 Michael Guy vs. Atty. Glenn Gacott, GR No.

206147, January 13,

2016

Facts:

It appears from the records that there was a breach of contract where
the seller of transceivers that were defective was not able to replace the
same or refund the amount paid. A suit was filed against the corporation that
sold it which was later on discovered to be a partnership.

Summons was served upon the partnership and after trial, judgment
was rendered against it. Appeal not having made, the judgment became final
and executory.

The Sheriff levied upon a vehicle belonging to Guy, a partner, but he

moved to lift the levy because he was not the judgment debtor. The motion
was denied, holding that as a registered partnership, Guy should be treated
as a general partner and may be held jointly and severally with the
partnership.

This was affirmed by the CA which rule that Guy cannoy feign
ignorance of the existence of summons and that the summons be not served
upon all the partners. It is sufficient that it be served on the managing partner,
and being such, he is bound by the service of summons upon the
partnershipbased on Article 1821 of the New Civil Code.

Issue:

Whether a service of summons upon a partnership binds a partner.

Held:

Guy is not bound by the service of summons upon the partnership.

This is especially so that summons was not served upon the general
manager.

Jurisdiction over the person or jurisdiction in personam – the power of

the court to render a personal judgment or to subject the parties in a
particular action to the judgment and other rulings rendered in the action – is
an element of due process that is essential in all actions, civil as well as
criminal, except in actions in rem and quasi in rem. (Macasaet vs. Co, 697
SCRA 187,198)

Jurisdiction over the person of the plaintiff is acquired by the mere filing
of the complaint in the court. As the initiating party, the plaintiff in a civil action
voluntarily submits himself to the jurisdiction of the court. As to the defendant,
the court acquires jurisdiction over his person either by proper service of the
summons, or by his voluntary appearance in the action.

The partnership was never shown to have been served with the
summons through any of the enumerated authorized persons to receive
such. Service of summons upon persons other than those enumerated in
Section 11 is invalid. Even substantial compliance is not sufficient service of
summons. It is not correct to say that it was immaterial whether the summons
to the partnership was served on the theory that it was a corporation.

Although a partnership is based on delectus personae or mutual

agency, whereby a partner can generally represent the partnership in its
business affairs, it is non sequitor that a suit against a partnership is
necessarily a suit impleading each and every partner. It must be
remembered that a partnership is a juridical entity that has a distinct and
separate personality from the persons composing it.

 Acampado v. Sps. Lourdes and Felimon Cosmilla, GR No. 198531,

Sept. 28,2015

Facts:

For resolution of the Court is the instant Petition for Review

on Certiorari filed by petitioners Ethel Acampado, et al., seeking to reverse
and set aside the Resolutions dated 28 June 2007 and 19 August 2011 of
the Court of Appeals, Cebu City in CA-G.R. SP. No. 00805. The assailed
resolutions reversed the Order dated 16 May 2005 of the Regional Trial
Court (RTC) of Aklan, Branch 6 which denied the Motion for Reconsideration
filed by respondents Spouses Lourdes and Felimon Cosmilla for being pro
forma.

The present petition stems from the Petition for the Declaration of the
Nullity of Document filed by respondents against petitioners before the RTC
of Kalibo, Aklan, Branch 6. In their Amended Complaint docketed as SPL.
Civil Case No. 6644, respondents Spouses Cosmilla alleged that the sale of
their share on the subject property was effected thru a forged Special Power
of Attorney (SPA) and is therefore null and void.

After trial on the merits, the RTC rendered a Decision dated 31 March 2005
dismissing the complaint of the respondents for failure to prove by
preponderance of evidence that the signatures of the respondents in the SPA
were forged. The RTC disposed in this wise:

"WHEREFORE, in view of the foregoing considerations, [respondents']

complaint is hereby DISMISSED. [Respondents] are also ordered to jointly
and severally pay [petitioner Katipunan de los Reyes] the sum of P25,000.00
for transportation expenses and attorney's fees as well as [petitioner
Acampados] P21,772.50 for attorney's fees and litigation expenses.

Costs against the [respondents]."

Aggrieved, respondents filed a Motion for Reconsideration on 6 May

2005 seeking for the reversal of the earlier RTC Decision.

For failure of the respondents, however, to comply with the

requirement of notice of hearing as required under Sections 4 and 5 of Rule
15 of the Revised Rules of Court, the court a quo denied the Motion for
Reconsideration in Order dated 16 May 2005, viz:

"WHEREFORE, in view of the foregoing considerations, the Motion for

Reconsideration is declared pro forma and the decision sought to be
reconsidered is declared final and executory as the period of appeal has
already expired.
SO ORDERED."

Ascribing grave abuse of discretion, respondents elevated the matter

to the Court of Appeals by filing a Petition for Certiorari, Prohibition and
Mandamus with prayer for Preliminary Injunction and TRO seeking to annul
and set aside the RTC Order dated 16 May 2005.

For lack of merit, the Court of Appeals dismissed the petition filed by
the respondents in a Decision dated 27 October 2006. The appellate court
held that there is no showing that lower court committed grave abuse of
discretion amounting to lack or excess in jurisdiction in denying the Motion
for Reconsideration of the respondents. Resonating the disquisition of the
lower court, the Court of Appeals declared that a motion which fails to comply
with Sections 4, 5 and 6 of the Rules of Court is nothing but a useless piece
of paper and does not stall the running of the reglementary period.

On Motion for Reconsideration by Respondents, however, the Court of

Appeals reversed its earlier Resolution and allowed the relaxation of the
procedural in a Resolution dated 28 June 2007. Hence, the appellate court
vacated the 16 May 2005 Order of the RTC directed the court a quo to thresh
out the Motion for Reconsideration filed by the respondents on the merits.

In a Resolution dated 19 August 2011, the Court of Appeals denied the

Motion for Reconsideration filed by petitioners.

Issue:

Petitioners are now before this Court via this instant Petition for Review
on Certiorar praying that the Court of Appeals Resolution be reversed and
set aside on the ground that:

The CA gravely erred and committed reversible error in issuing resolutions

dated June 28, 2007 and Agust 19, 2011 which, in effect reconsidered its
own decision dismissing the petition for certiorari, prohibition, mandamus
with prayer for preliminary injunction and TRO of respondents.

Held:

The Court Grant the petition.

The Motion for Reconsideration is a contentious motion that needs to

comply with the required notice and hearing and service to the adverse party
as mandated by the following provisions of the Revised Rules of Court.
The foregoing requirements — that the notice shall be directed to the
parties concerned, and shall state the time and place for the hearing of the
motion — are mandatory, and if not religiously complied with, the motion
becomes pro forma. A motion that does not comply with the requirements of
Sections 4 and 5 of Rule 15 of the Rules of Court is a worthless piece of
paper which the clerk of court has no right to receive and which the court has
no authority to act upon.[ The logic for such requirement is simple: a motion
invariably contains a prayer which the movant makes to the court which is
usually in the interest of the adverse party to oppose. The notice of hearing
to the adverse party is therefore a form of due process; it gives the other
party the opportunity to properly vent his opposition to the prayer of the
movant. In keeping with the principles of due process, therefore, a motion
which does not afford the adverse party a chance to oppose should simply
be disregarded.[ Principles of natural justice demand that a right of a party
should not be affected without giving it an opportunity to be heard.

Harsh as they may seem, these rules were introduced to avoid

capricious change of mind in order to provide due process to both parties
and to ensure impartiality in the trial.

It is important, however, to note that these doctrines refer exclusively

to a motion, since a motion invariably contains a prayer, which the movant
makes to the court, which is to repeat usually in the interest of the adverse
party to oppose and in the observance of due process, the other party must
be given the opportunity to oppose the motion. In keeping with the
principles of due process, therefore, a motion which does not afford
the adverse party the chance to oppose it should simply be
disregarded. Failure to comply with the required notice and hearing is
a fatal defect that is deleterious to respondents cause.

Nevertheless, the three-day requirement is not a hard and fast rule.

Where a party has been given an opportunity to be heard, the time to study
the motion and oppose it, there is compliance with the rule. The test is the
presence of the opportunity to be heard, as well as to have time to study the
motion and meaningfully oppose or controvert the grounds upon which it is
based.

We here follow the rule and so pronounce that contrary to the findings
of the appellate court, petitioners were not given ample opportunity to vent
their side on the issue since they were not able to promptly receive a copy
of the notice of hearing impinging the latter's right to due process. We
consulted the records and we found that no notice of hearing was appended
to the Motion for Reconsideration of the respondent. As discussed above, a
motion for reconsideration is a litigated motion where the right of the adverse
party will be affected by its admission. The adverse party in this case had
the right to resist the motion because it may result to the reversal of a prior
favorable decision. The proof of service was therefore indispensable in order
to avoid surprises on the opposite party.

The absence thereof is fatal to the motion.

It bears stressing that a motion without notice and hearing, is pro

forma, a mere scrap of paper that cannot be acted by the court. It presents
no question that the court can decide. The court has no reason to consider it
and the clerk has no right to receive it. Indisputably, any motion that does not
contain proof of service and notice to the adverse party is not entitled to
judicial cognizance.
 Considering that the running of the period towards the finality of the
judgment was not stopped, the RTC Decision dated 31 March 2005 became
final and executory. Every litigation must come to an end once a judgment
becomes final, executory and unappealable. For just as a losing party has
the right to file an appeal within the prescribed period, the winning party also
has the correlative right to enjoy the finality of the resolution of his case by
the execution and satisfaction of the judgment, which is the life of the law. To
frustrate it by dilatory schemes on the part of the losing party is to frustrate
all the efforts, time and expenditure of the courts. It is in the interest of justice
that we should write finis to this litigation. Consequently, we find no
reversible error when the RTC denied respondents' motion for
reconsideration.

 Norlinda Marilag vs Mrcelino Martinez, GR No. 201892, June 22,

2015

Facts:

On July 30, 1992, Rafael Martinez (Rafael), respondent's father,

obtained from petitioner a loan in the amount of P160,000.00, with a
stipulated monthly interest of five percent (5%), payable within a period of
six (6) months. The loan was secured by a real estate mortgage over a parcel
of land covered by Transfer Certificate of Title (TCT) No. T-208400.

When the obligation became due and demandable, no payment was

made hence, a complaint for judicial foreclosure of mortgage was filed where
the trial court rendered a judgment in the amount of P229,000, with an
interest of 12% per annum. Before notice of judgment, the debtor agreed to
pay the creditor the amount of P689,000 and the daughter executed a
promissory note after paying P400,000 binding himself to pay the balance.As
there was no payment was made, the creditor sued the debtor but debtor
refused to pay contending that he has already paid more than the amount.
 The trial court ruled that there was already an extinguishment of the
obligation because of the payment. However, upon motion for
reconsideration, the court recalled its original decision and ruled that causes
of action in the foreclosure and collection are separate and distinct. The CA
reversed the aforesaid decision and ruled that there was res judicata, hence,
appeal was filed with the SC.

Issue:

Whether the Cort of appeals erred in dismissing the collection case.

Held:

The court agrees that the dismissal is correct because of litis pendentia
and not res judicata because there was no evidence that the judgment in the
collection case already attained finality.

The prosecution in the collection case was barred, instead, by the

principle of litis pendentia in view of the substantial identity of ther parties
and the singularity of the causes of action in the foreclosure and collection
cases, such that the prior foreclosure case barred petitioner’s recourse to the
subsequent collection cases.

To lay down the basics, litis pendentia, as a ground for the dismissal
of a civil action, refers to that situation wherein another action is pending
between the same parties for the same cause of action, such that the second
action becomes unnecessary and vexatious. For the bar of litis pendentia to
be invoked, the following requisites must concur: (a) identity of parties, or at
least such parties as represent the same interests in both actions; (b) identity
of rights asserted and relief prayed for, the relief being founded on the same
facts; and (c) the identity of the two preceding particulars is such that any
judgment rendered in the pending case, regardless of which party is
successful would amount to res judicata in the other. The underlying principle
of litis pendentia is the theory that a party is not allowed to vex another more
than once regarding the same subject matter and for the same cause of
action. This theory is founded on the public policy that the same subject
matter should not be the subject of controversy in courts more than once, in
order that possible conflicting judgments may be avoided for the sake of the
stability of the rights and status of persons, and also to avoid the costs and
expenses incident to numerous suits. Consequently, a party will not be
permitted to split up a single cause of action and make it a basis for several
suits as the whole cause must be determined in one action. To be sure,
splitting a cause of action is a mode of forum shopping by filing multiple
cases based on the same cause of action, but with different prayers, where
the round of dismissal is litis pendentia for res judicata, as the case may be).

In this relation, it must be noted that the question of whether a cause

of action is single and entire or separate is not always easy to determine and
the same must often be resolved, not by the general rules, but by reference
to the facts and circumstances of the particular case. The true rule, therefore,
is whether the entire amount arises from one and the same act or contract
which must, thus, be sued for in one action, or the several parts arise from
distinct and different acts or contracts, for which a party may maintain
separate suits .

 Roasters Phils., Inc. v Gaviola, et al., GR No. 191874,

September 2, 2015

Facts:

On 9 April 2003, respondents Georgia Gaviola and Maria Leisa M.

Gaviola (Maria Leisa), together with their children Karla Helene, Kashmeer
Georgia and Klaire Marlei, filed a Complaint for Damages against Roasters
Philippines before the RTC of Las Piñas City. The family was hospitalized
due to "acute gastroenteritis and possible food poisoning" when they dined
at Kenny Rogers Roasters restaurant Duty-Free Branch in Parañaque.
 Petitioner filed a Motion to Dismiss on the ground of failure to state a
cause of action. The trial court denied the motion to dismiss, as well as the
subsequent motion for reconsideration filed by petitioner.

In its Answer Ad Cautelam, petitioner alleged that the complaint states

no cause of action; that it is not the direct and real owner of the said Kenny
Rogers branch; and that there was no valid demand made by respondents.
Petitioner counterclaimed for damages.

Meanwhile, petitioner filed a Petition for Certiorari before the Court of

Appeals questioning the refusal of the trial court to dismiss the complaint. On
14 March 2005, the appellate court dismissed the petition. On 7 March 2006,
the Court of Appeals issued a Resolution declaring the 14 March 2005
Decision to have become final and executory as of 20 July 2005.

On 26 April 2007, petitioner filed a Motion to Dismiss on the ground of

failure of respondents to prosecute the pending case alleging that
respondents had not filed any pleading to revive or re-activate their case
since the 14 March 2005 Decision of the Court of Appeals has become final
and executory. In response to the Motion to Dismiss, respondents filed a
Manifestation with Motion to Set the Case for Pre-Trial. The trial court denied
the Motion to Dismiss filed by petitioner and set the pre-trial to 6 August
2007. Petitioner filed a motion for reconsideration from said order but it was
denied by the trial court.[8] On 12 November 2007, the trial court referred the
case to mediation. Petitioner meanwhile filed a petition for certiorari before
the Court of Appeals assailing the denial of its Motion to Dismiss. Petitioner
also filed the corresponding motion to suspend proceedings before the trial
court in view of the pendency of its certiorari petition. The Court of Appeals
eventually denied the petition on 18 April 2008 which prompted the trial court
to deny petitioner's motion to suspend proceedings. The trial court set the
hearing for 19 May 2008.

During the presentation of their evidence-in-chief on 19 May 2008,

respondents failed to attend the hearing. Consequently, the trial court issued
an Order dismissing the Complaint for failure to prosecute pursuant to
Section 3, Rule 17 of the Rules of Court.
Issue:

The nature and effect of a dismissal of an action for failure to prosecute

for an unreasonable length of time.

Held:

The Court held that a dismissal of action for failure to prosecute for an
unreasonable length of time is a final order and not an interlocutory order,
hence, it is appealable.

Under Rule 17, Section 3 of the 1997 Rues of Court, an action may be
dismissed for failure to prosecute in any of the following instances: (1) if the
plaintiff fails to appear at the time of the trial; or (2) if he fails to prosecute the
action for an unreasonable time; or (3) if he fails to comply with the Rules of
court or any order of the court.

The fundamental test for non prosequitur is whether, under the

circumstances, the plaintiff is chargeable with want of due diligence in filing
to proceed with reasonable promptitude. There must be unwillingness on the
part of the plaintiff to prosecute.

Section 3, Rule 17 of the 1997 Rules of Procedure is explicit that the

dismissal of the complaint due to failure to prosecute “shall have the effect
of an adjudication upon the merits unless otherwise declared by the court.
“The Rule says:

If, for no justifiable cause, the plaintiff fails to appear on the date of the
presentation of his evidence in chief on the complaint, or to prosecute his
action for an unreasonable length of time, or to comply with the Rules or
upon the court’s own motion, without prejudice to the right of the defendant
to prosecute his counterclaim in the same or separate action. This dismissal
shall have the effect of an adjudication upon the merits unless otherwise
declared by the court”.

 ALLIED BANKING CORPORATION v. SPOUSES RODOLFO &

GLORIA MADRIAGA, GR No. 196670, October 12, 2016
Facts:

Respondent Spouses Rodolfo and Gloria Madriaga obtained a

P750,000.00 loan from Allied Bank (the Bank) secured by a real estate
mortgage on their property. Respondents alleged to have religiously paid the
loan from June 1996 to August 1999 through Leo Nolasco (Nolasco), the
Bank's Creditor Investigator/Appraiser, in the aggregate amount of
P628,953.96. In July 1999, respondents converted the remaining Balance of
their loan, including interest, in the amount of P380,000.00 to a term loan.
Payments were regularly coursed to Nolasco.

On 25 May 2001, respondents received a demand letter from the Bank

for the payment of P399,898.56. Upon further inquiry, respondents
discovered that said amount represented their unpaid obligation from June
2000 to May 2001. Respondents claimed to have paid for the same. They
requested for a copy of the ledger and/or record of their loan obligation but
the Bank ignored the same.

The Bank filed a petition for extrajudicial foreclosure of mortgage over

respondents' property. The respondents countered with a complaint for
specific performance to examine the loan documents. Answer was filed by
the bank. Then, they moved that they be allowed to file an amended
complaint which was granted but which they never filed despite repeated
extensions. They likewise failed to move that the case be set for pre-trial.

The court dismissed the case for failure to prosecute for an

unreasonable length of time and to comply with the order of the court. The
Trial court ruled that they were trying to employ dilatory tactics to thwart the
foreclosure of their property.

Issue:
 Whether the trial court correctly dismissed respondents' complaint for
failure to prosecute.

Held:

Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as

amended, the failure on the part of the plaintiff, without any justifiable cause,
to comply with any order of the court or the Rules, or to prosecute his action
for an unreasonable length of time, may result in the dismissal of the
complaint either motu proprio or on motion by the defendant. There are three
(3) instances when the trial court may dismiss an action motu proprio,
namely: 1) where the plaintiff fails to appear at the time of the trial; 2) where
he fails to prosecute his action for an unreasonable length of time; and, 3)
when he fails to comply with the rules or any order of the court.

The failure of a plaintiff to prosecute the action without any justifiable

cause within a reasonable period of time will give rise to the presumption that
he is no longer interested to obtain from the court the relief prayed for in his
complaint; hence, the court is authorized to order the dismissal of the
complaint on its own motion or on motion of the defendants. The presumption
is not, however, by any means, conclusive because the plaintiff, on a motion
for reconsideration of the order of dismissal, may allege and establish a
justifiable cause for such failure.

In this case, respondents should have set the case for pre-trial right
after their receipt of the Bank's Rejoinder in May 2002. Instead, respondents
sought to delay the proceedings by manifesting that an amended complaint
will be. filed. Respondents' offered excuse that their financial status forced
the successive withdrawals of their counsels deserves scant consideration.
PAO even admitted that respondents failed the indigency test. The failure of
respondents to promptly set the case for pre- trial, without justifiable reason,
is tantamount to failure to prosecute. Respondents cannot blaim their
counsels because they too had been remiss in their duty to diligently pursue
the case when they failed to secure the services of a counsel within the given
period. Respondents' laxity in attending to their case ultimately led to its
dismissal. Indeed, respondents were in the brink of losing their property to
foreclosure. This situation should all the more pursue the case relentlessly.
The law aids the vigilant, not those who slumber on their rights. Vigilantibus,
sed non dormientibus Jura subverniunt.

 CLODUALDA D. DAAC vs. VALERIANA ROSALDO YU, G.R. No.

183398, June 22, 2015

FACTS:

The instant petition stems from a complaint filed by petitioner

Clodualda D. Daaco against respondent Valeriana Rosaldo Yu, Faustina
Daaco, and the Register of Deeds of Tacloban City docketed before the
RTC, Branch 6, Tacloban City as Civil Case No. 2006-02-16 for Annulment
of Title, Recoveiy of Property under TCT No. T-28120 and Damages.

After the answer had been filed and preliminary matters disposed of,
the RTC, on September 5, 2007, set the pre-trial conference on October 4,
2007. However, upon motion, the trial court dismissed the case as against
respondent Yu in its assailed Order for petitioner's failure to appear thereat.

Subsequently, petitioner filed a Motion for Reconsideration alleging the

following grounds: (1) that she was not properly notified of the pre-trial
conference scheduled at 8:30 a.m. on October 4, 2007 as she received
notice thereof only at 5:30 p.m. of October 3, 2007, or merely 15 hours before
the scheduled conference, and thus, the order of dismissal was invalid; and
(2) that there is still an unresolved Motion to Consider the Answer of
Respondent as Not Filed, which she had previously filed on October 4, 2006.

The case filed by the plaintiff was dismissed due to her failure to appear
to the pre-trial. She contended that for the first time in the SC that she was I,
properly notified considering that the notice of pre trial conference was raised
for the first time in the Supreme Court, not in the trial court.

Issue:
 WHETHER OR NOT THE REGIONAL TRIAL COURT'S DISMISSAL
OF THE CASE FOR PETITIONER'S FAILURE TO APPEAR IN THE PRE-
TRIAL CONFERENCE IS CONTRARY TO LAW, RULES, AND EXISTING
JURISPRUDENCE.

Held:

It is settled that points of law, theories, issues and arguments not

brought to the attention of the lower court need not be, and ordinarily will not
be, considered by a reviewing court, as they cannot be raised for the first
time at that late stage.

Accordingly, the trial court cannot be said to have whimsically or

capriciously dismissed the case for it was merely implementing the letter of
the law. As the trial court observed, the court was just 20 minutes away from
petitioner's residence. Prudence and diligence in complying with the rules
and orders of the court would have prompted petitioner to have at least
notified the court of her predicament. This way, she could have been
appointed with counsel or granted an extension of time to prepare for pre-
trial. Unfortunately for petitioner, she not only failed to attend the scheduled
conference, she also failed to inform the court the reasons for her absence.
Indeed, while a 15-hour notice may be quite impulsive, this fact, standing
alone, fails to excuse petitioner's absence. The fact remains that notice was
received by petitioner before the date of the pre-trial, in compliance with the
notice requirement mandated by the Rules.

 METROPOLITAN BANK v. FADCOR, GR No. 197970, Jan 25,

2016

Facts:

Metrobank granted five (5) loans in the aggregate amount of

P32,950,000.00 to respondent Fadcor, Inc. or The Florencio Corporation
(Fadcor), represented by its President Ms. Leticia D. Florencio and its
Executive Vice-President, Ms. Rachel D. Florencio-Agustin. As such, Fadcor
executed five (5) Non-negotiable Promissory Notes in favor of Metrobank. In
addition, Fadcor through individual respondents executed two (2) Real
Estate Mortgages in favor of Metrobank over ten (10) parcels of land as
collateral for the loans obtained on August 2, 1995, in the amount of
P18,000,000.00; P10,000,000.00, obtained on September 14, 1995, and an
Amendment of Real Estate Mortgage to secure a loan of P22,000,000.00,
obtained on October 26, 1995. Furthermore, the same respondents
executed two (2) Continuing Surety Agreements in favor of Metrobank,
binding themselves jointly and severally liable to pay any existing or future
obligation in favor of Metrobank up to a maximum amount of Ninety Million
Pesos (P90,000,000.00) only.

Thereafter, respondents defaulted in the payment of their loan

amortizations in the total aggregate sum of P32,350,594.12, hence, after
demands for payment of the arrears were ignored, Metrobank filed on April
20, 2001 an extra-judicial petition for foreclosure of mortgage of the ten (10)
mortgaged parcels of land. On July 31, 2001, the foreclosed properties were
sold at public auction in the amount of P32,961,820.72 to Metrobank as the
highest bidder. Consequently, the corresponding Certificate of Sale was
issued to Metrobank and the proceeds of sale were applied to Fadcor's
indebtedness and expenses of foreclosure. Nonetheless, the amount of
P17,479,371.86 remained unpaid as deficiency obligation, prompting
Metrobank to demand from respondents payment of such deficiency
obligation. Respondents, on the other hand, failed to pay. Hence, on
September 23, 2003, Metrobank filed a Complaint against Fadcor for
recovery of the deficiency obligation.

Respondents failed to appear at the scheduled pre-trial. The RTC,

therefore, issued an Order directing Metrobank to present its evidence ex
parte. Metrobank presented as lone witness its Senior Assistant Manager,
Ms. Irene Sih-Tan and, thereafter, on September 4, 2004, it filed its Formal
Offer of Evidence. Respondents filed a Motion for Reconsideration of the
same Order, but on September 21, 2004, the RTC denied the said motion.

After the denial of its motion for reconsideration, Metrobank appealed

the case to the CA and the latter, on May 17, 2011, granted the appeal, thus,
reversing and setting aside the decision of the RTC.
 In reversing the RTC, the CA ruled that the petitioner's lone witness,
Irene Sih-Tan identified and marked Exhibits "A" to "DD-4" only as shown in
the TSN, however, the RTC admitted Exhibits "A" to "MM," contrary to this
Court's resolution in Administrative Matter (A.M.) No. 03-1-09-SC[7] which
provides that no evidence shall be allowed to be presented and offered
during the trial in support of the party's evidence-in-chief other than those
that have been identified below and pre-marked during the trial.

The CA, in its Resolution dated August 5, 2011, denied the motion for
reconsideration filed by Metrobank, hence, the present petition.

Held:

One must not deviate from the fact that this case involves an ex parte
presentation of evidence allowed by the RTC after the respondents herein
failed to appear at the scheduled pre-trial conference and submit a pre-trial
brief despite receipt of the Order of the same court. Section 5, Rule 18 of the
Rules of Court, states:

Section 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.

The "next preceding" section mandates that:

Section 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 authorized 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.

Under the present case, it is as if there was no pre-trial because the

respondents did not appear nor file their pre-trial briefs despite due notice
causing the RTC, on August 9, 2004 to allow petitioner, after the latter filed
its motion, to present its evidence ex parte in accordance with Section 5,
Rule 18 of the Rules of Court.

When respondents failed to appear during the pre-trial despite due

notice, they have already acquired the risk of not being able to dispute the
evidence presented ex parte by petitioner. In The Philippine American Life
and General Insurance Company v. Joseph Enario, this Court ruled that,
"[t]he legal ramification of defendant's failure to appear for pre-trial is still
detrimental to him while beneficial to the plaintiff. The plaintiff is given the
privilege to present his evidence without objection from the defendant, the
likelihood being that the court will decide in favor of the plaintiff, the
defendant having forfeited the opportunity to rebut or present its own
evidence."