Delta Motors Corporation vs. Court of Appeals

An appellate court may not rule on issues or prayers not raised in the petition before it, especially after the decision has become final; matters not included in the assignment of errors are beyond the court's jurisdiction to decide, and any statement on such matters not necessary to the decision constitutes obiter dictum that may be stricken out.

State Investment House, Inc. (SIHI) brought an action for a sum of money against Delta Motors Corporation (DELTA) in the Regional Trial Court of Manila, Branch VI, docketed as Civil Case No. 84-23019. DELTA was declared in default, and the RTC rendered judgment on 5 December 1984 ordering DELTA to pay ₱20,061,898.97 plus 25% attorney's fees. DELTA had been dissolved and taken over by the Philippine National Bank (PNB), preventing personal or mail service of the decision. SIHI secured an order for service by publication, and after publication moved for and obtained execution, resulting in the levy and sale of DELTA's properties in Iloilo and Bacolod City.

SIHI sued DELTA for a sum of money in the RTC of Manila, Branch VI, docketed as Civil Case No. 84-23019. DELTA was declared in default, and on 5 December 1984 the RTC, per Judge Ernesto Tengco, rendered judgment ordering DELTA to pay ₱20,061,898.97 as its total outstanding obligation, plus 25% of the total obligation as attorney's fees and costs of suit. The decision could not be served on DELTA, either personally or by registered mail, due to its earlier dissolution; DELTA had been taken over by the Philippine National Bank (PNB) in the meantime.

On 4 November 1986, SIHI moved for service of the decision by publication, which the trial court allowed on 6 December 1986. The decision was published in the Thunderer, a weekly newspaper in Manila. After publication, SIHI moved for execution, which the trial court granted on 11 March 1987 on the ground that no appeal had been taken despite publication. The writ of execution was issued, and pursuant thereto certain properties of DELTA in Iloilo and Bacolod City were levied upon and sold; the sheriff likewise levied on other properties.

DELTA then commenced a special civil action for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 23068, insisting that the trial court never acquired jurisdiction over its person due to invalid service of summons, rendering the decision null and void, and that the void decision never became final and executory. On 22 January 1991, the Court of Appeals ruled against DELTA on the jurisdictional ground but found that the record was bereft of any showing that a copy of the assailed judgment had been properly served on PNB, which had assumed DELTA's operations upon dissolution. The CA held that the decision did not become executory pending service of a copy on DELTA, which could appeal within the reglementary period. Both parties' motions for reconsideration were denied on 27 May 1991. DELTA's petition for review with the Supreme Court (G.R. No. 100366) was denied on 16 September 1991 for non-compliance with Circular No. 1-88, and the motion for reconsideration was denied on 9 October 1991, with DELTA receiving the resolution on 31 October 1991.

On 12 November 1991, DELTA filed a Notice of Appeal with the RTC in Civil Case No. 84-23019, appealing from the 5 December 1984 decision. SIHI moved to dismiss the appeal on 2 December 1991, arguing it was filed out of time because DELTA had obtained a certified true copy of the decision on 21 September 1990 and thus had only fifteen days therefrom to appeal. The trial court dismissed the Notice of Appeal on 3 June 1992 and denied DELTA's motion for reconsideration on 14 September 1992. DELTA then filed a petition for certiorari under Rule 65 with the Court of Appeals, docketed as CA-G.R. SP No. 29147, seeking annulment of both trial court orders and elevation of the records to the Court of Appeals. On 17 June 1993, the Court of Appeals set aside the trial court orders and directed the RTC to elevate the records, which was done on 18 January 1993. SIHI's petition for review to the Supreme Court (G.R. No. 110677) was denied on 18 July 1994, and the motion for reconsideration was denied on 21 September 1994.

While SIHI's petition in G.R. No. 110677 was pending, DELTA filed an Omnibus Motion on 14 February 1994 in CA-G.R. SP No. 29147, seeking to declare null and void ab initio the trial court's 11 March 1987 order issuing the writ of execution, the writ of execution itself, and all proceedings conducted by the sheriff implementing the writ. SIHI opposed the motion on grounds of lack of jurisdiction (pending SC petition), res judicata, and forum-shopping. The Court of Appeals initially merely noted the motion on 7 June 1994 due to the pending SC petition. After the SC denied SIHI's petition, DELTA moved to resolve the Omnibus Motion. On 5 January 1995, the Court of Appeals denied the Omnibus Motion, holding that the matters prayed for were not raised as issues in the petition and were therefore beyond the court's jurisdiction to decide. The resolution contained a paragraph stating that as a necessary consequence of the CA's 22 January 1991 ruling, all proceedings and orders arising from the trial court's decision were null and void. SIHI moved for clarification to delete this paragraph as obiter dictum, while DELTA moved for reconsideration arguing the matters were incidental to the CA's appellate jurisdiction. On 14 July 1995, the Court of Appeals granted SIHI's motion, deleted the paragraph, and denied DELTA's motion for reconsideration. DELTA then filed the instant petition for certiorari before the Supreme Court.

• Jurisdiction over Omnibus Motion: DELTA insisted that the matters raised in the Omnibus Motion were incidental to and included in the appellate jurisdiction of the Court of Appeals, hence the CA had jurisdiction to rule on the motion. DELTA argued that it could not file the Omnibus Motion with the RTC since the records had already been elevated to the Court of Appeals and the trial court had lost jurisdiction over the case upon perfection of the appeal.
• General Prayer: DELTA alleged that while the matters prayed for in the Omnibus Motion were not specifically raised in the petition, they were included in the general prayer "for such other reliefs and remedies just and equitable in the premises."
• Obiter Dictum: DELTA submitted that the deleted paragraph in the 5 January 1995 resolution contained a finding or affirmation of fact and thus could not have constituted obiter dictum.

• Lack of Jurisdiction: SIHI argued that there was a pending petition for review with the Supreme Court, thus the Court of Appeals was without jurisdiction to entertain the Omnibus Motion.
• Res Judicata: SIHI contended that the Omnibus Motion was barred by res judicata.
• Forum-Shopping: SIHI argued that the filing of the Omnibus Motion was a clear act of forum-shopping and should be denied outright.
• Obiter Dictum: SIHI asked for the deletion of the assailed paragraph in the 5 January 1995 resolution, arguing it was not necessary to the decision of the case, could not be considered binding for establishing precedent, and that the resolution did not decide the incident on its merits or dispose of the issues.

• Scope of Appellate Jurisdiction: Whether the Court of Appeals had jurisdiction to rule on DELTA's Omnibus Motion seeking to nullify the execution orders and writ, when those matters were not raised as issues in the original petition in CA-G.R. SP No. 29147 and the decision therein had already become final.
• Obiter Dictum: Whether the deleted paragraph in the Court of Appeals' 5 January 1995 resolution constituted obiter dictum that was properly stricken out.

• Scope of Appellate Jurisdiction: No. The Court of Appeals committed no reversible error in denying the Omnibus Motion, as the matters prayed for were not raised as issues in the petition, which had long become final, and Section 7 of Rule 51 limits the appellate court to errors stated in the assignment of errors and properly argued in the brief.
• Obiter Dictum: Yes. The deleted paragraph was obiter dictum because it touched upon a matter not raised by the petitioner in its petition, was not a prerequisite to disposing of the issue before the court, and the body of the resolution contained no discussion or legal principle to support the statement.

• Scope of Appellate Jurisdiction: The decision of the Court of Appeals of 17 June 1993 in CA-G.R. SP No. 29147 had long become final insofar as DELTA was concerned, and DELTA knew that the only issues raised therein concerned the trial court's orders of 3 June 1992 and 14 September 1992. At the time DELTA filed the petition in CA-G.R. SP No. 29147, the orders sought to be declared null and void in the Omnibus Motion — namely the 11 March 1987 execution order and writ — had already been issued, having been issued at the commencement of CA-G.R. SP No. 23068. If DELTA intended to challenge those orders in CA-G.R. SP No. 29147, it could have explicitly alleged them as additional causes of action and prayed for corresponding affirmative relief. If that initially proved unavailing, DELTA could and should have moved for reconsideration on that aspect. After the finality of the decision, any attempt to introduce or revive the issue had become procedurally impermissible. The issues raised in the Omnibus Motion could have been allowed during the pendency of the case by way of amendments to the petition. Moreover, Section 7 of Rule 51 of the Rules of Court mandates that no error which does not affect jurisdiction over the subject matter will be considered unless stated in the assignment of errors and properly argued in the brief, save as the court may notice plain errors not specified and clerical errors. The Court of Appeals could only consider errors raised by DELTA, which were limited to the two trial court orders. To allow the Omnibus Motion, filed more than eight months after promulgation of the decision and long after its finality, would result in abandonment of sound judicial process. As to SIHI's claim of res judicata, the Court found it inapplicable in light of the dispositive portions of the CA's decisions in CA-G.R. SP No. 23068 and CA-G.R. SP No. 29147.

• Obiter Dictum: An obiter dictum has been defined as an opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it. It is a remark made by a judge in his decision upon a cause, incidentally or collaterally, and not directly upon the question before him, or upon a point not necessarily involved in the determination of the cause, or introduced by way of illustration, analogy, or argument. Such remarks are not binding as precedent. The assailed phrase was indeed obiter dictum because it touched upon a matter not raised by DELTA expressly in its petition assailing the dismissal of its notice of appeal. It was not a prerequisite in disposing of that issue. The body of the resolution did not contain any discussion on such matter nor mention any principle of law to support the statement.

• Scope of Appellate Review (Section 7, Rule 51) — No error which does not affect jurisdiction over the subject matter will be considered unless stated in the assignment of errors and properly argued in the brief, save as the court, at its option, may notice plain errors not specified and clerical errors. The Court applied this rule to hold that the Court of Appeals could only consider errors raised by DELTA in its petition, which were limited to the trial court's orders of 3 June 1992 and 14 September 1992, and could not entertain matters raised in an Omnibus Motion filed after the decision had become final.

• Obiter Dictum — An opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it; a remark made incidentally or collaterally, not directly upon the question before the court, or upon a point not necessarily involved in the determination of the cause. Such are not binding as precedent. The Court found that the deleted paragraph in the CA's 5 January 1995 resolution was obiter dictum because it touched upon a matter not raised in the petition, was not necessary to the decision, and was unsupported by any discussion or legal principle in the body of the resolution.

• Finality of Judgments — After a decision has become final, any attempt to introduce or revive issues that could have been raised during the pendency of the case is procedurally impermissible. Issues not raised but available could have been allowed during the pendency by way of amendment to the petition.

• "After the finality of the decision in said case, any attempt to introduce or revive the issue had become procedurally impermissible. Plainly, the issues raised in the Omnibus Motion could have been allowed during the pendency of said case by way of amendments to the petition." — This passage articulates the ratio decidendi on the first issue: that matters not raised during the pendency of a case cannot be revived after finality, even if they could have been included by amendment.

• "An obiter dictum has been defined as an opinion expressed by a court upon some question of law which is not necessary to the decision of the case before it." — This is the canonical definition of obiter dictum adopted by the Court, drawn from Auyong Hian vs. Court of Tax Appeals and Black's Law Dictionary, and applied to strike out the disputed paragraph.

• "To allow DELTA's Omnibus Motion which it filed more than eight months from promulgation of the decision in CA-G.R. SP No. 29147, or long after finality of said case, would result in abandonment of sound judicial process." — This statement underscores the procedural impropriety of raising new issues through a motion filed after finality, emphasizing the importance of finality in judicial process.

• Miguel vs. Court of Appeals, 29 SCRA 760 (1969) — Cited as jurisprudence supporting the application of Section 7 of Rule 51 on the procedure in the Court of Appeals, limiting review to errors stated in the assignment of errors.

• Bañez vs. Court of Appeals, 59 SCRA 15 (1974) — Cited alongside Miguel for the same proposition on the scope of appellate review under Section 7 of Rule 51.

• Escaño vs. Court of Appeals, 100 SCRA 197 (1980) — Cited alongside Miguel and Bañez for the same proposition on the scope of appellate review.

• Auyong Hian vs. Court of Tax Appeals, 59 SCRA 110 (1974) — Cited as the source of the definition of obiter dictum adopted by the Court, and also cited by SIHI in its motion for clarification to argue that the disputed paragraph was not necessary to the decision and could not be considered binding precedent.

• Tobias vs. Diaz, 213 SCRA 253 (1992) — Cited by SIHI in support of its argument that the disputed paragraph could not be considered binding for the purpose of establishing precedent.

• Section 7, Rule 51 of the Rules of Court — Provides that no error which does not affect jurisdiction over the subject matter will be considered unless stated in the assignment of errors and properly argued in the brief, save as the court may notice plain errors not specified and clerical errors. The Court applied this provision to hold that the Court of Appeals could only consider errors raised by DELTA in its petition, which were limited to the trial court's orders of 3 June 1992 and 14 September 1992, and could not rule on matters raised in the Omnibus Motion that were never part of the petition.

Narvasa, C.J., Francisco and Panganiban, JJ., concurred. Melo, J., took no part.