Jonathan Landoil International Co., Inc. vs. Spouses Suharto Mangudadatu and Miriam Sangki Mangudadatu

A party's failure to appear at pretrial, without a valid excuse for both the party and all counsel of record, authorizes the trial court to allow ex parte presentation of evidence and render judgment thereon; the proper remedy from such order is a motion for reconsideration, not a motion for new trial. Further, a postmaster's certification of receipt shall prevail over a lawyer's mere denial thereof by virtue of the presumption that official duties have been regularly performed.

Respondent-Spouses Suharto and Miriam Sangki Mangudadatu filed a complaint for damages against petitioner Jonathan Landoil International Co., Inc. (JLI) in the Regional Trial Court of Tacurong City, Sultan Kudarat. JLI initially moved to dismiss the complaint. When the motion was denied, it filed an answer. Both parties submitted their pretrial briefs. On August 8, 2000, neither JLI nor its counsels appeared at the scheduled pretrial. The trial court declared JLI "in default" and allowed the respondents to present evidence ex parte. JLI subsequently received the adverse decision, filed a motion for new trial, and later sought to quash the writ of execution, alleging non-receipt of the order denying that motion.

Nature: Respondent-spouses Suharto and Miriam Sangki Mangudadatu filed a Complaint for damages against petitioner Jonathan Landoil International Co., Inc. (JLI) before the Regional Trial Court, Branch 20, Tacurong City, Sultan Kudarat, docketed as Civil Case No. 537.

Pretrial Proceedings: Petitioner initially filed a Motion to Dismiss, which was denied. It then filed its Answer dated November 23, 1999. Both parties submitted their respective Pretrial Briefs. On August 8, 2000, neither petitioner nor any of its counsels appeared at the scheduled pretrial. Consequently, the trial court declared petitioner "in default" and allowed respondents to present evidence ex parte.

Trial and Decision: Respondents presented evidence ex parte without petitioner's participation. On June 19, 2001, the RTC rendered its Decision. Petitioner received a copy on July 3, 2001.

Motion for New Trial: On July 18, 2001, petitioner filed an Omnibus Motion for New Trial and Change of Venue. In support, petitioner claimed that its counsel, Atty. Mario, was sick — which allegedly constituted excusable negligence for failure to attend the August 8, 2000 pretrial — and that the services of collaborating counsel Atty. Rogelio Fernandez had been terminated by the Board of Directors on August 4, 2000. The Motion was deemed submitted for resolution on August 7, 2001, and was denied by the trial court in an Order dated September 12, 2001.

Post-Judgment Actions: Petitioner received a copy of the Writ of Execution dated December 4, 2001 on December 12, 2001. Alleging it had not received the Order denying its Motion for New Trial, petitioner filed a Motion to Quash/Recall Writ of Execution on December 14, 2001.

Change of Counsel and Depositions: On January 7, 2002, Attys. Jaime L. Mario Jr. and Dioscoro G. Peligro submitted separate withdrawals of appearance. On the same date, the law firm Ong Abad Santos & Meneses entered its appearance and filed a Supplement to Motion to Quash, attaching the affidavits of Attys. Mario and Peligro attesting that they had not received the Order denying the Motion for New Trial. Also on January 7, 2002, petitioner received a Sheriff's Notice regarding the public auction sale of its properties.

On January 9, 2002, the RTC directed respondents to comment on the Motion to Quash and set a hearing for February 1, 2002. Respondents filed their Vigorous Opposition, attaching two separate Certifications from the postmaster of Tacurong City: one stating that a certain Michelle Viquira received on October 19, 2001 a copy of the Order for Atty. Peligro, and another stating that Atty. Mario personally received his copy on December 21, 2001.

On January 28, 2002, petitioner proceeded with the deposition-taking of Attys. Mario and Peligro at the Mandarin Oriental Hotel in Makati City before a notary public acting as deposition officer. Respondents had earlier faxed a Motion to Strike Off the Notice to Take Deposition, asking petitioner not to proceed until the motion was resolved.

RTC Resolution: On February 21, 2002, the RTC issued a Resolution denying the Motion to Quash. The trial court considered the depositions but found, against all other evidence, that petitioner had failed to prove convincingly its non-receipt of the Order. Petitioner received a copy of this Resolution on March 6, 2002.

Proceedings Before the Court of Appeals: Petitioner filed a petition first for Prohibition (CA-GR SP No. 68483, denied February 26, 2002), then for Certiorari and Prohibition (CA-GR SP No. 69556) questioning the RTC's denial of the Motion to Quash. Petitioner argued that since it had not received the Order denying its Motion for New Trial, the period to appeal had not yet lapsed, and thus the judgment was not yet final. The CA dismissed the Petition, ruling that (1) depositions under Rule 23 could no longer be taken after trial termination; (2) the trial court's alleged error was one of judgment, not jurisdiction; and (3) the postmaster's certification prevailed over counsel's denial.

• Non-Receipt of Order Denying Motion for New Trial: Petitioner maintained that it and its counsels had not received the trial court's Order denying the Omnibus Motion for New Trial. Since notice of the denial order never became effective, the period to appeal the RTC Decision had not lapsed, the judgment remained non-final, and the Writ of Execution was therefore premature and void.

• Impropriety of Executing a Non-Final Judgment: Petitioner argued that the RTC departed from the accepted course of judicial proceedings by issuing and enforcing a Writ of Execution while the judgment, not being final, could not validly be the subject of execution.

• Error of Jurisdiction, Not Mere Error of Judgment: Petitioner contended that the trial court's disregard of the deposition evidence — which allegedly proved non-receipt — constituted an error of jurisdiction reviewable by certiorari, not a mere error of judgment. Petitioner asserted the CA erred in holding otherwise.

• Propriety of Taking Depositions After Trial: Petitioner argued that the CA gravely erred in ruling that it could no longer avail itself of deposition-taking under Rule 23 after trial had been terminated. Petitioner submitted that depositions are available at any stage of the proceedings, including for use in a motion to quash a writ of execution.

• Evidentiary Weight of Deposition Evidence: Petitioner faulted the CA for ruling that the trial court properly gave weight to respondents' witnesses (presented ex parte during trial) over petitioner's deposition evidence submitted in support of the Motion to Quash.

• Evidentiary Value of Postmaster's Certification: Petitioner maintained that the CA misapplied the rulings in Aportadera v. Court of Appeals and Philippine National Bank v. CFI of Rizal concerning the evidentiary weight of a postmaster's certification vis-à-vis a lawyer's denial of receipt.

• Presumption of Regularity and Proof of Receipt: Respondents submitted that the postmaster's Certifications constituted clear evidence that petitioner's counsels received the Order denying the Motion for New Trial, thereby rendering the RTC Decision final and executory. The presumption that official duties were regularly performed must prevail over counsels' self-serving denials.

• Finality of Judgment: Respondents argued that the period for appeal had long lapsed, the RTC Decision had become final, and the trial court properly issued the Writ of Execution pursuant to its ministerial duty.

• Impropriety of Deposition-Taking: Respondents contended that depositions under Rule 23 are a mode of discovery intended for pre-trial preparation and cannot be employed after judgment has been rendered and has become final, particularly where trial was already terminated.

• Error of Judgment, Not Jurisdiction: Respondents maintained that any error by the trial court in assessing the evidence was at most an error of judgment, not a jurisdictional error correctible by certiorari.

• Receipt of Order: Whether petitioner received the trial court's Order denying its Omnibus Motion for New Trial, and consequently, whether the RTC Decision had become final and executory.

• Propriety of Deposition-Taking: Whether the taking of oral depositions after termination of trial and in support of a motion to quash a writ of execution was proper under Rule 23 of the 1997 Rules of Civil Procedure.

• Nature of Trial Court's Error: Whether the trial court's alleged failure to accord due weight to the deposition evidence constituted a jurisdictional error reviewable by certiorari, or merely an error of judgment.

• Evidentiary Value of Postmaster's Certification: Whether the appellate court correctly applied the rule that a postmaster's certification of receipt prevails over a lawyer's mere denial.

• Motion for New Trial and Pretrial Obligations: Whether petitioner had established valid grounds for a new trial, considering its failure to appear at the pretrial and to file a motion for reconsideration from the ex parte presentation order.

• Receipt of Order: The presumption that official duties have been regularly performed is a disputable presumption under Section 3(m), Rule 131 of the Rules of Court. The postmaster's certification carried greater evidentiary weight than the counsels' mere denial of receipt. The trial court further found that petitioner received copies of respondents' Motion for Execution, Motion for Early Resolution, and the RTC's Order submitting the Motion for Execution for resolution — facts petitioner did not rebut. Had petitioner truly not received the denial order, these subsequent motions should have alerted it to inquire or oppose the Motion for Execution. The petition therefore failed to overcome the factual finding of receipt.

• Propriety of Deposition-Taking: Depositions are not limited to pre-trial discovery. Under Section 4, Rule 23, depositions may be used "at the trial or upon the hearing of a motion or an interlocutory proceeding." Philippine jurisprudence, notably Dasmariñas Garments v. Reyes, permits deposition-taking even after trial commencement. For purposes of the Motion to Quash, the deponents resided more than 100 kilometers from Sultan Kudarat, a circumstance squarely within Section 4(c)(2) of Rule 23. However, the trial court did not disregard the depositions entirely; it considered and weighed them against all other evidence and still found that petitioner failed to prove non-receipt convincingly. The CA's declaration of impropriety on this point was erroneous, but the error did not affect the outcome.

• Nature of Trial Court's Error: The RTC's assessment of evidence and its finding that petitioner failed to prove non-receipt constituted an error of judgment, not an error of jurisdiction. Certiorari does not lie to correct errors of judgment, which are properly the subject of an appeal. Petitioner had lost the right to appeal by allowing the judgment to become final.

• Evidentiary Value of Postmaster's Certification: The rulings in Philippine National Bank v. CFI of Rizal, Aportadera Sr. v. CA, and Grafil v. Feliciano were correctly applied. The postmaster's certification is entitled to greater credence under the disputable presumption that official duties have been regularly performed.

• Motion for New Trial and Pretrial Obligations: The motion for new trial was improper on two grounds. First, petitioner failed to justify its own absence from the pretrial; the rule requires both parties and their counsels to appear. Second, it failed to justify the absence of both counsel of record. Atty. Fernandez remained counsel of record until formal withdrawal was granted; his termination by the Board did not excuse his non-appearance. The proper remedy from the order allowing ex parte presentation of evidence was a motion for reconsideration — not a motion for new trial — and liberality in considering such a motion was unavailable because petitioner did not explain its failure to file one. The lapse of time between the August 8, 2000 pretrial and the June 19, 2001 Decision demonstrated negligence by petitioner and its counsels.

• Presumption of Regularity of Official Duties (Disputable Presumption) — Under Section 3(m), Rule 131 of the Rules of Court, it is presumed that official duties have been regularly performed. A postmaster's certification that mail was received shall prevail over the recipient's mere denial of receipt. Applied here, the Supreme Court deferred to the trial court's factual finding that the postmaster's certification outweighed the denial of petitioner's former counsels.

• Effect of Non-Appearance at Pretrial (Rule 18) — Under Section 5, Rule 18 of the Rules of Court, failure of the defendant to appear at pretrial without valid cause authorizes the trial court to allow the plaintiff to present evidence ex parte and to render judgment based thereon. The obligation to appear extends to both the party and counsel. A counsel whose services have been terminated but whose withdrawal has not yet been granted remains counsel of record. The proper remedy from such an order is a motion for reconsideration, not a motion for new trial. There is no requirement to attach an affidavit of merit because the defense has already been laid in the answer. Courts apply a liberal standard in considering motions for reconsideration of such orders, but the liberality rule does not apply where the movant offers no explanation for its failure to file the proper motion.

• Use of Depositions (Rule 23, Section 4) — Depositions are not confined to pre-trial discovery. They may be taken at any time after institution of the action, whenever necessary or convenient, and used for trial or for the hearing of a motion or interlocutory proceeding. Deposition-taking is "well-nigh unrestricted" where the matters inquired into are relevant, not privileged, and the inquiry is made in good faith and within the bounds of the law. Limitations arise only when the examination is conducted in bad faith, to annoy or oppress, upon irrelevant matters, or encroaches on privilege. The trial court has discretion to allow or disallow a deposition, but this discretion must be exercised reasonably and in consonance with the spirit of the law, to promote just, speedy, and inexpensive disposition of every action and proceeding.

• Negligence of Counsel Binds the Client — The negligence of counsel in the performance of their duties binds the client. Counsel's failure to attend pretrial, to file a motion for reconsideration from an order allowing ex parte presentation, and inaction throughout the pendency of the case resulted in the finality and execution of the default judgment. The client may not disclaim responsibility for procedural lapses committed by retained counsel.

• "Lawyers must be careful in handling cases, because their negligence in the performance of their duties binds their clients." — Opening line of the decision, encapsulating the procedural principle that governs the outcome.

• "The rationale for this requirement of compelling the parties to appear personally before the court is to exhaust the possibility of reaching a compromise." — The justification for mandatory party attendance at pretrial under Section 4, Rule 18.

• "Under the new Rules, the consequence of non-appearance without cause at the pretrial is not for the petitioner to be considered 'as in default,' but 'to allow the plaintiff to present evidence ex parte and [for] the court to render judgment on the basis thereof.'" — Articulates the current procedural consequence distinguishing Rule 18 from the prior regime.

• "Liberality is the rule in considering a motion for reconsideration. It is best for the trial court to give both the plaintiff and the defendant a chance to litigate their causes fairly and openly, without resort to technicality. Unless the reopening of the case is clearly intended for delay, courts should be liberal in setting aside orders barring defendants from presenting evidence." — The governing standard for motions to set aside orders allowing ex parte presentation of evidence.

• "There is a disputable presumption that official duties have been regularly performed. On this basis, we have ruled that the postmaster's certification prevails over the mere denial of a lawyer." — The controlling principle on proof of receipt.

• "[D]epositions may be taken at any time after the institution of any action, whenever necessary or convenient. There is no rule that limits deposition-taking only to the period of pre-trial or before it; no prohibition against the taking of depositions after pre-trial." — Quoted from Dasmariñas Garments v. Reyes, confirming the breadth of deposition availability.

• "The liberty of a party to avail itself of this procedure, as an attribute of discovery, is 'well-nigh unrestricted if the matters inquired into are otherwise relevant and not privileged, and the inquiry is made in good faith and within the bounds of the law.'" — The scope of deposition discovery.

• Dasmariñas Garments, Inc. v. Reyes, 225 SCRA 622 (1993) — Followed. Established that depositions may be taken at any time after institution of the action, not merely during pre-trial, and used in lieu of the witness's actual presence. Applied to sustain the permissibility of petitioner's deposition-taking, although it did not alter the outcome.

• Philippine National Bank v. CFI of Rizal, 209 SCRA 294 (1992) — Followed. Established that a postmaster's certification of receipt prevails over the bare denial of a lawyer, applying the presumption of regularity in official duties.

• Aportadera Sr. v. Court of Appeals, 158 SCRA 695 (1988) — Followed. Same principle on the evidentiary superiority of the postmaster's certification.

• Fortune Corporation v. Court of Appeals, 229 SCRA 355 (1994) — Followed. Defined depositions as chiefly a mode of discovery whose primary function is to supplement pleadings and afford an adequate factual basis for trial preparation.

• Northwest Airlines, Inc. v. Cruz, 376 Phil. 96 (1999) — Distinguished. Recognized that the trial court's discretion to disallow depositions arises when they do not conform to legal requirements or may cause material injury to the adverse party; not applicable on the facts here since the depositions were permissible.

• People v. Webb, 371 Phil. 491 (1999) — Distinguished. Deposition-taking was unnecessary because the trial court had already admitted the exhibits on which the witnesses would have testified. Contrasted with the present case where the depositions were offered for a legitimate purpose (proving non-receipt of a court order).

• Jungco v. Court of Appeals, 179 SCRA 213 (1989) — Followed. Identified a motion for reconsideration as the proper remedy from an order allowing ex parte presentation of evidence after non-appearance at pretrial.

• Section 4, Rule 18, Rules of Court — Mandates the duty of both parties and their counsel to appear at pretrial; non-appearance of a party may be excused only if a valid cause is shown or a fully authorized representative appears. Applied to establish petitioner's obligation to justify both its own and its counsels' absence.

• Section 5, Rule 18, Rules of Court — Provides that the consequence of a defendant's non-appearance at pretrial without valid cause is to allow the plaintiff to present evidence ex parte, upon which the court shall render judgment. Applied as the procedural basis for the ex parte proceeding.

• Section 1, Rule 37, Rules of Court — Enumerates the exclusive grounds for a motion for new trial: (1) fraud, accident, mistake, or excusable negligence; (2) newly discovered evidence. Applied to determine that petitioner's grounds (counsel's illness, termination of services) did not constitute valid grounds absent justification for the party's own absence.

• Section 4, Rule 23, Rules of Court — Governs the use of depositions at trial or upon the hearing of a motion or interlocutory proceeding; enumerates the circumstances under which depositions are admissible, including when the deponent resides more than 100 kilometers from the place of hearing. Applied to sustain the admissibility of the depositions, although the evidence did not change the result.

• Section 1, Rule 23, Rules of Court — States that depositions may be taken with leave of court after jurisdiction has been obtained, or without leave after an answer has been served. Applied to establish the procedural availability of depositions.

• Section 3(m), Rule 131, Rules of Court — The disputable presumption that official duties have been regularly performed. Applied as the controlling evidentiary principle to prefer the postmaster's certification over counsel's denial.

Justices Corona and Carpio Morales concurred. Justice Sandoval-Gutierrez was on leave.

N/A (No dissenting opinions recorded).