G.R. No. 179999 March 17, 2009 10.
Petitioners argue that appearance at pre-trial is mandatory, and
ANSON TRADE CENTER, INC., ANSON EMPORIUM CORPORATION and
TEDDY KENG SE CHEN, Petitioners, vs. PACIFIC BANKING
CORPORATION, Represented by Its Liquidator, the President of the
Philippine Deposit Insurance Corporation, Respondent.
Topic: Pre-Trial
Doctrine: Pursuant to Sec. 4 and 5 of Rule 18, non-appearance by the
plaintiff in the pre-trial shall be cause for dismissal of the action. However,
every rule is not without an exception. In fact, Section 4, Rule 18 explicitly
provides that the non-appearance of a party may be excused if a valid cause
is shown therefor. In this case, there is valid cause.
Facts:
1. Pacific Banking Corporation (PBC) was a closed banking institution
undergoing liquidation by the Philippine Deposite Insurance
Corporation (PDIC). (So PBC is represented by PDIC in this case)
2. Anson Trade Center Inc. (ATCI) and Anson Emporium Corporation
(AEC) obtained several loans from PBC. As security for the
obligations, Teddy Chen, Vice Head of these two corporations,
executed Continuing Suretyship Agreements. Subsequently, ATCI
and EAC defaulted in the payment of their loans. Hence, PBC filed a
collection case before the RTC.
3. Petitioners ATCI, AEC, and Chen filed their MTD. PBC filed their
respective Opposition. However, due to the RTCs inaction on the
MTD, PBC filed a Motion to Resolve (the MTD). Hence, RTC
resolved and denied the MTD. Hence, petitioners filed their Answers.
4. During the pre-trial, all the parties were present and the RTC
referred the case for arbitration. The arbitration was unsuccessful so
it was referred back to the RTC for trial.
5. Instead of trial, another pre-trial conference was set by RTC.
However, PBC failed to attend.
6. Hence, petitioners moved for dismissal of the case on the ground of
non-appearance of PBC at the pre-trial. RTC granted the MTD and
dismissed the case.
7. PBC filed a petition for certiorari R65 with the CA, arguing that RTC
committed GADALEJ when it dismissed the case, as PBCs absence
in the pre-trial was not deliberate or intentional. PBC explained that
its liquidator, PDIC, was undergoing reorganization, resulting in lack
of manpower to handle more than 400 banks ordered closed. PB
pleaded for the relaxation of the rules.
8. CA granted the petition and reversed RTCs decision.
9. Hence, this petition for review on certiorari.
failure of such constitute a serious procedural blunder which merits
the dismissal.
11. PBC argues that Rules must be relaxed as it will cause irreparable
damage to them, and in order to promote ends of justice.
Issue: W/N the case should be dismissed based on failure to appear at the
pre-trial
Held: NO!!
1. Pre-trial, by definition, is a procedural device intended to clarify and
limit the basic issues raised by the parties and to take the trial of
cases out of the realm of surprise and maneuvering. It is an answer
to the clarion call for the speedy disposition of cases.
2. Pursuant to Sec. 4 and 5 of Rule 18, non-appearance by the plaintiff
in the pre-trial shall be cause for dismissal of the action. However,
every rule is not without an exception. In fact, Section 4, Rule 18
explicitly provides that the non-appearance of a party may be
excused if a valid cause is shown therefor. In this case, there is valid
cause.
3. PBC did not intentionally snub the pre-trial conference. The
Monetary Board ordered the closure of PBC by reason of insolvency
and it has since been represented by PDIC. Still in the course of the
liquidation of PBC, PDIC was reorganized in a way that the four
departments litigation were reduced to one, with the new Litigation
Department having only four in-house counsels who assumed
thousands of cases. It is understandable how the notice for the pre-
trial conference could be lost or overlooked, as the PDIC was still
coping and adjusting with the changes resulting from its
reorganization.
4. It is important to note that PBC was not remiss in its duties to
prosecute its case. PBC promptly and religiously attended the
hearings set by the RTC. In fact, PBC was present in the first pre-
trial conference. When the RTC did not immediately act on the
Motions to Dismiss, it was PBC which filed Motions to Resolve. The
actuations of respondent reveal its interest in prosecuting the case,
instead of any intention to delay the proceedings.
5. Moreover, PBC is already insolvent and undergoing liquidation. It
instituted the case for collection of money precisely to recover from
petitioners the unpaid loans. Even if the dismissal of the case was
without prejudice, PBC has already paid 344,878.23 as docket fees
and with the dismissal of said case, the amount would be forfeited.
PBC would have to pay docket fees once more when it re-files its
case. For respondent to again pay docket fees for the re-filing of its
Complaint against petitioners would truly be detrimental to the
creditors of respondent.