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MADRIGAL TRANSPORT INC. vs.

LAPANDAY HOLDINGS CORPORATION;


MACONDRAY AND COMPANY INC.; and LUIS P. LORENZO JR.

Facts: Petitioner Madrigal Transport, Inc filed a petition for Voluntary Insolvency before
the Regional Trial Court
Subsequently, petitioner filed a complaint for damages against Lapanday Holdings
The insolvency court (RTC) declared petitioner insolvent
Lapanday filed a Motion to Dismiss the case pending before the RTC which was
granted for failure of the complaint to state a cause of action
Petitioner then filed a Motion for Reconsideration which was later denied
Subsequently, petitioner filed a Petition for Certiorari with the Court of Appeals
The CA issued a resolution requiring petitioner to explain why its petition should not be
dismissed outright, on the ground that the questioned orders should have been elevated
by ordinary appeal
The appellate court ruled that the main issue in the instant case was purely legal, the
petition could be treated as one for review as an exception to the general rule that
certiorari was not proper when appeal was available.
Lapanday challenged the ruling
The CA issued a adecision dismissing Madrigal’s petition for certiorari stating that an
order granting a motion to dismiss was final and thus the proper subject of an appeal,
not certiorari
Furthermore, even if the petition could be treated as an appeal, it would still have to be
dismissed for lack of jurisdiction because the issues raised by petitioner involved pure
questions of law that should be brought to the Supreme Court pursuant to Section 2 of
Rule 50 and Section 2 ( c) of Rule 41 of the Rules of Court
Issue: WON Petition for Certiorari under Rule 65 is the proper remedy.
Held: NO. A writ of certiorari governed by Rule 65 may be issued only for the correction
of errors of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction. The writ cannot be used for any other purpose, as its function is limited to
keeping the inferior court within the bounds of its jurisdiction.
Where appeal is available to the aggrieved party, the action for certiorari will not be
entertained. Remedies of appeal (including petitions for review) and certiorari are
mutually exclusive, not alternative or successive.Hence, certiorariis not and cannot be a
substitute for an appeal, especially if one’s own negligence or error in one’s choice of
remedy occasioned such loss or lapse. One of the requisites of certiorari is that there be
no available appeal or any plain, speedy and adequate remedy. Where an appeal is
available, certiorari will not prosper, even if the ground therefor is grave abuse of
discretion.

The requisites of certiorari are:

1. the writ is directed against a tribunal, a board or any officer exercising judicial or
quasi-judicial functions;
2. Such tribunal, board or officer has acted without or in excess of jurisdiction, or
with grave abuse of discretion amounting to lack or excess of jurisdiction; and
3. There is no appeal or any plain, speedy and adequate remedy in the ordinary
course of law

We are not unaware of instances when this Court has granted certiorari despite the
availability of appeal. Where the exigencies of the case are such that the ordinary
methods of appeal may not prove adequate -- either in point of promptness or
completeness, so that a partial if not a total failure of justice could result -- a writ
of certiorari may still be issued. Petitioner cites some of these exceptions to justify the
remedy it has undertaken with the appellate court, but these are not applicable to the
present factual milieu.
Even assuming that the Order of the RTC was erroneous, its error did not constitute
grave abuse of discretion. Petitioner asserts that the trial court should not have
dismissed the Complaint or should have at least allowed the substitution of the assignee
in petitioner’s stead. These alleged errors of judgment, however, do not constitute a
despotic, capricious, or whimsical exercise of power. On the contrary, petitioner availed
of certiorari because the 15-day period within which to file an appeal had already
lapsed. Basic is the rule that certiorari is not a substitute for the lapsed remedy of
appeal.
As previously stressed, appeal -- not certiorari -- was the correct remedy to elevate the
RTC’s Order granting the Motion to Dismiss. The appeal, which would have involved a
pure question of law, should have been filed with the Supreme Court pursuant to
Section 2 (c) of Rule 41 and Section 2 of Rule 50,Rules of Court.
REPUBLIC vs. TECHNOLOGICAL ADVOCATES FOR AGRO-FOREST PROGRAMS
ASSOCIATION
Facts: On November 27, 1995, respondent Technological Advocates for Agro-Forest
Programs Association, Inc. (TAFPA) and DENR, Regional Office (RO) No. IX,
represented by its then Regional Executive Director (RED), Cipriano B. Paet, entered
into a contract for community organizing activities, social investigation, and information
education campaign at the San Isidro Tinago Reforestation Sub-Project in Sergio
Osmeña, Sr., Zamboanga del Norte.
On December 15, 1999, respondent filed with the RTC, Zamboanga City, a special civil
action for Mandamus with Prayer for Damages, praying that after notice and hearing, a
writ was issued commanding the RED of the DENR to pay respondent P802,350.64,
representing the latter's unpaid claims, P50,000.00 as moral damages, P25,000.00 by
way of attorney's fees and legal interest on the principal sum demanded. The RTC
subsequently treated the case as one for specific performance rather than an action for
mandamus, since the allegations in the complaint clearly reflected that respondent's
cause of action was based on a contract.
Meanwhile, on January 18, 2000, Atty. Vidzfar A. Julie (Atty. Julie), entered his
appearance as counsel for DENR.
On June 8, 2000, the Office of the Solicitor General (OSG) deputized Atty. Julie as
special counsel to assist the Solicitor General in the subject case.
On March 16, 2001, the RTC rendered a Decision in favor of the respondent and
against the petitioner.
On May 22, 2001, petitioner, through its deputized counsel, filed a Motion for
Reconsideration, but it was denied on September 18, 2001.
On February 19, 2002, the RTC made an Entry of Final Judgment stating, among other
things, that the decision dated March 16, 2001 had, on January 31, 2002, become final
and executory, there being no appeal filed by any party before any appellate court.
Respondent thus filed an urgent motion for execution with the RTC which was granted
on March 14, 2002.
Subsequently, the OSG filed a Manifestation and Motion asking the RTC to set aside
the March 16, 2001 Decision on the ground of lack of due process. On May 20, 2002,
the RTC issued an Order denying the motion.
Undeterred, the OSG filed a Notice of Appeal dated July 23, 2002, before the RTC
raising the following issues: (1) whether or not plaintiff has a cause of action against
defendant; and (2) whether or not plaintiff is entitled to be paid his money claim against
defendant.
On December 27, 2002, the RTC issued an Order disapproving the motion
Aggrieved, petitioner sought recourse before the CA via a petition for Annulment of
Judgment under Rule 47 of the Rules of Court, seeking the annulment of the decision of
the RTC dated March 16, 2001, based on the following grounds: (1) That the action lies
within the jurisdiction of the COA and not before the courts; (2) That private respondent
did not exhaust administrative remedies against petitioner, hence, no cause of action
against petitioner; and (3) Respondent is not entitled to be paid its money claim against
petitioner.
On September 9, 2004, the CA rendered a Decision denying the petition.
In denying the petition, the CA opined that the RTC acquired jurisdiction over
respondent's cause of action. The CA added that the rule on due process was not
violated as petitioner was given all the opportunity to participate in the proceedings
before the RTC, which it in fact did, and was duly notified of all court processes, orders,
and decision.
Issue: WON petition for Annulment of Judgment filed by the Republic was proper.
Held: NO. An action to annul a final judgment is an extraordinary remedy, which is not
to be granted indiscriminately by the court. It is a recourse equitable in character and
allowed only in exceptional cases. The reason for the restriction is to prevent this
extraordinary action from... being used by a losing party to make a complete farce of a
duly promulgated decision that has long become final and executory.
Under Section 2, Rule 47 of the Rules of Civil Procedure, the only grounds for
annulment of judgment are extrinsic fraud and lack of jurisdiction. Lack of jurisdiction as
a ground for annulment of judgment refers to either lack of jurisdiction over the person
of the defending party or over the subject matter of the claim. It is absence of, or no,
jurisdiction; that is, the court should not have taken cognizance of the petition because
the law does not vest it with jurisdiction over the subject matter
It should be stressed that in a petition for annulment of judgment based on lack of
jurisdiction, petitioner must show not merely an abuse of jurisdictional discretion, but an
absolute lack of jurisdiction.
In this case, petitioner is no longer questioning the jurisdiction of the RTC based on the
above arguments. Petitioner now questions the propriety of the notice sent to the
deputized counsel of the OSG, arguing that notice to its deputized counsel is not notice
to the OSG.
Hence, absent such notice, the decision of the RTC did not become final and executory.
Moreover, the failure of the RTC to serve the OSG copies of legal notices, orders, and
judicial processes constitutes lack of due process.
As regards petitioner’s remaining arguments, suffice it to say that this is not an appeal
from the decision and orders of the RTC, which to reiterate has become final and
executory; the correctness of the judgment is therefore not in issue. Accordingly, there
is no need to address the errors allegedly committed by the trial court in issuing the
assailed orders.

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