Philippine National Bank vs. Paneda

A motion for reconsideration is not pro forma merely because it reiterates issues already passed upon by the court, provided it specifically identifies the findings or conclusions in the judgment alleged to be contrary to law or unsupported by evidence and states additional specific reasons for those grounds; where the movant's notice of hearing was addressed to opposing counsel and copies were furnished, there is substantial compliance with Rule 15.

PNB sold a parcel of land covered by Tax Declaration No. 1685 to Bernardo de Vera on October 9, 1985, under a "Contract of Sale with Option to Resell" prepared by PNB. De Vera was placed in possession and introduced improvements, but was subsequently evicted by respondents Consolacion Chan, Elizabeth Capulla, and Caroline Reyes, who claimed ownership and possession. Chan, et al. filed an action for quieting of title and damages against the de Veras, who in turn filed a third-party complaint against PNB. Neither the de Veras nor PNB contested the plaintiffs' claim of possession and ownership, leading the RTC to render summary judgment declaring Chan, et al. lawful possessors and owners, and ordering PNB to pay the de Veras over ₱33 million in damages, improvements, attorney's fees, and expenses.

On October 9, 1985, Bernardo de Vera bought a parcel of land covered by Tax Declaration No. 1685 from PNB under a "Contract of Sale with Option to Resell" prepared by the bank. Shortly after the sale, PNB placed de Vera in possession of the property, and de Vera began introducing improvements, constructing roads and putting up a concrete fence. However, de Vera was subsequently evicted by Consolacion Chan, Elizabeth Capulla, and Caroline Reyes, who claimed possession and ownership over the same property.

Chan, et al. filed an action for quieting of title and damages against the de Veras. In turn, the de Veras filed a third-party complaint against PNB. Neither the de Veras nor PNB contested the plaintiffs' claim of possession and ownership, so the trial court declared Chan, et al. lawful possessors and owners. After trial on the merits, the RTC rendered judgment on August 20, 1998, ordering PNB to pay the de Veras ₱1,000.00 per square meter for 33,873 square meters (₱33,873,000.00), plus ₱20,000.00 for documentation, ₱200,000.00 for improvements, ₱50,000.00 in attorney's fees, and ₱10,000.00 in litigation expenses, with 12% legal interest per month from the date of judgment until full payment.

PNB received the decision on November 19, 1998, and filed a Motion for New Trial and Reconsideration on December 3, 1998. The RTC denied the motion in its Order dated February 18, 1999, finding it pro forma on the ground that the documents PNB sought to present as newly discovered evidence were the same ones marked as Exhibits "1" to "24-A" in its Pre-Trial Brief dated July 1, 1994, and that the motion failed to comply with Sections 5 and 7 of Rule 15 regarding notice of hearing and motion day. The RTC declared its August 20, 1998 decision final and executory and ordered the issuance of a Writ of Execution. PNB received the February 18, 1999 Order on March 2, 1999, and filed a Notice of Appeal on March 3, 1999. Without acting on the Notice of Appeal, the RTC issued a Writ of Execution on March 9, 1999. PNB then filed a Petition for Certiorari with the CA, which issued a Temporary Restraining Order on March 23, 1999, and a writ of preliminary injunction on May 18, 1999. The CA ultimately dismissed PNB's petition on April 20, 2001, affirming the RTC's finding that the motion was pro forma and that the decision had attained finality.

• Grave Abuse of Discretion by the CA: PNB argued that the CA committed grave abuse of discretion in affirming the RTC's declaration that its decision had become final and executory notwithstanding PNB's timely filing of a Notice of Appeal, on the ground that PNB's Motion for New Trial and Reconsideration was pro forma, thereby depriving PNB of its valuable right to appeal.
• Excessive and Unfounded Damages: PNB argued that the CA sanctioned the trial court's award of excessive and unfounded damages of ₱33.8 million against it by way of summary judgment.
• Denial of Appeal: PNB argued that the CA erred in affirming the lower court's denial of PNB's notice of appeal while granting the belated withdrawal of appeal by respondents in support of the latter's motion for execution.
• Warranty Against Eviction: PNB argued that the CA decided a question of substance in a way probably not in accord with the New Civil Code on sales and warranty against eviction.
• Contract as Law Between the Parties: PNB maintained that the provisions of the Contract of Sale with Option to Resell are the law between the parties and should be respected.

• Pro Forma Motion: Whether PNB's Motion for New Trial and Reconsideration is pro forma and, consequently, did not toll the running of the period for appeal.
• Compliance with Rule 15: Whether PNB's Motion complied with Sections 5 and 7 of Rule 15 of the Rules of Court regarding notice of hearing and motion day.
• Finality of the RTC Decision: Whether the RTC Decision of August 20, 1998 attained finality.

• Pro Forma Motion: No. The Motion for Reconsideration was not pro forma because it specifically pointed out findings and conclusions in the RTC judgment alleged to be contrary to law or unsupported by evidence, and stated additional specific reasons for those grounds. While the Motion for New Trial lacked merit because the proffered documents were not newly discovered, the Motion for Reconsideration satisfied the requisites under Rule 37.
• Compliance with Rule 15: Yes, substantially. Even if the notice of hearing may have been defective, the defect was cured because the RTC took cognizance of the motion and the adverse party was notified, as copies were furnished to opposing counsel — constituting substantial compliance with Rule 15.
• Finality of the RTC Decision: No. Because the Motion for Reconsideration was timely filed and was not pro forma, it tolled the running of the period for appeal. PNB's Notice of Appeal was filed within the reglementary period and should have been given due course.

• Pro Forma Motion: The Court distinguished between the Motion for New Trial and the Motion for Reconsideration. The Motion for New Trial lacked merit because the documents PNB sought to present were the same ones already marked in its Pre-Trial Brief, and thus were not newly discovered evidence. However, the Motion for Reconsideration was not pro forma. Under Coquilla vs. Commission on Elections and Marina Properties Corporation vs. Court of Appeals, a motion for reconsideration is not pro forma merely because it reiterates issues already passed upon by the court; what is essential is compliance with the requisites of the Rules — specifically, that the motion specify the findings or conclusions in the judgment alleged to be not supported by the evidence or contrary to law, with express reference to pertinent evidence or legal provisions. PNB's Motion for Reconsideration set forth fifteen specific points challenging the RTC's findings, including lack of notice to PNB's counsel, the RTC's erroneous assumption that PNB had no title, the applicability of the caveat emptor principle, the unconscionability of the damages award, and PNB's status as a mortgagee in good faith. These averments revealed a bona fide effort to present additional matters and reiterate arguments in a different light, with no intent to delay proceedings. The circumstances did not fall within any of the categories where a motion for reconsideration has been held pro forma (second motion for reconsideration, failure to specify findings, failure to substantiate alleged errors, mere allegation that the decision is contrary to law, or failure to give notice to the adverse party).

• Compliance with Rule 15: The RTC held that the Motion violated Section 5 (notice of hearing not addressed to parties concerned and set beyond ten days) and Section 7 (hearing set on a Monday instead of Friday) of Rule 15. The CA held that the notice of hearing was not addressed to the parties concerned. The Court found these conclusions incorrect. Under Maturan vs. Araula, even if a motion's notice of hearing was addressed only to the clerk of court, substantial compliance exists when a copy of the motion is furnished to opposing counsel and the adverse party files an opposition. In the present case, records revealed that the notices in the Motion were addressed to the respective counsels of the private respondents, and they were duly furnished with copies as shown by receipts signed by their staff or agents. The defect, if any, was cured by the court's taking cognizance and the adverse party's actual notification.

• Finality of the RTC Decision: Because the Motion for Reconsideration was timely filed on December 3, 1998 — within the period from PNB's receipt of the decision on November 19, 1998 — and was not pro forma, it interrupted the running of the period to appeal. The RTC denied the motion on February 18, 1999, a copy of which PNB received on March 2, 1999. PNB filed its Notice of Appeal on March 3, 1999, within the reglementary period. The RTC should have given due course to the appeal instead of issuing a Writ of Execution. The CA therefore erred in affirming the RTC Order and the Writ of Execution. The Court noted that under Rule 45, the other issues raised by PNB — which required calibration of factual findings — could not be passed upon, as that function is reserved to the courts a quo.

• Pro Forma Motion for Reconsideration — A motion for reconsideration is deemed pro forma, and thus does not toll the period for appeal, only when: (1) it is a second motion for reconsideration; (2) it does not specify the findings and conclusions alleged to be contrary to law or not supported by the evidence; (3) it fails to substantiate the alleged errors; (4) it merely alleges that the decision is contrary to law; or (5) the adverse party was not given notice thereof. The mere reiteration of issues already passed upon by the court does not by itself render a motion pro forma; what is essential is that the motion specify the findings or conclusions in the judgment alleged to be not supported by the evidence or contrary to law, making express reference to pertinent evidence or legal provisions, and state additional specific reasons for those grounds. In this case, PNB's Motion for Reconsideration was not pro forma because it set forth fifteen specific points identifying the RTC's erroneous findings and conclusions, revealing a bona fide effort to present additional matters.

• Substantial Compliance with Rule 15 — Where a motion's notice of hearing may be defective for not being properly addressed to all parties concerned, the defect is cured when the court takes cognizance of the motion and the adverse party is otherwise notified, such as when copies of the motion are furnished to opposing counsel. Substantial compliance with the notice requirements of Rule 15 suffices where the adverse party was not denied its day in court. In this case, the notices were addressed to the respective counsels of the private respondents, who were duly furnished copies, constituting substantial compliance.

• "The mere reiteration in a motion for reconsideration of the issues raised by the parties and passed upon by the court does not make a motion pro forma; otherwise, the movant's remedy would not be a reconsideration of the decision but a new trial or some other remedy." — This passage, quoted from Coquilla vs. Commission on Elections, articulates the core principle that distinguishes a valid motion for reconsideration from a pro forma one, and is central to the Court's ruling that PNB's motion was not pro forma.

• "Where the circumstances of a case do not show an intent on the part of the pleader to merely delay the proceedings, and his motion reveals a bona fide effort to present additional matters or to reiterate his arguments in a different light, the courts should be slow to declare the same outright as pro forma." — This passage, quoted from Marina Properties Corporation vs. Court of Appeals, defines the doctrinal standard for evaluating whether a motion for reconsideration is pro forma, emphasizing the movant's intent and bona fide effort over mere repetition of issues.

• "The doctrine relating to pro forma motions has a direct bearing upon the movant's valuable right to appeal. It would be in the interest of justice to accord the appellate court the opportunity to review the decision of the trial court on the merits than to abort the appeal by declaring the motion pro forma, such that the period to appeal was not interrupted and had consequently lapsed." — This passage, also from Marina Properties Corporation vs. Court of Appeals, explains the policy rationale behind the pro forma doctrine and why courts should be reluctant to declare motions pro forma, given the impact on the right to appeal.

• Coquilla vs. Commission on Elections, 434 Phil. 861 (2002) — Followed. The Court relied on this case for the principle that mere reiteration of issues in a motion for reconsideration does not make it pro forma, and for the enumeration of circumstances under which a motion for reconsideration has been held pro forma. None of those circumstances were present in PNB's motion.
• Marina Properties Corporation vs. Court of Appeals, 355 Phil. 705 (1998) — Followed. The Court cited this case for the rule that a motion for reconsideration interrupts the running of the period to appeal unless pro forma, and for the principle that courts should be slow to declare a motion pro forma where the movant shows a bona fide effort and no intent to delay.
• Maturan vs. Araula, 197 Phil. 583 (1982) — Followed. The Court relied on this case for the doctrine of substantial compliance with Rule 15 notice requirements, holding that where a copy of the motion is furnished to opposing counsel and the adverse party is not denied its day in court, defects in the notice of hearing are cured.
• Sun Un Giok vs. Matusa, 101 Phil. 727 (1957) — Cited. The Court referenced this case for the proposition that a defect in the notice of hearing is cured by the court's taking cognizance of the motion and the adverse party's actual notification.

• Section 2, Rule 37, 1997 Rules of Civil Procedure — Provides the grounds for a motion for new trial or reconsideration and expressly states that a motion for reconsideration interrupts the running of the period to appeal unless the motion is pro forma. The Court applied this provision to determine that PNB's Motion for Reconsideration, having specified findings and conclusions contrary to law or unsupported by evidence, was not pro forma and thus tolled the appeal period.
• Section 5, Rule 15, Rules of Court — Requires that the notice of hearing be addressed to all parties concerned and specify the time and date of hearing, which must not be later than ten days after filing. The Court found that PNB substantially complied with this requirement because the notices were addressed to opposing counsel and copies were furnished.
• Section 7, Rule 15, Rules of Court — Requires that motions be scheduled for hearing on Friday afternoon, or if Friday is a non-working day, the next working day afternoon. The RTC found PNB's motion defective for setting the hearing on a Monday, but the Court found that any defect was cured by substantial compliance.
• Article 1308, Civil Code — Cited in PNB's Motion for Reconsideration regarding the prohibition against leaving a buyer the unilateral power to determine whether a contract should continue. The Court noted this argument as part of PNB's bona fide effort to present additional matters.

Consuelo Ynares-Santiago (Chairperson), Romeo J. Callejo, Sr., and Antonio Eduardo B. Nachura concurred. Minita V. Chico-Nazario was on leave.