Rubio vs. Alabata

Procedural rules on prescription for revival of judgment may be relaxed in the exercise of equity jurisdiction where strict enforcement would result in manifest injustice to a party whose failure to comply was solely attributable to counsel's neglect and not to the party's own fault.

Petitioners Rufa A. Rubio, Bartolome Bantoto, Leon Alagadmo, Rodrigo Delicta, and Adriano Alabata are the heirs of Agapito Alagadmo who, together with respondent Lourdes Alabata, were protagonists in a prior case for annulment of declaration of heirship and sale, reconveyance and damages. The petitioners, being indigent, were represented throughout by the Public Attorney's Office (PAO). When the prior case was appealed to the Court of Appeals, representation transferred from PAO-Dumaguete to the Special Appealed Cases Division (SAC-PAO) at the PAO Central Office in Manila, creating a structural gap in communication between the litigants and their counsel of record.

Petitioners Rufa A. Rubio, Bartolome Bantoto, Leon Alagadmo, Rodrigo Delicta, and Adriano Alabata, as heirs of Agapito Alagadmo, filed a case for annulment of declaration of heirship and sale, reconveyance and damages against respondent Lourdes Alabata before the Regional Trial Court, Branch 43, Dumaguete City (RTC-43), docketed as Civil Case No. 10153. On October 31, 1995, the RTC-43 rendered a Decision voiding the "Declaration of Heirship and Sale," ordering respondent to reconvey the entire subject property to petitioners, dismissing respondent's counterclaim, and ordering her to pay moral and exemplary damages plus the cost of suit. Being indigent, petitioners were represented by the Public Attorney's Office in Dumaguete City (PAO-Dumaguete).

Respondent elevated the RTC-43 Decision to the Court of Appeals. Because the case was on appeal, petitioners' representation was transferred from PAO-Dumaguete to the Special Appealed Cases Division (SAC-PAO) at the PAO Central Office in Manila, with Atty. Ma. Lourdes Naz as the lawyer in charge. Respondent, however, later withdrew her appeal, paving the way for the RTC-43 Decision to lapse into finality. The CA resolution granting the withdrawal became final and executory on June 20, 1997, and the Entry of Judgment was issued on August 20, 1997, and recorded in the CA Book of Entries of Judgments. A copy of the Entry of Judgment was sent to Atty. Naz, but she failed to inform petitioners of the development before she resigned from PAO sometime in November 1997. She also failed to inform PAO-Dumaguete of the entry of judgment.

The judgment was never executed. When petitioners followed up with PAO-Dumaguete, they were informed that the appeal was still pending. Petitioners claimed that their counsel at PAO-Dumaguete was never informed that the entry of judgment had already been issued. Due to their penury and unfamiliarity with the rules, petitioners could not be expected to bypass PAO-Dumaguete and directly verify the status of the case with SAC-PAO. They had to trust their lawyer and wait.

It was only in November 2007, more than ten years from the date when the RTC-43 Decision was entered in the CA Book of Entries of Judgments, that petitioners discovered the decision had become final and executory, when their nephew secured a copy of the Entry of Judgment from RTC-43. On December 5, 2007, petitioners, through PAO-Dumaguete, filed an action for revival of judgment, which was raffled to RTC-42. After respondent filed her Answer with Affirmative Defenses, RTC-42 granted her Motion to Dismiss on February 28, 2008, ordering the case dismissed on the ground of prescription. Petitioners' motion for reconsideration was denied on April 4, 2008. Petitioners then appealed to the Court of Appeals, which on November 16, 2011 affirmed the RTC-42 dismissal, and on September 26, 2012 denied petitioners' motion for reconsideration.

• Manifest Injustice: Petitioners maintained that the lower courts erred in strictly applying the procedural rules on prescription and dismissing the case, notwithstanding that petitioners would suffer manifest injustice and deprivation of their property due to a fault not attributable to them.
• No Fault on Their Part: Petitioners argued that they could not be faulted for the delay because their PAO counsel, specifically SAC-PAO, failed to inform them that respondent had withdrawn her appeal and that the entry of judgment had already been issued. They had relied on PAO-Dumaguete's representation that the appeal was still pending.

• Prescription vs. Equity: Whether the Court of Appeals erred in strictly applying the procedural rules on prescription and dismissing the action for revival of judgment, despite the fact that petitioners would suffer manifest injustice and deprivation of their property due to a fault not attributable to them.

• Prescription vs. Equity: Yes. The CA erred in strictly applying the prescriptive period, the Supreme Court exercising its equity jurisdiction to relax the rules where strict enforcement would result in manifest injustice to a party whose non-compliance was solely attributable to counsel's neglect.

• Prescription vs. Equity: Under Section 6, Rule 39 of the 1997 Rules of Civil Procedure, a final and executory judgment may be executed by motion within five years from entry, and thereafter by independent action before it is barred by the statute of limitations. An action for revival of judgment is governed by Article 1144(3) and Article 1152 of the Civil Code, which prescribe a ten-year prescriptive period from the time the judgment becomes final. Both the RTC-42 and the CA were technically correct in dismissing the action, as more than ten years had lapsed from the entry of judgment on August 20, 1997, to the filing of the revival action on December 5, 2007. However, strict application would result in injustice to petitioners for two reasons: first, respondent herself decided not to contest the RTC-43 Decision and withdrew her appeal, signifying her acceptance of that judgment; and second, no fault could be attributed to petitioners, who were indigent litigants represented by the PAO. SAC-PAO, specifically Atty. Naz, failed to inform them of the abandonment of the appeal and of the entry of judgment before her resignation. PAO-Dumaguete, for its part, erroneously believed the appeal was still pending. Due to their penury and ignorance of the rules, petitioners could not be expected to bypass PAO-Dumaguete and directly verify with SAC-PAO. No prejudice would be caused to respondent, who had withdrawn her appeal and thereby respected the RTC-43 Decision. She had continued to possess property that rightfully belonged to petitioners. The Court, in the exercise of equity jurisdiction, relaxed the rules, holding that although strict compliance with procedural rules is desired, liberal interpretation is warranted where strict enforcement would not serve the ends of justice, and that courts under the principle of equity will not be strictly bound by the statute of limitations when to do so would result in manifest wrong or injustice. The rule that the mistakes of counsel bind the client may not be strictly followed where observance would result in the outright deprivation of the client's property or where the interest of justice so requires.

• Equitable Relaxation of Procedural Rules — While strict compliance with procedural rules is generally desired, liberal interpretation is warranted in cases where strict enforcement would not serve the ends of justice. Courts, under the principle of equity, will not be strictly bound by the statute of limitations or the doctrine of laches when doing so would result in manifest wrong or injustice. The Court applied this doctrine to allow an action for revival of judgment filed beyond the ten-year prescriptive period, where the delay was solely attributable to the neglect of the petitioners' PAO counsel and not to any fault of the petitioners themselves.

• Mistakes of Counsel Do Not Always Bind the Client — The general rule that the mistakes of counsel bind the client may not be strictly followed where observance of it would result in the outright deprivation of the client's liberty or property, or where the interest of justice so requires. The Court applied this exception where PAO counsel's failure to inform indigent clients of the entry of judgment caused the lapse of the prescriptive period for execution.

• Execution by Motion or by Independent Action (Section 6, Rule 39) — A final and executory judgment may be executed by motion within five years from the date of entry. After the lapse of five years, and before it is barred by the statute of limitations, the judgment may be enforced by an independent action. The revived judgment may also be enforced by motion within five years from its entry and thereafter by action before it is barred by the statute of limitations. The prescriptive period for such an action is ten years under Article 1144(3) of the Civil Code, reckoned from the time the judgment becomes final per Article 1152.

• "Although strict compliance with the rules of procedure is desired, liberal interpretation is warranted in cases where a strict enforcement of the rules will not serve the ends of justice; and that it is a better rule that courts, under the principle of equity, will not be guided or bound strictly by the statute of limitations or the doctrine of laches when to do so, manifest wrong or injustice would result." — This passage articulates the ratio decidendi: the equity-based rationale for relaxing the prescriptive period for revival of judgment.

• "procedural rules may, nonetheless, be relaxed for the most persuasive of reasons in order to relieve a litigant of an injustice not commensurate with the degree of his thoughtlessness in not complying with the procedure prescribed. Corollarily, the rule, which states that the mistakes of counsel bind the client, may not be strictly followed where observance of it would result in the outright deprivation of the client's liberty or property, or where the interest of justice so requires." — This passage, quoted from Sy vs. Local Government of Quezon City, defines the exception to the rule that counsel's mistakes bind the client, particularly where property deprivation would result.

• "No prejudice is caused to respondent because she withdrew her appeal. Withdrawing her appeal means that she respected the RTC-43 Decision, which voided the 'Declaration of Heirship and Sale,' dismissed respondent's counterclaim, and ordered her to reconvey the entire subject property to petitioners and to pay moral and exemplary damages plus the cost of suit." — This passage establishes the equity analysis: the respondent would suffer no prejudice from relaxation, having already conceded the merits by withdrawing her appeal.

• Villeza vs. German Management and Services, Inc., G.R. No. 182937, August 8, 2010, 627 SCRA 425 — Cited for the rule on execution by motion or by independent action under Section 6, Rule 39, and for the principle that strict enforcement of procedural rules may be relaxed in the interest of justice. The Court relied on this case for the proposition that courts, under equity, will not be strictly bound by the statute of limitations when manifest injustice would result.

• Sy vs. Local Government of Quezon City, G.R. No. 202690, June 5, 2013 — Cited for the principle that procedural rules may be relaxed to relieve a litigant of injustice not commensurate with the degree of thoughtlessness in non-compliance, and that the rule on mistakes of counsel binding the client may not be strictly followed where it would result in outright deprivation of property or where the interest of justice so requires.

• Section 6, Rule 39, 1997 Rules of Civil Procedure — Governs execution by motion or by independent action. A final and executory judgment may be executed by motion within five years from entry; after five years and before the statute of limitations bars it, by independent action. The Court found that while the petitioners' action for revival was filed beyond the ten-year prescriptive period, equity warranted relaxation.

• Article 1144(3), Civil Code — Provides that actions upon a judgment must be brought within ten years from the time the right of action accrues. The Court acknowledged this as the governing prescriptive period for revival of judgment but relaxed its application on equity grounds.

• Article 1152, Civil Code — Provides that the period for prescription of actions to demand fulfillment of obligations declared by a judgment commences from the time the judgment became final. The Court noted this provision in establishing the reckoning point for the prescriptive period.

Presbitero J. Velasco, Jr. (Chairperson), Diosdado M. Peralta, Lucas P. Bersamin (designated Acting Member in lieu of Associate Justice Roberto A. Abad per Special Order No. 1640 dated February 19, 2014), and Marvic Mario Victor F. Leonen concurred. No separate concurring opinions were noted.