Gonzales v. Pe

G.R. No. 167398 (August 9, 2011)

Facts:

The case involves a dispute between Augustus Gonzales and spouses Nestor Victor and Ma. Lourdes Rodriguez (petitioners) and Quirico Pe (respondent). The respondent, engaged in the business of supplying construction materials, entered into a transaction with the petitioners, who were awarded contracts by the Department of Public Works and Highways (DPWH) for construction projects. In 1998, the respondent agreed to supply cement for these projects, specifically for the "Lanot-Banga Road" and "Laua-an Pandan Road."

To facilitate the DPWH's pre-payment program for cement, petitioner Nestor Rodriguez provided the respondent with a blank Land Bank of the Philippines (LBP) check, which was signed by the petitioners but left blank regarding the amount and date. The check was intended as collateral for the payment of 15,698 bags of cement valued at P1,507,008.00. However, a year later, the respondent filled in the check for P2,062,000.00, dated June 30, 1999.

On December 9, 1999, the petitioners filed an Amended Complaint against the respondent, seeking a declaration of payment, cancellation of documents, and damages. They claimed that they had already paid the respondent P2,306,500.00, which exceeded the amount owed for the cement supplied. The respondent countered that he had delivered more cement than what was claimed and sought recovery of the balance of P2,062,000.00, asserting that the check was dishonored due to insufficient funds.

The Regional Trial Court (RTC) ruled in favor of the petitioners on June 28, 2002, declaring their obligation to the respondent as fully paid and nullifying the check filled out by the respondent. The respondent filed a Notice of Appeal on July 30, 2002, but the petitioners later moved to dismiss the appeal, arguing that the respondent failed to pay the required docket fees. The RTC dismissed the appeal on September 23, 2002, and issued a writ of execution.

In response, the respondent filed a Petition for Certiorari with the Court of Appeals (CA), which granted a temporary restraining order and later ruled in favor of the respondent, allowing him to pay the appellate fees belatedly. The petitioners then sought to challenge this decision.

Legal Issues:

1. Whether the respondent's appeal was perfected despite the non-payment of docket and other lawful fees.
2. Whether the Court of Appeals erred in allowing the belated payment of appellate fees and in reversing the RTC's decision.

Arguments:

• Petitioners' Arguments:

  • The petitioners contended that the respondent's failure to pay the required docket fees at the time of filing the Notice of Appeal rendered the appeal unperfected, making the RTC's decision final and executory.
  • They argued that the CA's decision to allow belated payment was erroneous and contrary to established procedural rules.

• Respondent's Arguments:

  • The respondent maintained that his appeal was perfected upon the filing of the Notice of Appeal, as per Section 9, Rule 41 of the Rules of Court.
  • He argued that the RTC had not assessed the appellate fees, which contributed to his failure to pay them on time, and that the CA had jurisdiction to rule on the matter.

Court's Decision and Legal Reasoning:

The Supreme Court granted the petition, reversing the CA's decision. The Court emphasized that the payment of docket fees is a mandatory and jurisdictional requirement for the perfection of an appeal. It reiterated that an appeal is not a right but a statutory privilege, and strict compliance with procedural rules is necessary.

The Court distinguished the case from previous rulings, such as Yambao v. Court of Appeals, where the parties had made an attempt to pay the fees. In this case, the respondent did not make any payment or attempt to do so at the time of filing the Notice of Appeal. The Court held that the respondent's claim of negligence on the part of the RTC Branch Clerk was insufficient to excuse his failure to comply with the rules.

The Court also clarified that the RTC retained jurisdiction to issue orders regarding the case until the appeal was perfected. Since the respondent's appeal was not perfected due to non-payment of fees, the RTC's decision became final and executory, warranting the issuance of a writ of execution.

Significant Legal Principles Established:

1. The payment of docket and other lawful fees within the reglementary period is mandatory for the perfection of an appeal.
2. An appeal is a statutory privilege, and failure to comply with procedural requirements results in the loss of the right to appeal.
3. The RTC retains jurisdiction over a case until the appeal is perfected, allowing it to issue orders for the protection of the prevailing party.