G.R. No. 110020 September 25, 1998
REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, HON. LUIS BELLO, JR., Presiding Judge of RTC, Branch 16, Laoag City, HAROLD M. HERNANDO, and SPOUSES ROLANDO V. ABADILLA And SUSAN SAMONTE, respondents.

FACTS

Petitioner Republic filed a complaint for rescission, cancellation, reconveyance, and damages against the spouses Rolando Abadilla and Susan Samonte, Harold M. Hernando (as attorney-in-fact of the Quetulios), and the Register of Deeds of Laoag City. The complaint alleged that in 1984, the government expropriated two parcels of land from the Quetulios for the Laoag International Airport through a compromise agreement approved by the RTC on January 31, 1985, with just compensation fully paid. However, in 1989, Hernando, as attorney-in-fact, obtained new owner’s duplicate copies of the titles and sold the same properties to the Abadilla spouses. The Republic sought to nullify this second sale, arguing the lots were already government property and the spouses acted in bad faith.
Hernando, who was under suspension from the practice of law, was allowed by the trial court to represent himself and his co-defendants and to file a “Comment/Answer/Motion to Dismiss” despite the lapse of the reglementary period to answer. This pleading attached an “Affidavit of Revocation” purportedly cancelling the compromise agreement and a “Rescission of Compromise Agreement” allegedly signed by a government special attorney. The trial court dismissed the complaint, ruling that the Republic’s failure to file a reply/opposition to this pleading constituted an admission of the due execution and genuineness of these attached instruments under the Rules of Court.
The Republic’s motion for reconsideration was denied. It then filed a petition for certiorari under Rule 65 with the Supreme Court (G.R. No. 107229), which was referred to the Court of Appeals (CA-G.R. SP No. 29460). The Court of Appeals dismissed the petition, treating it as an ordinary appeal filed out of time. The Republic filed the present petition for review on certiorari.

ISSUE

1. Whether the Court of Appeals erred in dismissing the petition for certiorari (CA-G.R. SP No. 29460) for being filed out of time, instead of treating it as a special civil action under Rule 65.
2. Whether the trial court committed grave abuse of discretion in dismissing the complaint based on the Republic’s alleged failure to specifically deny under oath the “Affidavit of Revocation” and “Rescission” documents attached to Hernando’s pleading.

RULING

The Supreme Court GRANTED the petition.
1. On the first issue, the Court held that the Court of Appeals erred in not giving due course to the special civil action for certiorari. The trial court committed grave abuse of discretion not only in its substantive ruling but also in its procedural irregularities: allowing a suspended lawyer to represent parties, setting the case for pre-trial without ruling on a motion to declare defendants in default, and then permitting the filing of a belated answer. Given this patent arbitrariness and bias, appeal was not an adequate remedy. While the extraordinary writ of certiorari cannot substitute for a lost appeal, the rule may be relaxed to prevent a grave miscarriage of justice, as in this case of grave abuse of discretion. The Court noted, however, that the original petition (G.R. No. 107229) was filed by the Office of the Solicitor General nine days late, admonishing government lawyers to be more scrupulous in observing deadlines.
2. On the second issue, the Court held the trial court committed a stark error in considering the “Affidavit of Revocation” and “Rescission” documents as actionable documents whose due execution and genuineness were deemed admitted. The Compromise Agreement in the expropriation case was approved by the court and had long become final and executory, having the effect of res judicata. A judicial compromise can only be set aside on grounds of fraud, mistake, or duress, which were not alleged. Hernando’s unilateral “Affidavit of Revocation” could not nullify the final judgment. Furthermore, the “Rescission” document was a mere private writing to which the Republic was not a party; its due execution and genuineness could not be deemed admitted under the rules applicable to actionable documents. The trial court’s dismissal on this ground constituted grave abuse of discretion.
The Supreme Court reinstated Civil Case No. 9934-16 and ordered the trial court to proceed with the hearing.