Sarsaba vs. Te

An order denying a motion to dismiss is an interlocutory order that does not completely dispose of the case and is therefore not appealable under Rule 45; in actions that survive the death of a party, the proper procedural remedy upon the death of a plaintiff is the substitution of heirs under Section 16, Rule 3 of the Rules of Court, not the dismissal of the complaint, and the failure to serve summons on a deceased defendant does not affect the jurisdiction over or require dismissal of claims against co-defendants who were validly served and who have submitted responsive pleadings.

The case originated from a labor dispute where Patricio Sereno obtained a judgment against Teodoro Gasing for illegal dismissal. When the monetary award remained unsatisfied, the sheriff levied upon a Fuso Truck in Gasing's possession. The truck was registered in the name of Pedro Te (deceased), and his widow, Fe Vda. de Te, claimed ownership, alleging Gasing merely rented the vehicle. After the truck was sold at public auction to Sereno, Fe Vda. de Te filed an action for recovery of the motor vehicle against Sereno, his counsel (Atty. Sarsaba), the sheriff, and the NLRC. During the pendency of the case, both defendant Sereno and plaintiff Fe Vda. de Te died, raising procedural questions regarding jurisdiction over deceased parties and the continuation of the action.

• On February 14, 1995, the NLRC rendered a decision in NLRC Case No. RAB-11-07-00608-93 entitled Patricio Sereno v. Teodoro Gasing/Truck Operator, finding Sereno to have been illegally dismissed and ordering Gasing to pay monetary claims amounting to P43,606.47.
• After the Writ of Execution was returned unsatisfied, Labor Arbiter Newton R. Sancho issued an Alias Writ of Execution on June 10, 1996, directing Sheriff Fulgencio R. Lavarez to satisfy the judgment award.
• On July 23, 1996, Lavarez, accompanied by Sereno and his counsel petitioner Atty. Rogelio E. Sarsaba, levied a Fuso Truck bearing License Plate No. LBR-514, which was then in the possession of Gasing.
• On July 30, 1996, the truck was sold at public auction, with Sereno appearing as the highest bidder.
• Respondent Fe Vda. de Te, wife of the late Pedro Te (the registered owner of the truck as evidenced by Official Receipt and Certificate of Registration), filed a Complaint for recovery of motor vehicle with damages before the RTC, Branch 18, Digos City, docketed as Civil Case No. 3488.
• Respondent alleged that Gasing merely rented the truck from her; that she was not a party to the labor case between Sereno and Gasing; and that Lavarez erroneously assumed Gasing owned the truck because he was in possession of it at the time of levy.
• Petitioner filed a Motion to Dismiss on the grounds that respondent had no legal personality to sue, the complaint failed to state a cause of action, and the complaint was not accompanied by an Affidavit of Merit and Bond required for delivery of the truck pendente lite.
• The NLRC and Lavarez also filed separate Motions to Dismiss on grounds of lack of jurisdiction and lack of cause of action.
• On January 21, 2000, the RTC issued an Order denying petitioner's Motion to Dismiss for lack of merit.
• In his Answer, petitioner denied the material allegations and asserted as affirmative defenses that respondent had no legal personality to sue as she had no interest over the vehicle, and that the truck was already sold to Gasing on March 11, 1986 by Jesus Matias, who bought it from the Spouses Te.
• On October 17, 2005, petitioner filed an Omnibus Motion to Dismiss on the grounds of: (1) lack of jurisdiction over defendant Sereno who died before service of summons; and (2) discharge of respondent's attorney-in-fact for lack of legal personality to sue after respondent died on April 12, 2005.
• The Sheriff's Return of Service dated May 19, 1997 stated that Sereno could not be served with summons because he was already dead.
• Respondent, through her counsel, filed an Opposition contending that the failure to serve summons on Sereno is not a ground for dismissing the complaint against the other defendants who had already submitted responsive pleadings, and that the death of the plaintiff did not render the attorney-in-fact functus officio since he had already testified and offered documentary evidence when the plaintiff was still alive.
• On March 22, 2006, the RTC issued the assailed Order denying the Omnibus Motion to Dismiss, ruling that the case against the other defendants may proceed independently despite the failure to serve summons on Sereno, and that the proper remedy regarding the plaintiff's death was substitution of heirs, not dismissal.

• The petition raises pure questions of law involving the effect of non-service of summons on a deceased defendant and the effect of the death of the plaintiff during the pendency of the case, thereby justifying direct recourse to the Supreme Court under Rule 45.
• The RTC never acquired jurisdiction over the person of defendant Patricio Sereno because he died before service of summons; consequently, the complaint should be dismissed not only against Sereno but against all defendants.
• Respondent Fe Vda. de Te died on April 12, 2005, during the pendency of the case, which extinguished the special power of attorney executed in favor of her attorney-in-fact, Faustino Castañeda, rendering him functus officio and without legal personality to prosecute the case, necessitating dismissal of the complaint.

• The failure to serve summons upon Sereno is not a ground for dismissing the complaint against the other defendants, including petitioner, who have already submitted their respective responsive pleadings and were validly served.
• The death of the plaintiff does not render the attorney-in-fact functus officio because he had long testified on March 13, 1998 for and on behalf of the plaintiff and submitted documentary exhibits in support of the complaint when the plaintiff was still alive.
• The proper remedy is the substitution of heirs under Section 16, Rule 3 of the Rules of Court, not the dismissal of the complaint, since the action for recovery of personal property survives the death of the plaintiff under Section 1, Rule 87 of the Rules of Court.

• Procedural Issues:
  • Whether a petition for review on certiorari under Rule 45 is the proper mode of appeal from an interlocutory order denying a motion to dismiss.
  • Whether the petition violates the principle of hierarchy of courts.
• Substantive Issues:
  • Whether the failure to serve summons on a defendant who died before service requires dismissal of the complaint against all defendants.
  • Whether the death of the plaintiff during the pendency of the case requires dismissal of the complaint or merely substitution of heirs, and whether the attorney-in-fact retains authority to prosecute the case after the principal's death.

• Procedural:
  • The petition for review on certiorari under Rule 45 is procedurally improper because the assailed Order dated March 22, 2006 denying the Omnibus Motion to Dismiss is an interlocutory order that does not completely dispose of the case; only final orders or judgments that end the litigation are appealable under Rule 45.
  • The proper remedy for the denial of a motion to dismiss is to file an answer, proceed to trial, and assign the order as error in an appeal from the final judgment, or to file a special civil action for certiorari under Rule 65 if the order was issued without or in excess of jurisdiction or with grave abuse of discretion.
  • While the petition technically violates the hierarchy of courts by seeking direct recourse to the Supreme Court, the Court relaxed this rule to address the pure questions of law presented and to prevent further delay in the trial of the case.
  • The petition is dismissed for being an improper mode of appeal.
• Substantive:
  • The failure to serve summons on defendant Sereno, who died before the sheriff could serve the summons, does not warrant dismissal of the complaint against the other defendants who were validly served with summons and had submitted their respective responsive pleadings; only the claim against Sereno is dismissed, which may be filed as a claim against his estate.
  • The action for recovery of personal property (the truck) survives the death of the plaintiff under Section 1, Rule 87 of the Rules of Court, as it affects primarily property rights rather than personal injuries.
  • While the special power of attorney executed by the plaintiff in favor of her attorney-in-fact was extinguished by her death pursuant to Article 1919(3) of the Civil Code (not being constituted for the common interest of principal and agent or for the benefit of a third person under Article 1930), the proper remedy is the substitution of heirs under Section 16, Rule 3 of the Rules of Court, not the dismissal of the complaint.
  • The trial court's jurisdiction over the case subsists despite the death of the plaintiff, and the proceedings are not invalidated by the failure of counsel to immediately effect substitution, provided the action survives.

• Interlocutory Orders — Orders that do not dispose of the case completely but merely resolve incidental matters and indicate that other things remain to be done by the court as regards the merits are interlocutory and not appealable; the remedy is to proceed to trial and assign the order as error in an appeal from the final judgment. The Court applied this to dismiss the Rule 45 petition assailing the denial of a motion to dismiss.
• Substitution of Parties — Under Section 16, Rule 3 of the Rules of Court, when a party to a pending action dies and the claim is not extinguished, it is the duty of counsel to inform the court and give the name of the legal representative; the rule is not a matter of jurisdiction but a requirement of due process designed to ensure the deceased party continues to be properly represented in the suit through heirs or legal representatives.
• Survival of Actions — Actions to recover real or personal property survive the death of a party under Section 1, Rule 87 of the Rules of Court; the test is whether the cause of action affects primarily and principally property and property rights (survives) or whether the injury is to the person (does not survive), as enunciated in Gonzalez v. Philippine Amusement and Gaming Corporation.
• Extinguishment of Agency by Death — Agency is extinguished by the death of the principal under Article 1919(3) of the Civil Code, unless it was constituted for the common interest of the principal and agent or for the interest of a third person who has accepted the stipulation in his favor under Article 1930.
• Hierarchy of Courts — The principle requiring recourse first to lower-ranked courts before the Supreme Court is generally strict but may be relaxed when only pure questions of law are involved, to prevent further delay and promote judicial efficiency.

• "There is a 'question of law' when the doubt or difference arises as to what the law is on certain state of facts, and which does not call for an examination of the probative value of the evidence presented by the parties-litigants. On the other hand, there is a 'question of fact' when the doubt or controversy arises as to the truth or falsity of the alleged facts."
• "An order or judgment of the RTC is deemed final when it finally disposes of a pending action, so that nothing more can be done with it in the trial court. In other words, the order or judgment ends the litigation in the lower court. On the other hand, an order which does not dispose of the case completely and indicates that other things remain to be done by the court as regards the merits, is interlocutory."
• "Allowing appeals from interlocutory orders would result in the 'sorry spectacle' of a case being subject of a counterproductive ping-pong to and from the appellate court as often as a trial court is perceived to have made an error in any of its interlocutory rulings."
• "Strictly speaking, the rule on substitution by heirs is not a matter of jurisdiction, but a requirement of due process. The rule on substitution was crafted to protect every party's right to due process. It was designed to ensure that the deceased party would continue to be properly represented in the suit through his heirs or the duly appointed legal representative of his estate."
• "The Supreme Court is a court of last resort, and must so remain if it is to satisfactorily perform the functions assigned to it by the fundamental charter and immemorial tradition. It cannot and should not be burdened with the task of dealing with causes in the first instance."

• Cucueco v. Court of Appeals — Cited for the distinction between questions of law and questions of fact.
• Sevilleno v. Carilo — Cited for the rule on modes of appeal from RTC decisions under Rule 41, distinguishing between appeals to the Court of Appeals and the Supreme Court.
• Mondragon Leisure and Resorts Corporation v. United Coconut Planters Bank — Cited for the principle that an order denying a motion to dismiss is interlocutory and not appealable.
• Gonzalez v. Philippine Amusement and Gaming Corporation — Cited for the test in determining whether an action survives the death of a party based on whether the injury affects primarily property rights or personal rights.
• Napere v. Barbarona — Cited for the rule that failure of counsel to inform the court of the death of his client does not invalidate proceedings if the action survives, and that substitution is a requirement of due process, not jurisdiction.
• Vergara, Sr. v. Suelto — Cited for the policy on strict observance of the hierarchy of courts and the limited original jurisdiction of the Supreme Court.

• Rule 45, 1997 Rules of Civil Procedure — Governs petitions for review on certiorari to the Supreme Court on pure questions of law; held inapplicable to interlocutory orders.
• Rule 41, Sections 1 and 2, 1997 Rules of Civil Procedure — Outlines the modes of appeal from the RTC, distinguishing between appeals to the Court of Appeals (questions of fact or mixed) and to the Supreme Court (questions of law only).
• Rule 3, Section 16, 1997 Rules of Civil Procedure — Provides for the substitution of parties upon death; requires counsel to inform the court within thirty days of the death and give the name and address of the legal representative.
• Rule 9, Section 1, 1997 Rules of Civil Procedure — States that defenses and objections not pleaded in a motion to dismiss or answer are deemed waived, except for lack of jurisdiction over the subject matter, litis pendentia, res judicata, or prescription.
• Rule 16, Section 1, 1997 Rules of Civil Procedure — Governs the grounds for a motion to dismiss, including lack of jurisdiction over the person of the defending party.
• Rule 87, Section 1, 1997 Rules of Civil Procedure — Enumerates actions that survive the death of a party, including actions to recover real or personal property or an interest therein, and actions to enforce liens thereon.
• Article 1919(3), Civil Code of the Philippines — Provides that agency is extinguished by the death of the principal.
• Article 1930, Civil Code of the Philippines — Provides the exception where agency continues despite the death of the principal if it was constituted for the common interest of the principal and the agent or for the interest of a third person who has accepted the stipulation in his favor.