PHILIPPINE BUSINESS BANK v. FELIPE CHUA

FACTS:

Philippine Business Bank (PBB) filed a petition to challenge the Court of Appeals (CA) decision that overturned the Regional Trial Court's (RTC) order declaring the finality of its Partial Summary Judgment and granting the issuance of a writ of execution against respondent Felipe Chua. The dispute arose when stockholder and director/Treasurer of CST Enterprises, Inc. (CST), Tomas Tan, filed a derivative suit against PBB and others, claiming that the company's properties were fraudulently used as collateral for loans without proper authority. PBB argued that the loans were valid and binding, supported by a secretary's certificate and original titles as collateral. Respondent Chua denied authorizing the loans and signing the promissory notes but admitted to signing them to persuade John Dennis Chua to pay off the unauthorized loan.

The RTC granted PBB's Motion for Partial Summary Judgment, holding respondent Chua liable for the promissory notes and ordering him to pay PBB. The RTC declared the Partial Summary Judgment as final and executory since respondent Chua failed to file a certiorari petition within the reglementary period. A writ of execution was issued and a notice of levy and sale on execution of personal properties and parcels of land were also issued.

Respondent Chua filed a petition for certiorari and mandamus with the CA, challenging the RTC's orders. The CA partly affirmed the disallowance of the appeal but ruled that the RTC committed grave abuse of discretion in issuing the writ of execution. PBB filed a petition with the Supreme Court, raising two issues. However, the Supreme Court denied the petition, ruling that a partial summary judgment is not considered a final judgment.

The main issue in this case is whether a summary judgment can be considered a "partial judgment." A summary judgment resolves the issue of liability alone, while a partial judgment does not put an end to the action by declaring the plaintiff's entitlement to a remedy. PBB argues that a summary judgment should be considered a partial judgment since it only settles liability and leaves the issue of damages for later determination. The court needs to decide whether a summary judgment is a partial judgment or an interlocutory order, similar to a record of pre-trial that only specifies the disputed facts to be settled during trial.

ISSUES:

  1. Whether the partial summary judgment is a final judgment or an interlocutory order.

  2. Whether the partial summary judgment rendered by the trial court is a final judgment that completely disposes of the case.

  3. Whether the liability of respondent Chua will be affected by the resolution of the issues in the main case.

  4. Whether the partial summary judgment attained finality when respondent Chua failed to file a certiorari petition.

  5. Whether certiorari is the proper remedy to correct errors in the lower court's judgment.

  6. Whether the partial summary judgment is an interlocutory order.

RULING:

  1. The partial summary judgment is an interlocutory order and not a final judgment. A final judgment is one that finally disposes of a case, leaving nothing more to be done by the court. On the other hand, an interlocutory order does not finally dispose of the case and indicates that other things remain to be done by the court. The partial summary judgment is considered a record of pre-trial, an interlocutory order, rather than a final judgment. The appeal from the partial summary judgment should be taken together with the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a substantial controversy exists.

  2. No, the partial summary judgment rendered by the trial court is not a final judgment that completely disposes of the case. The partial summary judgment only resolved the cross-claim made by PBB against its co-defendant, respondent Chua, based on his admission of signing promissory notes as a co-maker in favor of PBB. The main issues raised in the complaint, as well as the counterclaim and third-party complaint, remained unresolved.

  3. Yes, the liability of respondent Chua will be affected by the resolution of the issues in the main case. The promissory notes were executed by John Dennis Chua in two capacities - as the alleged representative of CST and in his personal capacity. Thus, the determination of whether John Dennis Chua was properly authorized to sign the promissory notes on behalf of CST and whether he signed them in his personal capacity would have the effect of determining respondent Chua's right to go after CST and/or John Dennis Chua for reimbursement. Respondent Chua's liability is intertwined with his alleged co-debtors, and it would not be proper to treat him separately from them.

  4. No, the partial summary judgment did not attain finality even without the filing of a certiorari petition by respondent Chua. The partial summary judgment is an interlocutory order and cannot become a final and executory judgment until the main case is decided.

  5. No, certiorari is not the proper remedy to correct errors in the lower court's judgment. Certiorari is a limited form of review that can only correct errors of jurisdiction, not errors of judgment or mistakes in the judge's findings and conclusions of law and fact. Errors in the lower court's judgment can be corrected through an appeal or other direct review.

  6. Yes, the partial summary judgment is an interlocutory order. It is a judgment or final order for or against one or more of several parties or in separate claims, counterclaims, cross-claims, and third-party complaints while the main case is pending. It cannot become a final and executory judgment until the court allows an appeal therefrom.

PRINCIPLES:

  • A final judgment or order is one that finally disposes of a case and declares the rights and obligations of the parties. An interlocutory order does not finally dispose of the case and indicates that further proceedings are required.

  • A partial summary judgment is an interlocutory order that specifies the disputed facts that need to be settled in the course of trial.

  • An interlocutory order may not be questioned on appeal except as part of an appeal from a final judgment rendered in the case.

  • The appeal from a partial summary judgment should be taken together with the judgment rendered in the entire case after a trial is conducted on the material facts on which a substantial controversy exists.

  • A partial summary judgment is not a final judgment that completely disposes of the case if it only resolves certain claims or issues but leaves other claims or issues unresolved.

  • In a partial summary judgment, the liability of a defendant cannot be completely determined if issues related to the defendant's alleged co-defendants and their possible reimbursement are still pending resolution.

  • A partial summary judgment is an interlocutory order and cannot become a final and executory judgment until the main case is decided.

  • Certiorari is not the proper remedy to correct errors in the lower court's judgment. It can only correct errors of jurisdiction, not errors of judgment or mistakes in the judge's findings and conclusions of law and fact.

  • Errors in the lower court's judgment can be corrected through an appeal or other direct review.

  • No question will be entertained on appeal unless it has been raised in the proceedings below.

  • The issue of the propriety of a summary judgment should be resolved in the proper appeal once the court a quo has completely resolved all the issues involved in the present case in a final judgment.