Dagot, Jr. vs. Spouses Go Cheng Key

A prohibited second motion for reconsideration cannot toll the reglementary period to appeal; once that period lapses without a proper appeal, the judgment becomes final and immutable. A petition filed by counsel without authority and with procedural defects, including absence of proof of service and a valid verification/certification against forum shopping, is expunged.

Dagot et al. are the children and heirs of the late spouses Marcial Dagot, Sr. and Maxima Oblan. Dagot, Sr. was the registered owner of a 17.0229-hectare parcel in Puerto Princesa City under OCT No. G-558. The controversy involves the extent of the property that the heirs could validly convey and the titles that later covered the land; the SC’s resolution turned on the procedural effect of a prohibited second motion for reconsideration and the finality of the RTC’s May 19, 2009 Decision.

Dagot et al. claimed to be the children and heirs of the late spouses Marcial Dagot, Sr. and Maxima Oblan. Dagot, Sr. was the registered owner of a 17.0229-hectare parcel in Barangay Tagburos (now San Jose), Puerto Princesa City, covered by OCT No. G-558. Dagot, Sr. died intestate on September 16, 1949. On November 19, 1960, Dagot et al. and Oblan executed an Extra-Judicial Settlement with Sale conveying 11 hectares, more or less, of the subject property to Pelagia P. Ebro. When the instrument was presented for registration, the copy of OCT No. G-558 could not be retrieved from the vault of the Office of the Register of Deeds; OCT No. G-558 was administratively reconstituted under Republic Act No. 26, and the annotation dated December 14, 1960 of the Extra-Judicial Settlement with Sale was made on the reconstituted copy under Entry No. 2137. The reconstituted copy bore only that annotation because prior annotations were not carried over.

On August 4, 1961, without notice to Dagot et al., Ebro commissioned a subdivision survey of the subject property. TCT No. T-1220 was issued in Ebro’s name, complete with technical description, and covered 130,227 square meters or more than 13 hectares. On July 10, 1964, Ebro sold to spouses Go Cheng Key and Chua Siong Kuan the whole property covered by TCT No. T-1220, resulting in cancellation of TCT No. T-1220 and issuance of TCT No. T-1533. Sometime in 1989, the spouses Key divided the subject property into seven lots, and on August 20, 1993, they donated these seven lots to the other respondents, resulting in the issuance of TCT Nos. T-1220, T-1533, 18927, 18928, 18929, 18930, 18931, 18932, and 18933.

When the original copy of OCT No. G-558 was finally recovered, it showed annotations made prior to the reconstituted copy: Entry No. 593, an Absolute Deed of Sale dated January 12, 1955 executed by Maxima Oblan selling one hectare to F.M. San Diego; Entry No. 963, an Absolute Deed of Sale dated January 12, 1955 executed by Maxima Oblan covering one hectare in favor of Neciforo Garcellano; and Entry No. 1378, a Deed of Sale dated February 12, 1959 executed by Teodulo Mingua for two hectares. The portions bought by Mingua and San Diego were later conveyed by both parties to Go Cheng Key, while the portion bought by Garcellano was sold to and now owned by Lolita Go Zabala. Respondents occupied the whole 17-hectare parcel formerly registered under OCT No. G-558.

In their Complaint dated September 22, 1999 filed before the RTC, Dagot et al. sought annulment/cancellation of TCT Nos. T-1220, T-1533, 18927, 18928, 18929, 18930, 18931, 18932, and 18933. They alleged that the title issued to Ebro and all subsequent titles were void because they exceeded the 11 hectares sold to Ebro; hence, the August 4, 1961 subdivision survey should be invalidated and a new survey ordered to segregate the 11 hectares under the Extra-Judicial Settlement with Sale dated November 19, 1960. Respondents, in their Answer with affirmative defenses and counterclaim, averred that Dagot et al. had no valid cause of action because respondents were innocent purchasers for value who relied on the presumed validity of Ebro’s title. Respondents further argued that Dagot et al.’s cause of action to nullify the Extra-Judicial Settlement with Sale dated November 16, 1960 and the August 4, 1961 survey had prescribed and was barred by laches.

After trial, the RTC issued a Decision dated May 19, 2009 in favor of Dagot et al. The RTC held that Ebro’s title, insofar as the excess two hectares was concerned, was void for lack of a proper and valid mode of disposition conveying ownership to her; it also found that TCT No. T-1220 contained errors so manifest that respondents could not be considered innocent purchasers for value, and that registered land cannot be acquired by prescription. The dispositive portion upheld OCT No. G-558 as to the remaining two hectares, declared the registration and inclusion of the two hectares in TCT No. T-1220 and TCT No. T-1533 void, voided the August 4, 1961 subdivision survey and subsequent surveys, ordered a new survey to segregate the two hectares, voided the inclusion of that portion in the listed TCTs, ordered surrender of the TCTs for amendment and reduction, and directed respondents to vacate and turn over possession of the two hectares to Dagot et al. Respondents filed a motion for reconsideration on June 4, 2009, which the RTC denied in an Order dated October 15, 2009. On November 4, 2009, when counsel for respondents personally received the October 15, 2009 Order, respondents filed an Urgent Manifestation on the October 15, 2009 Order denying their motion for reconsideration. In its Order dated November 10, 2009, the RTC considered the Urgent Manifestation as a second motion for reconsideration but allowed it because it raised “new [issues] not raised before ... such as the concept of trust, among others,” and tolled the 15-day period to file an appeal. The RTC also noted that some exhibits marked for petitioners, which were offered and admitted by the court, were not included in and attached to the records.

Acting on the motion for reconsideration, the RTC issued an Order dated May 31, 2010, reversing its May 19, 2009 Decision and dismissing the complaint. The RTC noted that, prior to the execution of the Extra-Judicial Settlement with Sale, Oblan had already sold four of the 17 hectares to several persons, so Dagot et al. owned only the remaining 13 hectares at the time of the settlement; it also found that the inclusion of the additional two hectares in TCT No. T-1220 in Ebro’s name was made by mistake. Citing Article 1456 of the Civil Code, the RTC held that an action for reconveyance based on implied or constructive trust must be filed within 10 years from discovery of the mistake or fraud; under Section 52 of Presidential Decree No. 1529, registration serves as constructive notice to all, and since Ebro’s title was registered on July 18, 1962 and the complaint was filed only on September 22, 1999, the action had prescribed. The CA, in its Decision dated October 11, 2013, denied the appeal and affirmed the RTC’s dismissal on prescription, emphasizing that respondents occupied the whole property and that the action for reconveyance was filed around 37 years after registration of TCT No. T-1220 in Ebro’s name. The CA denied the two motions for reconsideration in its Resolution dated February 11, 2014.

Atty. Robert Y. Peneyra represented petitioners since the filing of the Complaint on September 22, 1999. On August 22, 2012, Atty. Lester Alvarado Flores filed an Entry of Appearance before the CA as collaborating counsel for petitioners. On March 5, 2014, petitioners, through Atty. Flores, filed a Verified Petition for Review on Certiorari under Rule 45, docketed as G.R. No. 211309, with a verification and certification of non-forum shopping executed by Dagot, Jr., Alangadi, and Dalojo. On March 12, 2014, Atty. Peneyra filed a Motion for Extension to file a Petition for Review on Certiorari on behalf of petitioners, docketed as G.R. No. 211957; the Petition was filed on April 11, 2014 without proof of service to the adverse party and without explanation why service was not done personally. In an Affidavit dated August 8, 2014, Dagot, Jr. stated that he found out on August 5, 2014 that Atty. Peneyra had filed G.R. No. 211957; that as early as May 2012 they had informed Atty. Peneyra and Atty. Palay of their desire to dispense with their services through letters sent by registered mail on May 4, 2012; that the filing of G.R. No. 211957 was without their authority; that the signature over his printed name in the Verification/Certification page of G.R. No. 211957 was not his; and that he did not appear before Atty. Palay on April 11, 2014 for notarization. Atty. Palay filed a Manifestation dated December 19, 2016 stating that he was not the principal counsel and had no lawyer-client relationship with petitioners, and that Atty. Peneyra requested him to sign the pleadings with him. Atty. Peneyra, in a Comment dated January 4, 2017, claimed that his services were never terminated, that he was never asked to desist from appearing, and that he prepared the petition and instructed Dagot, Jr. to sign the verification and certification against non-forum shopping and have it notarized by Atty. Palay. The SC imposed fines on Atty. Peneyra for non-compliance with its resolutions and later increased the fine to PHP 5,000.00 in its September 14, 2022 Resolution.

• Finality and Prohibited Second Motion for Reconsideration: Petitioners argued that respondents had 15 days from receipt of the October 15, 2009 Order denying their motion for reconsideration to file a notice of appeal or a verified petition for review on certiorari; instead, they filed an Urgent Manifestation that the RTC treated as a second motion for reconsideration, which is expressly prohibited by Section 5, Rule 37 of the Rules of Court. Because respondents failed to file the proper appeal or petition within the reglementary period, the RTC Decision dated May 19, 2009 had already reached finality and could no longer be modified.
• Co-Ownership and Extent of Sale: Petitioners argued that they sold to Ebro an undivided portion of 11 hectares, as evidenced by Entry No. 2137 annotation on the reconstituted copy of OCT No. G-558; that the remaining 6.0229 hectares were extrajudicially settled by the heirs without an actual subdivision survey to separate the boundaries by metes and bounds; and that a legal co-ownership was thus established between petitioners and Ebro.
• Expunction and Counsel’s Authority: Petitioners, through Dagot, Jr.’s affidavit and Sinumpaang Salaysay, maintained that G.R. No. 211957 was filed by Atty. Peneyra without their authority, that the signature over Dagot, Jr.’s printed name in the verification/certification was not his, and that they had informed Atty. Peneyra and Atty. Palay of their desire to dispense with their services; they prayed that G.R. No. 211957 be expunged and that Atty. Peneyra and Atty. Palay be disciplined.

• Finality Issue Not Raised / Submission Anew: Respondents countered that the issue of finality of the May 19, 2009 RTC Decision cannot be raised in a Rule 45 petition because it was not among the issues raised in the Appellants’ Brief; that the November 10, 2009 Order stated some exhibits marked for petitioners were not included in the records; and that petitioners participated in subsequent hearings, so they are deemed to have submitted the case anew for the trial court’s decision.
• Innocent Purchasers for Value: Respondents averred that Dagot et al. had no valid cause of action because respondents were innocent purchasers for value who simply relied on the presumed validity of Ebro’s title.
• Prescription and Laches: Respondents argued that Dagot et al.’s cause of action to nullify the Extra-Judicial Settlement with Sale dated November 16, 1960 and the August 4, 1961 survey had already prescribed and was barred by laches.
• Defects of G.R. No. 211957: Respondents claimed that the petition filed by Atty. Peneyra lacked a verification and certification of non-forum shopping and was filed out of time, and that they received only the petition filed by Atty. Flores.

• Expunction of G.R. No. 211957: Whether G.R. No. 211957 should be expunged from the records because Atty. Peneyra filed it without authority from petitioners and because it lacked proof of service and a valid verification/certification against forum shopping.
• Finality of the RTC Decision: Whether the RTC Decision dated May 19, 2009 attained finality for failure of respondents to file an appeal within the reglementary period after the denial of their motion for reconsideration.

• Expunction of G.R. No. 211957: Yes. The SC expunged G.R. No. 211957 because Atty. Peneyra filed it without authority and it lacked proof of service and a valid verification/certification; G.R. No. 211309 was timely and properly verified.
• Finality of the RTC Decision: Yes. The Urgent Manifestation was a prohibited second motion for reconsideration under Section 5, Rule 37; it did not toll the appeal period, and the May 19, 2009 RTC Decision became final and immutable.

• Expunction of G.R. No. 211957: A valid substitution of counsel under Section 26, Rule 138 of the Rules of Court requires: (1) a written application for substitution; (2) the client’s written consent; (3) the consent of the substituted lawyer, if obtainable; and (4) proof of service of notice of the motion on the attorney to be substituted. A mere notice of appearance of a new lawyer does not presume substitution; the first counsel of record is presumed to continue until a formal notice to the contrary is filed. Here, Atty. Flores entered only as collaborating counsel, and there was no showing of full compliance with the formal requirements of substitution. Nonetheless, the SC could not give due course to G.R. No. 211957 because it lacked proof of service to the adverse party and an explanation why service was not done personally; more importantly, Dagot, Jr. denied executing the Verification and Certification against Forum Shopping attached to it. By contrast, G.R. No. 211309 was timely filed and its verification and certification was signed by all petitioners. Petitioners also confirmed through Dagot, Jr.’s affidavit and Sinumpaang Salaysay that Atty. Peneyra was not authorized to file G.R. No. 211957. The SC thus expunged G.R. No. 211957 and treated Dagot, Jr.’s August 8, 2014 Affidavit and August 26, 2015 Sinumpaang Salaysay as a formal administrative complaint against Atty. Peneyra and Atty. Palay, ordered redocketed as a regular administrative charge.
• Finality of the RTC Decision: Under Rule 45, the SC’s review is limited to errors of law. The CA erroneously neglected to consider the effects of respondents’ Urgent Manifestation, the RTC’s treatment of it as a second motion for reconsideration, and the RTC’s tolling of the 15-day appeal period; these matters affect the jurisdiction of the courts and the validity of succeeding proceedings, so the CA’s disregard was an error of law. Section 5, Rule 37 expressly provides that no party shall be allowed a second motion for reconsideration of a judgment or final order. Although the RTC allowed the Urgent Manifestation as a second motion for reconsideration because it supposedly raised “new [issues]” such as the concept of trust, respondents had already raised laches and prescription in their Answer with Counterclaim dated October 11, 1999, and the specific argument on Article 1456 of the Civil Code was already included in their first Motion for Reconsideration dated May 31, 2009. No novel issue warranted an exception. The trial court should have required the parties to present any missing evidence before rendering decision, and it could not on its own toll the reglementary period of appeal based on a prohibited second motion for reconsideration. A prohibited pleading cannot toll the running of the period to appeal because it cannot be given any legal effect. An appeal is not a matter of right but is one of sound judicial discretion, and a party who fails to question an adverse decision by not filing the proper remedy within the prescribed period loses the right to do so; the decision becomes final and binding by operation of law. The principle of immutability of judgments provides that once a judgment has attained finality, it can never be altered, amended, or modified, even to correct an erroneous judgment; the exceptions are correction of clerical errors, nunc pro tunc entries causing no prejudice, void judgments, and circumstances transpiring after finality rendering execution unjust and inequitable. None of the exceptions applied. The SC also noted that, on the merits, the records supported the conclusion that petitioners were entitled to only two hectares and that the inclusion of the two hectares in Ebro’s title was a mistake, but it still held that the finality of the May 19, 2009 Decision controlled. The SC warned that allowing orders and decisions borne out of prohibited superfluous motions and pleadings would lead to no end to litigation, and that the bare invocation of “the interest of substantial justice” is not a magic wand that will automatically compel suspension of procedural rules.

• Immutability of Judgments — Once a judgment attains finality, it can never be altered, amended, or modified, even if the alteration, amendment, or modification is to correct an erroneous judgment. The exceptions are: (1) correction of clerical errors; (2) nunc pro tunc entries causing no prejudice to any party; (3) void judgments; and (4) circumstances transpiring after finality rendering execution unjust and inequitable. The SC applied the rule because the RTC’s May 19, 2009 Decision became final when respondents failed to appeal, and none of the exceptions applied.
• Prohibition Against a Second Motion for Reconsideration — Section 5, Rule 37 of the Rules of Court provides that no party shall be allowed a second motion for reconsideration of a judgment or final order. A prohibited second motion for reconsideration cannot toll the running of the period to appeal because it cannot be given any legal effect. The SC applied this to the Urgent Manifestation, which the RTC treated as a second motion for reconsideration.
• Appeal Is Not a Matter of Right — An appeal may be availed of only in the manner provided by law and the rules; a party who fails to question an adverse decision by not filing the proper remedy within the prescribed period loses the right to do so, and the decision becomes final and binding by operation of law. The SC applied this because respondents did not file a notice of appeal or a Rule 45 petition within 15 days from receipt of the October 15, 2009 Order.
• Substitution of Counsel — A valid substitution of counsel requires: (1) a written application for substitution; (2) the client’s written consent; (3) the consent of the substituted lawyer, if obtainable; and (4) proof of service of notice of the motion on the attorney to be substituted. A mere notice of appearance of a new lawyer does not presume substitution; the first counsel of record is presumed to continue until a formal notice to the contrary is filed. The SC applied this in noting that Atty. Flores’s entry as collaborating counsel did not formally substitute Atty. Peneyra, but still expunged G.R. No. 211957 for lack of authority and procedural defects.
• Verification and Certification Against Forum Shopping; Proof of Service — A petition must be verified and accompanied by a valid certification against forum shopping and proof of service on the adverse party, with an explanation if service was not done personally. The SC expunged G.R. No. 211957 because it lacked proof of service and an explanation, and Dagot, Jr. denied executing its verification/certification.

• "no party shall be allowed a second motion for reconsideration of a judgment or final order." — Section 5, Rule 37’s prohibition, which the SC used to treat the Urgent Manifestation as a prohibited pleading.
• "As such, it cannot toll the running of the period to appeal since such pleading cannot be given any legal effect precisely because of its being prohibited." — The SC’s conclusion that a prohibited second motion for reconsideration cannot toll the appeal period.
• "The principle of immutability of judgments provides that once a judgment has attained finality, it can never be altered, amended, or modified, even if the alteration, amendment or modification is to correct an erroneous judgment." — The immutability rule applied to the May 19, 2009 RTC Decision.
• "A party who fails to question an adverse decision by not filing the proper remedy within the period prescribed by law loses the right to do so as the decision, as to such party, becomes final and binding by operation of law." — The consequence of respondents’ failure to appeal within the reglementary period.

• Cortal vs. Inaki A. Larrazabal Enterprises, 817 Phil. 464 (2017) — Relied on for the rule that procedural rules must be faithfully observed and that the bare invocation of “the interest of substantial justice” is not a magic wand that automatically compels suspension of procedural rules.
• Spouses Bergonia vs. Court of Appeals, 680 Phil. 334 (2012) — Cited in Cortal for the same principle on faithful observance of procedural rules.
• Land Bank of the Philippines vs. Ascot Holdings and Equities, Inc., 562 Phil. 974 (2007) — Cited for the rule that a prohibited pleading cannot toll the running of the period to appeal.
• Heirs of Albano vs. Spouses Ravanes, 790 Phil. 557 (2016) — Cited for the rule that appeal is not a matter of right and that failure to file the proper remedy makes the decision final and binding by operation of law.
• Republic vs. Heirs of Gotengco, 824 Phil. 568 (2018) — Cited for the principle of immutability of judgments and its exceptions.
• Bernardo vs. Court of Appeals, 341 Phil. 413 (1997) — Cited for the requirements of a valid substitution of counsel.
• Elbiña vs. Ceniza, 530 Phil. 183 (2006) — Cited for the rule that a mere notice of appearance of a new lawyer does not presume substitution and that the first counsel of record is presumed to continue until a formal notice to the contrary is filed.
• Land Bank of the Phils. vs. Pamintuan Development Co., 510 Phil. 839 (2005) — Cited in Elbiña for the same rule on substitution of counsel.

• Section 5, Rule 37, Rules of Court — No second motion for reconsideration of a judgment or final order; applied to the Urgent Manifestation, which the RTC treated as a second motion for reconsideration and which could not toll the appeal period.
• Rule 45, Rules of Court — Petition for review on certiorari; SC review limited to errors of law; applied in reviewing the CA’s failure to consider the finality issue and in treating G.R. No. 211309 as the proper petition.
• Section 26, Rule 138, Rules of Court — Substitution of counsel requirements; applied in noting that Atty. Flores’s entry as collaborating counsel did not formally substitute Atty. Peneyra.
• Section 1, Rule 45 in relation to Sections 4 and 5, Rule 7, Rules of Court — Verification and certification against forum shopping; applied in expunging G.R. No. 211957 because its verification/certification was denied by Dagot, Jr., while G.R. No. 211309 was signed by all petitioners.
• Section 5(d), Rule 56 in relation to Section 13, Rule 13, Rules of Court — Proof of personal service and written explanation; applied in expunging G.R. No. 211957 for lack of proof of service and explanation.