July 2005 - Philippine Supreme Court Decisions/Resolutions

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Philippine Supreme Court Jurisprudence > Year 2005 > July 2005 Decisions > G.R. No. 154040 - Advance Textile Mills, Inc., v. Willy Tan, et al. :




G.R. No. 154040 - Advance Textile Mills, Inc., v. Willy Tan, et al.

PHILIPPINE SUPREME COURT DECISIONS

FIRST DIVISION

[G.R. NO. 154040. July 28, 2005]

ADVANCE TEXTILE MILLS, INC., Petitioners, v. WILLY C. TAN, doing business under the name WCT Manufacturing, Respondents.

R E S O L U T I O N

QUISUMBING, J.:

Before us is a Petition for Review on Certiorari of the Decision1 dated June 17, 2002 of the Court of Appeals in CA-G.R. CV No. 49607 which set aside the Order of Default dated April 5, 1995 and the Decision2 dated April 19, 1995 of the Regional Trial Court of Makati City, Branch 147, in Civil Case No. 94-1683.

Petitioner Advance Textile Mills, Inc., allegedly sold textile materials to Willy C. Tan of WCT Manufacturing. After a few attempts at collecting the unpaid balance of P1,751,892.67, on November 11, 1993, petitioner sent respondent a final demand letter giving him ten days to settle his debt on pain of legal action.3 Respondent still failed to pay. Thereafter, petitioner instituted an action for collection of a sum of money before the Regional Trial Court of Makati City.4

In his Answer,5 respondent denied purchasing fabric materials on credit from the petitioner and alleged that all his purchases were paid in cash basis. He likewise denied receiving any demand letter from the petitioner.

A pre-trial conference was scheduled on March 6, 1995.6 On motion of respondent's counsel, the trial court granted the motion to cancel and reset the pre-trial conference on April 5, 1995.7 Both on said date respondent and counsel failed to appear, so the trial court, upon petitioner's motion, declared respondent in default and thereafter allowed the presentation of evidence ex parte.

On April 19, 1995, the trial court rendered a Decision ordering respondent to pay petitioner the amount of P1,751,892.67 with interest at the legal rate of 12% per annum from the time the complaint was filed until the obligation shall have been totally paid; the amount of P150,000 as attorney's fees; and the cost of the proceedings.8

Respondent appealed the decision to the Court of Appeals. On June 17, 2002, the appellate court ruled that the Order of Default was null and void, for failure of the trial court to serve the respondent with notice of pre-trial. The Court of Appeals held that the notice of pre-trial should be sent to both the party-litigant and his counsel on record and not merely to the counsel. The decretal portion of the decision reads:

WHEREFORE, premises considered, the assailed Decision dated April 19, 1995 as well as the Order dated April 5, 1995 declaring appellant in default, are hereby ANNULLED and SET ASIDE. This case is ordered REMANDED to the court a quo for further appropriate proceedings.

SO ORDERED.9

Aggrieved, petitioner elevated the case to this Court and raised the following issues:

I WHETHER OR NOT THE HONORABLE COURT OF APPEALS COMMITTED SERIOUS ERROR IN DISREGARDING THE TRIAL COURT'S AUTHORITY TO DECLARE THE [RESPONDENT] IN DEFAULT AS A RESULT OF HIS FAILURE TO APPEAR AT THE PRE-TRIAL CONTRARY TO THE SETTLED JURISPRUDENCE ON THE PRESUMPTION OF CORRECTNESS OF THE COURT'S ACTION.

II WHETHER OR NOT THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NULLIFYING AND/OR SETTING ASIDE THE TRIAL COURT'S JUDGMENT BY DEFAULT AND REMANDING THE CASE FOR FURTHER APPROPRIATE PROCEEDINGS, IN EFFECT RENDERING NUGATORY THE OBJECTIVE OF ATTAINING A SPEEDY AND INEXPENSIVE DISPOSITION OF CASES.10

Simply put, the main issue for our resolution is whether a separate notice resetting pre-trial date is required before the party-litigant can be declared in default for his failure to attend the reset pre-trial.

Petitioner contends that respondent, in filing the Ex-parte Motion to Cancel Hearing, impliedly acknowledged the sufficiency of the first notice served solely upon his counsel. Petitioner maintains that respondent may not now insist and claim that the subsequent notice of pre-trial sent to his counsel was defective and inadequate. Petitioner cites Five Star Bus Co., Inc. v. Court of Appeals,11 where this Court held that service of such notice on a party-litigant shall preferably be made through his counsel who has the duty to see to it that the former received such notice and attends the reset pre-trial.

Petitioner contends that the trial court's order declaring respondent in default was proper since the latter's failure to appear at the pre-trial conference was not due to fraud, accident, mistake or excusable negligence. Lastly, petitioner calls attention to the fact that respondent failed to put up a meritorious defense to allow a full hearing on the substantive issues raised.

On the other hand, respondent insists that the rules call for separate notices to counsel and to party, otherwise the judgment is void.

Prefatorily, we note that the proceedings before the lower court happened in the years 1994 to 1995, and thus governed by the old Rules of Civil Procedure. Under the old rules, particularly Rule 20, Section 1,12 a notice of pre-trial must be served on the party affected, separately from his counsel,13 otherwise the proceedings will be null and void.14 The general rule that notice to counsel is notice to parties has been held insufficient and inadequate for purposes of pre-trial,15 such that the trial courts uniformly serve such notice to party through or care of his counsel at counsel's address with the express imposition upon counsel of the obligation of notifying the party of the date, time and place of the pre-trial conference and assuring that the party either appear thereat or deliver to counsel a written authority to represent the party with power to compromise the case, with the warning that a party who fails to do so may be non-suited or declared in default.16

A pre-trial conference facilitates the disposal of cases by simplifying or limiting the issues and avoiding unnecessary proof of facts at the trial. Before a party is non-suited or is declared as in default, it must be shown that said party and his counsel were duly served with separate notices of the pre-trial conference.17 Respondent does not dispute that the original notice complied with the requirements.18 He is contesting the adequacy of the service of the order resetting the pre-trial conference to April 5, 1995.

The Rules of Court do not categorically require that the format and manner of service of the notice of a reset pre-trial be similar to an order of pre-trial. Nonetheless, we find guiding light in the similar case of Pineda v. Court of Appeals.19 In Pineda, the pre-trial was rescheduled as prayed for by both counsels who were personally notified by the clerk of court as appearing in the Minutes. However, the Minutes did not indicate whether the parties to the case were informed of the new schedule. This Court ruled that the order of default for therein respondent's failure to attend the pre-trial was null and void as no notice of the reset pre-trial was ever sent to therein respondent.20 For the same reason that separate notices to counsel and client are required in an order of pre-trial, so similarly should these requirements be observed in resetting the pre-trial.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated June 17, 2002 of the Court of Appeals in CA-G.R. CV No. 49607 is AFFIRMED. Costs against petitioner.

SO ORDERED.

Davide, Jr., C.J., (Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.

Endnotes:

1 Rollo, pp. 46-52. Penned by Associate Justice Portia Aliño-Hormachuelos, with Associate Justices Elvi John S. Asuncion, and Edgardo F. Sundiam concurring.

2 CA Rollo, pp. 29-30.

3 Rollo, p. 57.

4 Id. at 59-68.

5 Id. at 69-75.

6 Id. at 76.

7 Id. at 79.

8 CA Rollo, p. 30.

9 Id. at 86-87; Rollo, pp. 51-52.

10 Rollo, pp. 21-22.

11 G.R. No. 120496, 17 July 1996, 259 SCRA 120.

12 Rule 20, Section 1. Pre-trial mandatory. - In any action, after the last pleading has been filed, the court shall direct the parties and their attorneys to appear before it for a conference to consider:

. . .

13 De Guia v. De Guia, G.R. No. 135384, 4 April 2001, 356 SCRA 287, 293; Aducayen v. Flores, No. L-30370, 25 May 1973, 51 SCRA 78.

14 De Guia v. De Guia, supra; Sagarino v. Pelayo, No. L-27927, 20 June 1977, 77 SCRA 402, 408-409.

15 Taroma v. Sayo, No. L-37296, 30 October 1975, 67 SCRA 508, 512.

16 De Guia v. De Guia, supra; Five Star Bus Co., Inc. v. Court of Appeals, G.R. No. 120496, 17 July 1996, 259 SCRA 120, 126; Ng v. Alfaro, Adm. Mat. No. P-93-959, 1 December 1994, 238 SCRA 486, 491.

17 Lim v. Animas, No. L-39094, 18 April 1975, 63 SCRA 408, 410-411.

18 Rollo, p. 76.

19 No. L-35583, 30 September 1975, 67 SCRA 228.

20 Id. at 232.




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