4. Panay Railways Inc Vs. Heva Management And Development.docx

T. FELARCA Panay Railways Inc v HEVA Management and Development Corp et al. GR No. 154061 – January 25 2012 CJ Sereno DOCTRINES: Procedural Rules and Technicalities Statutes and rules regulating the procedure of courts are applicable to actions pending and unresolved at the time of their passage - Procedural laws and rules are retroactive in that sense and to that extent. The effect of procedural statutes and rules on the rights of a litigant may not preclude their retroactive application to pending actions. This retroactive application does not violate any right of a person adversely affected. Neither is it constitutionally objectionable. The reason is that, as a general rule, no vested right may attach to or arise from procedural laws and rules. It has been held that “a person has no vested right in any particular remedy, and a litigant cannot insist on the application to the trial of his case, whether civil or criminal, of any other than the existing rules of procedure.” Docket Fees - The payment of the full amount of the docket fees is an indispensable step for the perfection of an appeal. The right to appeal is not a natural right and is not part of due process - It is merely a statutory privilege, which may be exercised only in accordance with the law. Procedural rules are not to be belittled or dismissed simply because their non-observance may result in prejudice to a party’s substantive rights. FACTS: 

Petitioner Panay Railways Inc. (PRI) executed real estate mortgages (REM) to secure a loan from Traders Royal Bank (TRB) to purchase several parcels of lands, including Lot6315 which has subdivided portions that were excluded in the REM. PRI failed to meet its loan obligations causing the foreclosure of the REM in favor of the bank. Writ of Possession was filed by TRB against PRI.

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During the proceeding, PRI waived its rights over the parcels of land including Lot 6315. Unbeknownst to PRI, the excluded portions of Lot 6315 were included in their waiver and in the Contract to sell and deed of absolute sale from the foreclosure. PRI eventually filed a motion for the partial annulment of said contracts upon finding out; RTC dismissed this petition.

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PRI filed an appeal without paying docket fees, respondent filed for dismissal due to nonpayment of docket fees. PRI reasoned its counsel was not yet familiar with the 1997 Rules of Court which recently effected back then and that the docket fees were not mandatory. RTC dismissed the notice of appeal and the Motion for reconsideration subsequently filed by PRI.

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PRI escalated the case to the CA, alleging RTC erred as it failed to relax procedural rules for the sake of substantial justice. During the pendency of this case, AM 00-2-10SC took effect which enabled trial courts to dismiss appeal motu prporio for being filed out of time or nonpayment of docket fees within the reglementary period. CA dismissed PRI’s case, PRI escalates the case to the Supreme Court.

ISSUE: Whether the dismissal of PRI’s appeals were erroneous as procedural rules should be relaxed in the case to administer substantial justice? RULING: No, the dismissal of PRI’s appeals were valid. The Supreme Court held that, procedural rules are not to be belittled or dismissed simply because their non-observance may result in prejudice to a party’s substantive rights. The right to appeal is not a natural right and is not part of due process - It is merely a statutory privilege, which may be exercised only in accordance with the law. The effect of procedural statutes and rules on the rights of a litigant may not preclude their retroactive application to pending actions. As a general rule, no vested right may attach to or arise from procedural laws and rules. In this case, PRI cannot assert that the negligence of its counsel in not familiarizing itself with the rules of procedure is a valid reason to relax the procedural rules for PRI to attain substantial justice. The court reiterated the rule that any act performed by lawyers within their scope of general or implied authority is regarded as an act of the client. The mistake or negligence of the counsel may result in the rendition of an unfavorable judgement against it. Therefore the dismissal of PRI’s appeals were valid as procedural rules as a general rule should be followed.