Republic of the Philippines

Supreme Court
Manila
SECOND DIVISION
ADELIA C. MENDOZA and as
Attorney-in-Fact
of
ALICE
MALLETA,
Petitioners,
-

versus

UNITED COCONUT PLANTERS

BANK, INC.,
Respondent.

G.R. No. 165575

Present:
CARPIO, J., Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:
February 2, 2011

x---------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
This is a petition for review on certiorari[1] of the Court of Appeals
Resolution dated July 2, 2004, in CA-G.R. CV No. 79796, and its Resolution dated
September 9, 2004, denying petitioners motion for reconsideration. The Court of
Appeals dismissed the Appellants Brief filed by petitioners for failure to comply
with the requirements under Section 13, Rule 44 of the 1997 Revised Rules of
Civil Procedure.
The facts are as follows:

On November 5, 2001, petitioner Adelia Mendoza, attorney-in-fact of

petitioner Alice Malleta, filed a Complaint [2] for annulment of titles, foreclosure
proceedings and certificate of sale with the Regional Trial Court (RTC)
of Lipa City, Fourth Judicial Region.
In their Complaint, herein petitioners stated that on October 6, 1995, they
entered into a Real Estate Mortgage Contract with respondent United Coconut
Planters Bank (UCPB) in the amount ofP4,925,000.00.[3] On August 27, 1998, the
properties were sold at public auction in the total amount of P31,300,00.00 to
UCPB. On September 17, 2001, an Affidavit of Consolidation was executed by
UCPB.
Petitioners contended that the foreclosure proceedings violated due process
and the legal requirements under Act No. 3135, as amended, on the following
grounds:
a)
There was no valid and legal notice to petitioner Adelia
Mendoza of the foreclosure proceedings;
b)
There was no valid and legal notice of the auction sale;
c)
There was no valid and legal notice of the consolidation
of ownership;
d)
There was no valid publication and notice as required by
law;
e)
There was a violation of Republic Act No. 3765, An Act
to Require the Disclosure of Finance Charges in Connection with
Extensions of Credit, specifically Section 6 of the law;
f)
There was no clear and accurate financial statement
showing the application of payments of the plaintiffs (petitioners
herein); and
g)
There was no valid letter of demand showing the clear
finance charges.
Petitioners prayed that the foreclosure proceedings and Certificate of Sale be
annulled, and that if ever any new title is issued in lieu of their Transfer
Certificates of Titles,[4] the same should be cancelled and annulled; that respondent
be ordered to pay petitioners attorneys fees of P50,000.00 and litigation expenses
of P20,000.00.

In its Answer with Compulsory Counterclaim, [5] respondent UCPB denied

that petitioners entered into a Real Estate Mortgage Contract with it in the amount
of P4,925,000.00, the truth being that petitioner Adelia Mendoza executed several
promissory notes in the total principal amount of P27,500,000.00, and to secure
these obligations she executed, together with petitioner Alice Malleta, several real
estate mortgages over several parcels of land in favor of UCPB.
Respondent denied that the foreclosure proceedings were legally defective,
as the said proceedings were done in accordance with the provisions of Act No.
3135, as amended. It countered that the law does not require personal notice to the
mortgagor of the foreclosure proceedings and the auction sale, as the publication of
the notice of sale in a newspaper of general circulation constitutes constructive
notice to the whole world. Moreover, there is no legal requirement of personal
notice to the mortgagor of the consolidation of ownership, as the registration of the
certificate of sale with the Register of Deeds constitutes notice to the whole world
that the mortgagor or any interested party has one year from the date of such
registration to redeem the foreclosed properties. Respondent claimed that it
complied with the posting requirements, and that it had also complied with the
provisions of Republic Act No. 3765 and had regularly furnished petitioners with
statements of account pursuant to standard banking practice.
Respondent contended that petitioners knew that the foreclosure was
forthcoming due to their default in the payment of their obligations. Petitioners had
been sent several verbal and written demands to pay their obligations and had been
warned that failure to settle their obligations would result in the foreclosure of their
properties. Further, petitioners had one year from the date of registration of the
certificate of sale to redeem their property, but they failed to do so.
Respondent denied that there was non-disclosure of finance charges without
lawful and legal demand, since it had regularly sent petitioners statements of
account and had regularly given verbal and written notices to pay their
obligations. It also denied the allegations of lack of reconciliation and verification
of accounts. In this regard, respondent stated that petitioners could have easily
verified their account with the account officers of UCPB, but they failed to do so.

As special and affirmative defenses, respondent stated that on August 9,

1994, petitioner Mendoza applied for and was granted a credit line in the amount
of P25 million, which is supported by a Loan Agreement. [6] On October 9, 1995,
the credit line was increased by P2.5 million, as evidenced by a Loan Agreement.
[7]
Petitioner Mendoza availed of the said credit line in the aggregate principal
amount of Twenty-Seven Million Five Hundred Thousand Pesos (P27.5 million)
and executed promissory notes[8] therefor. Among other conditions, the promissory
notes carried acceleration clauses, making these notes immediately due and
payable even before maturity in case an event of default occurred, including, but
not limited to, payment of principal and interest amortizations.
Moreover, respondent stated that on August 10, 1995, as partial security for
the promissory notes, petitioner Malleta, through her attorney-in-fact, petitioner
Adelia Mendoza, executed a real estate mortgage in favor of UCPB over several
parcels of land registered under the name of Alice B. Malleta with the Register of
Deeds of Lipa City. Later, pursuant to petitioner Mendozas commitment with
UCPB, the titles of the mortgaged properties were transferred under the name of
Adelia B. Mendoza upon release of the loan proceeds and the mortgage annotation
was carried over to the new titles.
According to respondent, on October 6, 1995, petitioner Mendoza executed
a real estate mortgage over 12 parcels of land,[9] all registered in her name, as
additional security for the said promissory notes.
Respondent stated that petitioner Mendoza failed to discharge her
obligations under the promissory notes, despite written and verbal demands made
by UCPB upon her, the latest of which was the demand letter dated January 29,
1998.[10] Hence, it had no other recourse but to initiate foreclosure proceedings on
the aforementioned securities.
Respondent averred that on May 6, 1998, it filed a Petition[11] for
Extrajudicial Foreclosure of the mortgaged properties before the Ex Officio Sheriff
of Lipa City.
On July 21, 1998, the Sheriff prepared a Notice of Sale [12] and set the date of
the public sale on August 27, 1998.[13] On July 28, 1998, the Sheriff posted the

Notice of Sale in three public places and the Notice was, likewise, published
in Tambuling Batangas, a newspaper of general circulation, on July 22 and 29,
1998, and on August 5, 1998. The certificate of posting and publishers affidavit of
publication were attached as Annexes 12,[14] and 13,[15] respectively.
The public sale was conducted on August 28, 1998. The mortgaged
properties were sold in the amount of P31,300,000.00 to UCPB as the highest and
winning bidder. A Certificate of Sale[16] was issued in favor of UCPB, which was
duly registered in July 2000 at the back of the certificates of title of the mortgaged
properties with the Register of Deeds of Lipa City.
Petitioners failed to redeem the foreclosed properties within the one-year
redemption period that expired on July 21, 2001. Consequently, UCPB
consolidated its ownership over the said properties and new certificates of title
were issued under its name.
Respondent stated that on August 27, 1998, the date of the auction sale,
petitioners outstanding obligation was P58,692,538.63, as evidenced by a
Statement of Account.[17]
According to respondent, the proceeds of the foreclosure sale amounted
to P31,300,000.00, leaving a deficiency of P27,392,538.63, an amount which it is
entitled to payment from petitioner Mendoza, together with penalties and interest
due thereon.
Respondent prayed that, after hearing, judgment be rendered (1) dismissing
the Complaint for lack of merit; (2) on the counterclaim, ordering petitioners to
pay the deficiency claim of P27,392,538.63, including the penalties and interests
due thereon from August 27, 1998, and P1 million as attorneys fees
and P200,000.00 as litigation expenses.
On March 25, 2003, respondent filed a Motion to Dismiss [18] for failure to
prosecute. Respondent contended that petitioners, through counsel, received a copy
of its Answer on August 26, 2002, as shown by the photocopy of the registry return
receipt. It stated that under Section 1, Rule 18 of the 1997 Rules of Civil
Procedure, petitioners have the positive duty to promptly set the case for pre-trial

after the last pleading had been filed. It stated that the Answer was the last
pleading, since petitioners failed to file a Reply thereon within the reglementary
period.
Respondent stated that since August 26, 2002, or almost a period of six
months, petitioners had not taken steps to set the case for pre-trial as mandated by
the rules. Respondent submitted that the case should be dismissed for failure to
prosecute for an unreasonable period of time as provided by Section 3, Rule 17 of
the 1997 Rules of Civil Procedure. It asserted that failure to set the case for pretrial for almost six (6) months is an unreasonable period of time, as a period of
three (3) months had been found to constitute an unreasonable period of time
in Montejo v. Urotia.[19]
Petitioners, through counsel Atty. Jose P. Malabanan, filed an Opposition to
the Motion to Dismiss and Motion to Set the Case for Pre-trial,[20] and stated
therein that their counsel on record is Atty. Monchito C. Rosales, who died on
December 22, 2002; that Atty. Jose P. Malabanan forgot the case because of the
death of Atty. Rosales (who is his law partner), and that he was setting the case for
pre-trial.Petitioners prayed that the Opposition and motion to set the case for pretrial be granted.
On April 15, 2003, the RTC of Lipa City, Branch 12 issued an
Order dismissing the case. The court found the Motion to Dismiss (for failure to
prosecute) to be in accordance with the rules. It stated that the records of the case
showed that since August 20, 2002, the issues in this case had already been joined,
and that Atty. Monchito C. Rosales was still alive then, yet he did not take any step
to have the case set for pre-trial. It found the claim of Atty. Jose P. Malabanan, that
he forgot about the case because of the death of Atty. Rosales, as unpardonable,
flimsy and an invalid excuse.
[21]

The Motion for Reconsideration of the Order dated April 15, 2003 was
denied for lack of merit by the trial court in an Order dated May 26, 2003.[22]
Thereafter, petitioners appealed the trial courts Orders to the Court of
Appeals, and filed an Appellants Brief on April 5, 2004.

On May 20, 2004, respondent filed a Motion to Dismiss Appeal on the

ground that the Appellants Brief failed to comply with the requirements under
Section 13, Rule 44 of the 1997 Rules of Civil Procedure. Respondent contended
that the Appellants Brief contained only the following topics: (1) Prefaratory
Statement; (2) Statement of Facts and Antecedent Proceedings; (3) Parties; (4)
Statement of the Case; (5) Issues; (6) Arguments/Discussion; and (7) Prayer. The
Appellants Brief did not have the following items: (1) A subject index of the matter
in the brief with a digest of the arguments and page references, and a table of cases
alphabetically arranged, textbooks and statutes cited with references to the pages
where they are cited; (2) an assignment of errors; (3) on the authorities cited,
references to the page of the report at which the case begins and page of the report
on which the citation is found; (4) page references to the record in the Statement of
Facts and Statement of the Case.
Respondent contended that the absence of a specific assignment of errors or
of page references to the record in the Appellants Brief is a ground for dismissal of
the appeal under Section 1 (f), Rule 50 of the 1997 Rules of Civil Procedure.[23]
On June 4, 2004, petitioners filed an Opposition to Motion to Dismiss
Appeal.[24] They contended that the assignment of errors were only designated as
Issues in their Appellants Brief; and although the designation of the Assignment of
Error may vary, the substance thereof remains. Moreover, petitioners stated that the
textbooks and statutes were cited immediately after the portion where they are
quoted, which is more convenient and facilitates ready reference of the legal and
jurisprudential basis of the arguments. They claimed that the absence of a subject
index does not substantially deviate from the requirements of the Rules of Court,
because one can easily go over the Appellants Brief and can designate the parts
with nominal prudence. They pointed out that Section 6 of the Rules of Court
provides for a liberal construction of the Rules in order to promote their objective
of securing a just, speedy and inexpensive disposition of every action and
proceeding.
On July 2, 2004, the Court of Appeals issued a Resolution dismissing the
appeal. The dispositive portion of the Resolution reads:
WHEREFORE, in view of the foregoing, the defendant-appellee
UCPBs Motion to Dismiss Appeal is hereby GRANTED. This appeal is

ordered DISMISSED for failure to comply with Section 13, Rule 44 of

the 1997 Revised Rules of Civil Procedure. [25]

The Court of Appeals held that the right to appeal is a statutory right and a
party who seeks to avail of the right must faithfully comply with the rules. It found
that the Appellants Brief failed to comply with Section 13, Rule 44 of the 1997
Revised Rules of Civil Procedure, thus:
In this case, the plaintiff-appellants brief failed to provide an
index, like a table of contents, to facilitate the review of appeals by
providing ready references to the records and documents referred to
therein. This Court has to thumb through the brief page after page to
locate the partys arguments, or a particular citation, or whatever else
needs to be found and considered. In so doing, the plaintiff-appellant
unreasonably abdicated her duty to assist this Court in the appreciation
and evaluation of the issues on appeal.
Further, the statement of facts is not supported by page references
to the record. Instead of reasonably complying with the requirements of
the rules, plaintiff-appellant annexed the plain photocopy of the
documents being referred to in the statements of facts. Thus, if only to
verify the veracity of the allegations in the brief and the existence of the
attached documents, this Court has to pore over the entire records of this
case.
There is no merit in the plaintiff-appellants argument that the
Assignment of Error was merely designated as Issues but the substance
thereof remains and should not cause the dismissal of the appeal. The
Supreme Court categorically stated in De Liano vs. Court of Appeals that
the statement of issues is not to be confused with the assignment of
errors because they are not one and the same, for otherwise, the rules
would not have required a separate statement of each. [26]

Petitioners motion for reconsideration was denied for lack of merit by the
Court of Appeals in its Resolution dated September 9, 2004. The appellate court
held that petitioners merely reiterated the arguments raised in their Opposition to
Motion to Dismiss Appeal, which arguments were already passed upon by the
court. Moreover, the Court of Appeals noted that despite ample opportunity,
petitioners never attempted to remedy the deficiency in their Appellants Brief by

filing another brief in conformity with the rules, but obstinately maintained that
their Appellants Brief substantially complied with the rules.
Hence, petitioners filed this petition raising the following issues:
I
THE HONORABLE COURT OF APPEALS ERRED IN DISMISSING
THE APPEAL NOTWITHSTANDING THE PETITIONERS
SUBSTANTIAL COMPLIANCE [WITH] SECTION 13, RULE 44 [OF]
THE 1997 RULES OF CIVIL PROCEDURE.
II
THE
HONORABLE REGIONAL TRIAL COURT OF LIPA CITY,
BRANCH 12 ERRED IN ORDERING THE DISMISSAL OF
PETITIONERS COMPLAINT ON THE GROUND OF FAILURE TO
PROSECUTE THEIR
CAUSE
OF ACTION
FOR AN
UNREASONABLE PERIOD OF TIME.
III
THE HONORABLE REGIONAL TRIAL COURT OF LIPA CITY,
BRANCH 12 ERRED IN NOT HOLDING THAT RESPONDENTS
NON-COMPLIANCE WITH THE POSTING REQUIREMENT
UNDER SECTION 3, ACT NO. 3135 IS FATAL TO THE VALIDITY
OF THE FORECLOSURE PROCEEDINGS.
IV
THE EXTRAJUDICIAL FORECLOSURE PROCEEDINGS AND
AUCTION SALE OF THE SUBJECT REALTIES VIOLATE THE
PROVISIONS OF ARTICLE XVII OF THE CONTRACT OF
MORTGAGE ENTERED INTO BY AND BETWEEN THE
PETITIONERS AND RESPONDENT ON 06 OCTOBER 1995.
V
RESPONDENT UNITED COCONUT PLANTERS BANK VIOLATED
SECTION 4 OF REPUBLIC ACT NO. 3765 ON THE REQUIREMENT
OF FULL DISCLOSURE OF FINANCE CHARGES IN
CONNECTION WITH THE EXTENSIONS OF CREDIT.
VI

PETITIONERS ARE ENTITLED TO REASONABLE ATTORNEYS

FEES.[27]

The main issue is whether or not the Court of Appeals erred in dismissing
petitioners appeal on the ground that their Appellants Brief failed to comply with
Section 13, Rule 44 of the 1997 Rules of Civil Procedure as the said brief did not
have a subject index, an assignment of errors, and page references to the record in
the Statement of Facts.
Petitioners argue that the absence of a subject index in their Appellants Brief
is not a material deviation from the requirements of Section 13, Rule 44 of the
1997 Revised Rules of Civil Procedure, and that each portion of the 12-page brief
was boldly designated to separate each portion.
Moreover, petitioners contend that while the assignment of errors was not
designated as such in their Appellants Brief, the assignment of errors were clearly
embodied in the Issues thereof, which substantially complies with the rules.
The petition is without merit.
The right to appeal is neither a natural right nor a part of due process; it is
merely a statutory privilege, and may be exercised only in the manner and in
accordance with the provisions of law.[28] An appeal being a purely statutory right,
an appealing party must strictly comply with the requisites laid down in the Rules
of Court.[29]
In regard to ordinary appealed cases to the Court of Appeals, such as this
case, Section 13, Rule 44 of the 1997 Rules of Civil Procedure provides for the
contents of an Appellants Brief, thus:
Sec. 13. Contents of appellants brief.The appellants brief shall
contain, in the order herein indicated, the following:
(a) A subject index of the matter in the brief with a digest of the
arguments and page references, and a table of cases alphabetically
arranged, textbooks and statutes cited with references to the pages where
they are cited;

(b) An assignment of errors intended to be urged, which errors

shall be separately, distinctly and concisely stated without repetition and
numbered consecutively;
(c) Under the heading Statement of the Case, a clear and concise
statement of the nature of the action, a summary of the proceedings, the
appealed rulings and orders of the court, the nature of the judgment and
any other matters necessary to an understanding of the nature of the
controversy, with page references to the record;
(d) Under the heading Statement of Facts, a clear and concise
statement in a narrative form of the facts admitted by both parties and of
those in controversy, together with the substance of the proof relating
thereto in sufficient detail to make it clearly intelligible, with page
references to the record;
(e) A clear and concise statement of the issues of fact or law to be
submitted to the court for its judgment;
(f) Under the heading Argument, the appellants arguments on each
assignment of error with page references to the record. The authorities
relied upon shall be cited by the page of the report at which the case
begins and the page of the report on which the citation is found;
(g) Under the heading Relief, a specification of the order or
judgment which the appellant seeks; and
(h) In cases not brought up by record on appeal, the appellants
brief shall contain, as an appendix, a copy of the judgment or final order
appealed from.

In this case, the Appellants Brief of petitioners did not have a subject
index. The importance of a subject index should not be underestimated. De Liano
v. Court of Appeals[30] declared that the subjectindex functions like a table of
contents, facilitating the review of appeals by providing ready reference. It held
that:
[t]he first requirement of an appellants brief is a subject index. The index
is intended to facilitate the review of appeals by providing ready
reference, functioning much like a table of contents. Unlike in other
jurisdictions, there is no limit on the length of appeal briefs or appeal
memoranda filed before appellate courts. The danger of this is the very
real possibility that the reviewing tribunal will be swamped with

voluminous documents. This occurs even though the rules consistently

urge the parties to be brief or concise in the drafting of pleadings, briefs,
and other papers to be filed in court. The subject index makes readily
available at ones fingertips the subject of the contents of the brief so that
the need to thumb through the brief page after page to locate a partys
arguments, or a particular citation, or whatever else needs to be found
and considered, is obviated.[31]

Moreover, the Appellants Brief had no assignment of errors, but petitioners

insist that it is embodied in the Issues of the brief. The requirement under Section
13, Rule 44 of the 1997 Rules of Civil Procedure for an assignment of errors in
paragraph (b) thereof is different from a statement of the issues of fact or law in
paragraph (e) thereof. The statement of issues is not to be confused with the
assignment of errors, since they are not one and the same; otherwise, the rules
would not require a separate statement for each. [32] An assignment of errors is an
enumeration by the appellant of the errors alleged to have been committed by the
trial court for which he/she seeks to obtain a reversal of the judgment, while the
statement of issues puts forth the questions of fact or law to be resolved by the
appellate court.[33]
Further, the Court of Appeals found that the Statement of Facts was not
supported by page references to the record. De Liano v. Court of Appeals held:
x x x The facts constitute the backbone of a legal argument; they are
determinative of the law and jurisprudence applicable to the case, and
consequently, will govern the appropriate relief. Appellants should
remember that the Court of Appeals is empowered to review both
questions of law and of facts. Otherwise, where only a pure question of
law is involved, appeal would pertain to this Court. An appellant,
therefore, should take care to state the facts accurately though it is
permissible to present them in a manner favorable to one party. x x
x Facts which are admitted require no further proof, whereas facts in
dispute must be backed by evidence. Relative thereto, the rule
specifically requires that ones statement of facts should be supported by
page references to the record. Indeed, disobedience therewith has been
punished by dismissal of the appeal. Page references to the record are
not an empty requirement. If a statement of fact is unaccompanied by
a page reference to the record, it may be presumed to be without

support in the record and may be stricken or disregarded altogether.

[34]

The assignment of errors and page references to the record in the statement
of facts are important in an Appellants Brief as the absence thereof is a basis for
the dismissal of an appeal under Section 1 (f), Rule 50, of the 1997 Rules of Civil
Procedure, thus:
SECTION 1. Grounds for dismissal of appeal. -- An appeal may
be dismissed by the Court of Appeals, on its own motion or on that of the
appellee, on the following grounds:
xxxx
(f ) Absence of specific assignment of errors in the appellants
brief, or of page references to the record as required in section 13,
paragraphs (a), (c), (d) and (f) of Rule 44.

Rules 44 and 50 of the 1997 Rules of Civil Procedure are designed for the
proper and prompt disposition of cases before the Court of Appeals. [35] Rules of
procedure exist for a noble purpose, and to disregard such rules in the guise of
liberal construction would be to defeat such purpose. [36] The Court of Appeals
noted in its Resolution denying petitioners motion for reconsideration that despite
ample opportunity, petitioners never attempted to file an amended appellants brief
correcting the deficiencies of their brief, but obstinately clung to their argument
that their Appellants Brief substantially complied with the rules. Such obstinacy is
incongruous with their plea for liberality in construing the rules on appeal.[37]
De Liano v. Court of Appeals held:
Some may argue that adherence to these formal requirements
serves but a meaningless purpose, that these may be ignored with little
risk in the smug certainty that liberality in the application of procedural
rules can always be relied upon to remedy the infirmities. This misses
the point. We are not martinets; in appropriate instances, we are prepared
to listen to reason, and to give relief as the circumstances may
warrant. However, when the error relates to something so elementary as
to be inexcusable, our discretion becomes nothing more than an exercise

in frustration. It comes as an unpleasant shock to us that the contents of

an appellants brief should still be raised as an issue now. There is
nothing arcane or novel about the provisions of Section 13, Rule 44. The
rule governing the contents of appellants briefs has existed since the old
Rules of Court, which took effect on July 1, 1940, as well as the Revised
Rules of Court, which took effect on January 1, 1964, until they were
superseded by the present 1997 Rules of Civil Procedure. The provisions
were substantially preserved, with few revisions. [38]

In fine, the Court upholds the Resolutions of the Court of Appeals

dismissing the appeal of petitioners on the ground that their Appellants Brief does
not comply with the requirements provided in Section 13, Rule 44 of the 1997
Rules of Civil Procedure, as the dismissal is supported by Section 1 (f), Rule 50 of
the 1997 Rules of Civil Procedure and jurisprudence.[39] With the dismissal of the
appeal, the other issues raised by petitioners need not be discussed by the Court.
WHEREFORE, the petition is DENIED. The Court of Appeals Resolutions
dated July 2, 2004 and September 9, 2004, in CA-G.R. CV No. 79796, are
hereby AFFIRMED.
Costs against petitioners.
SO ORDERED.