Prieto vs. Alpadi Development Corporation

The Supreme Court held that a petition for review on certiorari under Rule 45 must be filed within the reglementary period of fifteen (15) days from notice of the judgment or final order, extendible by only thirty (30) days for justifiable reasons, and that failure to file within this period results in the loss of the right to appeal. The Court affirmed that a client is bound by the acts of counsel of record, including their negligence in procedural matters, and notice sent to counsel is binding upon the client; the negligence of counsel constitutes excusable cause only when it is so gross, reckless, and inexcusable as to deprive the client of their day in court.

Rhodora Prieto was employed as an accounting clerk and cashier for the Alpadi Group of Companies, composed of Alpadi Development Corporation (ADC), Manufacturers Building, Incorporated (MBI), and Asian Ventures Corporation (AVC), entities engaged in leasing office spaces. From 1992 to 1994, Prieto allegedly collected rental payments from tenants totaling P544,858.64, which she failed to remit to the corporation. Instead, she allegedly misappropriated the funds for personal use and to lend to employees of Tri-Tran Transit, creating fraudulent deposit slips to conceal the misappropriation. This led ADC to file a criminal complaint for estafa under Article 315(1)(b) of the Revised Penal Code against Prieto before the Regional Trial Court of Manila, Branch 8.

• Prieto was employed as an accounting clerk and cashier of the Alpadi Group of Companies, composed of ADC, MBI, and AVC, all engaged in leasing office spaces.
• She was charged with estafa under Article 315(1)(b) of the Revised Penal Code in an Information dated May 13, 1997 for allegedly defrauding ADC of P544,858.64 in rental collections from 1992 to 1994.
• The prosecution presented evidence including the testimony of Angeles Manzano (Office Manager) and Jaime Clamar, Jr. (Private Investigator); Prieto's "kusang-loob na salaysay" executed on January 3, 1995 admitting she collected rentals, made fraudulent deposit slips, and used collections for personal expenses and lending; fraudulent deposit slips; Clamar's Investigation Report dated July 18, 1995; computation of unremitted collections with Prieto's conforme; and an affidavit from a tenant stating Prieto requested cash payments instead of checks.
• After the prosecution rested its case and filed its Formal Offer of Evidence on December 13, 2004, Prieto filed a Demurrer to Evidence on January 13, 2005 (beyond the 20-day period granted, which expired on January 3, 2005).
• In her Demurrer, Prieto argued she could not be convicted of estafa because as an employee, she only had material and physical possession of the rental collections (likened to a bank teller), not juridical possession, and because there was no showing that demand was made upon her to deliver or return the collections.
• The RTC granted the Demurrer on March 8, 2005, holding that Prieto only received material possession and the juridical possession remained in the owner, citing Guzman vs. CA.
• The RTC denied ADC's Motion for Reconsideration on August 8, 2005, reiterating that the prosecution failed to prove the element of juridical possession, citing Burce vs. CA.
• The Court of Appeals granted ADC's Petition for Certiorari on August 28, 2009, finding that Prieto had discretion as to when to deposit the rentals and had both physical and juridical possession, distinguishing her case from that of a bank teller; the CA reinstated the case for further trial.
• The CA denied Prieto's Motion for Reconsideration on November 12, 2009; the PAO received a copy on November 24, 2009.
• The PAO filed a Motion for Extension of Time to File Petition for Review (G.R. No. 190282) on December 4, 2009, requesting 30 days from December 9, 2009 (until January 8, 2010).
• On January 12, 2010, the PAO filed a Manifestation with Motion withdrawing the appeal, alleging Prieto had a change of heart and wanted to settle amicably.
• On February 10, 2010, the Supreme Court granted the withdrawal of G.R. No. 190282 and considered it closed and terminated.
• On the same date (February 10, 2010), Prieto filed the instant petition through new counsel (Atty. Xilexferen P. Barroga), claiming she only received the CA Resolution on January 26, 2010, and that she did not authorize the PAO to withdraw the previous appeal.

• Prieto argued that she was a mere employee with continuing instructions to deposit rental payments either on the same day or the day after collection, and she could not have validly retained control of the amounts collected because ownership remained with ADC; without juridical possession, she cannot be convicted of estafa.
• She claimed she was not aware that the PAO filed a Motion for Extension in G.R. No. 190282 and did not authorize the PAO to file the Manifestation withdrawing her appeal.
• She alleged that the PAO deliberately refused to give her a copy of the CA Resolution dated November 12, 2009 and misrepresented to the Court that she authorized the withdrawal.
• She contended that she only received the Resolution on January 26, 2010 (mailed by the PAO), making her petition filed on February 10, 2010 timely if the 15-day period is counted from actual receipt.
• She prayed for the liberal application of the rules of procedure, arguing that the "higher interest of justice" should excuse the procedural lapse.

• ADC argued that G.R. Nos. 190282 and 191025 both involve the same appeal of the same Court of Appeals decision, and since G.R. No. 190282 was already withdrawn and terminated by the Supreme Court, the instant petition constitutes an improper attempt to revive a terminated proceeding.
• ADC contended that even with the 30-day extension granted in G.R. No. 190282, the last day to appeal was January 8, 2010, so the filing of the instant petition on February 10, 2010 was clearly out of time.
• ADC asserted that Prieto's arguments regarding the substantive issues merely rehashed or restated those already resolved by the Court of Appeals in its decision reinstating the criminal case.

• Procedural Issues:
  • Whether the petition for review on certiorari was filed within the reglementary period provided under Rule 45, Section 2 of the Rules of Court
  • Whether Prieto can be excused from the effects of her counsel's negligence in withdrawing the previous appeal and failing to file the petition on time
  • Whether the liberal application of procedural rules should be applied to allow the late filing of the petition
• Substantive Issues:
  • Whether the Court of Appeals committed grave abuse of discretion in reversing the Regional Trial Court's grant of demurrer to evidence and reinstating the criminal case for estafa

• Procedural: The Supreme Court denied the petition for being filed out of time. The Court held that the reglementary period for filing a petition for review under Rule 45 is 15 days from notice of the judgment or final order, extendible by only 30 days for justifiable reasons. Since the Public Attorney's Office (counsel of record) received notice of the Court of Appeals Resolution on November 24, 2009, and the 30-day extension was granted until January 8, 2010, the filing of the instant petition on February 10, 2010 was clearly belated. The Court ruled that a client is bound by the acts of counsel of record, and notice sent to counsel is binding upon the client; the negligence of counsel in failing to notify the client of an adverse judgment or in withdrawing the appeal does not excuse the late filing unless the negligence is so gross, reckless, and inexcusable as to deprive the client of their day in court. The Court found Prieto's allegations of deliberate refusal by the PAO to give her copies and unauthorized withdrawal to be bare allegations without evidence, and contrary to the PAO's diligent prior conduct in representing her. The Court emphasized that liberal application of rules is the exception, not the rule, requiring a showing of exceptionally meritorious circumstances or reasonable cause justifying non-compliance, which Prieto failed to prove.
• Substantive: N/A (The Court did not reach the substantive issues regarding the propriety of the Court of Appeals' reversal of the demurrer to evidence as the petition was dismissed on procedural grounds)

• Binding Effect of Counsel's Acts on Client — The general rule is that a client is bound by the acts, even mistakes, of counsel in the realm of procedural technique. Notice sent to counsel of record is binding upon the client, and the neglect or failure of counsel to inform the client of an adverse judgment resulting in the loss of the right to appeal is not a ground for setting aside a judgment valid and regular on its face. The exception applies only when the negligence of counsel is so gross, reckless, and inexcusable that the client is deprived of their day in court.
• Reglementary Period for Appeals — The right to appeal is neither a natural right nor a part of due process; it is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law. Under Rule 45, Section 2 of the Rules of Court, a petition for review on certiorari must be filed within 15 days from notice of the judgment or final order, extendible by only 30 days for justifiable reasons.
• Liberal Application of Procedural Rules — The relaxation of procedural rules in the interest of justice is the exception to the rule that rules must be complied with for the orderly administration of justice. It was never intended to be a license for erring litigants to violate rules with impunity. Liberality can be invoked only in proper cases and under justifiable causes and circumstances, requiring a showing of reasonable cause justifying non-compliance and convincing the Court that dismissal would defeat the administration of substantial justice.
• Finality of Judgments — A judgment becomes "final and executory" by operation of law when the reglementary period to appeal lapses and no appeal is perfected. Once final, no court can exercise appellate jurisdiction to review or modify the decision, as judgments must become final at some definite point in time.

• "The general rule is that a client is bound by the acts, even mistakes, of his counsel in the realm of procedural technique. The exception to this rule is when the negligence of counsel is so gross, reckless and inexcusable that the client is deprived of his day in court."
• "If indeed accused-appellant felt and believed that his counsel was inept, that he should have taken action, such as discharging him earlier, instead of waiting until an adverse decision was handed, and thereupon heap all blame and condemnation on his counsel, who cannot now be heard to defend himself."
• "Time and again the Court has declared that the right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege and may be exercised only in the manner and in accordance with the provisions of law."
• "The relaxation of procedural rules in the interest of justice was never intended to be a license for erring litigants to violate the rules with impunity."
• "We must stress that the bare invocation of 'the interest of substantial justice' line is not some magic wand that will automatically compel this Court to suspend procedural rules."
• "A judgment becomes 'final and executory' by operation of law. Finality becomes a fact when the reglementary period to appeal lapses and no appeal is perfected within such period."

• National Power Corporation v. Laohoo — Cited for the doctrine that a client is bound by the acts of counsel and that notice to counsel is notice to the client; also cited for the rule that negligence of counsel must be gross, reckless, and inexcusable to excuse non-compliance with procedural rules.
• People v. Kawasa and Salido — Cited for the principle that a client who believes counsel is inept should discharge him earlier rather than waiting for an adverse decision to blame the counsel, and that allowing otherwise would result in endless litigation.
• Basuel v. Fact-Finding and Intelligence Bureau (FFIB) — Cited for the principle that the right to appeal is a statutory privilege that must be exercised in accordance with law.
• Marohomsalic v. Cole — Cited for the principle that liberality in interpretation of rules is not a license to violate rules with impunity.
• Daikoku Electronics Phils., Inc. v. Raza — Cited for the requirement that petitioner must show reasonable cause justifying non-compliance with rules to merit liberality.
• Building Care Corp./Leopard Security & Investigation Agency v. Macaraeg — Cited for the principle that relaxation of procedural rules must remain the exception and that the bare invocation of "substantial justice" is not a magic wand to suspend procedural rules.
• Rivera-Pascual v. Lim — Cited for the principle that procedural rules should not be easily brushed aside with mere averment of "higher interest of justice."
• Neplum, Inc. v. Orbeso — Cited for the rule that parties praying for liberal interpretation must hurdle the heavy burden of proving they deserve exceptional treatment.
• Lalican v. Insular Life Assurance Co. Ltd. — Cited for the doctrine on finality and immutability of judgments.
• People v. Hon. Laguio, Jr. and Dayap v. Sendiong — Cited by the Court of Appeals (and referenced in the petition) for the rule that reversal of a grant of demurrer to evidence does not violate double jeopardy.
• People v. Nano — Cited by the Court of Appeals for the rule that filing of a petition by a private complainant instead of the OSG is a mere defect in form curable by subsequent ratification.

• Rule 45, Section 2 of the Rules of Court — Sets forth the 15-day reglementary period for filing petitions for review on certiorari and the provision for a 30-day extension only.
• Rule 65 of the Rules of Court — Mentioned regarding the grounds for certiorari filed by ADC before the Court of Appeals.
• Article 315(1)(b) of the Revised Penal Code — The provision on estafa with abuse of confidence defining the elements of the crime charged against Prieto.