PRE-TRIAL

1. Chan v. Abaya, 90 SCRA 61 (1979)

PARTIES:
NAME OF THE ACTION: ACTION FOR DAMAGES

FACTS:

Alfonso A. Chan filed a complaint against Sofronia Agao on the CFI of Surigao del Sur for
the damages suffered by him and his wilful as a result of the family and malicious
prosecution of the petitioner by the private respondent

Private respondent filed her answer denying the material allegations in the complaint,
and interposed a counter claim for damages, attorney’s fees and costs, as well as the
payment of back rentals on a building which the petitioner failed to pay despite
demands.

Instead of filing a responsive pleading, the petitioner filed a motion for bill of particulars,
asking for a more definite statement on the alleged lease contract. The respondent
judge however, did not take action on the motion for a bill of particulars and set a pre-
trial conference on the case on August 13 and 14, 1975

Counsel for the petitioner sent a telegraphic motion to the court, followed by a formal
written motion, asking that the pre-trial conference be reset to another date until his
motion for bill of particulars shall have been resolved.

But the case was called for a pre-trial conference on August 13, 1975 as scheduled.
Noting the absence of the petitioner and his counsel, the atty of the private respondent
asked the court that the petitioner be ordered to pay private respondent her expenses
in coming to court (200 pesos) which was granted by the court but was eventually
lowered to 100 pesos.

The petitioner claims that the payment of damages to the private respondent is
unjustified because the petitioner was not properly notified of the holding of the
pre.trial conference, further, petitioner alleges that the pre-trial conference on August
13, 1975 was premature since respondent judge had not yet resolved petitioner's
motion for a bill of particulars.

ISSUE: Whether or not the calling of a pre-trial conference on August 13, 1975 was
timely

RULING: No, the calling for the pre.trial on August 13, 1975 was untimely.
As will be seen, the court is directed to hold the pre-trial of the case after the last
pleading has been filed. The last pleading in this case would be the answer of the
plaintiff to the counterclaim of the defendant. But, no answer to the counterclaim had
been filed because of the unresolved motion for a bill of particulars. Obviously, the
calling of a pretrial conference on August 13, 1975 was premature since there was yet to
be filed the "last pleading"

Under the rules, pre-trial is mandatory and the court has uniformly held that the parties,
as well as their counsel, who are required to appear thereat, must be notified of the
same, and the notice of pre-trial must be served upon them separately.

While a copy of the notice of pre-trial conference set for August 13 and 14, 1975 may
have been sent to the petitioner Alfonso Chan separately, by registered mail at his given
address of record on August 8, 1975, the petitioner received the notice only on August
18, 1975, his inability to attend and be present at the pre.trial conference on August 13,
1975 is, therefore, justified.

*Last pleading = Answer or reply

2. Filoil v. Dy Pac, 160 SCRA 133 (1988)

PARTIES:
● Plaintiff-appellee: Filoil Marketing Corporation (now Petrophil Corporation)
● Defendant-appellant: Dy Pac & Co., Inc.

NAME OF THE ACTION: collection of a sum of money with interest

FACTS:
Plaintiff Filoil sold and delivered on credit petroleum products to defendant Dy Pac who
became indebted to it in the total amount of P2,123.69, Notwithstanding repeated
demands, Dy Pac refused to pay. This prompted Filoil to commence an action for
collection of a sum of money with interest. In its Answer with Counterclaim, defendant
admitted the credit transactions but denied indebtedness, alleging lack of cause of
action, payment, and prescription.

At the hearing, neither defendant nor his counsel appeared and so plaintiff was allowed
to present its evidence ex parte. The court rendered a decision on the same date
ordering defendant to pay plaintiff the sum of P2,123.69 (+interest, atty’s fees, costs).
MR denied. Defendant appealed to the CFI of Manila.

The case was set for pre-trial with a warning that no further postponements would be
granted. In the lower court’s pre-trial order, the parties were ordered to prepare a
stipulation of facts based on their exhibits already marked and submit the same to the
Court within 30 days. The parties were also warned that if they cannot submit the
stipulation of facts, the Court will dismiss the appeal. The parties failed to submit the
required stipulation of facts and so the trial court dismissed defendant’s appeal. MR of
defendant denied.

RULING OF LOWER COURTS:

Trial Court dismissed the appeal for failure of the parties to submit the required
stipulation of facts.

CA certified the case to the SC as involving only questions of law.

ISSUE: Whether or not the trial court erred in dismissing its appeal on the ground that
the parties failed to submit a stipulation of facts.

RULING:
There is no law which compulsorily requires litigants to stipulate at pre-trial on the
facts and issues that may possibly crop up in a particular case, upon pain of dismissal
of such a case. The process of securing admissions, whether of facts or evidence, is
essentially voluntary. Stipulations of facts, like contracts, bind the parties thereto who
are not allowed to controvert statements made therein. The trial court may urge or
advise the parties to try and arrive at a stipulation of facts. Courts, however, cannot
compel the parties to enter into an agreement upon the facts. Where the parties are
unable to arrive at a stipulation of agreed facts and do not reach an amicable settlement
of their controversy, the court must close the pre-trial proceedings and go forward with
the trial of the case. The court a quo, therefore, committed serious or reversible error in
dismissing appellant’s appeal solely upon the ground that the parties had failed to
comply with the court’s Order to submit a stipulation of facts.

Defendant’s appeal was entitled to a regular trial. Under Section 45 of RA 296, as

amended by RA 6031, the defendant-appellant was entitled to have its affirmative
defenses and counterclaim passed upon by the CFI in a trial de novo. Defendant-
appellant had never been afforded the benefit of a trial, even by the City Court which
had rendered its judgment on the evidence of the plaintiff submitted ex-parte. We hold
that the trial court’s Order of 24 May 1973 in effect denied defendant-appellant its
right to due process and must hence be set aside.

3. Sarmiento v. Juan, 120 SCRA 403 (1983)

Plaintiff: Belfast Surety & Insurance Co., Inc.

Defendant: Sarmiento

Name of Action: Action for indemnity

FACTS: Civil Case No. 126113 was an action filed by private respondent Belfast Surety &
Insurance Co., Inc. against herein petitioner and his father Benjamin R. Sarmiento, Sr. for
indemnification under an Indemnity Agreement executed by them in connection with a
bail bond.

After the petitioner filed an answer with compulsory counterclaim, private respondent
filed a motion to dismiss the case against defendant Benjamin R. Sarmiento, Sr., and to
schedule the case for pre-trial. This motion was granted by Judge Juan and the pre-trial
was set.

At the said pre-trial, nobody appeared except Atty. Federico T. Castillo, Jr., counsel for
the private respondent. However, the petitioner sent to the Court on the same date an
urgent motion for postponement stating therein that when he was preparing to go to
the Court, he felt severe stomach pain followed by loose bowel movements, and he
accordingly prayed that the pre-trial be postponed to another date.

On motion of Atty. Castillo, the petitioner was "declared non-suited" (should have been
"as in default") and the private respondent allowed to present its evidence ex-parte.
(MR denied)

It does not appear whether the ex-parte presentation of evidence by the private
respondent had already been accomplished, nor that a decision thereon had been
rendered. Petitioner filed a petition for certiorari with SC to annul the aforementioned
orders of Judge Juan. The said petition was remanded to CA (denied). Said decision is
the subject of the present appeal by certiorari.

LOWER COURT RULING:

Urgent motion for postponement filed by petitioner was DENIED.
MR denied.
CA denied the petition.

ISSUE:
1. WON pre-trial was premature there having been no answer filed by private
respondent to petitioner’s counterclaim.
2. WON the trial court could not legally declare petitioner in default.
3. WON there was GAD when trial court denied petitioner’s urgent motion for
postponement despite the merit of the ground.

RULING:
1. No. While it may be true that the private respondent had not filed any
answer to the counterclaim contained in the petitioner's answer, such
circumstance does not prevent the trial court from conducting the pre-trial. As
was observed by the respondent Court of Appeals in its questioned decision: "If
no answer (to the counterclaim) is timely filed the pre-trial order may issue.
Otherwise, an unscrupulous party litigant can hold court processes by the simple
expedient of failing to answer."

The requirement that the pre-trial shall be scheduled "after the last pleading has
been filed" ( Section 1, Rule 18, Rules of Court) is intended to fully apprise the
court and the parties of all the issues in the case before the pre-trial is
conducted. It must be remembered that the issues may only be ascertained from
the allegations contained in the pleadings filed by the parties. The last
permissible pleading that a party may file would be the reply to the answer to
the last pleading of claim that had been filed in the case, which may either be
the complaint, a cross-claim, a counterclaim or a third party complaint, etc.
(Secs. 2 and 11, Rule 6, Rules of Court.) Any pleading asserting a claim must be
answered, and the failure to do so by the party against whom the claim is
asserted renders him liable to be declared in default in respect of such claim.
(See. 10, Ibid) There are, however, recognized exceptions to the rule, making the
failure to answer a pleading of claim as a ground for a default declaration, such
as the failure to answer a complaint in intervention (Sec. 2(c) Rule 12, Rules of
Court), or a compulsory counterclaim so intimately related to the complaint such
that to answer to same would merely require a repetition of the allegations
contained in the complaint (Zamboanga Colleges, Inc. vs. Court of Appeals, 1
SCRA 870; Ballecer vs. Bernardo, 18 SCRA 291; Agaton vs. Perez, 18 SCRA 1165.)

In the case presently considered, the nature of the counterclaim in the

petitioner's answer has not been made clear, except to categorize it as a
compulsory counterclaim. Such being the case, it is likely to be one where the
answering thereof is not necessary, and the failure to do so would not be a
ground to be declared in default. In any event, the private respondent's failure to
answer the petitioner's counterclaim after the period to file the answer had
lapsed is no obstacle to holding a pre-trial. The requirement that the last
pleading must have been filed before a pre-trial may be scheduled should more
appropriately be construed to mean not only if the last pleading had been
actually filed, but also if the period for filing the same had expired.

2. Yes. The declaration default on the part of the petitioner may not be
considered as entirely proper under the circumstances surrounding the same. It
is undenied that nobody appeared at the pre-trial except the counsel for the
private respondent. Under settled doctrines, not even the private respondent
may be considered as having appeared at the said pre-trial, it not having made
appearance thereat through a duly authorized representative. In such a
situation, the trial court would have acted more properly if it dismissed the case,
 or declared the private respondent as plaintiff therein as non-suited instead of
declaring the petitioner as in default (erroneously stated by it as "non-suited.")
This is because while the court may declare the plaintiff non- suited for non-
appearance at the pre-trial or dismiss the case for his non- appearance at the
trial without motion on the part of the defendant (Sec. 3, Rule 17), the latter may
not be declared in default without such motion on the part of the plaintiff. (Sec.
1. Rule 18; Trajano vs. Cruz, 80 SCRA 712.) A plaintiff who makes no valid
appearance at pre-trial may not ask that the defendant be punished for the same
shortcoming it was equally guilty of.

3. Yes. The petitioner also has valid reason to complain about the apparent
over anxiousness of the trial court to finish the case in summary fashion. The
petitioner had manifested to the Court that his inability to appear before the
pre-trial was due to a sudden ailment that befell him while he was preparing to
go to Court. While it is true that the motion for postponement was not
accompanied by a medical certificate, it must be considered that not every
ailment is attended to by a physician, or if so, a medical certificate under oath as
required by the Rules could be secured within the limited time available. There
has been no refutation of the cause of the non-appearance of the petitioner as
claimed by the latter. Said cause had been reiterated under oath in the
petitioner's motion for reconsideration to which the trial court turned a deaf ear.
Any suspicion that the petitioner was merely suing for delay is readily dispelled
by the fact that the pre-trial was being set for the first time, and that the
petitioner took immediate steps against the refusal of the trial court to set aside
the default declaration and to pursue remedies steadfastly against the same in
the higher tribunals.

4. Citibank v. Chua, 220 SCRA 75 (1993)

PARTIES: CITIBANK, N.A., petitioner, vs. HON. SEGUNDINO G. CHUA, SANTIAGO M.

KAPUNAN and LUIS L. VICTOR, ASSOCIATE JUSTICES OF THE HON. COURT OF APPEALS,
THIRD DIVISION, MANILA, HON. LEONARDO B. CANARES, Judge of Regional, Trial Court
of Cebu, Branch 10, and SPOUSES CRESENCIO AND ZENAIDA VELEZ, respondents

NAME OF THE ACTION: Petition for certiorari, prohibition and mandamus with
preliminary injunction

FACTS: Sps. Velez filed a case for specific performance with damages against Citibank.
During the pre-trial conference, counsel for petitioner bank appeared, presenting a
special power of attorney executed by Citibank officer Florencia Tarriela in favor of
petitioner bank's counsel, the J.P. Garcia & Associates, to represent and bind petitioner
bank at the pre-trial conference. The counsel for the private respondents orally moved
to declare petitioner bank as in default on the ground that the special power of attorney
was not executed by the Board of Directors of Citibank.
RULING OF LOWER COURTS: Respondent judge, however, issued an order declaring
petitioner bank as in default on the ground that the special power of attorney was not
executed by the Board of Directors of Citibank. It stands to reason that the defendant-
bank has no proper representation during the pre-trial conference.

ISSUE: Was the petitioner bank's counsel validly authorized to represent petitioner bank
during the pre-trial?

RULING: Yes. Although as a general rule, all corporate powers are to be exercised by the
board of directors, exceptions are made where the Code provides otherwise.

Section 25 of said Code provides that the directors of the corporation shall elect its
corporate officers, and further provides as follows:

"SEC. 25. Corporate officers; quorum. — . . . The directors or trustees and officers to be
elected shall perform the duties enjoined on them by law and by the by-laws of the
corporation . . ."

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 and the
Secretary Pro-Tem, to execute a power of attorney to a designated bank officer,
William W. Ferguson in this case, clothing him with authority to direct and manage
corporate affairs.

We reiterate the previous admonitions of this Court against "precipitate orders of

default as these have the effect of denying the litigant the chance to be heard. While
there are instances, to be sure, when a party may be properly defaulted, these should
be the exceptions rather than the rule and should be allowed only in clear cases of an
obstinate refusal or inordinate neglect to comply with the orders of the court. Absent
such a showing, the party must be given every reasonable opportunity to present his
side and to refute the evidence of the adverse party in deference to due process of law".

Considering further that petitioner bank has a meritorious defense and that the amount
in contest is substantial, the litigants should be allowed to settle their claims on the
arena of the court based on a trial on the merits rather than on mere technicalities.