Fil Oil Marketing Corp vs.

Dy Pac
Facts:
In 1961 to 1965, the plaintiff had sold and delivered petroleum products to
defendant Dy Pac & Co. Inc. on credit and became indebted to the former in the total
amount of P 2,123.69. However, the defendant refused to answer despite repeated
demands. At the hearing, neither defendant Dy Pac nor its counsel appeared in which
the City Court of Manila allowed the plaintiff Fil oil to proceed ex parte and ordering the
former to pay the latter in its decision. Dy Pac appealed to CFI Manila which set the
case for pre-trial ruling that both the parties are ordered to prepare a stipulation of facts
based on their exhibits already marked and submit the same to the court. In accordance
with the ruling, both the plaintiff and defendant are warned that if they cannot submit the
required stipulation of facts, the Court will dismiss the appeal. The trial court dismissed
the appeal of the defendant corporation for failure to the parties to submit the required
stipulation of facts. The defendant filed a motion for reconsideration but was also denied
thereby elevating the case to the Court of Appeals. Dy Pac and Corp. claimed that it
was deprived of its day in court on the grounds that his appeal was dismissed for failure
to submit a stipulation of facts and that the defendant's counsel did not file its authority
to appear during pre-trial.
 
Issue:
Whether or not the case can be dismissed on the ground that the parties failed to
submit a stipulation of facts.
 
Held:
No. The Court erred in dismissing the appeal of the defendant from the City
Court of Manila since there is no law which requires the litigant to stipulate on the facts
upon dismissal of a case. The Court cannot justify its dismissal solely on the ground that
the parties had failed to comply with the Court's Order to submit the required stipulation
of facts. The right of the defendant to due process was deprived with the said order of
the trial court. Under Section 45 of the RA 296, the defendant was entitled to have its
affirmative defenses and counterclaim passed upon by the Court of First Instance in a
regular trial or trial de novo.  In this case, the defendant was not given the benefit of trial
and even rendered judgment on the evidence of the plaintiff submitted ex parte. It is
more proper that the Court must have closed the proceedings and go forward with the
trial of the case where the parties fail to arrive at a stipulation agreed facts and do not
reach amicable settlement of their controversy. The parties can identify those facts that
need not to be proved and which are not really controverted during pre-trial conference
for their own convenience. But under the law, the Courts cannot compel the parties to
enter into agreement upon the facts.