SPOUSES
JEFFREY and G.R. No. 154334
JOSEPHINE
KHONGHUN,
Petitioners, Present:
PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.
UNITED
COCONUT PLANTERS
BANK,*
Respondent. Promulgated:
July
31, 2006
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CORONA, J.:
This is an appeal by certiorari under
Rule 45 of the 1997 Rules of Civil Procedure (Rules) which seeks to set aside
the decision[1]
of the Court of Appeals (CA) in CA-G.R. No. 65358[2]
and its resolution[3]
dismissing the petition for certiorari and prohibition filed by petitioners
herein.
In October 1984, petitioner spouses
Jeffrey and Josephine Khonghun obtained certain loans
from respondent United Coconut Planters Bank (UCPB) ranging from P200,000 to P1,000,000.[4]
They executed promissory notes which they, however, eventually failed to pay,
prompting UCPB to file a case for a sum of money with preliminary attachment[5]
with the Regional Trial Court (RTC) of Makati City,
Branch 41. The case was raffled to Judge Manuel Victorio.
In February 2000 or by the time the complaint
was filed, petitioners’ loan had already ballooned to P4,428,041.47.
In their answer, petitioners admitted
the material allegations in UCPB’s complaint. They
did not dispute the genuineness and due execution of their promissory notes
although they claimed they did not agree to the stipulated interest stated
therein.
At the pre-trial conference on
February 23, 2001, petitioners and their counsel failed to appear. They had
also failed to submit a pre-trial brief. As a result, Judge Victorio
issued an order allowing respondent UCPB to present its evidence ex parte on February 26, 2001.[6]
On that date, respondent bank
presented its evidence ex parte and, on
the same day, Judge Victorio rendered judgment on UCPB’s complaint and ordered petitioners to pay their
obligations, as well as attorney’s fees, to the bank.[7]
Petitioners filed a motion for
reconsideration (MR) of the RTC order of February 26, 2001, claiming that their
non-appearance was occasioned by the interment of the wife of petitioners’
counsel two days before the pre-trial and Mr. Khonghun’s
debilitating health condition at that time.[8]
Petitioners prayed that they be allowed to present their evidence and
cross-examine respondent’s witnesses.
The RTC denied petitioners’ MR in an
order dated April 23, 2001, a copy of which was received by petitioners on May
10, 2001. On May 21, 2001, petitioners filed their notice of appeal but the
trial court denied it for having been filed three days after the lapse of the reglementary period.[9]
Via a petition for certiorari under Rule 65 of the Rules,
petitioners argued before the CA that Judge Victorio
committed grave abuse of discretion when he conducted the trial ex parte and later dismissed their notice of appeal.
During the pendency of their petition in the CA,
petitioners also filed a motion in the RTC seeking reconsideration of its order
dismissing their notice of appeal.
The CA dismissed the petition on the
following grounds: (1) petitioners resorted to the extraordinary civil action
of certiorari instead of an appeal (the period for which had already expired);
(2) petitioners were guilty of forum-shopping for simultaneously pursuing two
separate remedies, that is, a petition for certiorari in the CA and an MR in
the RTC, and (3) the trial court judge correctly conducted the ex parte trial for failure of petitioners and their
counsel to appear at the scheduled pre-trial and to submit a pre-trial brief.[10]
Later, the CA also dismissed
petitioners’ MR, hence, this appeal.
Petitioners fault the CA in affirming
the RTC decision although it violated Rule 18, Section 4[11]
of the Rules (which excuses litigants from appearing at the pre-trial for valid
cause) and deciding respondent’s complaint based merely on ex-parte evidence.
On the first issue, petitioners
insist that the trial court should have accepted the interment of their
counsel’s wife and Mr. Khonghun’s illness as
justifiable reasons for their absence at the trial.
We disagree.
What constitutes a valid ground to
excuse litigants and their counsels at the pre-trial under Rule 18, Section 4 of the Rules is subject to the sound
discretion of a judge.[12]
Petitioners could not question Judge Victorio’s
discretion absent any showing that he did so whimsically or capriciously. His
decision to allow respondent to present its evidence ex parte
was prompted by the fact that petitioners and their counsel failed to appear at
the pre-trial without informing the court of the reasons for their absence.
They did not even file any motion for postponement of the pre-trial. Neither
did they send their representatives to apprise the
court of their predicament. Worse, they failed to file a pre-trial brief.
Under Rule 18, Sections 5 and 6 of
the Rules, Judge Victorio’s action was correct. These
provisions clearly state:
Section 5. Effect of failure to appear.
― The failure of the plaintiff to appear when so
required pursuant to the next receding 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.
Section 6. Pre-trial brief.
― The parties shall file with the court and serve on the adverse
party, in such manner as shall ensure their receipt thereof at least three (3)
days before the date of pre-trial, their respective pre-trial briefs which
shall contain among others:
xxx xxx xxx
Failure to file the trial brief shall have the same
failure to appear at the pre-trial.[13]
(italics supplied)
On the second issue, petitioners
contend that it was error for the RTC to decide UCPB’s
complaint based merely on the latter’s evidence. According to them, the RTC
should have afforded them the opportunity to cross-examine respondent’s
witnesses and to present their own evidence, considering that they previously
assailed the interest specified in the promissory notes.
Again, we
disagree.
Rule 18, Section
5 mandates that, in case of defendant’s (petitioners’) failure to attend the
pre-trial, the court shall render judgment based on the evidence
presented ex parte by the plaintiff
(respondent UCPB).
It
should likewise be stressed that in their answer, not only did petitioners
admit the material allegations in respondent UCPB’s
complaint but they also failed to controvert the genuineness and due execution
of the promissory notes. Clearly, there was no longer any issue with respect to
their unpaid loans to respondent bank. Cross-examining respondent’s witnesses
and presenting evidence on their behalf would have been an exercise in futility
as it would serve no other purpose but delay the proceedings in the trial
court.
Lastly,
we see no issue regarding the interest imposed by UCPB on petitioners’ loans.
We quote with approval the disquisition of the trial court (as affirmed by the
CA):
…A review of the
answer filed by [petitioners] clearly indicated that they have not disputed the
genuineness and due execution of the promissory notes as well as the fact that
they have not paid the amount thereof. [Petitioners] alleged in their answer
that they signed the disclosure statements at the back of the promissory notes
in blank, impliedly suggesting that they have not stipulated on the rate of
interest. During the hearing on the motion for reconsideration, the Court
asked [petitioner] Jeffrey Khonghun what actually was
the rate of interest agreed upon by them and [respondent], and he admitted that
it was 32% which is the rate of interest appearing on the promissory notes…[14]
(italics supplied)
With
Jeffrey Khonghun’s admission, the trial court and the
CA had no other option but to disregard petitioners’ claim that they never
agreed to the interest rate imposed by respondent. Well-settled is the rule
that judicial admissions are conclusive on the party making them.[15]
WHEREFORE, the petition is hereby DENIED.
Costs against petitioners.
SO ORDERED.
Associate Justice
WE CONCUR:
Associate
Justice
Chairperson
Associate Justice
I
attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
Associate Justice
Chairperson, Second
Division
Pursuant to Section 13, Article VIII of the Constitution, and the Division Chairperson’s Attestation, I certify that the conclusions in the above decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
Chief Justice
* RTC Judge Manuel D. Victorio was impleaded as public respondent in this case. However, under Rule 45 of the 1997 Rules of Court, the petition for review on certiorari shall be filed without impleading the lower courts or judges thereof either as petitioners or respondents. Hence, Judge Manuel D. Victorio’s name was deleted from the title.
[1] Penned by Associate Justice Rebecca de Guia Salvador and concurred in by Associate Justices Eugenio S. Labitoria (now retired) and Teodoro P. Regino (now retired) of the Sixth Division of the Court of Appeals; dated January 24 2002, rollo, pp. 17- 26.
[2] Spouses Jeffrey and Josephine Khonghun v. Hon. Manuel D. Victorio and United Coconut Planters Bank.
[3] Dated July 10, 2002, rollo, p. 28.
[4]
Petitioners borrowed a total
of P2,000,000 from respondent.
[5] Docketed as Civil Case No. 00-470.
[6] Issued by Judge Manuel D. Victorio.
[7] Rollo, p. 101.
[8] Mr. Khonghun claimed he suffered acute bronchitis.
[9] Petitioners
received the assailed decision on March 15, 2001. On March 22, 2001, or seven
days thereafter, they filed a motion for reconsideration, thereby interrupting
the running of the 15-day reglementary period under
Rule 41, Section 3 of the Rules of Court. On May 10, 2001, petitioners received
the order of Judge Victorio denying their motion for
reconsideration. Consequently, from May 10, 2001, petitioners had only a period
of eight days, or until May 18, 2001, to perfect their appeal. Petitioners
filed their notice of appeal only on May 21, 2001, or three days after the
lapse of the reglementary period. (see
CA decision; supra note 1).
In Neypes v. Court of Appeals (G.R. No. 141524, 14 September 2005), however, parties now have a fresh period of 15 days within which to file a notice of appeal in the RTC, counted from the receipt of the order dismissing a motion for new trial or for reconsideration.
[10] Supra.
[11] Sec. 4. Appearance of Parties. It shall be the duty of the parties and their counsel to appear at the pre-trial. The non-appearance of a party may be excused only if a valid cause is shown therefor or if a representative shall appear in his behalf fully authorizing in writing to enter into an amicable settlement, to submit to alternative modes of dispute resolution, and to enter into stipulations or admissions of facts and of documents.
[12] Fountainhead International Philippines, Inc. v. Court of Appeals, G.R. No. 86505, 11 February 1991, 194 SCRA 12.
[13] Rule 18, supra.
[14] Rollo, p. 25.
[15] Rule 129, Section 4, Rules of Court.