Philam vs Enario, G.R. No. 182075, September 15, 2010

Facts:

Respondent was appointed as agent of Philamlife, at the time of respondent’s resignation, Philamlife allegedly discovered that respondent had an outstanding debit balance of ₱1,237,336.20, which he was obligated to settle and liquidate pursuant to the Revised Agency Contract he signed at the time of his employment.

Philamlife sent three (3) successive demand letters to respondent for the settlement of his outstanding debit account. When the parties failed to reach an agreement regarding the settlement of the outstanding debit balance, Philamlife filed a complaint for collection of a sum of money against respondent before the Regional Trial Court.

In his Answer, respondent denied the allegations that he had an outstanding debit balance considering that he and Philamlife had yet to reconcile the records of remittances with his compensation, as well as overriding commissions. Respondent prayed for the dismissal of the complaint and counterclaimed for damages.

The RTC set the pre-trial conference. The parties were directed to file their respective pre-trial briefs before the date of the pre-trial conference. Respondent moved for the postponement of the pre-trial for 3 consecutive times and failed to appear on the last scheduled conference date.

Consequently, Philamlife manifested that respondent be declared in default for failure to appear at the pre-trial. The RTC granted the manifestation and allowed Philamlife to present its evidence. All manifestations, GRANTED. Plaintiff is allowed to present their evidence. Despite notice, respondent still failed to appear on the 28 August 2003 pre-trial. Philamlife was then allowed to present its evidence ex parte, which it did on that same hearing.The trial court rendered judgment ordering respondent to pay the plaintiff.

Respondent elevated the case to the Court of Appeals via petition for certiorari under Rule 65 of the Rules of Court which the CA VACATED and SET ASIDE the order of the RTC and the case REMANDED to that court for pre-trial and other proceedings.

Issue:

1. Whether the failure of the defendant to appear in the Pre-trial conference constitute default?
2. Whether the Pre-Trial is mandatory.

Held:

1. No, nowhere in the first aforementioned provision was the word “default” mentioned. Prior to the 1997 Revised Rules of Civil Procedure, the phrase “as in default” was initially included in Rule 20 of the old rules, This is a substantial reproduction of Section 2 of the former Rule 20 with the change that, instead of defendant being declared “as in default” by reason of his non-appearance, this section now spells out that the procedure will be to allow the ex parte presentation of plaintiff’s evidence and the rendition of judgment on the basis thereof. While actually the procedure remains the same, the purpose is one of semantical propriety or terminological accuracy as there were criticisms on the use of the word “default” in the former provision since that term is identified with the failure to file a required answer, not appearance in court.
   As the rule now stands, if the defendant fails to appear for pre-trial, a default order is no longer issued. Instead, the trial court may allow the plaintiff to proceed with his evidence ex parte and the court can decide the case based on the evidence presented by plaintiff.
2. Yes, 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.

   Therefore, “pre-trial cannot be taken for granted. It is not a mere technicality in court proceedings for it serves a vital objective: the simplification, abbreviation and expedition of the trial, if not indeed its dispensation.” This considered, it is required in Section 4 of Rule 20 of the Rules of Court that: