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VOL. 396, JANUARY 31, 2003 541

National Commercial Bank of Saudi Arabia vs. Court of
Appeals
*
G.R. No. 124267. January 31, 2003.

NATIONAL COMMERCIAL BANK OF SAUDI ARABIA,

petitioner, vs. COURT OF APPEALS and PHILIPPINE
BANKING CORPORATION, respondents.

Civil Procedure; Motions; The requirement of notice under

Sections 4 and 5, Rule 15 in connection with Section 2, Rule 37 of
the Revised Rules of Court is mandatory.—The requirement of
notice under Sections 4 and 5, Rule 15 in connection with Section 2,
Rule 37 of the Revised Rules of Court is mandatory. The absence of
a notice of hearing is fatal and, in cases of motions to reconsider a
decision, the running of the period to appeal is not tolled by their
filing or pendency.

Same; Same; The motion for reconsideration, being fatally

defective for lack of notice of hearing, cannot be cured by a belated
filing of a notice of hearing.—The motion for reconsideration,
however, being fatally defective for lack of notice of hearing, cannot
be cured by a belated filing of a notice of hearing. More so in the
case at bar where the Motion to Set the “Motion for Reconsideration”
was filed after the expiration of the period for filing an appeal.

_______________

* THIRD DIVISION.

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542 SUPREME COURT REPORTS ANNOTATED

National Commercial Bank of Saudi Arabia vs. Court of
Appeals

PETITION for review on certiorari of a decision of the Court

of Appeals.

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The facts are stated in the opinion of the Court.

          Romulo, Mabanta, Buenaventura, Sayoc & Delos
Angeles for petitioners.
          Platon, Martinez, Flores, San Pedro & Leaño for
private respondent.

CARPIO-MORALES, J.:

May the unrippled doctrine that a motion filed without the

requisite notice
1
of hearing is a useless piece of paper with no
legal effect be, under the facts of the case, relaxed?
Petitioner National Commercial Bank of Saudi Arabia
(NCBSA) filed a case against respondent Philippine
Banking Corporation (PBC) in the Regional Trial Court
(RTC) of Makati on December 4, 1985 to recover “the
duplication in the payment of the proceeds of a letter of
credit [NCBSA] has issued . . . brought about by the fact
that both the head office and the Makati branch of [PBC,
the negotiating
2
bank,] collected the proceeds of the letter of
credit.”
On August 24, 1993, the3 RTC of Makati rendered a
decision in favor of NCBSA. 4PBC received a copy of the
decision on September 3, 1993 and on the 12th day of the
period of appeal or on Septem-

_______________

1 See Vlason Enterprises Corp. v. Court of Appeals, 310 SCRA 26

(1999); Tan v. Court of Appeals, 295 SCRA 755 (1998); De la Peña v. De
la Peña, 258 SCRA 298 (1996); MERALCO v. La Campana Food
Products, Inc., 247 SCRA 77 (1995); Goldloop Properties, Inc. v. Court of
Appeals, 212 SCRA 498 (1992); Tamargo v. Court of Appeals, 209 SCRA
519 (1992); Pojas v. Gozo-Da[d]ole, 192 SCRA 575 (1990); New Japan
Motors, Inc. v. Perucho, 74 SCRA 14 (1976); Manila Surety and Fidelity
Co., Inc. v. Bath Construction and Co., 14 SCRA 435 (1965).
2 Rollo, p. 11.
3 Id., at pp. 11, 303-316.
4 Id., at p. 11.

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VOL. 396, JANUARY 31, 2003 543

National Commercial Bank of Saudi Arabia vs. Court of
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5
ber 15, 1993, it filed a Motion for Reconsideration. 6
The
motion, however, did not contain a notice of hearing.

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On September 21, 1993, NCBSA filed a Manifestation

pointing out that PBC’s Motion 7
for Reconsideration did not
contain any notice of hearing.
On September 27, 1993, NCBSA filed a Motion 8
for Writ
of Execution of the decision of the trial court. On even date,
PBC filed
9
a Motion to Set “Motion for Reconsideration” for
Hearing alleging as follows:

xxx

2. The Motion for Reconsideration raised both questions of

facts and law arising from the erroneous findings made by
the Honorable Court in the said Decision;
3. In order that defendant can fully amplify and expound on
the issues raised on the said motions, there is a need to set
the Motion for Hearing.
10
xxx

NCBSA opposed this motion11

vigorously, it praying that it be
stricken off the records.
By Order of February 1, 1994, the trial court struck from
the records of the case PBC’s Motion for Reconsideration of
its decision12
and granted NCBSA’s Motion for Writ of
Execution.
PBC filed a Motion for Reconsideration of said Order of
February 1, 1994, this time alleging that PBC’s failure to
comply with the 3-day notice rule “was essentially an honest
mistake or over-

_______________

5 Id., at pp. 11, 28-38.

6 Id., at pp. 11, 99, 213.
7 Id., at pp. 39-40.
8 Id., at pp. 12, 41-44.
9 Id., at pp. 12, 45-46.
10 Id,, at p. 45.
11 Id., at pp. 12, 47-49.
12 Id., at pp. 12-13, 98-99.

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544 SUPREME COURT REPORTS ANNOTATED

National Commercial Bank of Saudi Arabia vs. Court of
Appeals
13
sight of counsel.” 14This motion was just as vigorously
opposed by NCBSA.
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By Order of March 2, 1994, the trial court denied PBC’s

Motion for Reconsideration of its Order of February 1, 1994,
finding that “[t]here are no compelling reasons
15
to warrant a
liberal construction of the rules on Motions.”
PBC assailed before the Court of Appeals via16Petition for
Certiorari the trial court’s March 2, 1994 Order.
By Decision of February 27, 1995, the 17
Court of Appeals
dismissed PBC’s Petition for Certiorari. On PBC’s Motion
for Reconsideration, however, the Court of Appeals, by
Amended Decision of March 8, 1996, set aside its February
27, 1995 Decision and granted PBC’s Petition for Certiorari
and directed the trial court to resolve PBC’s Motion for
Reconsideration
18
(of the trial court’s August 24, 1993
Decision).
Justifying its setting aside of its February 27, 1995
Decision, the Court of Appeals held in its Amended Decision:

. . . [T]o deny petitioner’s motion for reconsideration on the ground

of failure to contain a notice of hearing is too harsh an application
of procedural rules especially so when petitioner has filed a motion
to set the motion for reconsideration for hearing and had furnished
private respondent
19
a copy of the motion, a fact which is not denied
by the latter.

NCBSA thus comes to this Court assailing the Court of

Appeals’ Amended Decision.
The petition is impressed with merit.

_______________

13 Id., at pp. 13, 51, 104.

14 Id., at pp. 13, 112-116.
15 Id., at p. 125.
16 Id., at pp. 13, 126-166.
17 Id., at pp. 14, 211-219.
18 Id., at pp. 14, 256-260.
19 Id., at pp. 14, 256-257.

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National Commercial Bank of Saudi Arabia vs. Court of
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The requirement of notice under Sections 4 and 5, Rule 15

in connection
20
with Section 2, Rule 37 of the Revised Rules of
Court is mandatory. The absence of a notice of hearing is
fatal and, in cases of motions to reconsider a decision, the

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running of21the period to appeal is not tolled by their filing or

pendency. In the case at bar, it is not disputed that PBC’s
Motion for Reconsideration of the August 24, 1993 decision
of the trial court did not contain the requisite notice of
hearing.
In an attempt to cure the defect, PBC filed a Motion to
Set the “Motion for Reconsideration” for Hearing on
September 27, 1993, or 9 days after the period for filing the
Notice of Appeal had expired.
The motion for reconsideration, however, being fatally
defective for lack of notice of hearing,
22
cannot be cured by a
belated filing of a notice of hearing. More so in the case at
bar where the Motion to Set the “Motion for
Reconsideration” was filed after the expiration of the period
for filing an appeal.
NCBSA thus calls for the strict application of our rules of
procedure
23
to avoid further delays in the disposition of the
case, which has remained pending for more than 17 years.
PBC, on the other 24hand, invokes a just and fair
determination of the case.
PBC’s appeal for justice and fairness does not lie,
however, there being nothing on record to show that it has
been a victim of injustice or unfairness. On the contrary, as
found by the Court of Appeals in its original decision, PBC
had the opportunity to participate in the trial and present
its defense and had actually25made full use of the remedies
under our rules of procedure. More impor-

_______________

20 Restated in the same Rule and Section numbers in the 1997 Rules of
Civil Procedure.
21 Bank of the Philippine Islands v. Far East Molasses, 198 SCRA 689,
698-699 (1991).
22 People v. Court of Appeals, 296 SCRA 418, 426-427 (1998).
23 Rollo at p. 23.
24 Id., . at p. 323.
25 Id., at p. 217.

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National Commercial Bank of Saudi Arabia vs. Court of
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tantly, there was no oppressive exercise of judicial authority

that would26 call for the annulment of the trial court’s
resolutions.
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The finality of the decision of the trial court cannot be set

aside purely on the basis of liberality for while it is true that
a litigation is not a game of technicalities, this does not
mean that the Rules of Court may be ignored at will and at
random. Only for the most persuasive of reasons 27
should the
court allow a relaxation of its procedural rules.
PBC, however, has not advanced any persuasive or
exceptional reason in failing to set its Motion for
Reconsideration of the trial court’s decision for hearing. In
fact, in its Motion to Set “Motion for Reconsideration” for
Hearing, PBC was completely silent on why it did not set the
Motion for Reconsideration for hearing. It just alleged that,
as earlier quoted, “[i]n order that defendant can fully
amplify and expound on the issues raised on said motion,
there is a28 need to set the Motion [for Reconsideration] for
Hearing.” This allegation conveys that, if there was no
need for PBC to “fully amplify and expound on the issues
raised” in the Motion for Reconsideration, no setting for
hearing of said motion was needed. But as earlier stated, the
requirement of notice in this kind of motion is mandatory.
The Motion for Reconsideration thus remained a mere scrap
of paper which deserved no consideration.
But assuming that PBC had presented exceptional
reason or excuse for its failure to comply with the notice
requirement, the Motion for Reconsideration would be
denied on the ground 29
that it is pro forma.
In its Rejoinder to NCBSA’s Reply to Comment to the
petition at bar, PBC alleged that it was, in its Motion for
Reconsideration of the trial court’s decision, raising “serious
questions involving findings of fact and conclusions of law
by the trial court,” thus “questioning the decision as being
contrary to law and the evidence on

_______________

26 Id., at p. 218.
27 Limpot v. Court of Appeals, 170 SCRA 367, 377 (1989).
28 Rollo at p. 45.
29 Id., at pp. 323-330.

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National Commercial Bank of Saudi Arabia vs. Court of
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record.” A reading of the records will show, however, that
the same three issues raised by PBC during the trial—
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prescription, laches and lack of double payment—are what

are being raised in its Motion for Reconsideration of the
decision of the trial court.
PBC’s Motion for Reconsideration of the trial court’s
decision was thus31 “in substance . . . a reiteration of reasons
and arguments” raised before the trial court for the
dismissal of NCBSA’s complaint, which reasons and
arguments had already been considered and resolved
against it on the merits by the trial court. The Motion for
Reconsideration was thus merely pro forma.
Technicality aside, en passant, on the merits of PBC’s
Motion for Reconsideration of the trial court’s decision, the
trial court did not err in brushing aside its main defense of
prescription—that NCBSA’s complaint 32
is “based on the
quasi-contract of solutio indebiti,” hence, it prescribes in six
years and, therefore, when NCBSA filed its complaint nine
years after the cause of action arose, it had prescribed.
Solutio indebiti applies where: (1) a payment is made
when there exists no binding relation between the payor,
who has no duty to pay, and the person who received the
payment, and (2) the payment is made through 33
mistake,
and not through liberality or some other cause. In the case
at bar, PBC and NCBSA were bound by their contract, the
letter of credit, under which NCBSA obliged itself to pay
PBC, subject to compliance by the latter with certain
conditions provided therein. As such, the cause of action34 was
based on a contract, and the prescriptive period is ten, not
six years.
Even PBC’s defense of laches is bereft of merit, the cause
of action not having yet prescribed at the time NCBSA’s
complaint was filed.

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30 Rollo at p. 326.
31 Ibid.
32 CA Rollo at p. 85.
33 Power Commercial and Industrial Corp. v. Court of Appeals, 274
SCRA 597, 612 (1997).
34 Article 1144, Civil Code.

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Courts should never apply the doctrine of laches earlier than the 35
expiration of time limited for the commencement of actions at law.

And as to PBC’s allegation that the trial court erred in

finding the existence of double payment, suffice it to state
that PBC, while denying that there was double payment,
itself admitted having received a second set of payment for
the same amount covered36
by the letter of credit. Thus, in its
petition for certiorari filed with the Court of Appeals, it
alleged, quoted verbatim:

The second set for the same amount, although it was received and
credited to [PBC’s] account with Chemical Bank New York, were to
be and subsequently transmitted 37
to the account of Labroco
(International, Philippines) . . . (Emphasis supplied.)

WHEREFORE, the instant petition for review on certiorari

is GRANTED. The Amended Decision of the Court of
Appeals dated March 8, 1996 is SET ASIDE and the
Resolutions of the Regional Trial Court declaring the
Motion for Reconsideration filed by the Philippine Banking
Corporation as pro forma is REINSTATED.
SO ORDERED.

     Puno (Chairman), Panganiban, Sandoval-Gutierrez

and Corona, JJ., concur.

Petition granted, amended decision set aside. Resolutions

of the trial court reinstated.

Note.—A motion that does not comply with the

requirements of Sections 4 and 5 of Rule 15 of the Rules of
Court is a worthless piece of paper which the clerk of court
has no right to receive and which the court has no authority
to act upon. (Pallada vs. Regional Trial Court of Kalibo,
Aklan, Branch 1, 304 SCRA 440 [1999])

——o0o–—

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35 Imperial Valley Shipping Agency v. NLRC, 200 SCRA 178, 184

(1991).
36 Rollo at pp. 126-166.
37 Id., at p. 149, penultimate paragraph.

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