Tiu v. Middleton (July 19, 1999) DOCTRINE: Pre-trial is an essential device for the speedy disposition of disputes.

Hence, parties cannot brush it aside as a mere technicality. Where the pre-trial brief does not contain the names of witnesses and the synopses of their testimonies as required by the Rules of Court, the trial court, through its pre-trial order, may bar the witnesses from testifying. However, an order allowing the presentation of unnamed witnesses may no longer be modified during the trial, without the consent of the parties affected. NATURE: Petition for review on certiorari PONENTE: Panganiban FACTS: -The present Petition arose from a Complaint for recovery of ownership and possession of real property, accounting and damages filed against herein petitioner before the Regional Trial Court of Oroquieta City. -Before the commencement of trial, the court a quo sent a Notice of Pre-trial Conference, stating in part: The parties are WARNED that witnesses whose names and addresses are not submitted at the pre-trial may not be allowed to testify at the trial, and documents not marked as exhibits at the pre-trial, except those not then available or existing, may be barred admission in evidence. -In his Pre-trial Brief, petitioner averred that he would be presenting six witnesses, but he did not name them. After the pretrial conference, the court a quo issued a Pre-trial Order stating that the petitioner would present six witnesses and specifying the hearing dates for the said purpose. -Trial ensued, and herein respondents, as plaintiffs in the case below, presented their witnesses in due course. When his turn came, petitioner called Antonia Tiu as his first witness. Citing Section 6, Rule 18 of the 1997 Rules of Court, respondents objected, arguing that the witness could not be allowed to testify because petitioner had failed to name her in his Pre-trial Brief. RTC: witness, Ms. Antonia Tiu, must be barred as a witness because her name was not included in the pre-trial brief based on Sec. 6 of Rule 18, of the 1997 Rules of Civil Procedure ISSUES:

whether or not a judge can exclude a witness whose name and synopsis of testimony were not included in the pre-trial brief HELD: No. RATIO/RULING: -Pre-trial is an answer to the clarion call for the speedy disposition of cases. Although it was discretionary under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the subsequent amendments in 1997. Hailed as the most important procedural innovation in Anglo-Saxon justice in the nineteenth century, pre-trial seeks to achieve the following: (a) The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution (b) The simplification of the issues (c) The necessity or desirability of amendments to the pleadings (d) The possibility of obtaining stipulations or admissions of facts and of documents to avoid unnecessary proof (e) The limitation of the number of witnesses (f) The advisability of a preliminary reference of issues to a commissioner (g) The propriety of rendering judgment on the pleadings, or summary judgment, or of dismissing the action should a valid ground therefor be found to exist (h) The advisability or necessity of suspending the proceedings; and (i) Such other matters as may aid in the prompt disposition of the action. In light of these objectives, the parties are also required to submit a pre-trial brief, which must contain the following: (a) A statement of their willingness to enter into amicable settlement or alternative modes of dispute resolution, indicating the desired terms thereof (b) A summary of admitted facts and proposed stipulation of facts (c) The issues to be tried or resolved (d) The documents or exhibits to be presented, stating the purpose thereof (e) A manifestation of their having availed or their intention to avail themselves of discovery procedures or referral to commissioners; and (f) The number and names of the witnesses, and the substance of their respective testimonies. (Italics supplied)

-pre-trial and its governing rules are not technicalities which the parties may ignore or trifle with. As earlier stated, pre-trial is essential in the simplification and the speedy disposition of disputes -In a pre-trial, the judge is not a passive arbiter; he is an active participant who constantly seeks avenues through which trial can be expedited, simplified or even avoided by a resort to alternative modes of dispute resolution. The role and the authority of the trial court during pre-trial has been described by the Court in this wise: -Again, it is unquestionably within the trial courts power to require the parties at the pre-trial to (a) state the number of witnesses intended to be called to the stand, their names addresses, and a brief summary of the evidence each of them is expected to give, as well as to (b) formally disclose the number of the documents and things to be submitted and to furnish copies thereof or a short description of the nature of each. The tenor or character of the testimony of the witnesses and of the writings to be adduced at the trial being thus made known, in addition to the particular issues of fact and law, it becomes reasonably feasible to require the parties to state the number of trial dates that each will need to put on his case, and maybe bring about a further agreement as to some other controverted facts, or an amendment of the pleadings, etc -In light of the objectives of a pre-trial and the role of the trial court therein, it is evident that judges have thediscretion to exclude witnesses and other pieces of evidence not listed in the pre-trial brief, provided the parties are given prior notice to this effect. -the Notice of Pre-trial Conference warned the parties that witnesses whose names and addresses are not submitted at the pre-trial may not be allowed to testify at the trial.[18] In his Pretrial Brief, petitioner merely stated that he intended to present four (6) witnesses whose direct testimony will be finished in an average of one (1) hour each. He further requested four hearing days to present his evidence.[19] Evidently, he did not comply with the above rules and the Notice of Pre-trial Conference, because he failed to give the names of his witnesses and the synopsis of their testimonies. -In his Pre-trial Order,[20] however, the trial judge did not exercise his discretion to exclude the unlisted or unnamed witnesses. Rather, it simply provided that [t]he defendant will present six witnesses. It made no mention at all that they would

be barred from testifying unless they were named. Significantly, it also stated that plaintiffs will offer ten witnesses, without however naming them. Since the Order allowed respondents (as plaintiffs before the trial court) to present witnesses, it necessarily follows that it should grant the same right to petitioner. According to the Rules of Court: SEC. 7. Record of pre-trial. -- The proceedings in the pre-trial shall be recorded. Upon the termination thereof, the court shall issue an order which shall recite in detail the matters taken up in the conference, the action taken thereon, the amendments allowed to the pleadings, and the agreements or admissions made by the parties as to any of the matters considered. Should the action proceed to trial, the order shall explicitly define and limit the issues to be tried. The contents of the order shall control the subsequent course of action, unless modified before trial to prevent manifest injustice. -Hence, the provision in the Pre-trial Order allowing petitioner to present six witnesses shall control the subsequent course of action. The court a quo proceeded with the trial without modifying the Order. In the same vein, respondents did not challenge it before the trial. Neither did they invoke the power of the trial court to compel the petitioner to submit the names of his witnesses and summaries of their testimonies. By their silence, respondents acquiesced to the Pre-trial Order allowing the presentation of petitioners unnamed witnesses. Modifying a pre-trial order during the trial or, worse, when the defendant is about to present witnesses will indubitably result in manifest injustice. This could not have been the intention of the Rules DISPOSITION: the Petition is hereby GRANTED and the two assailed Orders, dated August 3, 1998, issued by the RTC Branch 14, Oroquieta City, are REVERSED and SET ASIDE. The Temporary Restraining Order issued by this Court is hereby lifted and the trial court is ORDERED to proceed with the hearing and to allow petitioner to present his six witnesses. VOTE: 3rd Division. Romero, Vitug, Purisima and Gonzaga-Reyes concur

Citibank v. Chua (March 17, 1993)

DOCTRINE: Doctrine: Although the power of attorney in question does not specifically mention the authority of petitioner's counsel to appear and bind the petitioner at the pre-trial conference, the terms of said power of attorney are comprehensive enough as to include the authority to appear for the petitioner at the pre-trial conference. NATURE: Petition for review on certiorari PONENTE: Campos Jr. FACTS:  Citibank petitioner bank /defendant  Sps. Velez respondents/plaintiff Quick Summary: This case involves 3 special power of attorneys (SPAs), executed by different officers of Citibank which were all validated by the Supreme Court. The SPAs granted the persons (bank employees / employees / counsel) indicated (in the SPAs) to appear before the court, on behalf of and binding Citibank Corporation in the Pre-Trial, among others, in this civil case. The parties are Citibank (defendant), a foreign corporation, duly licensed to do business here in the Philippines, and Spouses Velez (Sps V, for brevity & plaintiffs) who were clients of the bank. The Spouses V allege that Citibank extended to them credit lines with an additional accomodation of P5M availed of by: The Citibank purchases personal checks from Sps V, by exchanging them with Citibanks managers check on a daily basis. This business relationship occured for almost 6 months These managers checks were deposited by the Sps V to other banks (other than Citibank) to cover the personal checks previously issued to Citibank. When Sps V tried to exchange 6 checks amounting to P3M, the bank refused to exchange it and instead offered to another arrangement restructured to 30 months (with prevailing interest rate), to which the Sps agreed to.

Thereafter, when they delievered another check, the bank refused to accept it. Hence they filed action for Specific Perfomance plus Damages against the bank. Bank provided a different version: The personal checks of Mr. Velez deposited (or purchased by) with Citibank are unfunded checks but before depositing them, he would present his personal checks to a bank officer asking the latter to have his personal checks immediately credited as if it were a cash deposit and at the same time assuring the bank officer that his personal checks were fully funded. Having already gained the trust and confidence of the officers of the bank because of his past transactions, the bank's officer would always accommodate his request. The bank officer would affix his signature on the personal checks, and Cresencio Velez would then deposit his priorly approved personal checks to his current account and at the same time withdraw sums therefrom by way of bank's manager's check. Mr Velez would then deposit bank's manager's check to his various current accounts in other commercial banks to cover his previously deposited unfunded personal checks with petitioner bank. Naturally, the bank and its officers never discovered that his personal check deposits were unfunded. Hence the bank filed a criminal case in violation of BP 22 (bouncing checks) and estafa againt Sps V. The Civil Case filed by the Sps V, is the case at bar where, before reaching the CA, these were the events that transpired at the RTC during the Pre-trial (observe that there were 3 SPAs executed which never satsified the RTC): 1. 1st SPA: On first day of Pre-trial, Counsel for bank appeared, presenting a special power of attorney executed by Citibank officer Florencia Tarriela in favor of bank's counsel (J.P. Garcia & Associates), to represent and bind petitioner bank at the pretrial conference. (The Sps V insisted that this was not proper authority required by law for it was not executed by the BOD of Citibank) 2. 2nd SPA: To avoid further argument, a second special power of attorney was presented by petitioner bank, executed by William W. Fersugon, the Vice President and the highest ranking officer

of Citibank in the Philippines, in favor of its counsel J.P. Garcia & Associates. (But since the authority to delegate of William A. Fersugon in favor of an agent is limited to Citibanks bank employees, Sps V again opposed the SPA). 3. 3rd SPA: Another special power of attorney from Wiliam W. Fersugon in favor of the Citibank employees (removing the word bank prior the word employees) was presented. RTC: Disregarded all these SPAs and declared Citibank in default. CA: Dismissed petition of Citibank, reasoning among others:  that The By-Laws of Citibank, a foreign corporation, which authorizes appointment of atty-in-fact to represent it in litigation has not been approved by the SEC, as required by Sec. 46 of Corpo Code. These by-laws were approved in the U.S. but there is no showing that it was given the required imprimatur (whatever that means ) by the SEC.  No SPA was presented authorizing the cousel (of J.P. Garcia & Associates) to appear for and in behal of the bank during the pre-trial. What was presented is a general power of atty in favor of Ferguson, who in tun executed an SPA in favor of 5 Citibank employees which are not shown to be SPA to represent the bank (ina pre-trial or ina compromise agreement). ISSUES/ HELD: WON a resolution of the BOD of a Corporation is always necessary granting authority to an agent to represtn the corporation in court cases No. Corollary Issue: WON the by-laws of Citibank which has been previously granted a license to do business in the Philippines, are effective in our jurisdiction Yes Note: If the by-laws are valid and the BOD resolution is not needed, then the Citibank cannot be in default. RATIO/RULING:

1. General rule in the Corporation Code, all corporate powers are to be exercised by the BOD (sec. 23, Corpo Code). Exceptions are however provided in other provisions of the same Code (Sec. 25 & 47) corporate powers may be directly conferred upon corporate officers or agents by statute, the articles of incorporation, the by-laws or by resolution or other act of the board of directors. In addition, an officer who is not a director may also appoint other agents when so authorized by the by-laws or by the board of directors. Such are referred to as express powers. There are also powers incidental to express powers conferred. It is a fundamental principle in the law of agency that every delegation of authority, whether general or special, carries with it, unless the contrary be expressed, implied authority to do all of those acts, naturally and ordinarily done in such cases, which are reasonably necessary and proper to be done in order to carry into effect the main authority conferred. Since the by-laws are a source of authority for corporate officers and agents of the corporation, a resolution of the Board of Directors of Citibank appointing an attorney in fact to represent and bind it during the pre-trial conference of the case at bar is not necessary because its by-laws allow its officers, the Executing Officer to execute a power of attorney (described as GENERAL POWER OF ATTY or GPA) to a designated bank officer, such as William W. Ferguson in this case, clothing him with authority to direct and manage corporate affairs. By virtue of this authority granted in the GPA, Ferguson was given the power to delegate his POWER OF ATTY to one or more employees of the bank as he may deem advisable. Hence, Ferguson in turn, executed the SPAs (described above in the facts). Since the GPA specifically allows Ferguson to delegate his powers in whole or in part, there can be no doubt that the special power of attorney in favor, first, of J.P. Garcia & Associates and later, of the bank's

employees, constitutes a valid delegation of Ferguson's express power (under paragraph XVII of the GPA, in case Maam asks) to represent petitioner bank in the pre-trial conference in the lower court. 2. (Corollary issue) CA erred in relying on section 46, of the Corporation Code which prescribes by-laws of the Corporation to be approved and submitted by the SEC, however the provision starts with the phrase "Every corporation formed under this Code", which can only refer to corporations incorporated in the Philippines. Hence, Section 46, in so far as it refers to the effectivity of corporate by-laws, applies only to domestic corporations and not to foreign corporations such as Citibank. 1. Another reason why the by- laws are valid and effective, is that under sec. 125 of Corpo Code, a foreign corporation is require to sumit a copy of its articles of incorporation and by-laws to the SEC, certified in accordance with law. Sec. 126 of the same Code also provides that the when the SEC decides to issue a license to a foreign corporation, it is satisfied that the applicant's bylaws, among the other documents, meet the legal requirements. This, in effect, is an approval of the foreign corporations by-laws. It may not have been made in express terms, still it is clearly an approval. Therefore, petitioner bank's by-laws, though originating from a foreign jurisdiction, are valid and effective in the Philippines. In pursuance of the authority granted to Ferguson by petitioner bank's by-laws, its Executing Officer appointed William W. Ferguson, a resident of the Philippines, as its Attorney-in-Fact empowering the latter, among other things, to represent petitioner bank in court cases. In turn, William W. Ferguson executed a power of attorney in favor of J.P. Garcia & Associates (bank's counsel) to represent petitioner bank in the pre-trial conference before the lower court. This act of delegation is explicity authorized by GPA of his own appointment.

CA also erred in to state that the power of attorney given to the four (4) Citibank employees is not a special power of attorney to represent it in the pre-trial and/or compromise agreements. In the case of Tropical Homes, Inc. vs. Villaluz, 14 the special power of attorney executed by petitioner bank therein contained the following pertinent terms "to appear for and in its behalf in the above-entitled case in all circumstances where its appearance is required and to bind it in all said instances". The court ruled that: "Although the power of attorney in question does not specifically mention the authority of petitioner's counsel to appear and bind the petitioner at the pre-trial conference, the terms of said power of attorney are comprehensive enough as to include the authority to appear for the petitioner at the pre-trial conference." DISPOSITION: Petition granted. CA decision and resolution are reversed and set aside. Order of default of RTC Cebu is annulled an set aside. Case remanded for further proceedings. VOTE: 2nd Division. Narvasa, Padilla, Regalado, Nocon concur.