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[G.R. No. 148515.November 14, 2001]
DELBROS HOTEL CORP. vs. TIANSAY
THIRD DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated NOV 14 2001.
G.R. No. 148515(Delbros Hotel Corporation [also known as Acesite (Phils.) Hotel Corporation] vs. Leon H. Tiansay.)
Petitioner Deibros Hotel Corporation (DHC) assails the resolution of the Court of Appeals affirming the trial court's decision based on evidence presented ex parte by private respondent, consequently ruling that the trial court cannot be faulted for not notifying petitioner of the proceedings as no motion to lift default order was ever filed by petitioner.
The parties to the present controversy entered into a Consultancy Agreement whereby petitioner DHC appointed private respondent as DHC consultant with the duty of negotiating with the Government Service Insurance System (GSIS) and other financial institutions or corporations for the sale of petitioner DHC's 5-star hotel building; to negotiate with Hilton International for the purpose of raising the ceiling of petitioner's share in the Gross Operating Profit or to work out for the termination of the DHC-Hilton International Management agreement in the event that negotiations between the two fail; lastly, to negotiate with prospective buyers for the acquisition of DHC shares.
For compensation, petitioner undertook to pay private respondent the following:
(a) For the sale of DHC building, Consultant will be paid a compensation/commission by DHC equal to five percent (5%) of the purchase price for the building. Documentation costs will be for the account of DHC.
(b) For the amendment of the Management Agreement between DHC and Hilton International or termination of said agreement, Consultant will be paid by DHC a compensation/fee equivalent to the Central Bank Peso value of US$125,000.00 at the time of payment. It is understood that this compensation/fee is exclusive of the costs of negotiations to be incurred by Consultant, such as first class transportation, hotel and other travelling expenses and documentations costs, which shall be for the account of DHC. x x x.
4. The fee or commission of Consultant shall be promptly paid by DHC to Consultant, as follows:
(a) Fifty percent (5 0%) of the amoUnt agreed, upon completition and signing of the basic agreement covering any or all of the work assignments of Consultant; and
(b) The balance of fifty percent (50%) of the amount agreed, upon completion and execution of all the documents required to be executed covering the transaction.
(c) The fee or commission of Consultant shall be paid by DHC to the Consultant in cash.
Petitioner paid in advance to private respondent P40,000.00 per month, payable within the first 5 days of each month, during the effectivity of the agreement or any extension thereof which shall be deducted from the fee or commission payable by petitioner to private respondent. In the event of an unsuccessful implementation of the undertakings of private respondent after consistent and continuing efforts, the advances already paid to private respondent shall not be subject to reimbursement and will be treated as expense on the part of petitioner.
On February 7, 1985, the GSIS approved the proposal for the sale and leaseback of the subject building through the efforts of private respondent. And as requested by petitioner, private respondent negotiated further with the GSIS for reduction of interest rates which yielded positive results.
On January 6, 1986, private respondent wrote petitioner's president informing the latter that 50% of his consultancy fees had become due as a result of the GSIS approval of petitioner's proposal for the sale and leaseback of the subject hotel building and equipment. However, no remittance was made.
Repeated demands by private respondent for payment fell on deaf ears. Hence, on July 27, 1987 an action for specific performance was filed against petitioner. On August 19, 1987, private respondent amended the complaint.
On September 18, 1987, after asking for several extensions of time to file an answer, petitioner instead filed a motion to dismiss which was denied.
Thereafter, petitioner was granted 2 more extensions of time within which to answer, the second of which expired on June 27, 1988. This notwithstanding, petitioner again filed another motion for extension, but private respondent filed a motion to declare petitioner in default.
On June 29, 1988, petitioner filed its answer even when its last motion for extension was still pending resolution.
On July 19, 1988, the trial court declared petitioner in default and allowed private respondent to present evidence ex parte.
On July 26, 1988, petitioner filed a special civil action for certiorari and prohibition before the Court of Appeals assailing the trial court's denial of its motion to dismiss but the same, as well as a subsequent motion for reconsideration, was denied.
Unperturbed, petitioner elevated the matter to this Court but it suffered the same fate when the Court denied its petition on June 16, 1992 in G.R. No. 87678.
More than a year thereafter, or more specifically on July 23, 1993, the trial court ordered the resumption of the original case without notice to petitioner and thence rendered a decision dated April 29, 1994, declaring thusly:
WHEREFORE, in view of the foregoing considerations, plaintiff having established his case against defendant by preponderance of evidence, judgment is [rendered] in favor of plaintiff LEON H. TIANSAY. Accordingly, defendant DELBROS HOTEL CORP. (also known as Acesite Phils. Hotel Corp.) is hereby ordered to:
1. pay plaintiff the amount of P1,549,118.65 plus legal interest from the time of the filing of the complaint until full payment thereof;
2. pay plaintiff the sum of P3 00,000.00 by way of moral damages;
3. pay plaintiff the sum equivalent to 25% of the total amount due as attorney's fees;
4. pay the costs of suit.
Upon appeal, the Court of Appeals affirmed with modification only in so much as the attorney's fees were reduced to P 150,000.00.
Thus, the instant petition which we find unimpressed with merit.
It is of no moment that petitioner filed its answer, the same having been belatedly filed on June 29, 1988 inasmuch as the last extension of time to file answer granted to petitioner expired on June 27, 1988. Although petitioner filed a final motion for extension on June 27, 1988, this was not acted upon by the trial court. Time and again, the Court has ruled that parties and counsel should not assume that courts are bound to grant extensions for time prayed for, since, after all, a motion that is not acted upon in due time is deemed denied (Orosa vs. Court of Appeals, 261 SCRA 376 [1996]).
It is to be noted that petitioner's alleged urgent motion for reconsideration is not reflected in the record of the trial court. But foremost of petitioner's lapses is its failure to file a motion to set aside the order of default despite the fact that from the time, at the latest, its petition herein in G.R. No. 87678 was denied on July 16, 1992 to the time the trial court resumed proceedings on July 23, 1993, more than one year elapsed. And the decision of the trial court did not come down until close to a year thereafter.
Parenthetically, Section 3(a) of the 1997 Rules of Civil Procedure provide that a party in default shall be entitled to notice of subsequent proceedings but not to take part in the trial.
However, Section 9, Rule 13 of the Revised Rules of Court - which was the law then prevailing at the time the trial court resumed hearing the original case, and up to the time it rendered the contested decision - explicitly provides:
Sec. 9. Service upon party in default.-No service of papers other than substantially amended or supplemental pleadings and final orders or judgments shall be necessary on a party in default unless he files a motion to set aside the order of default, in which event he shall be entitled to notice of all further proceedings regardless of whether the order of default is set aside or not.
Thus, it was not improper for the trial court, at that time, not to notify petitioner of the resumption of the proceedings before it absent any motion to lift the default order.
At any rate, petitioner could not successfully claim that it was denied its day in court as in fact it was able to exhaust all available remedies, including an appeal. To be sure, denial of due process cannot be successfully invoked by a party which has had the opportunity to be heard on its motion for reconsideration (Rubenecia vs. Civil Service Commission, 244 SCRA 640 [1995]).
WHEREFORE, petition is denied due course.
SO ORDERED.
Very truly yours,
(Sgd.) JULIETA Y. CARREON
Clerk of Court
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