De Liano vs. Court of Appeals

An appeal is a statutory right that must be exercised in the manner prescribed by law; an appellant's failure to comply with the mandatory contents of an appellant's brief under Section 13, Rule 44, including the subject index, table of cases and authorities, page references to the record, assignment of errors, and statement of issues, warrants dismissal under Section 1(f), Rule 50, and the negligence of counsel binds the client, including a corporation.

Benjamin A. Tango owned a house and lot in Quezon City covered by TCT No. 299551. He executed two real estate mortgages over the property in favor of San Miguel Corporation as third-party or accommodation mortgages for spouses Bernardino and Carmelita Ibarra, who were SMC product dealers in Aparri, Cagayan. Francisco A.G. De Liano and Alberto O. Villa-Abrille, Jr. were senior executives of SMC. The mortgages were annotated on Tango's title.

Benjamin A. Tango owned a house and lot in Quezon City covered by TCT No. 299551. He executed two real estate mortgages over the property in favor of San Miguel Corporation (SMC). The mortgages were third-party or accommodation mortgages on behalf of the spouses Bernardino and Carmelita Ibarra, who were dealers of SMC products in Aparri, Cagayan. The mortgage contracts were dated December 4, 1990 and February 17, 1992. Francisco A.G. De Liano and Alberto O. Villa-Abrille, Jr. were senior executives of SMC.

After the RTC of Quezon City, Branch 227, rendered its Decision in Civil Case No. Q-95-24332 on March 30, 1998, SMC, De Liano, and Villa-Abrille appealed to the Court of Appeals. Their counsel, Atty. Edgar B. Afable, filed an Appellants' Brief. The brief did not comply with Section 13, Rule 44 of the Rules of Court. Tango, the private respondent, noticed the deficiencies and filed a Motion to Dismiss Appeal dated March 8, 1999. In their comment, the appellants averred that their brief had substantially complied with the required contents; that the omissions were only the result of oversight or inadvertence and could be considered harmless errors; and they prayed for liberality in the application of technical rules, adding that they had a meritorious defense.

On June 4, 1999, the Court of Appeals issued a Resolution dismissing the appeal. It found that the brief did not contain a subject index or a table of cases and authorities with page references, and that the Statement of the Case, Statement of Facts, and Arguments had no page references to the record. The appellate court applied Section 1(f), Rule 50 of the 1997 Rules of Civil Procedure, as amended, and quoted Del Rosario vs. Court of Appeals on the statutory nature of the right to appeal. It also stated that it need not resolve Tango's contention that the issues raised in the appeal were mere questions of law.

The appellants sought reconsideration and simultaneously filed a Motion to Admit Amended Defendants-Appellants' Brief. The Court of Appeals denied the consolidated motions on February 23, 2000. On closer scrutiny, the amended brief was as defective as the first: the first brief lacked an assignment of errors but included a statement of issues, while the amended brief had an assignment of errors but no statement of issues; the statement of facts still lacked page references to the record; authorities were cited without specifying the exact page of the report; and the amended brief did not follow the prescribed order because the assignment of errors came after the statement of the case and the statement of facts. Only SMC interposed the instant petition for review on certiorari.

• Dismissal on Technicalities: Petitioner SMC argued that the Court of Appeals erred in dismissing its appeal on the basis of pure technicalities and even after SMC had corrected the technical defect of its appeal.
• Failure to Consider Merits: Petitioner SMC argued that the Court of Appeals erred in dismissing the appeal without considering its merits.
• Damages Award: Petitioner SMC maintained that there were valid grounds to reverse the RTC's award of damages in favor of Tango because the award had no basis in fact or in law.
• Substantive Question: Petitioner SMC contended that the appeal involved a question of substance: whether a third-party mortgagor can unilaterally withdraw the mortgage without the consent of the debtor and creditor.
• Substantial Compliance and Liberality: In the Court of Appeals, the appellants averred that their brief had substantially complied with the required contents, that the omissions were due to oversight or inadvertence and were harmless, and they prayed for liberality in the application of technical rules, claiming a meritorious defense.

• Deficient Brief: Respondent Benjamin A. Tango pointed out that the Appellants' Brief did not contain a subject index or a table of cases and authorities with page references.
• Lack of Page References: Respondent pointed out that the Statement of the Case, Statement of Facts, and Arguments in the brief had no page references to the record.
• Dismissal Under Rule 50: Respondent sought dismissal of the appeal under Section 1(f), Rule 50 of the 1997 Rules of Civil Procedure, as amended.
• Questions of Law: Respondent contended that the issues raised in the appeal were mere questions of law, although the Court of Appeals did not resolve this contention after dismissing the appeal.

• Dismissal for Non-Compliance: Whether the Court of Appeals erred in dismissing SMC's appeal under Section 1(f), Rule 50 for non-compliance with Section 13, Rule 44, despite SMC's claim of substantial compliance and its filing of an amended brief.
• Consideration of Merits: Whether the Court of Appeals erred in dismissing the appeal without considering its merits, including the substantive question of whether a third-party mortgagor may unilaterally withdraw a mortgage without the consent of the debtor and creditor.
• Binding Effect of Counsel's Negligence: Whether SMC is bound by the procedural lapses of its counsel of record, Atty. Edgar B. Afable.

• Dismissal for Non-Compliance: No. The Court of Appeals correctly dismissed the appeal; the right to appeal is statutory and must be exercised in the manner prescribed by law, and non-compliance with Section 13, Rule 44 warrants dismissal under Section 1(f), Rule 50.
• Consideration of Merits: No. The merits could only be examined at the study and report stage; the appeal was dismissed during the completion stage, so the appellate court had no occasion to pass upon the merits.
• Binding Effect of Counsel's Negligence: Yes. SMC is bound by the acts of its counsel; a corporation acts through its officers and agents, and Atty. Afable was clothed with sufficient authority to represent and bind SMC.

• Dismissal for Non-Compliance: Section 13, Rule 44 prescribes the contents of an appellant's brief: (a) subject index with digest and page references and table of cases, textbooks, and statutes cited; (b) assignment of errors; (c) statement of the case with page references; (d) statement of facts with page references; (e) statement of issues; (f) argument with page references and proper citation of authorities; (g) relief; and (h) appendix copy of the judgment. The rule is not novel; it has existed since the old Rules of Court effective July 1, 1940, the Revised Rules effective January 1, 1964, and the 1997 Rules. The purpose is to present the appellate court with the factual and legal antecedents in the most helpful light and to minimize labor in examining the record. The CA found that the brief lacked a subject index and table of cases and authorities with page references, and that the statement of the case, statement of facts, and arguments had no page references to the record. Appellants failed to amend the brief to conform; instead they argued harmless error. Even the amended brief remained defective: the first lacked an assignment of errors but had a statement of issues; the amended had an assignment of errors but no statement of issues; the statement of facts lacked page references; authorities were cited without the exact page; and the prescribed order was not followed. The Court held that the half-hearted attempt hardened its resolve to demand strict observance. Section 1(f), Rule 50 authorizes dismissal for absence of specific assignment of errors or page references to the record as required in Section 13, paragraphs (a), (c), (d), and (f) of Rule 44. Del Rosario vs. Court of Appeals teaches that the right to appeal is statutory and must be faithfully complied with; deviations cannot be tolerated. Thus, dismissal was proper.
• Consideration of Merits: The Rules of Court provide two modes of appeal from RTC decisions to the CA: ordinary appeal under Section 2(a), Rule 41 when the RTC exercised original jurisdiction, and petition for review under Rule 42 when the RTC exercised appellate jurisdiction. This case involved an ordinary appeal. Cases elevated to the CA are classified as appealed civil cases, appealed criminal cases, and special cases; this case was an ordinary appealed civil case. Ordinary appealed civil cases in the CA undergo two stages: completion of records and study and report. At each stage a separate raffle is held. The Justice assigned for completion oversees completion only and may not examine the merits; the merits are determined by the Justice to whom the case is raffled for study and report after the case is deemed submitted. The case at bar did not reach the second stage because it was dismissed during the completion stage under Section 1(f), Rule 50. Consequently, the contention that the CA should have considered the substance of the appeal before dismissing it on technical grounds failed.
• Binding Effect of Counsel's Negligence: Generally, the negligence of counsel binds the client. Atty. Afable was also an employee of SMC. A corporation is an artificial being whose juridical personality is a fiction created by law; it exercises powers and transacts business through its board of directors and through officers and agents when authorized by resolution or by-laws. A corporate officer or agent may bind the corporation to the extent authority has been conferred, including incidental, implied, customary, and apparent powers. SMC's board resolution of May 5, 1999 attested that Atty. Afable was authorized to represent, prosecute, and defend SMC in actions arising from contracts, deeds, or acts where SMC is a party. Coupled with the rule that a lawyer has authority to bind his client in taking appeals and in all matters of ordinary judicial procedure, SMC was bound by the actuations of its counsel of record.

• Right to appeal is statutory — An appeal is not a natural or constitutional right but a statutory privilege; a party seeking to avail of it must faithfully comply with the rules governing appellate practice. The Court applied this principle to uphold the dismissal of SMC's appeal for non-compliance with the appellant's brief requirements.
• Mandatory contents of an appellant's brief under Section 13, Rule 44 — The brief must contain, in order: (a) a subject index with a digest of arguments and page references, and a table of cases, textbooks, and statutes cited with page references; (b) a separate, distinct, concise, and numbered assignment of errors; (c) a statement of the case with page references; (d) a statement of facts with page references; (e) a statement of the issues; (f) an argument on each assigned error with page references and proper citation of authorities; (g) a specification of the relief sought; and (h) an appendix copy of the judgment or final order appealed from. The Court found SMC's brief and amended brief non-compliant.
• Assignment of errors and statement of issues are distinct — The rules require both an assignment of errors and a statement of issues; they are not interchangeable. The first brief had a statement of issues but no assignment of errors, while the amended brief had an assignment of errors but no statement of issues.
• Page references to the record — A statement of fact unaccompanied by a page reference to the record may be presumed to be without support in the record and may be stricken or disregarded. The Court cited this rule in upholding the dismissal.
• Dismissal of appeal under Section 1(f), Rule 50 — An appeal may be dismissed by the Court of Appeals on its own motion or on motion of the appellee for absence of a specific assignment of errors or of page references to the record as required in Section 13, paragraphs (a), (c), (d), and (f) of Rule 44. The Court held that the CA properly applied this ground.
• Two-stage processing of ordinary appealed civil cases — Ordinary appealed civil cases undergo a completion stage and a study-and-report stage, with separate raffles; the merits may be examined only at the study-and-report stage. Because the appeal was dismissed at the completion stage, the CA did not err in not resolving the merits.
• Negligence of counsel binds the client — A client is generally bound by the procedural negligence of counsel. The rule applies with particular force to a corporation, which acts only through its officers and agents; where counsel is authorized to represent the corporation and to take appeals, the corporation is bound by counsel's acts and omissions.
• Authority of a corporate officer or agent — A corporation may be bound by acts of an officer or agent to the extent authority has been conferred, including powers incidental to, implied from, or apparent from the authority granted. SMC's board resolution and Section 23, Rule 138 confirmed Atty. Afable's authority.

• "Long ingrained in our jurisprudence is the rule that the right to appeal is a statutory right and a party who seeks to avail of the right must faithfully comply with the rules. x x x These rules are designed to facilitate the orderly disposition of appealed cases. In an age where courts are bedeviled by clogged dockets, these rules need to be followed by appellants with greater fidelity. Their observance cannot be left to the whims and caprices of appellants. x x x" — This passage, quoted by the Court from Del Rosario vs. Court of Appeals, states the controlling rationale for strict compliance with the rules on appellant's briefs and supports the dismissal of SMC's appeal.
• "Page references to the record are not an empty requirement. If a statement of fact is unaccompanied by a page reference to the record, it may be presumed to be without support in the record and may be stricken or disregarded altogether." — The Court used this to explain why the absence of page references in SMC's statement of facts was a substantial procedural defect, not a harmless omission.
• "The case at bar did not reach the second stage; it was dismissed during completion stage pursuant to Section 1 (f) of Rule 50. Consequently, petitioner's contention that the appellate court should have considered the substance of the appeal prior to dismissing it due to technicalities does not gain our favor." — This passage explains why the Court of Appeals could not have resolved the merits of the appeal and why the dismissal did not violate SMC's right to appeal.
• "That Atty. Afable was clothed with sufficient authority to bind petitioner SMC is undisputable. Petitioner SMC's board resolution of May 5, 1999 attests to that. Coupled with the provision of law that a lawyer has authority to bind his client in taking appeals and in all matters of ordinary judicial procedure, a fortiori then, petitioner SMC must be held bound by the actuations of its counsel of record, Atty. Afable." — This passage establishes that SMC could not escape the consequences of its counsel's procedural lapses.

• Del Rosario vs. Court of Appeals, G.R. No. 113899, February 22, 1996, 241 SCRA 553 — Followed and quoted; stands for the rule that the right to appeal is statutory and must be faithfully complied with, and that dismissal is proper for non-compliance with the rules on appellant's brief.
• Estiva vs. Cavil, 59 Phil. 67 (1933) — Cited for Justice Malcolm's definition and purpose of a brief: a short or condensed statement to present points and questions in controversy and assist the court in arriving at a just conclusion.
• Santiago vs. Felix, 24 Phil. 378 (1913) — Cited for the rule that a general assignment of errors is unacceptable; the appellant must specify the aspect of law or facts in which the trial court erred.
• Heirs of Palomique vs. Court of Appeals, 134 SCRA 331 (1985) — Cited for the rule that disobedience to the requirement of page references to the record has been punished by dismissal of the appeal.
• Genobiagon vs. Court of Appeals, 76 SCRA 37 (1977) — Cited together with Heirs of Palomique for the same rule on page references.
• People vs. Marong, 119 SCRA 430 (1982) — Cited for disapproving failure to cite page references to the record in support of a statement of facts; also cited in Del Rosario for strict compliance.
• Bernardo vs. Court of Appeals, 216 SCRA 224 (1992) — Cited for the distinction between a question of law and a question of fact.
• Yao Ka Sin Trading vs. Court of Appeals, 209 SCRA 763 (1992) — Cited for the rule that a corporate officer or agent may represent and bind the corporation to the extent of the authority conferred, including incidental, implied, customary, and apparent powers.

• Section 13, Rule 44, 1997 Rules of Civil Procedure — Prescribes the contents of an appellant's brief. The Court enumerated the requirements and found SMC's brief and amended brief non-compliant.
• Section 1(f), Rule 50, 1997 Rules of Civil Procedure — Authorizes dismissal of an appeal for absence of a specific assignment of errors or of page references to the record as required in Section 13, paragraphs (a), (c), (d), and (f) of Rule 44. This was the ground for the CA dismissal affirmed by the Court.
• Section 8, Rule 51, Rules of Court — Provides that no error not affecting jurisdiction, validity of judgment, or proceedings will be considered unless stated in the assignment of errors or closely related to and properly argued in the brief. The Court cited this to stress the importance of a proper assignment of errors.
• Section 2(a), Rule 41, Rules of Court — Provides for ordinary appeal from decisions of the RTC in the exercise of original jurisdiction. The Court used this to classify the appeal in this case.
• Section 1, Rule 42, Rules of Court — Provides for petition for review from decisions of the RTC in the exercise of appellate jurisdiction. The Court cited this as the contrasting mode of appeal.
• Section 1, Rule 51, Rules of Court — Defines when a case is deemed submitted for judgment. The Court cited this in explaining the two stages of ordinary appealed civil cases.
• Section 23, Rule 138, Revised Rules of Court — Provides that a lawyer has authority to bind his client in taking appeals and in all matters of ordinary judicial procedure. The Court applied this to hold SMC bound by Atty. Afable's acts.
• Section 17, Rule 48, old Rules of Court (1940) — Predecessor provision on contents of appellant's brief, substantially preserved in later rules. The Court cited it to show the rule is not novel.
• Section 16, Rule 46, Revised Rules of Court (1964) — Predecessor provision on contents of appellant's brief, substantially preserved in the 1997 Rules. The Court cited it to show the rule is not novel.

Bellosillo, Mendoza, Quisumbing, and Buena, JJ.