Lao v. Moya
REITERATIONFacts
The Antecedents: Respondent Lao Kang Suy filed a complaint against petitioner Domingo T. Lao for P138,000, with a prayer for preliminary attachment. Hacienda Mapaya, owned by petitioner, was attached upon the filing of a P140,000 bond. Petitioner filed an answer and, by posting a counterbond, secured the lifting of the attachment. Respondent amended his complaint to P419,670.81, and the court directed petitioner to post an additional counterbond of P330,000. Petitioner's motions for reconsideration were denied. Petitioner then filed an answer to the amended complaint with a counterclaim, and respondent filed a reply. Procedural History: A pre-trial was conducted on April 13, 1964, resulting in an order where parties agreed that petitioner would sell Hacienda Mapaya within four months for not less than P1,000,000, with proceeds to cover claimed amounts and other obligations for which petitioner was liable as surety. The order stipulated that if the writ of attachment were reinstated, respondent would agree to its dissolution and the sale of the property, provided the sums were deposited, and if petitioner failed to sell within four months, respondent could offer it for sale for at least P1,000,000. The trial was postponed to August 14, 1964. On August 14, 1964, the period to sell was extended by another four months upon agreement of counsels, and the court reaffirmed the pre-trial order. After the extension lapsed, petitioner sought another extension, which respondent opposed. Respondent learned of a supposed sale by petitioner to the Land Authority for P3,503,162.57 on August 2, 1963. The court ordered parties to verify this sale. Parties failed to verify the sale together. Petitioner did not appear on December 21, 1964, citing illness. Respondent failed to appear on December 28, 1964, due to a misunderstanding. On January 5, 1965, respondent moved for authority to sell the Hacienda. Over petitioner's opposition, the court granted this on January 25, 1965. Respondent proposed Independent Investment Co., Inc. as a buyer. Petitioner moved for reconsideration on February 4, 1965. Respondent filed a petition to inspect the property. Both motions were withdrawn due to the re-attachment of Hacienda Mapaya on February 12, 1965, when respondent posted an additional bond of P330,000. Respondent filed a manifestation seeking resolution of his February 3, 1965 motion. Petitioner moved to strike the manifestation and dismiss the case for failure to prosecute. On April 2, 1965, the court authorized respondent to offer the Hacienda for sale to Independent Investment Co., Inc. for at least P1,000,000.00. Respondent submitted a deed of absolute sale to Independent Investment Co., Inc. for approval. On April 20, 1965, petitioner moved to set aside the sale order. The court, on May 3, 1965, denied this motion, required petitioner and counsel to show cause for contempt, and ordered petitioner to execute a deed of sale within 10 days, failing which the Clerk of Court would execute it. The Petition: Petitioner filed a petition for certiorari with preliminary injunction, seeking to set aside the pre-trial order and subsequent orders authorizing the sale of Hacienda Mapaya. Petitioner argued that the pre-trial order was invalid because it did not accurately reflect the proceedings, specifically claiming he had disclosed a prior sale of the Hacienda to the Land Authority in strict confidence to the trial judge.
Issue(s)
Whether the pre-trial order dated April 13, 1964, and subsequent orders authorizing the sale of Hacienda Mapaya are valid and binding upon the petitioner. Whether the petitioner is estopped from assailing the validity of the pre-trial order due to his subsequent actions and failure to object promptly.
Ruling
The petition is dismissed for lack of merit. The preliminary injunction is revoked and set aside. Costs are against the petitioner.
Ratio Decidendi
On the validity and binding effect of the pre-trial order: The Court held that the pre-trial order was valid and binding. The petitioner's claim that the order did not faithfully reflect the proceedings was unsubstantiated. The Court noted that petitioner actively participated in subsequent proceedings, including seeking an extension of the period to sell the property as stipulated in the pre-trial order, and did not raise any objection to the order's veracity until much later. This conduct implied acquiescence to the terms of the pre-trial order. The Court also found it difficult to believe that petitioner would not have complained about the alleged misrepresentation in the order if it were indeed untrue, especially given the clear terms of the order. The trial judge's denial of the alleged confidential disclosure further weakened the petitioner's claim. On the petitioner's estoppel from assailing the pre-trial order: The Court ruled that the petitioner was estopped from assailing the validity of the pre-trial order. His actions, such as seeking an extension of the sale period and failing to object promptly to the order's contents, demonstrated his conformity to it. The Court emphasized that the pre-trial order had the presumption of veracity in its favor, and the petitioner's challenge was based on bare allegations. Furthermore, the subsequent orders authorizing the sale were merely pursuant to the terms of the pre-trial order, which resulted from a conference where the petitioner and his counsel were present and participated. Therefore, any prejudice suffered by the petitioner was self-inflicted, and he could not complain of injustice or undue deprivation of property. The Court also clarified that the pre-trial order did not constitute a final adjudication of the amounts owed, as paragraph 3 provided for an accounting and the trial was an opportunity for petitioner to substantiate his claims.
Main Doctrine
The Supreme Court dismissed a petition for certiorari seeking to set aside a pre-trial order and subsequent orders authorizing the sale of attached property. The Court held that the petitioner's active participation in proceedings following the pre-trial order, including seeking extensions and failing to object promptly to its contents, constituted acquiescence. The Court found no patent defect in the pre-trial order and gave credence to the respondent's assertion that the order reflected an agreed settlement, further bolstered by the trial judge's denial of the petitioner's claim of a confidential disclosure regarding a prior sale. The petition was dismissed for lack of merit, affirming the binding nature of pre-trial orders and the principle of estoppel.