor-spouse, if the debt did not redound to the benefit of the conjugal partnership. In such case, the non-debtor spouse may file a separate action with another court to defend his/her right over the property.

Clearly, whether a non-debtor spouse may file a separate action with another court will depend on whether the obligation contracted by the debtor-spouse redounded to the benefit of the conjugal partnership.

Here, it is undisputed that Enya is a non-debtor spouse. She is not a party to the Deed of Suretyship upon which Asian Bank based its collection suit. Neither is she impleaded in the case in the Pasig RTC. However, Sheriff De Guzman levied upon and sold the property covered by TCT No. 16461 to answer for the obligation of Miguel. The property belongs to the conjugal partnership of Miguel and Enya. The spouses got married on March 27, 1976, and bought the property in 1988, or during their marriage. 40 Under Article 116 of the Executive Order No. 209 or the Family Code of the Philippines, all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. Records of this case is bereft of showing that Asian Bank presented evidence to prove that the property is not conjugal. ETHIDa

The contract of suretyship executed by Miguel did not redound to the benefit of the conjugal partnership. There is no presumption that the conjugal partnership is benefited when a spouse enters into a contract of suretyship. The judgment creditor has the burden to prove that the contract of suretyship redounded to the benefit of the conjugal partnership. 41 Asian Bank failed to discharge this burden. It did not offer any evidence to show that the suretyship obligation benefited Miguel's family, especially in view of the admission of the parties that Miguel is neither an owner, officer, director, nor employee of ESC. 42

Considering that Miguel's obligation did not redound to the benefit of the conjugal partnership, Enya is deemed a stranger to the suit against Miguel. She correctly availed of the remedy of an independent action under Section 16, Rule 39 of the Rules of Court. In the same vein, the Parañaque RTC correctly took cognizance of the case.

Besides, the CA Eight Division erred when it declared that Enya should have questioned the denial of her motion to intervene by the Pasig RTC before the appellate court, instead of filing a separate suit in the Parañaque RTC. Intervention in the Pasig RTC is no longer available to Enya because the court already rendered judgment in the collection suit. Intervention may only be filed at any time before rendition of judgment. 43

II.

The CA Twelfth Division correctly dismissed the appeal due to Asian Bank's failure to timely file an appellant's brief.

Section 7, Rule 44 of the Rules of Court states that it shall be the duty of the appellant to file his/her brief within 45 days from receipt of notice from the CA. Failure to serve and file the required number of copies of his/her brief within the time provided is a ground for dismissal of the appeal under Section 1 (e), Rule 50. The CA may dismiss the appeal on its own motion or of the appellee.

We set forth the guidelines in resolving the issue of non-filing of appellant's brief in Government of the Kingdom of Belgium v. Court of Appeals, 44 to wit:

(1) The general rule is for the Court of Appeals to dismiss an appeal when no appellant's brief is filed within the reglementary period prescribed by the rules;

(2) The power conferred upon the Court of Appeals to dismiss an appeal is discretionary and directory and not ministerial or mandatory;

(3) 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;

(4) In case of late filing, the appellate court has the power to still allow the appeal; however, for the proper exercise of the court's leniency it is imperative that:

(a) the circumstances obtaining warrant the court's liberality;

(b) that strong considerations of equity justify an exception to the procedural rule in the interest of substantial justice;

(c) no material injury has been suffered by the appellee by the delay;

(d) there is no contention that the appellee's cause was prejudiced;

(e) at least there is no motion to dismiss filed.

(5) In case of delay, the lapse must be for a reasonable period; and

(6) Inadvertence of counsel cannot be considered as an adequate excuse as to call for the appellate court's indulgence except:

(a) where the reckless or gross negligence of counsel deprives the client of due process of law;

(b) when application of the rule will result in outright deprivation of the client's liberty or property; or

(c) where the interests of justice so require. cSEDTC

Here, three circumstances are undisputed. First, instead of filing the required appellant's brief, Asian Bank filed a Manifestation and Motion to Dismiss Appealed Case on the last day of filing an appellant's brief. Second, Enya moved to dismiss the appeal due to Asian Bank's non-filing of an appellant's brief. Third, Asian Bank filed its appellant's brief on May 19, 2015 or 114 days after the lapse of the period for its filing, and already after the CA dismissed its appeal. In line with Government of the Kingdom of Belgium, the CA Twelfth Division correctly dismissed the appeal. Although the dismissal is not mandatory, the CA, in the exercise of its discretion, properly found that there is no justifiable reason for Asian Bank to belatedly file its appellant's brief.

Asian Bank explained that it did not file the required appellant's brief since the CA Eight Division already declared that the Parañaque RTC does not have jurisdiction over the nullification case. 45 We cannot subscribe to Asian Bank's argument. A judgment or final order will reach finality only where no appeal or motion for new trial or reconsideration was filed by the losing party. 46 Here, Enya timely appealed before this Court the Decision of the Eight Division. Thus, it is untenable for Asian Bank to argue that the CA Twelfth Division should have obeyed the ruling of the Eight Division, whose decision is not yet final, and therefore bears no binding effect.

The right to appeal is not a natural right but a statutory privilege. It may be exercised only in the manner and in accordance with the provisions of the law and the Rules of Court. Failing to abide by the rules, the right to appeal is lost. Asian Bank's failure to seasonably file an appellant's brief, though not jurisdictional, results in the abandonment of the appeal which may be the cause for its dismissal. 47

In fine, We see no cogent reason to disturb the ruling of the CA Twelfth Division.

WHEREFORE, premises considered, the petition for review on certiorari in G.R. No. 217034 is GRANTED. The July 28, 2014 Decision and February 17, 2015 Resolution of the Court of Appeals Eight Division in CA-G.R. SP No. 126806 are hereby REVERSEDand SET ASIDE. The March 1, 2012 and July 16, 2012 Orders of the Regional Trial Court of Parañaque-Branch 257 in Civil Case No. 10-0145 are REINSTATED.

Meanwhile, the petition for review on certiorari in G.R. No. 221032 is DENIED. The April 16, 2015 and October 7, 2015 Resolutions of the Court of Appeals Twelfth Division in CA-G.R. CV No. 103372 are AFFIRMED.

SO ORDERED." Del Castillo, J., on official leave; Jardeleza, J., designated as Acting Working Chairperson of the First Division per Special Order No. 2680 dated July 12, 2019.

 

Very truly yours,

 

(SGD.) LIBRADA C. BUENADivision Clerk of Court

 

Footnotes

1.Rollo (G.R. No. 217034), pp. 28-35, Enya Ereñeta (Enya) assails the Court of Appeals Eight Division Decision dated July 28, 2014, and Resolution dated February 17, 2015, which declared the March 1, 2012 and July 16, 2012 Orders of the Pasig RTC as null and void for lack of jurisdiction; Rollo (G.R. No. 221032), pp. 25-40, Asian Bank challenges the Resolution promulgated by the CA Twelfth Division dated April 16, 2015 and October 07, 2015, which dismissed Asian Bank's appeal from the Decision of the Regional Trial Court of Parañaque (Parañaque RTC) dated June 20, 2014, for failure to file an appellant's brief.

2.Rollo (G.R. No. 217034), p. 153.

3.Id. at 158; penned by Judge Erlinda Piñera Uy.

4.Id. at 160-168.

5.Id. at 171-172.

6.Id. at 61.

7.Id. at 69-72.

8.Rollo (G.R. No. 221032), pp. 94-96.

9.Rollo (G.R. No. 217034), pp. 89-90; Order dated May 04, 2009.

10.Id. at 41-54.

11. x x x The officer shall not be liable for damages for the taking or keeping of the property, to any third-party claimant if such bond is filed. Nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property in a separate action, or prevent the judgment obligee from claiming damages in the same or a separate action against a third-party claimant who filed a frivolous or plainly spurious claim. x x x

12.Rollo (G.R. No. 217034), pp. 45-46.

13.Id. at 48.

14.Id. at 94-105.

15.Id. at 100.

16.Id. at 103.

17.Id. at 106-107; Order dated March 01, 2012.

18.Id. at 108; Order dated July 16, 2012.

19.Rollo (G.R. No. 221032), pp. 166-172; Asian Bank actually filed a Motion to Suspend Proceedings in the Parañaque RTC in view of the petition for certiorari it filed before the CA Eight Division. However, the Parañaque RTC, in its Order dated February 11, 2013, denied the motion considering that the CA Eight Division did not issue an injunction. Id. at 166-172.

20.Id. at 180; Order dated June 20, 2014; penned by Judge Rolando G. How.

21.Id. at 178.

22.Id. at 179.

23.Id. at 180.

24.Id. at 49.

25.Rollo (G.R. No. 217034), pp. 28-35.

26.Id. at 32-34.

27.Id. at 37-38; Resolution dated February 17, 2015.

28.Id. at 3-20.

29.Docketed as CA-G.R. CV No. 103372.

30.Rollo (G.R. No. 221032), p. 49.

31.Rollo (G.R. No. 217034), pp. 354-356.

32.Id. at 46-47.

33.Rollo (G.R. No. 221032), pp. 10-11; Resolution dated April 16, 2015, citing Section 1 (e), Rule 50 of the Rules of Court.

34.Id. at 13-18; Resolution October 7, 2015.

35.Id. at 52.

36.Rollo (G.R. No. 217034), p. 387.

37.Borlongan v. Banco De Oro, G.R. Nos. 217617 & 218450, April 5, 2017, 822 SCRA 418, 438-439.

38.Spouses Buado v. Court of Appeals, G.R. No. 145222, April 24, 2009, 586 SCRA 397, 405.

39.Supra note 37.

40.Rollo (G.R. No. 221032), p. 175, Rollo (G.R. No. 217034), p. 55, see also the Marriage Contract of the spouses.

41.Borlongan v. Banco De Oro, supra note 37 at 441, citing Spouses Ching v. Court of Appeals, G.R. No. 124642, February 23, 2004, 423 SCRA 356.

42.Rollo (G.R. No. 221032), p. 177.

43.Borlongan v. Banco De Oro, G.R. Nos. 217617 & 218450, April 5, 2017, 822 SCRA 418, 442.

44.G.R. No. 164150, April 14, 2008, 551 SCRA 223, 241-242.

45.Rollo (G.R. No. 217034), p. 354.

46.See RULES OF COURT, Rule 36, Section 2.

47.Sibayan v. Costales, G.R. No. 191492, July 4, 2016, 795 SCRA 387, 396.