Mediation and Judicial Dispute Resolution

Mediation and JDR in civil cases

By Atty. Tranquil G.S. Salvador III
January 14, 2022

Manila Standard 


“Parties to a dispute must take advantage of these to save their and the court’s time and resources.”

Mediation is a method of settling disputes outside a court setting where a neutral third party, known as a mediator, acts as a link between the parties (Barron’s Law Dictionary). In the Philippines, court-annexed mediation (CAM) is conducted by referring the parties to the mediator of the Philippine Mediation Center Unit (PMCU) accredited by the Supreme Court.

On the other hand, Judicial Dispute Resolution (JDR) is the process wherein a judge known as the JDR Judge employs conciliation, mediation, or early neutral evaluation in order to settle a case at the pre-trial stage (Definition, Philippine Judicial Academy). Under the 2019 Amendment to the Rules of Civil Procedure (ARCP), the JDR judge is a judge other than the judge originally assigned to hear and try the case.

The CAM must be terminated no later than 30 days from the receipt of the referral order from the court and the JDR no later than 15 days from the receipt of such a referral order (Section 8, Chapter 2B and Section 3, 2C, A.M. No. 19-10-20-SC). If both the CAM and JDR are unsuccessful, the trial will proceed on the dates agreed upon during the pre-trial before the judge originally assigned to handle the case (Sections 8 and 9, Rule 18, ARCP).

The CAM shall be mandatory for all ordinary civil cases, including mediatable permissive or compulsory counterclaim or cross-claim. It shall also be mandatory for all special civil actions, except Declaratory Relief (Rule 63), Review of Decisions of COA or COMELEC (Rule 64), Certiorari, Prohibition and Mandamus (Rule 65), Quo Warranto (Rule 66), and Contempt (Rule 71) (Section 1(a)(b), Chapter 1).

CAM is mandatory in special proceedings cases involving the settlement of estate where the dispute involves claims against the estate, or the distribution or partition of the estate in intestate proceedings; and cases involving issues under the Family Code and other laws, in relation to support, custody, visitation, property relations, guardianship of minor children, and other issues which can be the subject of a compromise agreement (Section 1(c)(d), Chapter 1).

Intellectual property cases, commercial or intra-corporate controversy cases, and environmental cases are all mandated to go through CAM (Section 1(e)(f)(g), Chapter 1). However, environmental cases are not required to undergo JDR unless the judge of the court to which the case was originally filed is convinced that settlement is still possible (Section 2(a), Chapter 1).

All cases subject of CAM and appealed cases from the first level courts or metropolitan/municipal trial courts may be referred to JDR in areas declared as JDR sites. (Section 2(a)(b), Chapter 1). The other cases that may be referred to JDR are: (a) settlements of estate, testate and intestate; (b) cases of forcible entry and unlawful detainer; (c) civil cases involving title to, or possession of, or interest over real property; and (d) habeas corpus cases decided by the metropolitan/municipal trial courts in the absence of any Regional Trial Court Judge (Section 2(1) to (4), Chapter 1).


In all other actions or proceedings where compromise is not prohibited by law and there is a likelihood of settlement, either or both of the parties may, by oral manifestation or written motion after the pre-trial/preliminary conference, or at any stage of the proceedings, request the court to refer their dispute to CAM and JDR, provided that there are still factual issues to be resolved (Section 3, Chapter 1).

There are cases that cannot be resolved by a compromise and therefore may not be referred to CAM and JDR. These are: (a) cases involving the civil status of persons; validity of a marriage or legal separation, any grounds for legal separation, future support, the jurisdiction of courts, and future legitime; (b) habeas corpus petitions; (c) probate of a will; and (d) cases with pending applications for restraining orders or preliminary injunctions (Section 4, Chapter 1).

However, for marriage cases where the parties inform the court that they have agreed to undergo mediation on some aspects of the case, the court may allow mediation on the custody of minor children, separation of property, or support pendente lite. By mutual consent of the parties, restraining orders and preliminary injunctions can also be subject to mediation (Section 4, Chapter 1).

It shall be the duty of the Judge during Pre-Trial/Preliminary Conference to orient the parties and counsels on: (a) the CAM process; (b) their mandatory appearance during the mediation proceedings; (c) their duty to negotiate in good faith and to exert earnest efforts to settle the case; and (d) the consequences of and sanctions for failure to appear before the PMCU or any misconduct or misbehavior committed during the mediation proceedings (Section 2(a)(b), Chapter 2A).

The Judge shall inform the parties that in case there is no settlement during CAM, the case may be referred to another court for JDR if the former is convinced that settlement is still possible. The parties will be informed that the JDR Judge may conduct a non-binding early neutral evaluation on the merits of their respective cases (Section 2(c)(d), Chapter 2A).

In the initial appearance of the parties and counsels for CAM, the PMCU shall require them to present proof of payment of mediation fees and assist them in selecting a mutually acceptable mediator from among the roster of mediators in the PMCU (Sections 2 and 3, Chapter 2B). If the parties cannot jointly select a common mediator, the PMCU shall, in the presence of the parties, choose the mediator by lot from among the mediators present at the unit (Section 4, Chapter 2B).

The PMCU shall submit a Mediator’s Report to the court specifying the result of the mediation (Section 12, Chapter 2B). If a compromise agreement is reached by the parties, the judgment of the court approving the compromise agreement shall contain a statement that it was rendered through CAM. This is to distinguish the CAM judgment from the JDR judgment and vice versa. (Section 13, Chapter 2B, Section 9, Chapter 2C).

Upon receipt of the Mediator’s Report stating that no settlement was reached in CAM, the referring judge shall determine, in the hearing set for this purpose, if settlement is still possible, and if he is convinced that it is, refer the case to the JDR Judge (Section 1, Chapter 2C). Only those judges who have undergone skills-based training in JDR procedures and stationed in areas declared as JDR sites, are authorized to conduct JDR (Section 4, Chapter 2C).

The JDR Judge shall then conduct the JDR process as mediator, conciliator, and/or neutral evaluator to actively assist and facilitate negotiations among the parties for them to settle their dispute. As mediator and conciliator, he facilitates the settlement discussions between the parties to reconcile their differences (Section 5, Chapter 2C).

As a neutral evaluator, he assesses the relative strengths and weaknesses of each party’s case and makes a non-binding and impartial evaluation to guide the parties to a fair and mutually acceptable settlement of their dispute. If the case is not settled in JDR, the JDR Judge shall accomplish the JDR Report and return the case to the Judge for the continuation of the proceedings in court (Sections 5 and 8, Chapter 2C).

The trial court shall impose the following sanctions in case parties and counsels fail to appear during CAM or JDR proceedings: (a) dismissal of the case, when there is failure of the plaintiff and counsel to appear without valid cause; or (b) ex-parte presentation of plaintiff’s evidence and dismissal of the defendant’s counterclaim when there is failure of the defendant and counsel to appear without valid cause (Section 5, Chapter 2D).

The court may, likewise, impose other sanctions, including but not limited to censure, reprimand, contempt, or reimbursement by the absent party of the costs of the appearing party, including attorney’s fees for that day up to treble such costs, which are payable on or before the date of the re-scheduled setting. In the exercise of its sound discretion, the trial court may lift, set aside, or modify the sanctions previously imposed (Section 5 and 6, Chapter 2D).

Any and all matters discussed or communications made, including requests for mediation, and documents presented during CAM and JDR shall be privileged and confidential. The mediator or JDR Judge shall not, in any manner, record the proceedings. No transcript or minutes of the mediation proceedings shall be taken. If personal notes are taken for guidance, the notes shall be destroyed. Should such records exist, the same shall also be privileged and confidential (Section 7, Chapter 2D).

Parties to a dispute must take advantage of the CAM and JDR in order to save their and the court’s time and resources. It may not look like a complete victory for either the complainant or defendant based on the reliefs sought in their respective pleadings but it may terminate the case that causes anxiety, sleepless nights and emotional distress. Hence, it is a win-win solution.

https://manilastandard.net/opinion/columns/footnotes-by-tranquil-g-s-salvador-iii/314065991/mediation-and-jdr-in-civil-cases.html

Jurisprudence provides that fraud, as a ground for a petition for relief, refers to extrinsic or collateral fraud which, in turn, has been defined as fraud that prevented the unsuccessful party from fully and fairly presenting his case or defense and from having an adversarial trial of the issue, as when the lawyer connives to defeat or corruptly sells out his client's interest. Extrinsic fraud can be committed by a counsel against his client when the latter is prevented from presenting his case to the court.

"While the remaining issues in the petition partake of a factual nature, the Court deems it necessary to write finis to this case at this level in order to avoid remanding the case to the appellate court. It has been held that "remand is not necessary if the Court is in a position to resolve a dispute on the basis of the records before it; and if such remand would not serve the ends of justice."51 A careful perusal of the petitions filed by Dana before the trial court, the appellate court, and this Court betrays the lack of allegations sufficient to support a petition for relief from judgment under Rule 38.

Jurisprudence provides that fraud, as a ground for a petition for relief, refers to extrinsic or collateral fraud52 which, in turn, has been defined as fraud that prevented the unsuccessful party from fully and fairly presenting his case or defense and from having an adversarial trial of the issue, as when the lawyer connives to defeat or corruptly sells out his client's interest. Extrinsic fraud can be committed by a counsel against his client when the latter is prevented from presenting his case to the court.53 In Lasala v. National Food Authority,54 the Court defined extrinsic fraud in relation to parties represented by counsel, viz.:

Extrinsic fraud x x x refers to "any fraudulent act of the prevailing party in litigation committed outside of the trial of the case, where the defeated party is prevented from fully exhibiting his side by fraud or deception practiced on him by his opponent, such as by keeping him away from court, by giving him a false promise of a compromise, or where an attorney fraudulently or without authority connives at his defeat."

Because extrinsic fraud must emanate from the opposing party, extrinsic fraud concerning a party's lawyer often involves the latter's collusion with the prevailing party, such that his lawyer connives at his defeat or corruptly sells out his client's interest.

In this light, we have ruled in several cases that a lawyer's mistake or gross negligence does not amount to the extrinsic fraud that would grant a petition for annulment of judgment.

We so ruled not only because extsic fraud has to involve the opposing party, but also because the negligence of counsel, as a rule, binds his client.55 (Citations omitted)

Given this definition, the Court found the following circumstances sufficient to make out a case for extrinsic fraud:

The party in the present case, the NFA, is a government agency that could rightly rely solely on its legal officers to vigilantly protect its interests. The NFA's lawyers were not only its counsel, they were its employees tasked to advance the agency's legal interests.

Further, the NFA's lawyers acted negligently several times in handling the case that it appears deliberate on their part.

First, Atty. Mendoza caused the dismissal of the NFA's complaint against Lasala by negligently and repeatedly failing to attend the hearing for the presentation of the NFA's evidence-in-chief. Consequently, the NFA lost its chance to recover from Lasala the employee benefits that it allegedly shouldered as indirect employer.

Atty. Mendoza never bothered to provide any valid excuse for this crucial omission on his part. Parenthetically, this was not the first time Atty. Mendoza prejudiced the NFA; he did the same when he failed to file a motion for reconsideration and an appeal in a prior 1993 case where Lasala secured a judgment of P34,500,229.67 against the NFA.

For these failures, Atty. Mendoza merely explained that the NFA's copy of the adverse decision was lost and was only found after the lapse of the period for appeal. Under these circumstances, the NFA was forced to file an administrative complaint against Atty. Mendoza for his string of negligent acts.

Atty. Cahucom, Atty. Mendoza's successor in handling the case, notably did not cross-examine Lasala's witnesses, and did not present controverting evidence to disprove and counter Lasala's counterclaim. Atty. Cahucom further prejudiced the NFA when he likewise failed to file a motion for reconsideration or an appeal from the trial court's September 2, 2002 decision, where Lasala was awarded the huge amount of P52,788,970.50, without any convincing evidence to support it.

When asked to justify his failure, Atty. Cahucom, like Atty. Mendoza, merely mentioned that the NFA's copy of the decision was lost and that he only discovered it when the period for appeal had already lapsed.

The trial court's adverse decision, of course, could have been avoided or the award minimized, if Atty. Cahucom did not waive the NFA's right to present its controverting evidence against Lasala's counterclaim evidence. Strangely, when asked during hearing, Atty. Cahucom refused to refute Lasala's testimony and instead simply moved for the filing of a memorandum.

The actions of these lawyers, that at the very least could be equated with unreasonable disregard for the case they were handling and with obvious indifference towards the NFA's plight, lead us to the conclusion that Attys. Mendoza's and Cahucom's actions amounted to a concerted action with Lasala when the latter secured the trial court's huge and baseless counterclaim award. By this fraudulent scheme, the NFA was prevented from making a fair submission in the controversy.56


Lasala has been subsequently reiterated in Cagayan Economic Zone Authority v. Meridien Vista Gaming Corporation,57 where the Court held that:cralawred

[I]n cases of gross and palpable negligence of counsel and of extrinsic fraud, the Court must step in and accord relief to a client who suffered thereby. x x x [F]or the extrinsic fraud to justify a petition for relief from judgment, it must be that fraud which the prevailing party caused to prevent the losing party from being heard on his action or defense. Such fraud concerns not the judgment itself but the manner in which it was obtained. Guided by these pronouncements, the Court in the case of Apex Mining, Inc. vs. Court of Appeals wrote:

If the incompetence, ignorance or inexperience of counsel is so great and the error committed as a result thereof is so serious that the client, who otherwise has a good cause, is prejudiced and denied his day in court, the litigation may be reopened to give the client another chance to present his case. Similarly, when an unsuccessful party has been prevented from fully and fairly presenting his case as a result of his lawyer's professional delinquency or infidelity, the litigation may be reopened to allow the party to present his side. Where counsel is guilty of gross ignorance, negligence and dereliction of duty, which resulted in the clients being held liable for damages in a damage suit, the client is deprived of his day in court and the judgment may be set aside on such ground.58 (Citations omitted and emphases in the original)

As in Lasala, the Court found sufficient factual justification for the grant of CEZA's petition for relief, viz.:

At the inception, CEZA was already deprived of its right to present evidence during the trial of the case when Atty. Baniaga filed a joint manifestation submitting the case for decision based on the pleadings without informing CEZA. In violation of his sworn duty to protect his client's interest, Atty. Baniaga agreed to submit the case for decision without fully substantiating their defense. Worse, after he received a copy of the decision, he did not even bother to inform his client and the OGCC of the adverse judgment. He did not even take steps to protect the interests of his client by filing an appeal. Instead, he allowed the judgment to lapse into finality. Such reckless and gross negligence deprived CEZA not only of the chance to seek reconsideration thereof but also the opportunity to elevate its case to the CA.59


Turning now to the case at bar, it is clear that Dana's allegations in her petition for relief fall way short of the jurisprudential threshold for extrinsic fraud. The Court quotes the allegations Dana made in her petition for relief with the trial court:

In all candor, [Dana] wanted to present her side of the controversy and all she intended was to take the witness stand. Without her knowing it, however, her time to present her evidence passed without her being able to do so. Her previous counsel did not remind, much less advice [sic], her of the hearing dates to present her case. Particularly, she was not simply aware of the hearings held by this [h]onorable [c]ourt on February 26 and March 26, 2009. She can only surmise that somebody must have maneuvered to impress, if not mislead, the [h]onorable [c]ourt that she was not interested to present her side.

This must be so since after [Dana] confronted her counsel about the promulgation of the Decision without her being able to present evidence, her counsel nonchalantly told her that it was their mutual decision not to present any evidence. This was not what [Dana] thought and knew. In the first place, she filed her Answer to the petition and assailed all the material allegations therein. She found no reason to abandon her case.

[Dana], by these assertions does not accuse her previous counsel any wrongdoing or neglect, or any other parties probably in cahoots with her said counsel. But it certainly had caused some harm to and, in fact, defrauded this [h]onorable [c]ourt which was led into believing that [Dana] was not interested in presenting her evidence. Hence, this [h]onorable [c]ourt found that [Dana] failed to appear despite notice as already mentioned above. Had it known that she was interested on [sic] presenting her side, this [h]onorable [c]ourt certainly would not have denied her that right. Otherwise put, by the deception, this Honorable Court was not aware that [Dana] was deprived of her day in court.60 (Emphasis and underlining Ours)

Dana's petition is anchored on two main allegations: first, that her counsel failed to notify her of the hearings dated February 26 and March 26, 2009; and second, that her counsel nonchalantly told her that it was their mutual decision to not present any evidence. However, she categorically admits that she "does not accuse her previous counsel [of] any wrongdoing or neglect, or any other parties probably in cahoots with her said counsel."61 Furthermore, the petition makes no specific citation of other acts or circumstances attributable to her counsel that fraudulently deprived Dana of her opportunity to fully ventilate her claims and defenses with the trial court. The acts complained of in the petition constitute neither "gross and palpable negligence" nor corruption or collusion amounting to extrinsic fraud. The general rule, which binds the client to the negligence of her counsel, remains applicable to this case. All told, the trial court did not commit grave abuse of discretion amounting to lack or excess of jurisdiction when it dismissed her petition for relief."


DANA S. SANTOS, PETITIONER, v. LEODEGARIO R. SANTOS, RESPONDENT.

G.R. No. 214593, July 17, 2019.


https://www.chanrobles.com/cralaw/2019julydecisions.php?id=510

The propriety of setting aside the judgment on compromise.

"The Court now resolves the question regarding the propriety of setting aside the judgment on compromise.

On one hand, the immutability and immediate effect of judgments upon compromise is well-settled. In Magbanua v. Uy,43 it was held that:

When a compromise agreement is given judicial approval, it becomes more than a contract binding upon the parties. Having been sanctioned by the court, it is entered as a determination of a controversy and has the force and effect of a judgment. It is immediately executory and not appealable, except for vices of consent or forgery. The nonfulfillment of its terms and conditions justifies the issuance of a writ of execution; in such an instance, execution becomes a ministerial duty of the court.44

However, like any other judgment, a judgment upon compromise which is contrary to law is a void judgment; and "[a] void judgment or order has no legal and binding effect. It does not divest rights, and no rights can be obtained under it; all proceedings founded upon a void judgment are equally worthless."45
On the other hand, Article 2035(2) and Article 5 of the New Civil Code provide:

ART. 2035. No compromise upon the following questions shall be valid:cralawre

x x x 
(2) The validity of a marriage or a legal separation. 

x x x x

ART. 5. Acts executed against the provisions of mandatory or prohibitory laws shall be void, except when the law itself authorizes their validity.

Again, the Court reiterates, at the risk of being repetitive, that the petition which gave rise to these proceedings is for the declaration of nullity of Dana and Leodegario's marriage. Dana's petition for certiorari with the CA, which is nothing but a consequence of the proceedings before the RTC, alleges the fraudulent deprivation of her chance to refute and controvert Leodegario's allegations and to present her side of the issue, which she also lays down in her petition. The core issue of Dana's petition is, therefore, the validity of her marriage to Leodegario. The termination of the case by virtue of the compromise agreement, therefore, necessarily implies the settlement by compromise of the issue of the validity of Dana and Leodegario's marriage.

In Uy v. Chua,46 which also involves an issue not subject to compromise under Article 2035, the Court held:

The Compromise Agreement between petitioner and respondent, executed on 18 February 2000 and approved by RTC-Branch 9 in its Decision dated 21 February 2000 in Special Proceeding No. 8830-CEB, obviously intended to settle the question of petitioner's status and filiation, i.e., whether she is an illegitimate child of respondent. In exchange for petitioner and her brother Allan acknowledging that they are not the children of respondent, respondent would pay petitioner and Allan P2,000,000.00 each. Although unmentioned, it was a necessary consequence of said Compromise Agreement that petitioner also waived away her rights to future support and future legitime as an illegitimate child of respondent. Evidently, the Compromise Agreement dated 18 February 2000 between petitioner and respondent is covered by the prohibition under Article 2035 of the Civil Code.47 (Emphasis and underscoring Ours)

In a long line of cases,48 the Court has censured and punished lawyers, and even judges, who have drafted agreements to dissolve marriages or to sanction adulterous relations. The rule applies a fortiori to the CA. It was, therefore, erroneous for the appellate court to terminate Dana's suit - which puts in issue the validity of her marriage - by virtue of the execution of the Decision 11 Q.R. No. 214593 compromise agreement which only covers the property relations of the spouses. While these issues are intertwined, a compromise of the latter issue should not and cannot operate as a compromise of the former, per Article 2035 of the Civil Code.

The Court cannot give its imprimatur to the dismissal of the case at bar even if, as the appellate court held, it was Dana's intention49 to have the case terminated upon the execution of the compromise agreement. Nevertheless, the Court agrees with the appellate court when it ruled that the scope of the compromise agreement is limited to Dana and Leodegario's property relations vis-à-vis their children, as Article 2036 of the Civil Code provides that "[a] compromise comprises only those objects which are definitely stated therein, or which by necessary implication from its terms should be deemed to have been included in the same." As held by the appellate court:cralawred

The agreement makes no mention of the marital ties between [Leodegario] and [Dana] but is limited only to their property relations vis-à-vis their children.50


However, despite the error committed by the appellate court, absent vices of consent or other defects, the compromise agreement remains valid and binding upon Dana and Leodegario, as they have freely and willingly agreed to, and have already complied with, the covenants therein. The agreement operates as a partial compromise on the issue of the disposition of the properties of the marriage.

Nevertheless, the Court is constrained to uphold the appellate court's decision, because the trial court's denial of Dana's petition for relief from judgment does not amount to grave abuse of discretion."



DANA S. SANTOS, PETITIONER, v. LEODEGARIO R. SANTOS, RESPONDENT.

G.R. No. 214593, July 17, 2019.


https://www.chanrobles.com/cralaw/2019julydecisions.php?id=510

The 1997 Rules of Civil Procedure changed the nature of an order of denial of a petition for relief from judgment, making it unappealable and, hence, assailable only via a petition for certiorari. Nevertheless, the appellate court, in deciding such petitions against denials of petitions for relief, remains tasked with making a factual determination, i.e., whether or not the trial court committed grave abuse of discretion in denying the petition. To do so, it is still obliged, as Service Specialists instructs, to "determine not only the existence of any of the grounds relied upon whether it be fraud, accident, mistake or excusable negligence, but also and primarily the merit of the petitioner's cause of action or defense, as the case may be." Stated otherwise, the finality of the RTC decision cannot bar the appellate court from determining the issues raised in the petition for relief, if only to determine the existence of grave abuse of discretion on the part of the trial court in denying such petition. While a Rule 38 Petition does not stay the execution of the judgment, the grant thereof reopens the case for a new trial; and thus, if merit be found in Dana's certiorari petition assailing the trial court's denial of her petition for relief, the case will be reopened for new trial.

"The core issue in this petition is the propriety of setting aside the judgment upon compromise rendered by the court a quo. Dana maintains that the judgment should be vacated because of Leodegario's alleged breach of their compromise; and because she did not intend to compromise the issue of the validity of her marriage. To bolster her stand, she invokes Sections 1 and 2, Article XV of the Constitution and urges the State to uphold, or at least try to uphold, her marriage. Leodegario, on the other hand, asserts the binding force of the trial court's decision and the judgment on compromise, claiming that the courts a quo acted according to law and jurisprudence in rendering the assailed judgments.

It must be borne in mind that Civil Case No. 03-6954 is a proceeding for the declaration of nullity of the marriage between Dana and Leodegario on the ground of psychological incapacity. The applicable substantive laws are, therefore, the Family Code and the New Civil Code, while the governing procedural law is A.M. No. 02-11-10-SC, with the Rules of Court applying suppletorily.27

In the case at bar, the CA28 and the OSG29 both concluded that the trial court decision had attained finality after Dana's inability to file an appeal therefrom. The two resolutions of the appellate court presuppose that the judgment on the validity of Dana and Leodegario's marriage had attained finality. Dana, on the other hand, asserts that it had not.

The Court agrees with the conclusion of the CA and the defensor vinculi regarding the finality of the RTC decision; however, we do not agree with their assertions as to the effect of the decision on the subsequent proceedings a quo.

There is indeed no showing in the record that Dana moved for reconsideration or new trial from the RTC decision. She, nevertheless, filed an appeal. However, probably cognizant of the proscription in Section 2030 of A.M. No. 02-11-10-SC, which makes the filing of a motion for reconsideration or a motion for new trial a precondition for filing an appeal, she withdrew her appeal and filed a petition for relief from judgment.

There is no provision in A.M. No. 02-11-10-SC prohibiting resort to a petition for relief from judgment in a marriage nullity case. Furthermore, the said Rule sanctions the suppletory application of the Rules of Court31 to cases within its ambit. It cannot, therefore, be said that Dana availed of an inappropriate remedy to question the decision of the trial court. Indeed, the trial court admitted Dana's petition for relief, heard the parties on the issues thereon, and rendered an order denying the petition. Dana then properly and seasonably assailed the order of denial via certiorari to the CA. It is, therefore, clear that the proceedings in Civil Case No. 03-6954 continued even after the trial court had rendered judgment and even after the lapse of the 15-day period for appealing the decision.

Nevertheless, considering the nature and office of a petition for relief, which is to set aside a final judgment,32 the Court cannot agree with Dana's assertion that the decision of the RTC in Civil Case No. 03-6954 had not attained finality. In fact, the decision has already been annotated in their marriage contract.33 This finding, however, does not detract from the fact that the proceedings in Civil Case No. 03-6954 continued even after the trial court had rendered judgment, precisely because Dana filed a petition for relief from that judgment. From the denial of her petition, she sought recourse to the appellate court. The appellate court, in dismissing the case upon the parties' compromise on their conjugal properties, invoked the finality of the RTC decision as a bar to the litigation of the other issues raised by Dana's petition. This conclusion is untenable.

In Samia v. Medina,34 which involved the application of the statutory ascendant of Rule 38 in the old Code of Civil Procedure, the Court held:cralawred

There is a great deal of similarity between an order granting a motion for a new trial based upon "accident or surprise which ordinary prudence could not have guarded against" under section 145 of the Code of Civil Procedure, and an order granting a motion for a new trial based upon "mistake, inadvertence, surprise, or excusable neglect," under section 113 of the Code of Civil Procedure, as both set aside the judgment, order, or proceeding complained of; both call for a new trial, and in both the injured party may question the order granting the motion for the new trial upon appeal from the new judgment rendered upon the merits of the case. The only fundamental difference lies in this, that while the judgment, order, or proceeding coming under section 145 of the Code of Civil Procedure is not final, that coming under section 113 is final. But this does not alter the nature or effect of the order granting the new trial, for this order does not put an end to the litigation in the sense that the party injured thereby has no other remedy short of appeal; he may question the propriety of the new trial on appeal from an adverse judgment rendered after such trial.35 (Emphasis and underscoring Ours)

In Servicewide Specialists, Inc. v. Sheriff of Manila,36 decided prior to the enactment of the 1997 Rules of Civil Procedure, the Court held:cralawred

There is no question that a judgment or order denying relief under Rule 38 is final and appealable, unlike an order granting such relief which is interlocutory. However, the second part of the above-quoted provision (that in the course of an appeal from the denial or dismissal of a petition for relief, a party may also assail the judgment on the merits) may give the erroneous impression that in such appeal the appellate court may reverse or modify the judgment on the merits. This cannot be done because the judgment from which relief is sought is already final and executor. x x x

The purpose of the rule is to enable the appellate court to determine not only the existence of any of the grounds relied upon whether it be fraud, accident, mistake or excusable negligence, but also and primarily the merit of the petitioner's cause of action or defense, as the case may be. If the appellate court finds that one of the grounds exists and, what is of decisive importance, that the petitioner has a good cause of action or defense, it will reverse the denial or dismissal, set aside the judgment in the main case and remand the case to the lower court for a new trial in accordance with Section 7 of Rule 38.37 (Citations omitted)

The 1997 Rules of Civil Procedure changed the nature of an order of denial of a petition for relief from judgment, making it unappealable38 and, hence, assailable only via a petition for certiorari.39 Nevertheless, the appellate court, in deciding such petitions against denials of petitions for relief, remains tasked with making a factual determination, i.e., whether or not the trial court committed grave abuse of discretion in denying the petition. To do so, it is still obliged, as Service Specialists instructs, to "determine not only the existence of any of the grounds relied upon whether it be fraud, accident, mistake or excusable negligence, but also and primarily the merit of the petitioner's cause of action or defense, as the case may be."40 Stated otherwise, the finality of the RTC decision cannot bar the appellate court from determining the issues raised in the petition for relief, if only to determine the existence of grave abuse of discretion on the part of the trial court in denying such petition. While a Rule 38 Petition does not stay the execution of the judgment,41 the grant thereof reopens the case for a new trial;42 and thus, if merit be found in Dana's certiorari petition assailing the trial court's denial of her petition for relief, the case will be reopened for new trial.

The CA, therefore, erred in refusing to reopen Dana's petition on the basis of the finality of the trial court decision."

DANA S. SANTOS, PETITIONER, v. LEODEGARIO R. SANTOS, RESPONDENT.

G.R. No. 214593, July 17, 2019.

https://www.chanrobles.com/cralaw/2019julydecisions.php?id=510