G.R. No. 156278; March 29, 2004
PLANTERS PRODUCTS, INC., petitioner, vs. FERTIPHIL CORPORATION, respondent.

FACTS

Respondent Fertiphil Corporation, a domestic fertilizer importer, paid a P10 levy per bag sold, as mandated by Letter of Instruction (LOI) No. 1465 issued by President Marcos. The levy was collected by the Fertilizer and Pesticide Authority and remitted to petitioner Planters Products, Inc. (PPI) for its rehabilitation. After the 1986 EDSA Revolution, Fertiphil demanded a refund from PPI, contending LOI No. 1465 was unconstitutional crony legislation. Upon PPI’s refusal, Fertiphil filed a collection suit. The Regional Trial Court declared LOI No. 1465 void and ordered PPI to refund the amount with interest. PPI filed a notice of appeal in 1992.
Subsequently, the case involved protracted litigation over an execution pending appeal, which reached the Supreme Court. After that matter was resolved, PPI moved for execution to recover properties taken under the earlier invalid execution. Fertiphil then moved to dismiss PPI’s 1992 appeal, arguing failure to pay appellate docket fees under the 1997 Rules of Civil Procedure. The trial court denied the motion, but the Court of Appeals granted Fertiphil’s certiorari petition, ruling the 1997 Rules applied retroactively and PPI’s failure to pay fees for three years after their effectivity rendered the 1991 decision final.

ISSUE

Whether the Court of Appeals erred in retroactively applying the 1997 Rules of Civil Procedure on appellate docket fee payment to dismiss PPI’s appeal perfected under the old rules.

RULING

Yes. The Supreme Court reversed the Court of Appeals. The general rule is that procedural rules apply to actions pending upon their passage. However, a recognized exception prohibits retrospective application when it would impair vested rights. At the time PPI perfected its appeal in 1992, the governing rule only required the filing of a notice of appeal within 15 days, which PPI complied with. The subsequent 1997 Rules introduced the new requirement of paying appellate docket fees within the appeal period.
To retroactively apply this new requirement to PPI’s appeal, perfected years before the new rules took effect, would impair PPI’s vested right to appeal. This would dismiss its appeal on a technicality, sacrificing the substantial merits of the case. Following the precedent in Land Bank of the Philippines v. de Leon, the Court held that justice and equity demand that PPI’s appeal, duly perfected under the old rules, should proceed. The case was remanded to the Court of Appeals for resolution on the merits, including the constitutionality of LOI No. 1465.