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RepublicofthePhilippines
SUPREMECOURT
Manila

THIRDDIVISION

G.R.No.174411July2,2014

CITYOFDAGUPAN,representedbytheCITYMAYORBENJAMINS.LIM,Petitioner,
vs.
ESTERF.MARAMBA,representedvyherATTORNEYINFACTJOHNNYFERRER,Respondent.

DECISION

LEONEN,J.:

ApetitionforrelieffromjudgmentunderRule38isanequitableremedywhichallowscourtstoreviewajudgment
tainted with neglect bordering on extrinsic fraud. In this case, total damages in the amount of Pl 1 million was
awarded in spite of the evidence on record. The motion for reconsideration of such judgment filed by the legal
officeroftheCityofDagupaninexplicablyomittedtherequirednoticeforhearing.Consideringthedamagethat
wouldbesufferedbythelocalgovernment,suchmistakewassoglaringastoraisesuspicionthatitwascontrived
tofavortheplaintiff.

Weareaskedinthispetition1filedbytheCityofDagupanthroughitsthenmayor,BenjaminS.Lim,to:(1)reverse
theCourtofAppealsdecisionandresolutionand(2)declarethatthedamagesawardedtorespondentEsterF.
Maramba are excessive. Petitioner, thus, prays that this court affirm the trial courts August 25, 2005 and
November 30, 2005 rulings in toto.2 Respondent Ester F. Maramba was a grantee of a Department of
Environment and Natural Resources (DENR) miscellaneous lease contract3 for a 284squaremeter property in
Poblacion, Dagupan City, for a period of 25 years.4 Sometime in 1974, she caused the construction of a
commercialfishcenterontheproperty.5

On December 20, 2003, petitioner city caused the demolition of the commercial fish center, allegedly without
givingdirectnoticetoMarambaandwiththreatoftakingovertheproperty.6ThispromptedMaramba,throughher
attorneyinfact,JohnnyFerrer,tofileacomplaintforinjunctionanddamageswithprayerforawritofpreliminary
injunctionand/ortemporaryrestrainingorder.7

The complaint alleged that the demolition was unlawful and that the "complete demolition and destruction ofthe
previouslyexistingcommercialfishcenterofplaintiffisvaluedatFiveMillion(P10,000,000.00)pesos."8Theword,
"ten,"washandwrittenontopoftheword,"five."

In the complaints prayer, Maramba asked for a judgment "ordering defendant corporation to pay plaintiff the
amount of Ten Thousand (P10,000.00) pesos for the actual and present value of the commercial fish center
completelydemolishedbypublicdefendant."9Theword,"million,"washandwrittenontopoftheword,"thousand,"
andanadditionalzerowashandwrittenattheendofthenumericalfigure.

Thehandwrittenintercalationwasnotexplainedinanypartoftherecordsandintheproceedings.

Shealsoprayedfor5millionasmoraldamagesand500,000.00asattorneysfees.10

On July 30, 2004, the trial court decision,11 penned by Judge Crispin C. Laron, ruled in favor of Maramba and
awarded10millionasactualdamages:

WHEREFORE,judgmentisrenderedinfavoroftheplaintiffandagainstthedefendantasfollows:

1.OrderingthedefendantCityofDagupantopaytheplaintifftheamountofTenMillion(10M)Pesosforthe
actualandpresentvalueofthecommercialfishcenterwhichwascompletelydemolished

2.OrderingthepublicdefendanttopayPhp500,000.00asmoraldamages

3.OrderingthedefendanttopayplaintifftheamountofPhp500,000.00asattorneysfees
4.Orderingthepublicdefendanttopaythecostofsuitand

5.Thewritofpreliminaryinjunctionismadepermanent.12

OnAugust26,2004,petitionercityfiledamotionforreconsideration.Marambafiledanoppositionontheground
thatthemotionwasnotsetforhearing.Theoppositionprayedthatthemotionbestrickenofftherecords.13

OnOctober21,2004,thetrialcourtdeniedpetitionercitysmotionforlackofnoticeoftimeandplaceofhearing,
thus, "the motion for reconsideration is not entitled to judicial cognizance."14 In a separate order on the same
date, the trial court also granted Marambas motion for execution and ordered that "a writ of execution [be]
issue[d]intheaboveentitledcaseuponsubmissionofthecertificateoffinality."15

PetitionercitythenfiledapetitionforreliefwithprayerforpreliminaryinjunctiondatedOctober29,2004,together
with an affidavit of merit.16 The city alleged that "the decision, were it not for the City Legal Officers mistake,
negligence and gross incompetence, would not have been obtained by the plaintiff, or should have been
reconsidered or otherwise overturned, the damage award in the total amount of P11M being not only
unconscionableandunreasonable,butcompletelybaseless."17

On November 18, 2004, the trial court denied petitioner citys petition for relief and ordered that the writ
ofexecutiondatedOctober26,2004beimplemented.18Thecourtstressedthat"[t]henegligenceofcounselbinds
theclient."19Petitionercityfiledforreconsideration.20

On August 25, 2005, the trial court, through acting Judge Silverio Q. Castillo, granted the petition for relief and
consequently modified its July 30, 2004 decision. It reduced the award ofactual damages from 10 million to
P75,000.00:

WHEREFORE,inthehighestinterestofjusticeandequity,thepetitionforrelieffromjudgmentisherebygranted.
Consequently,theDecisionisaccordinglymodified.

TheamountofactualdamagesisherebyreducedfromTenMillionPesostoP75,000.00.

"(O)neisentitledtoanadequatecompensationforsuchpecuniarylosssufferedbyhimasdulyproved.(Article
2199,CivilCode)

Inthiscase,theplaintiffEsterMarambawasonlyabletoprovetheamountofP75,000.00astheappraisedvalue
oftheimprovementsmadeontheleasedpremises.

She was not able to show proof of the P5 million amount of improvements made on the establishment, as she
wasclaimingtohavebeenmade.

Too,shedidnotshowanysinglereceiptforhertravellingexpensesandforthecarrentalshemadeduringher
stayinthecountryforthepurposeofprosecutingthiscase.

"Itisnecessaryforapartyseekingtheawardofactualdamagestoproducecompetentprooforthebestevidence
obtainabletojustifysuchaward."(Peoplev.Caraig,400SCRA67).

TheSupremeCourthasheldinalotofcasesthat"documentaryevidenceshouldbepresentedtosubstantiatea
claimfordamages"

Anentthemoraldamages,thesameisherebyreducedfromP500,000.00toP20,000.00.

"Moraldamagesarenotpunitiveinnatureandwereneverintendedtoenrichtheclaimantattheexpenseofthe
defendant."(Samson,Jr.v.BankofthePhilippineIslands,405SCRA607).

TheawardofattorneysfeesislikewisereducedfromP500,000.00toP20,000.00.

"Theamountofdamagesawardedshouldnotbepalpablyandscandalouslyexcessiveastoindicatethatitwas
the result of prejudice or corruption on the part of the trial court. (Cathay Pacific Airways, Ltd. v. Vasquez, 399
SCRA207).

Consequently,theWritofExecutionisherebyrecalled.

Notifypartiesandtheircounsel.

SOORDERED.21

Aggrievedbythisorderandthesubsequentdenialofhermotionforreconsideration,Marambafiledapetitionfor
certiorari before the Court of Appeals. She argued that Judge Castillo"acted without jurisdiction as he ha[d] no
authorityorlegalpowertosubstantiallyamendorcorrectafinalandexecutoryjudgment...."22Moreover,Judge
Castillo gravely abused his discretion "in granting the petition for relief filed by the other respondent city of
Dagupanonthe83rddayfromreceiptofthejudgmentor26dayslate."23

On June 15, 2006, the Court of Appeals24 granted Marambas petition for certiorari. It held that petitioner citys
motionforreconsiderationlackedanoticeofhearingandwasamerescrapofpaper25thatdidnottolltheperiod
toappeal.Consequently,theJuly30,2004decisionpennedbyJudgeLaronbecamefinalandexecutory.26 The
CourtofAppealsalsodeniedreconsideration,27promptingpetitionercitytoelevatethecasebeforethiscourt.

PetitionercityemphasizesthatitsmotionforreconsiderationoftheJuly30,2004decisionwastimelyfiled,tolling
the prescriptive period to appeal. Since this decision was not yet final, its subsequent modification by the trial
courtwasproper.28Thelackofnoticeofhearinginthemotionforreconsiderationwasduetocounselsoversight,
andadenialofthemotiononthisgroundalonesacrificedsubstantialrightsformeretechnicalities.29Petitionercity
alsocitesjurisprudenceonthesuspensionofproceduralruleswhenitsstrictapplicationwouldonlyresultingrave
injustice.30

Petitioner city agrees that "judgments must be final at some definite date," but Rule 38 also provides for relief
from judgments, orders, and other proceedings.31 It submits that it raised substantial issues in its motion for
reconsiderationsuchastheexcessivedamagesawardedbythelowercourtinitsJuly30,2004decision.32 The
petition for relief was correctly granted as "counsels mistake amounted to extrinsic fraud"33 and "to give the
plaintiff much more than it was able to prove and allow the faulty decision to be implemented is, truly, a
deprivationofdefendantofitspropertywithoutdueprocess."34

PetitionercitycontendsthatthemodificationoftheJuly30,2004decisionwaswellestablishedinthatonlyduly
provenpecuniarylossmaybeawarded.35Marambawasonlyabletoprove75,000.00astheappraisedvalueof
the improvements made on the property.36 According to petitioner city, "the proper amount ofdamages then
should not be Five Million Pesos (5,000,000.00) as alleged in the complaint, nor Ten Million Pesos
(10,000,000.00)asrequestedintheprayerofthecomplaintbutonlySeventyfiveThousandPesos(75,000.00)
asembodiedinthecontractuponwhichMrs.Marambabasedherclaim,theMiscellaneousLeaseAgreement."37
Infact,thecommercialfishcentermadeofmereG.I.sheetsandlightmetalbarswasconstructedaround1998,
anditsvaluewouldhavedepreciatedovertime.38

Lastly,petitionercityarguesthatitspetitionforreliefwasfiledontime.OnAugust11,2004,itreceivedacopyof
the July 30, 2004 decision penned by Judge Laron. On August 26,2004, petitioner filed its motion for
reconsideration. On October 25, 2004, it received a copy of the October 21, 2004 trial court order denying its
motionforreconsideration.FourdayslateroronOctober29,2004,itfileditspetitionforrelieffromjudgment.

On the other hand, Maramba maintains that petitioner city is bound by the mistake of its counsel in failing
toinclude a notice of hearing in its motion for reconsideration. This is not excusable negligence that warrants
relaxationoftherules.39

Maramba submits that the Court ofAppeals correctly sustained the award of damages in the July 30, 2004 trial
court decision. Since a special civil action for certiorari was brought before the Court of Appeals, it correctly
refrained from resolving factual questions.40 Petitioner city then elevated this case on Rule 45, thus, only
questionsoflawmayberaised.41

Maramba adds that petitioner city "failed to nail down in the crossexamination, during the trial of private
respondent (plaintiff) and her witness (Johnny Ferrer) on the witness stand after their direct testimony on the
damagessustained."42

TheJuly30,2004decisionwasfinalandexecutoryandcannotbeamendedevenifthecourtlaterdiscoversthat
itsdecisionwaserroneous.43

Inanycase,insteadofmerelyamendingtheJuly30,2004decision,actingjudgeshouldhaveproceededasifa
motion for new trial had been granted.44 This way, "evidence of the damages claimed would have to be taken
anewandofferedbybothparties,andsuchevidenceontheissueofdamageswouldthenbecompletebeforethe
appellatecourt...."45

Lastly,Marambaarguesthatshewasequallydeprivedofdueprocesswhenactingjudgeofthetrialcourtgranted
petitionercityspetitionforreliefwithoutconductingahearing.46

Thefollowingissuesareforresolution:

I.Whetherthelackofnoticeofhearinginamotionforreconsiderationisexcusablenegligencethatallows
thefilingofapetitionforreliefofjudgment
II.Whetherthe60dayperiodtofileapetitionforrelieffromjudgment,whenreckonedfromreceiptofthe
denialofthemotionforreconsideration,isconsideredfiledontime

III.WhethertheCourtofAppealserredinrulingthatcourtshavenolegalpowertoamendorcorrectafinal
judgmentevenifitlaterfindsthatitsdecisioniserroneousand

IV.Whetheractualdamagesmustbesubstantiatedinordertobeawarded.

Petitioner city does not deny that its motion for reconsideration lacked a notice of hearing. It offered no
explanationforthislapse,exceptforoversightbyitsthencounsel.

Petitionercitysubmitsthatthisisexcusablenegligencebycounsel,warrantingitsfilingofapetitionforrelieffrom
judgment under Rule 38 of the Rules of Court. Thus, the Court ofAppeals erred in finding grave abuse of
discretionbythetrialcourtingrantingthecityspetition.Marambacountersthatthelackofnoticeofhearingisnot
excusablenegligencethatwarrantsrelaxationoftherules.47

Maramba also cites Dorotheo v. Court of Appeals,48 International School, Inc. v. Minister of Labor and
Employment,49Florentinov.Rivera,50andMoneytrendLendingCorporationv.CourtofAppeals51 to support her
positionthatcourts"havenolegalpowertoamendorcorrectafinaljudgmentevenifitlaterfindsthatitsdecision
iserroneous."52

TheJuly30,2004decisionwassetasidewhenthetrialcourtgrantedpetitionercitysmotionforreconsideration
ofthedenialofitspetitionforrelieffromjudgment.53WhiletheCourtofAppealsfoundgraveabuseofdiscretion
bythetrialcourtinissuingthisAugust25,2005ordergrantingthepetitionforreliefonreconsideration,theCourt
ofAppealsdecisionwastimelyappealedbeforethiscourt.Thus,thereisnofinalandexecutorydecisionyet.

Inanycase,notwithstandingthedoctrineofimmutabilityofjudgments,thiscourthassetasideproceduralrulesin
"[t]hebroaderinterestsofjusticeandequity."54

Lackofnoticeinthemotionforreconsideration

MarambacitesLandBankv.Natividad.55Inthiscase,thetrialcourtorderedtheDepartmentofAgriculture(DA)
and Land Bank to pay just compensation for the lands owned by private respondents. DA and Land Bank filed
separatemotionsforreconsideration,buttheseweredeniedforlackofnoticeofhearing.

LandBankfiledapetitionforrelieffromorderonthegroundofexcusablenegligencebyitscounselwho"simply
scanned and signed the Motion for Reconsideration for Agrarian Case No. 2005, Regional Trial Court of
Pampanga, Branch 48, not knowing, or unmindful that it had no notice of hearing"56 because of his heavy
workload.Thiswasdenied,promptingLandBanktoelevatethecasetothiscourt.

This court denied Land Banks petition as the reasons given by counsel for his failure to include a notice of
hearing in the motion for reconsideration were not considered excusable negligence. Nevertheless, this court
resolvedtheotherissuesLandBankraisedinitspetitionsuchasthequestionofjustcompensationandprivate
respondentsallegedfailuretoexhaustadministrativeremedies.

But in Jehan Shipping Corporation v. National Food Authority,57 this court affirmed the Court of Appeals and
focusedonwhetherthepurposeofanoticeofhearinginamotionforreconsiderationwasmet.58

InJehan,thetrialcourtorderedrespondentNationalFoodAuthority(NFA)topayJehantheamountsitclaimed
asfreightservicesandotherexpenses.TheNFAreceivedacopyofthedecisiononOctober1,2001,whileJehan
filedamotionforexecutionpendingappealonOctober2,2001.TheNFAlaterfiledamotionforreconsideration
onOctober16,2001andasupplementalmotionforreconsiderationonNovember12,2001.Jehanfiledseparate
oppositionstobothmotions.Ahearingwassetforthemotionsfiled,buttheNFAscounselfailedtoappear.On
January8,2002,thetrialcourtdeniedNFAsmotionsforlackofnoticeofhearing.TheCourtofAppealsruledin
favoroftheNFA.ItheldthateveniftheNFAsmotionlackedanoticeofhearing,Jehanscounselwasstillableto
refutethesubstantialissuesraisedinthemotionsinitsoppositionstothemotions.Thiscourtaffirmedthisruling
anddiscussedthepurposebehindthenoticeofhearingrequirementasfollows:

This Court has indeed held time and time again that, under Sections 4 and 5 of Rule 15 of the Rules of Court,
mandatory is the notice requirement in a motion, which is rendered defective by failure to comply with the
requirement. As a rule, a motion without a notice of hearing is considered pro formaand does not affect the
reglementaryperiodfortheappealorthefilingoftherequisitepleading.

Asanintegralcomponentofproceduraldueprocess,thethreedaynoticerequiredbytheRulesisnotintended
forthebenefitofthemovant.Rather,therequirementisforthepurposeofavoidingsurprisesthatmaybesprung
upon the adverse party, who must be given time to study and meet the arguments in the motion before a
resolutionbythecourt.Principlesofnaturaljusticedemandthattherightofapartyshouldnotbeaffectedwithout
givingitanopportunitytobeheard.
The test is the presence of the opportunity to be heard, as well as to have time to study the motion and
meaningfully oppose or controvert the grounds upon which it is based.Considering the circumstances of the
presentcase,webelievethattherequirementsofproceduraldueprocessweresubstantiallycompliedwith,and
that the compliance justified a departure from a literal application of the rule on notice of hearing.59 (Emphasis
supplied, citations omitted) This court held that "when the adverse party has actually had the opportunity to be
heard,andhasindeedbeenheardthroughpleadingsfiledinoppositiontothemotion,thepurposebehindtherule
isdeemeddulyserved."60

JehanwasquotedwithapprovalinPreysler,Jr.v.ManilaSouthcoastDevelopmentCorporation.61InPreysler,this
courtruledthat"aliberalconstructionoftheproceduralrulesisproperwherethelapseintheliteralobservanceof
aruleofprocedurehasnotprejudicedtheadversepartyandhasnotdeprivedthecourtofitsauthority."62

Marambawasabletofileanoppositiontopetitionercitysmotionforreconsiderationonthegroundthatthemotion
wasnotsetforhearing.Theoppositionprayedthatthemotionbestrickenofftherecords.63

Initsonepageopposition,Marambadidnotaddressthesubstantiveissuesraisedbypetitionercityinitsmotion
for reconsideration such as the excessive award of actual damages.64 Nevertheless, this opposition was an
opportunitytobeheardforMarambaonthemattersraisedbypetitionercityinitsmotionforreconsideration.

Thiscourthasrelaxedproceduralruleswhenarigidapplicationoftheserulesonlyhinderssubstantialjustice.65

In Sy v. Local Government of Quezon City,66 Sys counsel filed the motion for reconsideration one day late. He
explainedthat"hissecretarysinadvertentplacingofthedateJanuary27,2012,insteadofJanuary26,2012,on
theNoticeofDecisionconstitutesexcusablenegligencewhichshouldtherefore,justifyarelaxationoftherules."67

Thiscourtrelaxedproceduralrulestogivewaytosubstantialjustice:

Bethatasitmay,proceduralrulesmay,nonetheless,berelaxedforthemostpersuasiveofreasonsinorderto
relievealitigantofaninjusticenotcommensuratewiththedegreeofhisthoughtlessnessinnotcomplyingwiththe
procedureprescribed.Corollarily,therule,whichstatesthatthemistakesofcounselbindtheclient,maynotbe
strictlyfollowedwhereobservanceofitwouldresultintheoutrightdeprivationoftheclientslibertyorproperty,or
wheretheinterestofjusticesorequires.

Asappliedinthiscase,theCourtfindsthattheproceduralconsequenceoftheabovediscussedonedaydelayin
thefilingofthesubjectmotionwhich,asamatterofcourse,shouldrendertheCAsJanuary20,2012Decision
alreadyfinalandexecutoryandhence,bartheinstantpetitionisincommensuratetotheinjusticewhichSymay
suffer.ThisisinlinewiththeCourtsobservationthattheamountofjustcompensation,therateoflegalinterest,
as well as the time of its accrual, were incorrectly adjudged by both the RTC and the CA, contrary to existing
jurisprudence. In this respect, the Court deems it proper to relax the rules of procedure and thus, proceed to
resolvethesesubstantiveissues.68(Citationsomitted.)

InUnitedAirlinesv.Uy,69thenoticeofappealwasfiledtwodayslate,andnoreasonwasgivenbyrespondents
counselforthedelay.Thiscourtstillgaveduecoursetotheappeal"duetotheuniqueandpeculiarfactsofthe
caseandtheseriousquestionoflawitposes."70Itdiscussedthat"technicality,whenitdesertsitsproperofficeas
anaidtojusticeandbecomesitsgreathindranceandchiefenemy,deservesscantconsideration."71

InSamalav.CourtofAppeals,72thenoticeofappealwasfiledonedaylatebecausetheoneentrustedtofileit
sufferedfromstomachpains.Thiscourtconsideredthisasexcusablenegligence:

We said that the general aim of procedural law is to facilitate the application of justice to the rival claims of
contendingparties,bearinginmindthatproceduralrulesarecreatednottohinderordelaybuttofacilitateand
promotetheadministrationofjustice.Inrenderingdecisions,courtsmustnotbetoodogmatic.Acompleteview
mustbetakeninordertorenderajustandequitablejudgment.Itisfarbettertodisposeofacaseonthemerits,
whichisaprimordialend,thanontechnicalitythatmayresultininjustice.

The rules of procedure are mere tools designed to facilitate the attainment of justice. Their strictand rigid
applicationespeciallyontechnicalmatters,whichtendstofrustrateratherthanpromotesubstantialjustice,must
beavoided.EventheRevisedRulesofCourtenvisionthisliberality.Technicality,whenitdesertsitsproperoffice
as an aid to justice and becomes its great hindrance and chief enemy, deserves scant consideration from the
courts.(Citationsomitted.)73

In this case, petitioner city received a copy of the trial courts July 30, 2004 decision on August 11, 2004.74 Its
motionforreconsiderationfiledonAugust26,2004wasfiledwithinthe15dayperiod.Thepurposesbehindthe
requirednoticeofhearingprovidethetimetostudythemotionforreconsiderationandgiveanopportunitytobe
heardweresatisfiedwhenMarambafiledanoppositiontothemotion.

Mistakeborderingonextrinsicfraud
Rule38oftheRulesofCourtallowsfortheremedycalledapetitionforrelieffromjudgment.Thisisanequitable
remedy"allowedinexceptionalcaseswhenthereisnootheravailableoradequateremedy"75thatwillallowfor
substantivejustice.

Section1ofRule38providesforthegroundsthatwarrantthefilingofapetitionunderRule38:

SECTION 1. Petition for relief from judgment, order, or other proceedings. When a judgment or final order is
entered,oranyotherproceedingisthereaftertakenagainstapartyinanycourtthroughfraud,accident,mistake,
or excusable negligence, he may file a petition in such court and in the same case praying that the judgment,
orderorproceedingbesetaside.(Emphasissupplied)

Courtsmaysetasidefinalandexecutoryjudgmentsprovidedthatanyofthegroundsfortheirgrantarepresent.

Thepresenceof"fraud,accident,mistakeorexcusablenegligence"mustbeassessedfromthecircumstancesof
thecase.

Excusablenegligenceasagroundforapetitionforreliefrequiresthatthenegligencebesogross"thatordinary
diligenceandprudencecouldnothaveguardedagainstit."76Thisexcusablenegligencemustalsobeimputable
tothepartylitigantandnottohisorhercounselwhosenegligencebindshisorherclient.77Thebindingeffectof
counsels negligence ensures against the resulting uncertainty and tentativeness of proceedings if clients were
allowedtomerelydisowntheircounselsconduct.78

Nevertheless, this court has relaxed this rule on several occasions such as: "(1) where [the] reckless or gross
negligence of counsel deprives the client of due process of law (2) when[the rules] application will result in
outrightdeprivationoftheclientslibertyorpropertyor(3)wheretheinterestsofjusticesorequire."79Certainly,
excusablenegligencemustbeproven.

Fraud as a ground for a petition for relief from judgment pertains to extrinsic or collateral fraud.80 This court
explainedthistypeoffraudasfollows:

Where fraud is the ground, the fraud must be extrinsic or collateral. The extrinsic or collateral fraud that
invalidatesafinaljudgmentmustbesuchthatitpreventedtheunsuccessfulpartyfromfullyandfairlypresenting
his case or defense and the losing party from having an adversarial trial of the issue. There is extrinsic fraud
when a party is prevented from fully presenting his case to the court as when the lawyer connives to defeat or
corruptlysellsouthisclientsinterest.Extrinsicfraudcanbecommittedbyacounselagainsthisclientwhenthe
latterispreventedfrompresentinghiscasetothecourt.(Citationsomitted)81

Ontheotherhand,mistakeasusedinRule38meansmistakeoffactandnotmistakeoflaw.82Awrongchoicein
legalstrategyormodeofprocedurewillnotbeconsideredamistakeforpurposesofgrantingapetitionforrelief
fromjudgment.83 Mistake as a ground also "does not apply and was never intended to apply to a judicial error
whichthecourtmighthavecommittedinthetrial[since]sucherrormaybecorrectedbymeansofanappeal."84

Mistakecanbeofsuchnatureastocausesubstantialinjusticetooneoftheparties.Itmaybesopalpablethatit
bordersonextrinsicfraud.

Petitioner city recounted the "mistakes, negligence, incompetence and suspicious acts/omissions"85 of city legal
officerAtty.RoyS.LafortezaintheaffidavitofmeritsignedbythenMayor,BenjaminS.Lim:

a)Hedidnotpresenttestimonialevidenceforthedefense

b)HefiledaMotionforReconsiderationofadecisionmostprejudicialtotheCityonthelastday,anddid
notevenbasehisargumentsonthetranscriptsthatclearlyshowthattheplaintiffhadpresentedabsolutely
noevidence/proofofherclaimfordamagesandattorneysfeesalso,hedidnotdirectlyattacktheDecision
itself,whichawardedP10MasactualdamagesandP500,000.00asattorneysfeeswithoutstatingclearly
anddistinctlythefactsonwhichtheawardsarebased(becausethereareactuallynosuchfacts).

c)Hefiledamotionforreconsiderationwithouttherequisitenoticeofhearinghismostgrievousandfatal
error.ThisresultedinthefinalityoftheDecision,andtheissuanceoftheOrderofExecution.

d)Hekepttheadversedecision,thedenialofhisMotionforReconsiderationandtheOrderofExecution
from this affiant, his immediate superior, and relied on his own devices (several times, he received but
completely ignored the advice and the reminder of the City Administrator that he should consult and
coordinate with the Citys legal consultant, Atty. Francisco F. Baraan III) despite the already precarious
situation he put the City in. As I said, I was informed of the order of execution by another lawyer.86
(Emphasissupplied)

Atty.Lafortezas"mistake"wasfatalconsideringthatthetrialcourtawardedatotalamountofP11millioninfavor
ofMarambabasedmerelyonhertestimonythat"theactualcostofthebuildingthroughcontinuousimprovement
is Five Million (5M) more or less"87 that her husband spent $1,760 for a round trip business travel to the
Philippines to attend to the case and that "for his accommodation and car rental, her husband spent more or
less,P10,000.00includingroundtripticket."88

First, nowhere in the trial courts July 30, 2004 decision penned by Judge Laron did it state or refer to any
documentpresentedbyMarambatosubstantiateherclaimedcosts.Infact,theamountsshetestifiedondidnot
evenadduptotheP10millionthecourtawardedasactualdamages.

On the other hand, the August 25, 2005 trial court decision penned by Judge Castillo discussed that
"MarambawasonlyabletoprovetheamountofP75,000.00astheappraisedvalueoftheimprovementsmadeon
theleasedpremises."89Therenewalleaseagreementcoveringtheproperty,signedbyMaramba,clearlystated
thisamount.90ThedecisionalsoexplainedthatMaramba"wasnotabletoshowproofofthe5millionamountof
improvementsmadeontheestablishment,asshewasclaimingtohavebeenmade[,]"91 and "she did not show
anysinglereceiptforhertravelingexpensesandforthecarrentalshemadeduringherstayinthecountryforthe
purposeofprosecutingthiscase."92

Second,thebodyofthetrialcourtsJuly30,2004decisionmentionedthatMarambawasentitledto1millionas
moral damages and P500,000.00 as attorneys fees.93 This is inconsistent with the dispositive portion that
awardedP500,000.00asmoraldamagesandP500,000.00asattorneysfees.94

The affidavit of merit discussed thatMaramba testified on her shock, sleepless nights, and mental anguish, but
sheneverexpresslyaskedformoraldamagesorspecifiedtheamountofP500,000.00.95

Ontheamountofattorneysfees,theaffidavitofmeritexplainedthatMarambadidnotshowalegalretainerbut
onlymentionedinpassing,"Ofcourse,(Iamaskingfor)myattorneysfeesintheamountofP500,000.00."96

Maramba now wants this court to overlook all these blatant discrepancies and maintain the P11 million
unsubstantiatedawardinherfavoronthesolegroundthatpetitionercitysassistantlegalofficerfailedtoinclude
anoticeofhearinginitsmotionforreconsiderationthatwasfiledwithinthe15dayreglementaryperiod.Shedid
not even attempt to address the lower courts findings that her claimed amounts as damages were all
unsubstantiated.

The gross disparity between the award of actual damages and the amount actually proved during the trial, the
magnitudeoftheaward,thenatureofthe"mistake"made,andthatsuchnegligencedidnotpersonallyaffectthe
legal officer of the city all contributed to a conclusion that the mistake or negligence committed by counsel
borderedonextrinsicfraud.

Therewerediscrepancyandlackofproofevenontheamountofmoraldamagesandattorneysfeesawarded.
ThisonlyheightenedasenseofarbitrarinessinthetrialcourtsJuly30,2004decision.Petitionercityspetitionfor
reliefwascorrectlygrantedinthetrialcourtsAugust25,2005decision.

PetitionercityfollowedtheprocedureunderRule38oftheRulesofCourt.Section4ofRule38providesthat"[i]f
the petition is sufficient in form and substance to justify relief, the court in which it is filed, shall issue an order
requiringtheadversepartiestoanswerthesamewithinfifteen(15)daysfromthereceiptthereof."

ThetrialcourtmentionedinitsNovember18,2004orderdenyingpetitionercityspetitionforrelieffromjudgment
that an answer with motion to dismiss was filed before it.97 Maramba prayed that the "petition for review be
outright denied for lack of merit [and] that the writ of execution dated October 26, 2004 be accordingly
implemented."98

Thus,therequirementunderSection4ofRule38wascompliedwithwhenMarambafiledananswerwithmotion
to dismiss, and the court considered this pleading in its resolution of petitioner citys petition for relief from
judgment.

PeriodsforfilingapetitionforreliefunderRule38

ThetimeforfilingapetitionforreliefisfoundunderSection3,Rule38oftheRulesofCourt,whichreads:

SEC. 3 Time for filing petition contents and verification. A petition provided for in either of the preceding
sectionsofthisRulemustbeverified,filedwithinsixty(60)daysafterthepetitionerlearnsofthejudgment,final
order,orotherproceedingtobesetaside,andnotmorethansix(6)monthsaftersuchjudgmentorfinalorder
was entered, or such proceeding was taken and must be accompanied with affidavits showing the fraud,
accident, mistake or excusable negligence relied upon, and the facts constituting the petitioners good and
substantialcauseofactionordefense,asthecasemaybe.(Emphasissupplied)

Thedoubleperiodrequiredunderthisprovisionisjurisdictionalandshouldbestrictlycompliedwith.99Otherwise,a
petitionforrelieffromjudgmentfiledbeyondthereglementaryperiodwillbedismissedoutright.100
The 60day period to file a petition for relief from judgment is reckoned from actual receipt of the denial of the
motionforreconsiderationwhenoneisfiled.101

Petitioner city received a copy of the July 30, 2004 decision on August 11, 2004. It filed a motion for
reconsiderationonAugust26,2004.OnOctober25,2004,itreceivedacopyoftheOctober21,2004trialcourt
orderdenyingitsmotionforreconsideration.FourdayslateroronOctober29,2004,itfileditspetitionforrelief
fromjudgment.Thus,thepetitionforrelieffromjudgmentwasconsideredfiledontime.

Actualdamages

TheissueontheamountofdamagesisafactualquestionthatthiscourtmaynotresolveinaRule45petition.102
However,thisruleadmitsofrecognizedexceptions:

Therecognizedexceptionstothisruleare:(1)whentheconclusionisafindinggroundedentirelyonspeculation,
surmiseandconjecture(2)whentheinferencemadeismanifestlymistaken(3)whenthereisagraveabuseof
discretion (4) when the judgment is based on a misapprehension of facts (5) when the findings of fact are
conflicting(6)whentheCourtofAppealswentbeyondtheissuesofthecaseanditsfindingsarecontrarytothe
admissionsofbothappellantandappellee(7)whenthefindingsoffactoftheCourtofAppealsarecontraryto
those of the trial court (8) when said findings of fact are conclusions without citation of specific evidence on
whichtheyarebased(9)whenthefactssetforthinthepetitionaswellasinthepetitionersmainandreplybriefs
arenotdisputedbytherespondentsand(10)whenthefindingsoffactoftheCourtofAppealsarepremisedon
thesupposedabsenceofevidenceandcontradictedbytheevidenceonrecord.(Sarmientov.CourtofAppeals,
353Phil.834,846[1998]).103(Emphasissupplied)

TheJuly30,2004trialcourtdecisionpennedbyJudgeLarononlysummarizedMarambastestimonyasbasisfor
itsawardof10millionasactualdamages:

Sheaskedherhusbandtohelpheronherlegalproblemregardingthedemolishedfishmarket,tellinghimtogo
tothePhilippinesandfindoutwhathappenedandhelpherfamily.HerhusbandcametothePhilippines.Heleft
onDecember30,2003andarrivedonDecember31,2003.HerhusbandstayedinthePhilippinesfortwentyone
(21)daysandpaid1,760dollarsforthebusinessclassroundtripfare.Forhisaccommodationandcarrental,her
husband spent more or less Php10,000.00 including the round trip ticket. She has been in possession of that
propertysubjectofthiscaseformorethanthirtytwo(32)yearsandforthedurationofmorethan32yearsthat
they are in possession of the property, she spent for the construction and improvement of the building and the
actual cost of the building through continuous improvement is Five Million (5M) more or less. The amount of
Php75,000.00washerexpensesincurredfortheyear1972.Duetohersufferings,sheaskedtheCourtformoral
damages in the amount of Ten Million (10M) pesos for the damages, attorneys fees in the amount of
Php500,000.00andallthoseexpensesincurredincomingtothePhilippinestogetherwithherhusbandtoseek
redress,theyspent1,760dollarstimestwo(18TSNMarch9,2004)(Emphasissupplied).104

On the other hand, in the August 25, 2005 order penned by Judge Castillo, the court explained that "Maramba
was only able to prove the amount of P75,000.00 as the appraised value of the improvements made on the
leasedpremises."105

Initspetitionfiledbeforethiscourt,petitionercityattachedacopyofthemiscellaneousleaseagreementbetween
MarambaandtheDENRwhichprovides:

THIRDItisherebyunderstoodandagreedthattheappraisedvalueofthelandforthefirstten(10)years,from
May13,1998,isP400.00persquaremeterorP13,600.00forthewholetractoflandandtheappraisedvalueof
theimprovementsexistingonthelandandthoseproposedtobeintroducedthereonisP75,000.00.106(Emphasis
supplied)

Article2199oftheCivilCodedefinesactualdamages.Itstatesthat"[e]xceptasprovidedbylaworbystipulation,
one is entitled to an adequate compensation only for such pecuniary loss suffered by him as he has duly
proven."107 Competent proof of the amountclaimed as actual damages is required before courts may grant the
award:

Actual damages, to be recoverable, must not only be capable of proof, but must actually be proved with a
reasonabledegreeofcertainty. Courtscannotsimplyrelyonspeculation,conjectureorguessworkindetermining
1 w p h i1

thefactandamountofdamages.Tojustifyanawardofactualdamages,theremustbecompetentproofofthe
actualamountofloss,credencecanbegivenonlytoclaimswhicharedulysupportedbyreceipts.108

Petitionercityemphasizedtheargumentitmadeinitsmotionforreconsiderationthat"theimprovementsallegedly
destroyedordamagedconsists[sic]onlyofG.I.sheetsandsomemakeshiftstallsusedforbuyingandsellingof
fisheryproducts[and][b]ynostretchofimaginationwouldsaidmaterialsamounttoPhp10,000,000.00asclaimed
bytheplaintiff."109Consideringtheforegoing,substantialjusticewarrantsthegrantofthepetition.
WHEREFORE, the petition is GRANTED. The Court of Appeals June 15, 2006 decision and August 14, 2006
resolutionareREVERSEDandSETASIDE.ThetrialcourtordersdatedAugust25,2005andNovember30,2005
areAFFIRMED.

MARVICMARIOVICTORF.LEONEN
AssociateJustice

WECONCUR:

PRESBITEROJ.VELASCO,JR.
AssociateJustice
Chairperson

DIOSDADOM.PERALTA MARTINS.VILLARAMA,JR.*
AssociateJustice AssociateJustice

JOSECATRALMENDOZA
AssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assignedtothewriteroftheopinionoftheCourt'sDivision.

PRESBITEROJ.VELASCO,JR.
AssociateJustice
Chairperson,ThirdDivision

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairperson'sAttestation,Icertifythatthe
conclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterof
theopinionof.theCourt'sDivision.

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes
*
Villarama,Jr.,J,designatedasActingMemberperSpecialOrderNo.1691datedMay22,2014inviewof
thevacancyintheThirdDivision.
1
ThepetitionisfiledpursuanttoRule45oftheRulesofCourt.
2
Rollo,p.38.
3
TheleasecontractiscoveredbyMiscellaneousLeaseApplicationNo.(11)4(EV137).
4
Rollo,p.125.
5
Id.at52and125.
6
Id.at52and125.
7
Id.at49and125.
8
Id.at50.
9
Id.at51.
10
Id.at50.
11
RegionalTrialCourt,Branch44,DagupanCity.
12
Rollo,pp.5758.
13
Id.at62.
14
Id.at70and126.
15
Id.at73.
16
Id.at7482.
17
Id.at74.
18
Id.at84.
19
Id.at83.
20
Id.at8590.
21
Id.at9293.
22
Id.at107.
23
Id.at108.
24
SpecialTenthDivisionpennedbyAssociateJusticeAndresB.Reyes,Jr.andconcurredinbyAssociate
JusticesHakimS.AbdulwahidandVicenteQ.Roxas.
25
Rollo,p.129.
26
Id.at130.
27
Id.at143.
28
Id.at268.
29
Id.
30
Id.at268269.
31
Id.at269.
32
Id.
33
Id.at270.
34
Id.at270,274275.
35
Id.at271.
36
Id.
37
Id.at272.
38
Id.at272273.
39
Id.at229.
40
Id.at234.
41
Id.
42
Id.at235.
43
Id.at236238.
44
Id.at236.
45
Id.
46
Id.at238.
47
Id.at229.
48
377Phil.851(1999)[PerJ.YnaresSantiago,FirstDivision].
49
256Phil.940(1989)[PerJ.Paras,SecondDivision].
50
515Phil.494(2006)[PerJ.YnaresSantiago,FirstDivision].
51
518Phil.134(2006)[PerJ.Garcia,SecondDivision].
52
Rollo,p.236.
53
Id.at9193.
54
Natividadv.Mariano,G.R.No.179643,June3,2013,697SCRA63,76[PerJ.Brion,SecondDivision].
55
497Phil.738(2005)[PerJ.Tinga,SecondDivision].
56
Id.at742.
57
514Phil.166(2005)[PerJ.Panganiban,ThirdDivision].
58
Id.at171and174.
59
Id.at173174.
60
Id.at167.
61
G.R.No.171872,June28,2010,621SCRA636[PerJ.Carpio,SecondDivision].
62
Id. at 642, citing E & L Mercantile, Inc. v. Intermediate Appellate Court, 226 Phil. 299 (1986) [Per J.
Gutierrez,Jr.,SecondDivision].
63
Rollo,p.62.
64
Id.
65
SeeSamalav.CourtofAppeals,416Phil.1(2001)[PerJ.Pardo,FirstDivision].
66
G.R.No.202690,June5,2013,697SCRA621[PerJ.PerlasBernabe,SecondDivision].
67
Id.at629.
68
Id.at630631.
69
376Phil.689(1999)[PerJ.Bellosillo,SecondDivision].
70
Id.at697.
71
Id.
72
416Phil.1(2001)[PerJ.Pardo,FirstDivision].
73
Id.at78.
74
Rollo,p.59.
75
Samalav.CourtofAppeals,416Phil.1,7(2001)[PerJ.Pardo,FirstDivision].
76
Madarang v. Spouses Morales, G.R. No. 199283, June 18, 2014, p. 9 [Per J. Leonen, Third Division],
citingGuevarrav.Bautista,593Phil.20,26(2008)[PerJ.Nachura,ThirdDivision].
77
SpousesQuev.CourtofAppeals,504Phil.616,626(2005)[PerJ.Carpio,FirstDivision],citingInsular
LifeSavingsandTrustCompanyv.Runes,Jr.,479Phil.995(2004)[PerJ.Callejo,Sr.,SecondDivision].
78
SpousesQuev.CourtofAppeals,504Phil.616,626(2005)[PerJ.Carpio,FirstDivision],citingAguilav.
CourtofFirstInstanceofBatangas,BranchI,243Phil.505(1988)[PerJ.Cruz,FirstDivision].
79
SpousesQuev.CourtofAppeals,504Phil.616,626(2005)[PerJ.Carpio,FirstDivision],citingSarraga,
Sr. v. Banco Filipino Savings and Mortgage Bank, 442 Phil. 55 (2002) [Per J. SandovalGutierrez, Third
Division].
80
SyBangv.Sy,604Phil.606,625(2009)[PerJ.ChicoNazario,ThirdDivision],citingGarciav.Courtof
Appeals,279Phil.242,249(1991)[PerJ.Sarmiento,SecondDivision].
81
SyBangv.Sy,604Phil.606,625(2009)[PerJ.ChicoNazario,ThirdDivision].
82
SeeAganv.HeirsofNueva,463Phil.834,836and841(2003)[PerJ.Tinga,SecondDivision].
83
See Samonte v. S.F. Naguiat, G.R. No. 165544, October 2, 2009, 602 SCRA 231, 237 [Per J. Peralta,
ThirdDivision],citingIbabaov.IntermediateAppellateCourt,234Phil.79,8889(1987)[PerJ.Gutierrez,
Jr.,SecondDivision].
84
Samontev.S.F.Naguiat,G.R.No.165544,October2,2009,602SCRA231,238[PerJ.Peralta,Third
Division],citingAganv.HeirsofSps.AndresNuevaandDiosdadaNueva,463Phil.834,841(2003)[PerJ.
Tinga,SecondDivision],citingGuevarav.Tuason&Co,1Phil.27(1901)[PerJ.Willard,EnBanc].
85
Rollo,p.78.
86
Rollo,p.78.
87
Id.at5657.
88
Id.at56.
89
Id.at92.
90
Id.at42.
91
Id.at92.
92
Id.at93.
93
Id.at57.
94
Id.at58.
95
Id.at80.
96
Id.at81.
97
Id.at83.
98
Id.
99
Madarang v. Spouses Morales, G.R. No. 199283, June 18, 2014, p. 6 [Per J. Leonen, Third Division],
citingSpousesReyesv.CourtofAppeals,557Phil.241,248(2007)[PerJ.Garcia,FirstDivision].
100
Madarangv.SpousesMorales,G.R.No.199283,June18,2014,p.6[PerJ.Leonen,ThirdDivision].
101
See Sarraga, Sr. v. Banco Filipino Savings and Mortgage Bank, 442 Phil. 55, 65 (2002) [Per J.
SandovalGutierrez,ThirdDivision].
102
RULESOFCOURT,rule45,sec.1.

Section 1. Filing of petition with Supreme Court. A party desiring to appeal by certiorari from a
judgmentorfinalorderorresolutionoftheCourtofAppeals,theSandiganbayan,theRegionalTrial
Courtorothercourtswheneverauthorizedbylaw,mayfilewiththeSupremeCourtaverifiedpetition
forreviewoncertiorari.Thepetitionshallraiseonlyquestionsoflawwhichmustbedistinctlysetforth.
(Emphasissupplied)
103
Tanv.OMCCarriersInc.,G.R.No.190521,January12,2011,639SCRA471,480[PerJ.Brion,Third
Division],citingSarmientov.CourtofAppeals,353Phil.834,846(1998)[PerJ.Kapunan,ThirdDivision].
104
Rollo,pp.5657.
105
Id.at92.
106
Id.at42.
107
CIVILCODE,art.2199.
108
Tanv.OMCCarriersInc.,G.R.No.190521,January12,2011,639SCRA471,481[PerJ.Brion,Third
Division],quotingVironTransportationCo.,Inc.v.DelosSantos,399Phil.243,255(2000)[PerJ.Gonzaga
Reyes,ThirdDivision],citingMarinaPropertiesCorporationv.CourtofAppeals,355Phil.705(1998)[Per
J.Davide,Jr.,FirstDivision].
109
Rollo,pp.269and60.

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