Fluor Daniel, Inc. Philippines vs. Fil-Estate Properties, Inc.

Motions for extension of time to file a petition for certiorari under Rule 65 are not absolutely prohibited and may be granted subject to the sound discretion of the court, provided exceptional and meritorious circumstances exist. The 60-day reglementary period is generally non-extendible, but the deletion of the clause allowing extensions for compelling reasons by A.M. No. 07-7-12-SC did not ipso facto make such motions absolutely prohibited; rather, they may be allowed under exceptional circumstances and in the name of substantial justice.

FDIP and FEPI were parties to a construction dispute that had been resolved through arbitration before the Construction Industry Arbitration Commission (CIAC) in CIAC Case No. 42-98. The CIAC rendered a decision ordering FEPI to pay FDIP over ₱13 million plus interest, which decision was affirmed by both the Court of Appeals and the Supreme Court and became final on April 17, 2009. Execution of the arbitral award proved problematic: FEPI offered real properties as satisfaction, but FDIP refused on the ground that it was a foreign-owned corporation barred from owning real property in the Philippines. The dispute over execution eventually led to the procedural question of whether FDIP could be granted additional time to file a petition for certiorari before the CA.

On April 26, 2000, the Construction Industry Arbitration Commission (CIAC) issued a Notice of Award in CIAC Case No. 42-98, captioned "Fluor Daniel, Inc. - Phils., Claimant, versus Fil-Estate Properties, Inc. (FEPI), Respondent." Attached to the Notice of Award was a Decision ordering FEPI to pay Fluor Daniel, Inc. - Philippines (FDIP) the amount of ₱13,579,599.57, plus interest. The matter was elevated to the appellate courts: the CIAC decision was affirmed by the Court of Appeals on December 21, 2001, and by the Supreme Court on June 18, 2008. The judgment attained finality on April 17, 2009 upon the issuance of an Entry of Judgment by the Supreme Court.

Perforce, the CIAC issued a writ of execution. FEPI offered real properties as satisfaction for the judgment debt, but FDIP refused, on the ground that it was a foreign-owned corporation which could not own real property in the Philippines. After further investigation, FDIP discovered that FEPI owned shares of stock in another corporation, Fil-Estate Industrial Park, Inc. (FEIP). The existence of these shares was relayed to the sheriff, and they were garnished in July 2012. On December 7, 2012, the shares were auctioned and awarded to FDIP as the highest bidder.

FDIP subsequently discovered that FEIP had ceased operations, thereby rendering its shares worthless. FDIP thus decided not to pay the sheriff's commission, and as a result, the corresponding certificate of sale was not executed. Deeming the award unsatisfied, FDIP filed with the CIAC a Motion for Issuance of Alias Writ of Execution dated July 24, 2013, which the CIAC denied in an Order dated December 6, 2013. On December 27, 2013, FDIP filed a motion for reconsideration. On January 27, 2014, the CIAC issued a Declaration reiterating the denial of FDIP's motion for an alias writ of execution.

On February 10, 2014, FDIP filed its Motion for Additional Time to File Petition for Certiorari with the CA, requesting an additional period of 15 days, or until February 25, 2014, within which to file a petition for certiorari. FDIP filed its petition for certiorari dated February 19, 2014. On February 24, 2014, the CA issued the first assailed Resolution, ruling that there was no showing of exceptional and meritorious circumstances warranting an extension. The CA held that if FDIP's case was truly meritorious, it should have promptly utilized the 60-day reglementary period to investigate FEPI's assets. The CA also noted that there was no showing that FDIP filed a motion for reconsideration of the CIAC's Order dated December 6, 2013, and that there was no other plain, speedy, and adequate remedy in the ordinary course of law. Consequently, the CA, in a Resolution dated February 28, 2014, simply considered FDIP's petition for certiorari as noted. FDIP filed a motion for reconsideration on March 20, 2014, which the CA denied on June 3, 2014, reiterating its earlier findings.

• Exceptional Circumstances: FDIP asserted that exceptional circumstances warranted the grant of additional time to file a petition for certiorari, as it had no plain, speedy, and adequate remedy from the CIAC's Order dated December 6, 2013, since a motion for reconsideration was prohibited under the CIAC Rules.
• Manifest Injustice: FDIP argued that it would suffer manifest injustice, as it would no longer have any recourse from the failed execution of the arbitral award obtained more than ten years prior.
• Need for Investigation: FDIP maintained that it needed additional time to conduct its investigation into FEPI's properties, since FEPI was forcing FDIP to receive payment in a form it could not legally hold, and more time was needed to find other suitable assets of FEPI to determine whether further litigation would be worthwhile.
• Unintentional Procedural Lapse: FDIP explained that the filing of its motion for reconsideration before the CIAC was unintentional, having been filed by its former counsel who was under the impression that he was still engaged by FDIP when in fact FDIP had already engaged another law firm.

• No Exceptional Circumstances: FEPI disputed FDIP's claim that its case was exceptional and meritorious enough to warrant the exercise of the CA's discretion, asserting that FDIP should have promptly utilized the 60-day reglementary period in conducting its investigation.
• Procedural Misconduct: FEPI argued that FDIP showed grave disregard for procedural rules by filing both a motion for reconsideration before the CIAC and a petition for certiorari before the CA, and that FDIP did not withdraw its motion for reconsideration even after filing the certiorari petition.
• Caveat Emptor: FEPI contended that FDIP had no one to blame but itself when it bought the allegedly worthless shares, having failed to observe due diligence in ascertaining the true value of the FEIP shares, since the principle of caveat emptor applies with equal force to auction sales.
• Improper Refusal to Consummate Auction Sale: FEPI argued that the resort to an alias writ of execution was correctly rejected by the CIAC, as FDIP could not prevent the consummation of the auction sale by refusing to pay the sheriff's fees and costs.

• Extension of Time for Certiorari: Whether the Court of Appeals erred in denying FDIP's Motion for Additional Time to File Petition for Certiorari.

• Extension of Time for Certiorari: Yes. The CA erred in denying the motion. While the 60-day period to file a petition for certiorari is generally non-extendible, motions for extension are not absolutely prohibited and may be granted subject to the court's sound discretion under exceptional and meritorious circumstances. The facts of this case presented such circumstances, warranting the grant of additional time in the interest of substantial justice.

• Extension of Time for Certiorari: Under Section 4, Rule 65 of the Rules of Court, a petition for certiorari must be filed not later than 60 days from notice of the judgment, order, or resolution complained of. The amendment introduced by A.M. No. 00-2-03-SC in 2000 allowed extensions for compelling reasons only, and Yutingco vs. Court of Appeals held the 60-day period to be inextendible as it is deemed reasonable and sufficient time for a party to prepare a petition. However, the strict proscription against extensions in Laguna Metts Corp. vs. Court of Appeals was subsequently qualified in Domdom vs. Third and Fifth Divisions of the Sandiganbayan, Labao vs. Flores, and Mid-Islands Power Generation Corp. vs. Court of Appeals, all of which held that motions for extension may be granted subject to the court's discretion and for compelling and meritorious reasons. These rulings were harmonized in Rep. of the Phils. vs. St. Vincent de Paul Colleges, Inc., which established that the general rule of non-extendibility admits of exceptions under exceptional circumstances. Applying this framework, the Court found that FDIP's case was meritorious: FDIP had not collected a single centavo of the ₱13 million award rendered in its favor almost 20 years prior, while FEPI had been evading its legal obligation for the same period by the simple expedient of opposing a motion for additional time. There was no showing that FEPI would be prejudiced by the grant. The issues raised by the parties — including whether the auction sale was void, whether caveat emptor applied, and whether the filing of a motion for reconsideration was a procedural fault — involved mixed questions of fact and law best litigated before the CA. Substantial justice dictated that the case be resolved on the merits rather than on a technicality, consistent with the principle that cases should be decided only after giving all parties the chance to argue their causes and defenses.

• Non-extendibility of the 60-day period for certiorari (general rule) — Under Section 4, Rule 65 of the Rules of Court, as amended by A.M. No. 07-7-12-SC, a petition for certiorari must be filed strictly within 60 days from notice of the judgment, order, or resolution sought to be assailed, or from notice of the denial of a motion for reconsideration or new trial. The period was specifically set to avoid unreasonable delay that would violate the constitutional right to speedy disposition of cases. The deletion of the clause allowing extensions for compelling reasons did not, however, ipso facto make motions for extension absolutely prohibited.
• Exceptional circumstances warranting extension (exception) — Motions for extension of time to file a petition for certiorari may be granted, subject to the sound discretion of the court, under exceptional and meritorious circumstances. Instances where extension has been relaxed include: when the assailed decision was contradictory to the evidence; when the relief sought would be more in keeping with law and equity and facilitate speedy trial; where paramount public interest necessitates resolution on the merits; where expropriation of private property is involved and no undue prejudice will result; and when the appellate court had already granted an extension but later reversed itself. In Castells vs. Saudi Arabian Airlines, the Court enumerated 13 factors, including: most persuasive and weighty reasons; to relieve a litigant from injustice not commensurate with procedural failure; good faith of the defaulting party; existence of special or compelling circumstances; the merits of the case; a cause not entirely attributable to the fault or negligence of the party favored; lack of showing that the review sought is merely frivolous and dilatory; the other party will not be unjustly prejudiced; fraud, accident, mistake, or excusable negligence; peculiar legal and equitable circumstances; in the name of substantial justice and fair play; importance of the issues involved; and exercise of sound judicial discretion.
• Substantial justice over technicality — Cases should be decided on the merits rather than on technicalities, as it is far better to dispose of a case on the merits — a primordial end — than on a technicality that may result in injustice. Every party-litigant must be afforded the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities.

• "The deletion of the clause in Section 4, Rule 65 by A.M. No. 07-7-12-SC did not, ipso facto, make the filing of a motion for extension to file a Rule 65 petition absolutely prohibited" — This passage, drawn from the Court's quotation of Domdom vs. Sandiganbayan, articulates the doctrinal basis for allowing motions for extension under exceptional circumstances, despite the amendment that removed the explicit clause permitting extensions for compelling reasons.
• "it is far better to dispose of a case on the merits which is a primordial end rather than on a technicality, if it be the case that may result in injustice." — Quoted from Bacarra vs. NLRC, this passage encapsulates the principle of substantial justice that guided the Court's decision to grant the extension and remand the case for adjudication on the merits.
• "FEPI has been successfully evading its legal obligation for almost 20 years by the simple expedient of a denial of a motion for additional time to file a petition for certiorari." — This statement underscores the Court's assessment of the equities favoring FDIP and the injustice that would result from a purely technical denial of the motion for extension.

• Yutingco vs. Court of Appeals, 435 Phil. 83 (2002) — Established that the 60-day period for filing a petition for certiorari is deemed reasonable and sufficient and ought to be considered inextendible, while recognizing that a motion for extension is addressed to the sound discretion of the court and may be allowed for good and sufficient reason if filed before expiration of the period sought to be extended.
• Laguna Metts Corp. vs. Court of Appeals, 611 Phil. 530 (2009) — Applied a strict interpretation of the general rule that petitions for certiorari must be filed within 60 days, explaining that the deletion of the extension clause under A.M. No. 07-7-12-SC was intended to prevent abuse of certiorari to delay cases.
• Domdom vs. Third and Fifth Divisions of the Sandiganbayan, 627 Phil. 341 (2010) — Qualified the strict rule in Laguna Metts, holding that the deletion of the extension clause did not absolutely prohibit motions for extension, which may still be allowed subject to the court's sound discretion under exceptional and meritorious cases.
• Labao vs. Flores, 649 Phil. 213 (2010) — Recognized the general rule of non-extendibility while acknowledging that certain exceptional circumstances may call for its non-observance.
• Mid-Islands Power Generation Corp. vs. Court of Appeals, 683 Phil. 325 (2012) — Further supported the allowance of extensions under exceptional circumstances, particularly where paramount public interest necessitated resolution on the merits.
• Rep. of the Phils. vs. St. Vincent de Paul Colleges, Inc., 693 Phil. 145 (2012) — Harmonized the seemingly conflicting rulings on the extendibility of the 60-day period, clarifying that Laguna Metts involved strict application of the general rule while Domdom relaxed the rule under exceptional circumstances.
• Castells vs. Saudi Arabian Airlines, 716 Phil. 667 (2013) — Enumerated 13 instances when the period to file a petition for certiorari may be extended, providing the analytical framework for evaluating motions for extension.
• Bacarra vs. NLRC, 510 Phil. 353 (2005) — Enunciated the principle that cases should be decided on the merits rather than on technicalities, cited as controlling authority for the disposition to remand the case to the CA.

• Section 4, Rule 65, Rules of Court — Provides that a petition for certiorari must be filed not later than 60 days from notice of the judgment, order, or resolution complained of, or from notice of the denial of a motion for reconsideration or new trial if timely filed. The provision, as amended by A.M. No. 07-7-12-SC, deleted the clause allowing extensions for compelling reasons, but the Court interpreted this deletion as not constituting an absolute prohibition on motions for extension.

Perlas-Bernabe, Senior Associate Justice (Chairperson), Hernando, Inting, and Zalameda, JJ., concurred.