G.R. No. 151280             June 10, 2004
THE PRESIDENT OF PHILIPPINE DEPOSIT INSURANCE CORPORATION AND PACIFIC BANKING CORP., petitioners,
HON. COURT OF APPEALS, REGIONAL TRIAL COURT OF BACOLOD CITY, BRANCH 43, NELLY M. LOVINA REALTY CO., INC., represented by its PRESIDENT, VICENTE M. LOVINA, JIM ROSE, TRADING CORP., INC., FRANCISCO SAJO and THE INTESTATE ESTATE OF ELENITA SAJO, respondents.
D E C I S I O N
CALLEJO, SR., J.:
Before the Court is a petition for certiorari under Rule 65 of the Rules of Court filed by the Philippine Deposit Insurance Corporation, through its President, and the Pacific Banking Corporation seeking to reverse and set aside the Decision1 dated September 5, 2001 of the Court of Appeals in CA-G.R. SP No. 56868. In the assailed decision, the appellate court affirmed the Order dated November 18, 1999 of the Regional Trial Court (RTC) of Bacolod City, Branch 43, directing the reception of the respondents’ evidence ex parte in Civil Cases Nos. 8722, 9287, 9315 and 9316. Likewise, sought to be reversed and set aside is the appellate court’s Resolution dated November 28, 2001 denying the petitioners’ motion for reconsideration.
The factual antecedents of the case are as follows –
The respondents, Nelly M. Lovina Realty Co., Inc., represented by its President, Vicente M. Lovina, Spouses Antonio and Lourdes Dadivas, Jim Rose Trading Co., Inc., Francisco Sajo and the Intestate Estate of Elenita Sojo, separately obtained loans from the petitioner Pacific Banking Corporation (PaBC). Their respective loans were classified as either Sugar Crop Loans or Agricultural Loans.
On July 5, 1985, the petitioner PaBC was ordered to stop operations and placed under receivership on account of insolvency. Thereafter, it was placed under liquidation and per Resolution No. 537 dated May 17, 1991 of the Monetary Board of the Bangko Sentral ng Pilipinas (BSP), the petitioner, Philippine Deposit Insurance Corporation (PDIC) was designated as liquidator of the petitioner PaBC.
On February 29, 1992, then President Corazon C. Aquino signed into law Republic Act No. 7202, otherwise known as The Sugar Restitution Law. Section 3 thereof provides:
Sec. 3. ...
(a) Condonation of interest charged by the banks in excess of twelve percent (12%) per annum and all penalties and surcharges;
(b) The recomputed loans shall be amortized for a period of thirteen (13) years inclusive of a three-year grace period on principal effective upon the approval of this Act. The principal portion of the loan will carry an interest rate of twelve per cent (12%) per annum and on the outstanding balance effective when the promissory notes were signed and released to producer.
The respondents requested the petitioners that the above provision of Rep. Act. No. 7202 be applied to their loans. The petitioners denied the respondents’ requests stating that Rep. Act No. 7202 applies only to sugar loans granted by government financial institutions. The petitioners then demanded payment by the respondents of their respective loans including interests, penalties and other charges.
Thereafter, the respondents, as plaintiffs, filed with the court a quo separate complaints against the petitioners. These complaints were consolidated and docketed as follows:
Civil Case No. 8722
NELLY M. LOVINA REALTY CO., Represented by its President VICENTE M. LOVINA, Plaintiff,
Civil Case No. 9287
SPOUSES ANTONIO & LOURDES DADIVAS, Plaintiffs,
Civil Case No. 9315
JIM ROSE TRADING CO., INC., Plaintiff,
Civil Case No. 9316
FRANCISCO SAJO, ET AL., Plaintiffs,
- versus -
PACIFIC BANKING CORP., ET AL, Defendants.
In their respective complaints, the respondents prayed, among others, that the court a quo compel the petitioners PDIC and PaBC to re-compute their (respondents’) loans in accordance with Section 3 of Rep. Act No. 7202.
The petitioners seasonably filed their answers to the complaints. However, on account of the repeated failure of the petitioners or their counsel to appear at the pre-trial, on August 19, 1999, the court a quo issued an Order directing the respondents to present their evidence ex parte. The petitioners filed a motion for reconsideration thereof but the court a quo denied the same in its Order dated November 18, 1999. In denying the petitioners’ motion for reconsideration, the court a quo stated, thus:
The records disclose that after Civil Cases Nos. 8722 and 9274 were ordered consolidated, the pre-trial conference for the same was originally set on June 14, 1996. In view, however, of the Motion for Consolidation of Civil Cases Nos. 8722 and 9274 with Civil Cases Nos. 9263, 9287, 9315 and 9316 still pending resolution for which latter cases the defendant was not yet served with any summons, pre-trial was reset on June 20, 1996. Then again it was reset on September 27, 1996, April 25, 1997 and August 1, 1997. For failure of either the defendant or its counsel to appear, defendant was declared in default and reception of evidence for plaintiff Lovina Realty was set on September 5, 1993, while reception of evidence for plaintiffs Jim Rose Trading, Spouses Antonio Dadivas and Sajo was set on September 12, 1997.
The Court, however, lifted the Order of Default of its Order dated September 5, 1997 on the basis of a Motion for Reconsideration filed by the defendant. Thereafter, plaintiff Lovina moved to set the pre-trial again on June 25, 1998 which pre-trial was moved/cancelled again by the defendant. The Court in the interest of justice again granted the motion and set the pre-trial on June 30, 1998 and again on September 17, 1998. Thereafter, the case was set on June 10, 1999 and August 17, 1999. For failure again of defendant to appear, Atty. Jose Ma. Ciocon, counsel for plaintiff Lovina, moved to declare it in default. Hence, this present motion.
It becomes a matter of concern to this Court that while the initial pre-trial was set on June 14, 1996, the same has been continuously postponed at the instance of the defendant causing the case to drag for over three (3) years without having moved from the pre-trial stage.
WHEREFORE, the Motion for Reconsideration is hereby DENIED and the reception of ex parte evidence for the plaintiffs is set on December 6, 1999 at 8:30 in the morning.
After their second motion for reconsideration was denied, the petitioners filed with the Court of Appeals (CA) a petition for certiorari alleging grave abuse of discretion amounting to lack or excess of jurisdiction on the part of Judge Florentino P. Pedronio in denying their motion to set aside order of default. The petitioners assert that (a) their counsel’s failure to attend the August 19, 1999 pre-trial was due to conflict of schedule and therefore, excusable; (b) they have strong and meritorious defenses; and (c) respondents have admitted the existence and validity of their respective loans and their failure to pay the same.
In the assailed Decision of September 5, 2001, the appellate court dismissed the petition. It held that the court a quo justifiably directed the respondents to present their evidence ex parte for failure of the petitioners or their counsel to attend the pre-trial. According to the CA, their consistent absence at the hearings set for pre-trial was inexcusable. Further, the issue in the consolidated cases involves a pure question of law; hence, the court a quo can resolve it without a full-blown trial. In any case, the petitioners are not deprived of their remedies against any adverse decision that may be rendered by the court a quo as they can still challenge the correctness of such decision even up to the Supreme Court.
The petitioners sought reconsideration of the above decision. However, in the assailed Resolution of November 28, 2001, the same was denied by the appellate court.
Aggrieved, the petitioners now come to this Court alleging that –
THE RESPONDENT APPELLATE COURT COMMITTED GRAVE AND FUNDAMENTAL ERRORS OF FACT AND LAW TANTAMOUNT TO AN EXERCISE OF GRAVE ABUSE OF DISCRETION AND/OR LACK OF JURISDICTION WHEN IT DISMISSED THE PETITION AND UPHELD THE RESPONDENT JUDGE’S ORDER DENYING PETITIONER’S MOTION TO SET ASIDE ORDER OF DEFAULT.3
The respondents filed their respective Comments on the petition. In the meantime, respondent Francisco Sajo passed away. In compliance with the Resolution dated July 1, 2002, the counsel of the deceased informed the Court that Celestino M. Sajo had been designated as the legal representative of the estate of respondent Sajo. On March 5, 2003, the Court gave due course to the petition and required the parties to file their respective memoranda.
It is the petitioners’ contention that their counsel’s absence at the pre-trial on August 19, 1999 was excusable and did not constitute obstinate refusal or inordinate neglect to comply with the Rules of Court as to warrant the declaration of default. Of the ten settings for pre-trial, only three had allegedly been cancelled at the petitioners’ instance. Further, the delay in the proceedings in the court a quo was due primarily to the efforts of the parties to amicably settle the case. In fact, the other similar cases, Leon G. Moya, Jr. v. Pacific Banking Corp., et al.,4 Spouses Fabian Ong v. Pacific Banking Corp., et al.,5 and Spouses Antonio and Lourdes Dadivas v. Pacific Banking Corp., et al.6 had already been dismissed on account of the parties’ amicable settlement. The petitioners pray for the lifting of the order of default to enable them to present their evidence in support of their meritorious defense.
The petition is bereft of merit.
At the outset, it must be stated that the filing of the instant petition for certiorari under Rule 65 of the Rules of Court is inappropriate. It is evident from the averments of material dates that the remedy of certiorari under Rule 65 was resorted to by the petitioners as a substitute for a lost appeal. The CA promulgated the assailed Decision on September 5, 2001, a copy of which was received by the petitioners on September 12, 2001.7 The petitioners filed a motion for reconsideration thereof on September 29, 2001 but the CA denied the same in the assailed Resolution of November 29, 2001, a copy of which was received by the petitioners on December 6, 2001.8 The petitioners’ remedy would have been to file a petition for review on certiorari under Rule 45 before this Court, and, reckoning the fifteen-day period to file the same from receipt of the resolution denying their motion for reconsideration, the petitioners had until December 21, 2001 to file a petition for review on certiorari before this Court. Instead, the petitioners filed the instant petition for certiorari on January 21, 2002, a month after the lapse of the reglementary period within which to file a petition for review on certiorari.
Apparently, the petitioners resorted to this special civil action of certiorari after failing to appeal within the fifteen-day reglementary period. This cannot be countenanced. The special civil action of certiorari cannot be used as a substitute for an appeal which the petitioners already lost.9 Certiorari lies only where there is no appeal nor any plain, speedy, and adequate remedy in the ordinary course of law.10 There is no reason why the question being raised by the petitioners, whether the appellate court committed grave abuse of discretion in dismissing the petition, could not have been raised by them on appeal.11
Admittedly, this Court, in accordance with the liberal spirit pervading the Rules of Court and in the interest of justice, has the discretion to treat a petition for certiorari as having been filed under Rule 45, especially if filed within the reglementary period for filing a petition for review.12 In this case, however, the Court finds no reason to justify a liberal application of the rules. The petition was filed well beyond the reglementary period to file a petition for review without any reason therefor.13
Even on the ground invoked by the petitioners, i.e., the appellate court committed grave abuse of discretion in dismissing their petition and upholding the respondent judge’s order of default, the present petition must be dismissed. By "grave abuse of discretion" is meant such capricious and whimsical exercise of judgment which is equivalent to an excess or a lack of jurisdiction.14 The abuse of discretion must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law as where the power is exercised in an arbitrary and despotic manner by reason of passion or hostility.15
In this case, in its decision upholding the Order dated November 18, 1999, directing the presentation of the respondents’ evidence ex parte, the appellate court discussed the facts on which it grounded its decision as well as the applicable law on the matter. Its action is neither whimsical nor despotic.
Indeed, the consistent failure of the petitioners or their counsel to appear at the pre-trial justify the court a quo’s order directing the respondents to present their evidence ex parte. Under Section 5,16 Rule 18 of the Rules of Court, failure on the part of the defendants, the petitioners in this case, and their counsel to appear at the pre-trial, shall be a cause to allow the respondents, as the plaintiffs, to present their evidence ex parte, and the Court to render judgment on the basis thereof.17 As correctly put by the CA, "assuming that the respondent judge was strict in the enforcement of the rules, that is an ocean away from being gravely abusive of his discretion."18
In the same light, the CA cannot be considered to have committed grave abuse of discretion amounting to lack or excess of jurisdiction when it affirmed the order of the respondent judge directing the respondents to present their evidence ex parte conformably with the rules.
WHEREFORE, the instant petition for certiorari is DISMISSED for lack of merit.
Puno, Quisumbing, Austria-Martinez, and Tinga, JJ., concur.
1 Penned by Associate Justice Hilarion L. Aquino, with Associate Justices Cancio C. Garcia and Jose L. Sabio, Jr. concurring.
2 Rollo, pp. 106-107.
3 Id. at 15-16.
4 Civil Case No. 9263.
5 Civil Case No. 9274.
6 Civil Case No. 9287.
7 Rollo, p. 4.
9 Conejos v. Court of Appeals, 387 SCRA 142 (2002).
12 Republic v. Court of Appeals, 322 SCRA 81 (2000).
14 Duero v. Court of Appeals, 373 SCRA 11 (2002).
16 The provision reads:
Sec. 5. Effect of failure to appear. – The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal shall be with prejudice, unless, otherwise, ordered by the court. A similar failure on the part of the defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof.
17 Leonardo v. S.T. Best, Inc., G.R. No. 142066, February 6, 2004.
18 Rollo, p. 35.
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