GR 188051; (November, 2010) (Digest)
G.R. No. 188051 ; November 22, 2010
ASIA UNITED BANK, Petitioner, vs. GOODLAND COMPANY, INC., Respondent.
FACTS
Asia United Bank (AUB) filed an ex-parte petition for a writ of possession over a Makati property after foreclosing on a real estate mortgage executed by Goodland Company, Inc. (Goodland) to secure a loan for a third party. The Regional Trial Court (RTC) granted the writ. Goodland, through its counsel of record, Atty. Antonio Bautista, filed motions for reconsideration, which were denied in an Order received by Atty. Bautista on June 15, 2007.
Subsequently, a different lawyer, Atty. Lito Mondragon, filed a Notice of Appeal on behalf of Goodland with the RTC. AUB opposed this, arguing Atty. Mondragon had not validly substituted Atty. Bautista as counsel of record. The RTC denied due course to the Notice of Appeal, ruling it was a “mere scrap of paper” due to the invalid substitution. Goodland filed a certiorari petition with the Court of Appeals (CA), which annulled the RTC’s orders, applying liberal procedural rules to allow the appeal in the interest of substantial justice.
ISSUE
Whether the Court of Appeals erred in giving due course to the Notice of Appeal filed by a new counsel without a valid substitution of the counsel of record.
RULING
The Supreme Court granted AUB’s petition and reversed the CA Decision. The Court held that the CA erred in applying a liberal stance. The rules on substitution of counsel under Rule 138, Section 26 of the Rules of Court are mandatory. For a substitution to be effectual, it requires a written application filed with the written consent of both the client and the attorney to be substituted, or, lacking consent, proof of service of the motion for substitution on the outgoing counsel. Atty. Mondragon failed to comply with any of these requisites.
The Court distinguished the case from Land Bank of the Philippines v. Pamintuan, cited by the CA, where liberality was applied because the new counsel did not intend to replace the counsel of record but was merely assisting. Here, Atty. Mondragon’s filing of the Notice of Appeal was a clear act of appearing as new counsel without effecting a proper substitution, making the filing a nullity. The RTC correctly denied it. Procedural rules are not to be disregarded when their application is necessary for the orderly administration of justice. The right to appeal is not absolute but must be exercised in accordance with the law. The RTC’s strict adherence to the rules was proper.