China Banking Corp. v. Escolar
REITERATIONFacts
The Antecedents: Petitioner China Banking Corporation filed a collection case against respondent Victoriano Escolar for $82,941.23, representing the face value of an exchange sight draft and stipulated interest in a trust receipt. Respondent Escolar disclaimed responsibility, pointing to co-defendant Tomas Cua as the real importer. Sy Hap Seng Company, another defendant, argued it lacked legal capacity to sue and that the complaint stated no cause of action. At pre-trial, Sy Hap Seng Company was dismissed, and the complaint was amended to implead it as Koh Lliam and Company. Petitioner later withdrew its claim against Koh Lliam and Company, asserting the obligation was solidary. Procedural History: The case experienced several postponements. Defendants Escolar and Cua failed to appear on June 20, 1967, leading to their default, but the order was set aside for Escolar. After further postponements and a failed compromise, the trial court denied Escolar's motion for postponement on December 18, 1967. This was reconsidered on February 8, 1968, allowing Escolar to present evidence on March 13, 1968, but further resets occurred due to lack of material time. On June 1, 1968, Escolar moved for postponement, citing the recent childbirth of his principal witness, Mrs. Norita Cantilla. The trial court denied this motion, considering the case submitted for decision. On September 25, 1968, the trial court rendered judgment ordering Escolar and Cua to pay China Banking Corporation P176,433.07 plus interest, attorney's fees, and costs. Escolar appealed to the Court of Appeals. The Petition: The Court of Appeals, acting solely on Escolar's first assignment of error regarding the denial of his motion for postponement, ruled that Escolar was denied due process and remanded the case for reception of his evidence. Petitioner's motion for reconsideration was denied, leading to the present petition for review.
Issue(s)
Whether respondent Victoriano Escolar was denied due process when his motion for postponement was denied. Whether the Court of Appeals erred in remanding the case to the trial court for further reception of evidence.
Ruling
The petition is meritorious. The appealed decision and resolution of the Court of Appeals are set aside, and the original judgment of the trial court dated September 25, 1968, is affirmed.
Ratio Decidendi
On whether respondent Victoriano Escolar was denied due process when his motion for postponement was denied: Respondent Victoriano Escolar cannot claim denial of due process. His motion for postponement, filed on June 1, 1968, for the hearing scheduled on June 3 and 5, 1968, was based on the recent childbirth of his principal witness, Mrs. Norita Cantilla. However, the motion was not verified, nor was it accompanied by an affidavit of merit summarizing the probable testimony of the witness. The attached medical certificate was also not under oath. Our Rules of Court explicitly require an affidavit for motions to postpone based on illness. Furthermore, Escolar had a history of failing to appear at scheduled hearings, and on previous occasions, the trial court had reconsidered orders of default to give him a chance to present his defense. The repeated postponements and the lack of a proper affidavit of merit indicated a dilatory scheme, prompting the trial court to exercise its sound discretion in denying the motion and submitting the case for decision. The trial judge acted wisely, recognizing the complainant's right to speedy justice. The respondent's failure to file a motion for reconsideration of the order submitting the case for decision or the subsequent judgment for four months further demonstrated a lack of genuine defense and deprived the court of an opportunity to correct itself. The cases cited by the Court of Appeals, which involved seasonable motions for reconsideration and meritorious defenses, were materially different from the present case. On whether the Court of Appeals erred in remanding the case to the trial court for further reception of evidence: The Court of Appeals erred in remanding the case. Its reliance on cases where seasonable motions for reconsideration were filed and meritorious defenses were presented is misplaced, as the facts in the instant case are materially different. In this case, respondent Escolar failed to file a motion for reconsideration of the order submitting the case for decision or the subsequent judgment. This omission, coupled with a history of postponements sought by Escolar, indicated that no defense was forthcoming and deprived the trial court of an opportunity to correct any perceived error. Moreover, the decision was rendered four months after the scheduled hearing, providing Escolar ample time to file a motion for reconsideration and invoke his right to due process. His failure to do so during this interim period, which he chose to ignore, suggested a deliberate attempt to delay the administration of justice. The trial court had already shown extreme patience with respondent Escolar. Lastly, unlike in the cases cited by the Court of Appeals, respondent Escolar did not present valid and meritorious defenses in his pleadings, merely pointing to Cua as the importer without questioning his own liability on the actionable documents. Therefore, the Court of Appeals' conclusion that Escolar was denied due process and its subsequent remand order were not justified.
Main Doctrine
A motion to postpone a trial on the ground of illness of a party or witness must be supported by an affidavit of merit, and the denial of such a motion, when not verified or lacking an affidavit of merit, is within the sound discretion of the trial court and should not be disturbed absent a clear showing of grave abuse of discretion. Repeated failures to appear and the lack of a proper affidavit of merit justify the denial of a motion for postponement and the submission of the case for decision.