Philippine Deposit Insurance Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Respondents, including Nelly M. Lovina Realty Co., Inc., Spouses Antonio and Lourdes Dadivas, Jim Rose Trading Co., Inc., Francisco Sajo, and the Intestate Estate of Elenita Sojo, had obtained loans from Pacific Banking Corporation (PaBC). These loans were classified as Sugar Crop Loans or Agricultural Loans. In 1985, PaBC was ordered to stop operations and was placed under receivership due to insolvency. Subsequently, the Philippine Deposit Insurance Corporation (PDIC) was designated as the liquidator of PaBC. In 1992, Republic Act No. 7202, known as The Sugar Restitution Law, was enacted, which provided for the condonation of certain interests and penalties on sugar loans and recomputed amortization periods. The respondents sought to have this law applied to their loans, but the petitioners denied their requests, asserting that the law only applied to loans granted by government financial institutions. Consequently, the petitioners demanded full payment of the loans, including accrued interests and charges. Procedural History: In response to the petitioners' demands, the respondents filed separate complaints against the Philippine Deposit Insurance Corporation (PDIC) and Pacific Banking Corporation (PaBC) with the Regional Trial Court (RTC) of Bacolod City. These cases were consolidated. The petitioners filed their answers, but repeatedly failed to appear at the scheduled pre-trial conferences. Consequently, the RTC issued an Order on August 19, 1999, directing the respondents to present their evidence ex parte. The petitioners' motion for reconsideration of this order was denied by the RTC in an Order dated November 18, 1999. Aggrieved, the petitioners filed a petition for certiorari with the Court of Appeals (CA), alleging grave abuse of discretion by the RTC. The CA dismissed the petition, affirming the RTC's order and holding that the petitioners' consistent absence from pre-trial hearings was inexcusable. The CA further noted that the issues involved questions of law that could be resolved without a full trial. The petitioners' subsequent motion for reconsideration of the CA's decision was also denied. The Petition: The petitioners, the Philippine Deposit Insurance Corporation and Pacific Banking Corporation, filed the present petition for certiorari under Rule 65 of the Rules of Court with the Supreme Court. They seek to reverse and set aside the Decision of the Court of Appeals dated September 5, 2001, and its Resolution dated November 28, 2001. The petitioners argue that the CA committed grave and fundamental errors of fact and law, amounting to grave abuse of discretion, by dismissing their petition and upholding the RTC's order directing the reception of evidence ex parte. They contend that their counsel's absence from the August 19, 1999 pre-trial was excusable due to a conflict of schedule, that they possess strong and meritorious defenses, and that the respondents admitted the validity of their loans and their failure to pay. The petitioners pray for the lifting of the order of default to allow them to present their evidence.
Issue(s)
Whether the petition for certiorari under Rule 65 was the proper remedy. Whether the Court of Appeals committed grave abuse of discretion in affirming the Regional Trial Court's order directing the reception of respondents' evidence ex parte.
Ruling
The petition is dismissed for lack of merit. The Supreme Court held that the petition for certiorari was an inappropriate remedy as it was used as a substitute for a lost appeal. Furthermore, the Court found no grave abuse of discretion on the part of the Court of Appeals in affirming the Regional Trial Court's order.
Ratio Decidendi
On the propriety of the remedy: The Supreme Court held that the petitioners' resort to a special civil action of certiorari under Rule 65 was inappropriate because it was used as a substitute for an appeal that they had lost. The Court emphasized that certiorari lies only where there is no plain, speedy, and adequate remedy in the ordinary course of law. The petitioners received the CA's decision on September 12, 2001, and the resolution denying their motion for reconsideration on December 6, 2001. Their remedy was to file a petition for review on certiorari under Rule 45, which they failed to do within the reglementary period ending on December 21, 2001. Instead, they filed the instant petition for certiorari on January 21, 2002, well beyond the deadline for an appeal. On the alleged grave abuse of discretion: The Supreme Court found no grave abuse of discretion on the part of the Court of Appeals in affirming the RTC's order directing the reception of respondents' evidence ex parte. The Court defined "grave abuse of discretion" as a capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction, or a virtual refusal to perform a duty enjoined by law. The consistent failure of the petitioners or their counsel to appear at the pre-trial hearings, which had been postponed numerous times, justified the RTC's order allowing the respondents to present their evidence ex parte, in accordance with Section 5, Rule 18 of the Rules of Court. The CA's affirmation of this order was therefore not arbitrary or despotic, but a proper application of the rules.
Main Doctrine
A petition for certiorari under Rule 65 of the Rules of Court cannot be used as a substitute for a lost appeal. Certiorari lies only where there is no plain, speedy, and adequate remedy in the ordinary course of law. The consistent failure to appear at pre-trial hearings may justify the reception of evidence ex parte.