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EN BANC

G.R. No. 108870 July 14, 1995

PHILIPPINE NATIONAL BANK and NATIONAL INVESTMENT DEVELOPMENT CORPORATION, Petitioners, v. HON. COURT OF APPEALS, HON. RODOLFO A. ORTIZ, Presiding Judge of the Regional Trial Court of Quezon City, Branch 89, CLARA REYES PASTOR and OTHER STOCKHOLDERS OF C & C COMMERCIAL CORPORATION and C & C COMMERCIAL CORPORATION, Respondents.

R E S O L U T I O N

DAVIDE, JR., J.:

The petitioners ask this Court to reconsider the decision of 3 March 1994 ¹which upheld the Court of Appeals ²in sustaining the order of the Regional Trial Court (RTC), Branch 89, Quezon City, disallowing the petitioners' appeal. ³

The petitioners allege in their motion for reconsideration that:

I. PETITIONERS' RIGHT TO APPEAL IS AN ESSENTIAL PART OF OUR JUDICIAL SYSTEM AND MAY NOT BE DENIED OR FORFEITED FOR A MERE 3-DAY DELAY (ASSUMING THERE IS SUCH A DELAY) IN FILING THE NOTICE OF APPEAL, ESPECIALLY SINCE PRIVATE RESPONDENTS' SUBSTANTIAL RIGHTS HAVE NOT BEEN PREJUDICED BY SUCH DELAY.chanroblesvirtualawlibrarychanrobles virtual law library

II. PLDT V. NLRC (128 SCRA 402 [1984]) APPLIES TO THE CASE AT BAR, AS RULED BY THE SAME SECOND DIVISION OF THIS HONORABLE SUPREME COURT IN ITS DECEMBER 15, 1993 RESOLUTION IN PNB V. COURT OF APPEALS (G.R. NO. 111305) INVOLVING THE SAME FACTUAL MILIEU; IN PNB'S CASE AS WELL AS THOSE OF OTHER PARTIES MAINTAINING OFFICES IN MULTI-STORIED BUILDINGS, NO BETTER RULE CAN SERVE JUSTICE AND FAIR PLAY IN THESE COMPLICATED AND CHANGING TIMES THAN THE RUDIMENTARY AND WISE PRECEPT THAN WHEN PARTY IS REPRESENTED BY COUNSEL NOTICES BE SENT TO THE LATTER.chanroblesvirtualawlibrarychanrobles virtual law library

III. JUSTICE AND EQUITY FOR ALL OF THE PARTIES, ASSUMING ARGUENDO THAT PNB'S NOTICE OF APPEAL WAS THREE (3) DAYS LATE, DEMAND THAT THIS 19-YEAR P20 MILLION CASE BE DECIDED ON THE MERITS NOT ON TECHNICALITY.chanroblesvirtualawlibrarychanrobles virtual law library

IV. PETITIONERS' APPEAL CAN BE GIVEN DUE COURSE UNDER THE DOCTRINE IN PHHC V. TIONGCO (12 SCRA 471 [1964]), ABSOLVING A PARTY FROM THE EFFECTS OF THE NEGLIGENCE OF ITS COUNSEL.

The private respondents countered by filing a motion to expunge the motion for reconsideration on the ground that the same is frivolous and dilatory being a rehash of arguments previously raised.chanroblesvirtualawlibrarychanrobles virtual law library

The petitioners then filed a motion for leave to admit supplemental motion for reconsideration and opposition to the private respondents' motion to expunge. The supplemental motion touches on the alleged "fundamentally grave and reversible errors of the 20 January 1992 decision of the trial court, which warrant a review on its merits by the appellate court." The private respondents moved to strike it out, reiterating for that purpose their motion to expunge.chanroblesvirtualawlibrarychanrobles virtual law library

Pursuant to the resolution of the Court en banc of 4 October 1994, a Special Second Division was created to resolve the motion for reconsideration.chanroblesvirtualawlibrarychanrobles virtual law library

On 21 November 1994, the Special Second Division heard the parties in oral arguments on the motion for reconsideration and the opposition thereto. The parties were, thereafter, granted fifteen days within which to settle the case and to inform the Court of the settlement, if any, and, in any event, to submit simultaneous memoranda within the said period.chanroblesvirtualawlibrarychanrobles virtual law library

In view of the importance of the issue involved, the Special Second Division referred this case to the Court En Banc which accepted it on 27 June 1995.chanroblesvirtualawlibrarychanrobles virtual law library

The core issue in the motion for reconsideration remains to be that as explicitly defined in the decision of 3 March 1994:

[W]hether herein petitioners . . . are deemed to have received a copy of the decision of the trial court on January 23, 1992 when the mail containing the decision was received by the PNB mailing clerk from the post office or only on January 28, 1992 when the mail was delivered by said clerk to the Legal Department of the PNB.

The mail containing the trial court's decision was addressed to the petitioners' counsel, Atty. Avamor Perez, whose address is entered in the record as the "6th Floor, PNB Bldg., Escolta Manila." The PNB mailing clerk is Catalino M. Sandoval, who is with the PNB Mailing Division, General Services Department.chanroblesvirtualawlibrarychanrobles virtual law library

The trial court held that the petitioners are, on the ground of estoppel, deemed to have received a copy of the decision on 23 January 1992 when the registered mail containing it was received by Mr. Sandoval. It reasoned thus:

This Court is not persuaded by the submission of defendant PNB that this Court's decision dated January 20, 1992, is not yet final and executory when it filed, thru counsel, its notice of appeal therefrom on February 10, 1992, for the reason that the date to be considered as the receipt by defendants' counsel is January 28, 1992, when the registered letter containing the decision was actually received at the Litigation and Collection Division of the Legal Department of defendant PNB, and not on January 23, 1992, when it was received and signed for by the PNB employee of the Mailing Division.chanroblesvirtualawlibrarychanrobles virtual law library

For, during the oral arguments pertaining to this incident on March 17, 1992, defendants' counsel admitted that all the previous orders of this Court in this case and all notices to him were also received by him through defendant PNB's Mailing Division and all these orders and notices were honored by him.chanroblesvirtualawlibrarychanrobles virtual law library

Defendants' counsel also admitted in open court that he never questioned before the validity of the service of these previous orders and notices in this case, to him, as defendants' counsel, although not received in the first instance by the litigation division of defendant PNB, since it is through the Mailing Division that all officials in defendant PNB receive their mails.chanroblesvirtualawlibrarychanrobles virtual law library

He likewise admitted that the PNB employee detailed at its Mailing Division who received the mails for the different departments and employees of defendant PNB, that day, January 23, 1992, was duly authorized to do so. In fact, according to him, this PNB employee detailed at the Mailing Division had been signing registry return receipts for orders and notices sent to defendants' counsel, without any complaint from the litigation division.chanroblesvirtualawlibrarychanrobles virtual law library

Under these circumstance, this Court holds that defendants' counsel cannot now be validly heard to complain, apparently for the first time, against the regularity of the service on him of the decision of this Court dated January 20, 1992, by registered letter, received and signed for by the PNB employee of its Mailing Division, since he is already estopped from questioning the validity of the service of the decision to him, thru the Mailing Division, not having questioned before the validity and efficacy of the service to him of the prior orders and notices of this Court in this case all of which he has honored without any complaint whatsoever, especially, as it appears, that the Litigation and Collection Division of the Legal Department of defendant PNB and its Mailing Division of its General Services Department, are housed and located at the same PNB Building at Escolta, Manila. ⁴chanrobles virtual law library

In the challenged decision of 3 March 1994, this Court agreed with the trial court and quoted extensively portions of the transcripts of the stenographic notes of the oral arguments held before the trial court on 17 March 1992 to support the conclusion that Catalino Sandoval was authorized to receive the registered mail containing the trial court's decision.chanroblesvirtualawlibrarychanrobles virtual law library

After an assiduous re-examination of this case, the Court is of the considered view that the challenged decision should be reconsidered.chanroblesvirtualawlibrarychanrobles virtual law library

It is undisputed that Catalino Sandoval is not connected with the Office of Atty. Avamor Perez in the Litigation and Collection Division of the Legal Department of the PNB either as his clerk or as a person-in-charge of the office. He is admittedly an ordinary employee of the PNB detailed at the Mailing Division of the General Services Department "authorized to receive the mails of defendant PNB." ⁵

In their Precis of Comment, ⁶ the private respondents state that:

Petitioners, all throughout the nineteen-year period of trial, have been collecting, receiving and signing for receipt of their notices and/or mail matters in Civil Case No. Q-18176 from the trial court and the private respondents, through PNB's Mailing Division which, under the internal rules and procedures of PNB, is "in charge of collecting all PNB mail matters." (emphasis supplied).

In paragraphs 3 to 6 of their comment (with opposition to injunction), the private respondents repeatedly assert that Sandoval was in charge of collecting all PNB mail matters. Thus:

3. The PNB Mailing Division, admittedly "in charge of collecting all PNB mail matters" . . . claimed, collected and received the decision from the post office and signed the registry return card to acknowledge receipt thereof on 23 January 1992 - this has been the practice of [petitioners] in regard to mail matters of the PNB, inclusive of all notices, pleadings, motions, and other processes in connection with Civil Case No. RQ-18176 a quo. . . .chanroblesvirtualawlibrarychanrobles virtual law library

4. From 23 January 1992 onwards, therefore, the copy of the subject decision thus collected and received by petitioners passed into petitioners' complete control and disposition - in fine, officials/employees handled/disposed of the same is petitioners' sole business to the exclusion of the whole world, knowledge and/or participation-wise.chanroblesvirtualawlibrarychanrobles virtual law library

5. And the fact is the envelope, addressed to petitioner's legal counsel of record, gave out in print reasonable notice as to the nature of its contents and to whom specifically it must
go . . . . Consonant as aforesaid with petitioners' internal rules and practice, not Atty. Avamor Perez of petitioners, but petitioners' own Mailing Division - "in charge of collecting [all] PNB mail matters" - went to the post office to collect and receive and sign for the same. No third party intervened in the collection, receipt and signing for this PNB mail.chanroblesvirtualawlibrarychanrobles virtual law library

6. Thus, anent the self-serving claim that petitioners' Legal Department received subject decision only on 28 January 1992 (a matter incapable of verification by anyone) is petitioners' own responsibility as employer for all PNB officers and employees - the procedures and men of the Mailing Division, as the designated "in charge of collecting all PNB mail matters," are after all petitioners' own making, exclusively within petitioners' supervision and control, and in petitioners' pay. ⁷ (emphasis supplied)

At the hearing on 17 March 1992, it was established on questions by the trial court that the authority of Sandoval was limited to mails for the PNB. Thus:

COURT:chanrobles virtual law library

He was duly authorized to get the mails for the PNB?chanrobles virtual law library

ATTY. PEREZ:chanrobles virtual law library

Yes, your Honor.chanroblesvirtualawlibrarychanrobles virtual law library

COURT:chanrobles virtual law library

Alright.chanroblesvirtualawlibrarychanrobles virtual law library

ATTY. PEREZ:chanrobles virtual law library

Just mail matters. But the fact that he received the registry return receipt of that decision he was not authorized to do so. He was not authorized to do so. He should have received, just receive, your Honor, the registry return card of that decision inasmuch as he does not understand the import of such a thing.chanroblesvirtualawlibrarychanrobles virtual law library

COURT:chanrobles virtual law library

He was not authorized to receive the what?chanrobles virtual law library

ATTY. PEREZ:chanrobles virtual law library

Your Honor, he was authorized. . . .chanroblesvirtualawlibrarychanrobles virtual law library

COURT:

He was authorized to receive mail for the PNB. . . .chanroblesvirtualawlibrarychanrobles virtual law library

ATTY. PEREZ:chanrobles virtual law library

Yes. ⁸

The registered mail containing the trial court's decision of 20 January 1992 was not a mail matter for the PNB or for petitioner National Investment Development Corporation (NIDC). It was a registered mail matter addressed to and exclusively intended for Atty. Avamor Perez, in his capacity as counsel for the petitioners, and not as an official or employee of the PNB.chanroblesvirtualawlibrarychanrobles virtual law library

Service of final orders and judgments can only be made either by personal service or by registered mail, or in special cases by publication. Section 7, Rule 13 of the Rules of Court expressly provides:

Sec. 7. Service of final orders or judgments. - Final orders or judgments shall be served either personally or by registered mail. When a party summoned by publication has failed to appear in the action, final orders or judgments against him shall be served upon him also by publication at the expense of the prevailing party.

Personal service shall be done in the manner set forth in Section 4 of the said Rule:

Sec. 4. Personal service. - Service of the papers may be made by delivering personally a copy to the party or his attorney, or by leaving it in his office with his clerk or with a person having charge thereof. If no person is found in his office, or his office is not known, then by leaving the copy, between the hours of eight in the morning and six in the evening, the party's or attorney's residence, if known, with a person of sufficient discretion to receive the same.

Service to a party is allowed only if the party is not represented by counsel. If he is, then, pursuant to Section 2 of Rule 13, service shall be made upon the attorney, unless service upon the party himself is ordered by the court. Unless so ordered, service on t