G.R. No. 169761 ; December 1, 2010
ARRA REALTY CORPORATION, CARLOS D. ARGUELLES and REMEDIOS DE LA RAMA-ARGUELLES, Petitioners, vs. PACES INDUSTRIAL CORPORATION, Respondent.

FACTS

Petitioner ARRA Realty and respondent Paces entered into an agreement whereby Paces would own two floors of a building to be constructed by ARRA for ₱6,211,676.00, payable on a deferred basis. Paces paid ₱2,774,992.02 and took possession of the 3rd and 4th floors, spending ₱1,312,935.00 for improvements. ARRA mortgaged the property to finance construction, and it was subsequently foreclosed. ARRA later sold the property to Guarantee Development Corporation, obliging itself to deliver it free of occupants. Paces filed a complaint against ARRA and Guarantee. Paces and Guarantee later settled via a compromise agreement, with Paces vacating the floors for ₱2,000,000.00. Paces then pursued an amended complaint solely against ARRA for damages.
The Regional Trial Court ruled Paces did not acquire ownership due to incomplete payment and ordered ARRA to refund Paces’ payment with interest. On appeal, the Court of Appeals modified the decision, ruling Paces obtained ownership and ordering ARRA to pay Paces ₱4,723,316.00 with legal interest. A copy of the CA Decision was sent by registered mail to petitioners’ counsel but was returned with the notation “Moved, left no address.” Petitioners later filed a motion for reconsideration, attaching a certification that counsel had filed a forwarding address with the post office.

ISSUE

Whether the Court of Appeals Decision had attained finality due to petitioners’ alleged failure to file a timely motion for reconsideration.

RULING

The Supreme Court denied the petition and affirmed the CA Decision. The Court held that the CA Decision had become final and executory. Service of court decisions and orders sent by registered mail to counsel of record at their address of record is deemed completed upon actual delivery or, if the mail is unclaimed, upon the expiration of five days from the first notice of the postmaster. Here, the registered mail containing the CA Decision was delivered to the address of record on April 15, 2005, but was unclaimed because the addressee had moved. Constructive service was thus completed five days later, on April 20, 2005. Petitioners then had only until May 5, 2005, to file a motion for reconsideration, which they failed to do.
The filing of a notice of forwarding address with the post office is not a substitute for filing a formal notice of change of address with the court. Petitioners’ counsel was negligent in not updating his address with the court. The burden of such carelessness falls solely on petitioners, and respondent should not suffer the consequences. Since no timely motion for reconsideration was filed, the CA Decision attained finality and became immutable.