TOPIC: RULE 45

ALEJANDRO V. TANKEH, Petitioner, vs. DEVELOPMENT BANK OF THE

PHILIPPINES, STERLING SHIPPING LINES, INC., RUPERTO V. TANKEH, VICENTE
ARENAS, and ASSET PRIVATIZATION TRUST, Respondents.

G.R. No. 171428; November 11, 2013

FACTS:

Respondent Ruperto V. Tankeh is the president of Sterling Shipping Lines, Inc. Ruperto
V. Tankeh applied for a $3.5 million loan from public respondent Development Bank of
the Philippines for the partial financing of an ocean-going vessel named the M/V Golden
Lilac. To authorize the loan, Development Bank of the Philippines required that the
following conditions be met:

1) A first mortgage must be obtained over the vessel, which by then had been
renamed the M/V Sterling Ace;
2) Ruperto V. Tankeh, petitioner Dr. Alejandro V. Tankeh, Jose Marie Vargas, as
well as respondents Sterling Shipping Lines, Inc. and Vicente Arenas should
become liable jointly and severally for the amount of the loan;
3) The future earnings of the mortgaged vessel, including proceeds of Charter and
Shipping Contracts, should be assigned to Development Bank of the Philippines;
and
4) Development Bank of the Philippines should be assigned no less than 67% of the
total subscribed and outstanding voting shares of the company. The percentage of
shares assigned should be maintained at all times, and the assignment was to
subsist as long as the assignee, Development Bank of the Philippines, deemed it
necessary during the existence of the loan.

The loan was approved by respondent Development Bank of the Philippines on March
18, 1981. The vessel was acquired on September 29, 1981 for $5.3 million.

On December 3, 1981, respondent corporation Sterling Shipping Lines, Inc. through

respondent Ruperto V. Tankeh executed a Deed of Assignment in favor of Development
Bank of the Philippines. On June 16, 1983, petitioner wrote a letter to respondent Ruperto
V. Tankeh saying that he was severing all ties and terminating his involvement with
Sterling Shipping Lines, Inc. He required that its board of directors pass a resolution
releasing him from all liabilities, particularly the loan contract with Development Bank of
the Philippines. In addition, petitioner asked that the private respondents notify
Development Bank of the Philippines that he had severed his ties with Sterling Shipping
Lines, Inc.

The accounts of respondent Sterling Shipping Lines, Inc. in the Development Bank of the
Philippines were transferred to public respondent Asset Privatization Trust on June 30,
1986. Presently, respondent Asset Privatization Trust is known as the Privatization and
Management Office. Its present function is to identify disposable assets, monitor the
progress of privatization activities, and approve the sale or divestment of assets with
respect to price and buyer.

On January 29, 1987, the M/V Sterling Ace was sold in Singapore for $350,000.00 by
Development Bank of the Philippines ’legal counsel Atty. Prospero N. Nograles. When
petitioner came to know of the sale, he wrote respondent Development Bank of the
Philippines to express that the final price was inadequate, and therefore, the transaction
was irregular. At this time, petitioner was still bound as a debtor because of the promissory
note dated May 12, 1981, which petitioner signed in December of 1981.

Petitioner filed several Complaints against respondents, praying that the promissory note
be declared null and void and that he be absolved from any liability from the mortgage of
the vessel and the note in question.

The trial proceeded with the petitioner serving as a sole witness for his case. The Regional
Trial Court ruled that the Promissory Note and the Mortgage Contract are null and void
insofar as plaintiff is concerned, and hereby annuls and voids those documents as to
plaintiff, and it is hereby further ordered that he be released from any obligation or liability
arising therefrom.

The Court of Appeals ruled that in the absence of any competent proof, Ruperto V.
Tankeh did not commit any fraud. Petitioner Alejandro V. Tankeh was unable to prove by
a preponderance of evidence that fraud or deceit had been employed by Ruperto to make
him sign the promissory note. With that, the Court of Appeals reversed and set aside the
judgment and ordered that plaintiff’s Complaint be dismissed.

Hence, this Petition was filed. Collectively, respondents argue that the Petition is actually
one of certiorari under Rule 65 of the Rules of Court and not a Petition for Review on
Certiorari under Rule 45. Thus, petitioner’s failure to show that there was neither appeal
nor any other plain, speedy or adequate remedy merited the dismissal of the Complaint.

ISSUE:

Whether the Petition is a Petition for Review on Certiorari under Rule 45. (YES)

RULING:

Contrary to respondent’s imputation, the remedy contemplated by petitioner is clearly that

of a Rule 45 Petition for Review. In Tagle v. Equitable PCI Bank, this Court made the
distinction between a Rule 45 Petition for Review on Certiorari and a Rule 65 Petition for
Certiorari:

Certiorari is a remedy designed for the correction of errors of jurisdiction, not errors
of judgment. In Pure Foods Corporation v. NLRC, we explained the simple reason
for the rule in this light: When a court exercises its jurisdiction, an error committed
 while so engaged does not deprive it of the jurisdiction being exercised when the
error is committed x x x. Consequently, an error of judgment that the court may
commit in the exercise of its jurisdiction is not correctable through the original civil
action of certiorari.

Even if the findings of the court are incorrect, as long as it has jurisdiction over the case,
such correction is normally beyond the province of certiorari. Where the error is not one
of jurisdiction, but of an error of law or fact a mistake of judgment, appeal is the remedy.

In this case, what petitioner seeks to rectify may be construed as errors of judgment of
the Court of Appeals. These errors pertain to the petitioner’s allegation that the appellate
court failed to uphold the findings of facts of the lower court. He does not impute any error
with respect to the Court of Appeals ’exercise of jurisdiction. As such, this Petition is
simply a continuation of the appellate process where a case is elevated from the trial court
of origin, to the Court of Appeals, and to this Court via Rule 45.

Contrary to respondents ’arguments, the allegations of petitioner that the Court of Appeals
"committed grave abuse of discretion" did not ipso facto render the intended remedy that
of certiorari under Rule 65 of the Rules of Court.

In any case, even if the Petition is one for the special civil action of certiorari, this Court
has the discretion to treat a Rule 65 Petition for Certiorari as a Rule 45 Petition for Review
on Certiorari. This is allowed if (1) the Petition is filed within the reglementary period for
filing a Petition for review; (2) when errors of judgment are averred; and (3) when there is
sufficient reason to justify the relaxation of the rules. When this Court exercises this
discretion, there is no need to comply with the requirements provided for in Rule 65.

In this case, petitioner filed his Petition within the reglementary period of filing a Petition
for Review. His Petition assigns errors of judgment and appreciation of facts and law on
the part of the Court of Appeals. Thus, even if the Petition was designated as one that
sought the remedy of certiorari, this Court may exercise its discretion to treat it as a
Petition for Review in the interest of substantial justice.