G.R. No. L-25393 October 30, 1980
FERNANDO GO, GO NAM, PONCIANO CUI VILLAS, FRANCISCO COSUANGCO and SOUTH PACIFIC HARDWARE CO., (a registered partnership), petitioners, vs. HON. COURT OF APPEALS, SPECIAL FOURTH DIVISION, VISAYAN SURETY INSURANCE CORPORATION AND WESTERN CONSTRUCTION CO., INC., respondents.

FACTS

Western Construction Co., Inc. filed a collection suit in the Court of First Instance of Iloilo against Juanito Hubo and his surety, Visayan Surety & Insurance Corporation. Visayan Surety, in its answer, filed a cross-claim against Hubo and a third-party complaint against the petitioners herein, who were indemnitors on a counter-bond. After trial, the trial court dismissed Western’s complaint against Hubo and Visayan Surety. It also dismissed Visayan Surety’s third-party complaint against the petitioners. Only Western appealed this decision to the Court of Appeals, naming Visayan Surety as the sole appellee. The petitioners, as third-party defendants, were not parties to this appeal.
Despite this, the Court of Appeals, in reversing the trial court, held Visayan Surety liable to Western. Furthermore, it adjudged the petitioners, the indemnitors, jointly and severally liable to reimburse Visayan Surety for any amount it pays to Western. The petitioners were never appellants or appellees in the appeal perfected by Western. Visayan Surety itself did not appeal the dismissal of its third-party complaint against the petitioners.

ISSUE

Whether the Court of Appeals acquired jurisdiction over the petitioners and could validly render a judgment imposing liability on them, despite them not being parties to the appeal.

RULING

No. The Court of Appeals acted without jurisdiction and in violation of the petitioners’ right to due process. The Supreme Court reversed the assailed decision insofar as it held the petitioners liable. The settled rule is that a party who does not appeal from a decision cannot obtain affirmative relief from the appellate court. Here, the trial court dismissed the third-party complaint against the petitioners. Visayan Surety, the third-party plaintiff, did not appeal this dismissal. Therefore, the dismissal became final as to the petitioners. The appellate court’s jurisdiction is derived from the appeal taken; it cannot extend to persons who are neither appellants nor appellees. Western’s appeal against Visayan Surety did not reopen the entire case for readjudication of claims already dismissed and from which no appeal was taken.
The petitioners were denied due process. They were not served copies of Visayan Surety’s brief in the appellate court and were given no opportunity to argue against the reinstatement of liability against them. The American and Philippine cases cited by the Court of Appeals regarding the effect of one party’s appeal on co-parties or joint debtors are inapplicable. The petitioners were not co-parties with Visayan Surety in the appeal, nor were they held jointly liable with Visayan Surety to Western by the trial court. Their alleged liability was separate and distinct, arising from the dismissed third-party complaint. Consequently, the appellate court’s judgment against them is void.