Ultra Mar Aqua Resource v. Fermida Construction Services
REITERATIONFacts
The Antecedents: On December 8, 2003, Fermida Construction Services (Fermida), represented by Myrna T. Ramos, entered into a Contract Agreement with Ultra Mar Aqua Resource, Inc. (Ultra Mar), represented by Victor B. Prieto, for the construction of a warehouse in Wawandue, Subic, Zambales, at a contract price of PhP1,734,740. During construction, variations were introduced regarding roof coverage, drainage canal, painting, and electrical works upon Ultra Mar's verbal requests and instructions, though no formal variation orders were issued. Fermida completed the project on January 17, 2004, issued a billing statement excluding variation costs, secured a 10% surety bond for retention to cover potential defects, and submitted a Contractor's Affidavit confirming settlement of all labor, materials, and equipment claims. Ultra Mar expressed dissatisfaction via letter, prompting Fermida to undertake repairs and issue another billing; however, Ultra Mar refused payment citing lack of FDT Report and building permits, substandard work, and delays, while denying requests for variations and attributing changes to rectifications of poor workmanship. Fermida demanded payment of the contract price plus variation costs, leading to the filing of a Complaint for Collection of Sum of Money with Prayer for Injunction. Procedural History: The RTC ordered an ocular inspection by an independent engineer, who later reported variations not conforming to plans, unapproved extra works based on verbal instructions, and recommended repairs for defects while noting the surety bond covers the 10% retention. Pre-trial was scheduled for August 9, 2004, but postponed twice at Ultra Mar's request to September 7, 2004; Ultra Mar's counsel failed to appear or file the pre-trial brief, leading to declaration of waiver and ex parte presentation by Fermida. Ultra Mar filed an Omnibus Motion to lift the order, citing counsel's nausea from low blood sugar, but failed to submit a required medical certificate timely, resulting in denial and a Decision on October 7, 2004, awarding Fermida PhP1,106,000.38 plus interest, attorney's fees, expenses, and nominal damages. RTC denied reconsiderations. On appeal, CA affirmed denial of relief from default effects, upheld liability based on Fermida's evidence and engineer's reports but modified to subject payment to 10% retention, deleted other awards, and denied reconsideration. The Petition: Ultra Mar argues the CA erred in upholding RTC's denial of its Omnibus Motion and reconsideration, claiming counsel's gross negligence (intermittent nausea, failure to inform of decision, deceptive reports) deprived it of due process and right to present evidence on meritorious defenses like defective work and unapproved variations. It cites counsel's later disbarment and malversation case as proof of negligence, seeking relief from default effects and remand for trial on merits.
Issue(s)
Whether the RTC and CA erred in denying relief from the order allowing ex parte evidence due to counsel's failure to appear at pre-trial and file brief, excusable as gross negligence binding only counsel, not client. Whether Ultra Mar should be relieved from judgment consequences given counsel's gross negligence and meritorious defenses.
Ruling
The petition is DENIED. The CA Decision dated July 28, 2009 and Resolution dated February 9, 2010 in CA-G.R. CV No. 86540 are AFFIRMED with MODIFICATION that payment of PhP1,106,038.82 to Fermida is no longer subject to 10% retention, as covered by the surety bond per contract and engineer's supplemental report.
Ratio Decidendi
On Issue 1: The RTC correctly applied Sections 4, 5, and 6, Rule 18, Rules of Civil Procedure, where defendant's failure to appear at pre-trial or file brief (same effect) allows plaintiff ex parte evidence and judgment thereon, a consequence retained post-1997 amendments deleting 'default' for terminological accuracy while preserving effects to expedite trials (citing Regalado, Remedial Law Compendium; Daaco v. Yu, G.R. No. 183398, June 22, 2015). Non-appearance is excused only by valid cause (court's discretion, undisturbed absent grave abuse) or authorized representative for settlements/ADR/stipulations; here, repeated postponements (privilege, not right) via urgent motions, then total failure despite directives, showed no valid cause, as counsel's illness claim lacked timely medical certificate despite leniency granted (dated pre-motion but unsubmitted, with belated excuses). CA correctly noted perplexing non-compliance over 34 days, treating reconsideration as prohibited second motion (Rule 52, Sec. 2). Trial courts must enforce against dilatory tactics to ensure proceedings despite refusal (Philippine American Life & Gen. Ins. Co. v. Enario, G.R. No. 182075, Sep. 15, 2010). On Issue 2: Client is bound by counsel's acts/omissions, including negligence, as counsel has implied authority for suit management, deemed client's own acts (Lagua v. CA, G.R. No. 173390, June 27, 2012, citing Bejarasco v. People; Tan v. CA, 524 Phil. 752, 2006). Clients must diligently monitor cases; endless reopening via new counsel alleging prior incompetence would prolong suits indefinitely (Tesoro v. CA). Counsel's disbarment/malversation (post-events, unrelated, first raised on appeal) cannot excuse, as new issues barred (Del Rosario v. Bonga, G.R. No. 136308, Jan. 23, 2001); thus, Ultra Mar waived evidence right, affirming liability on Fermida's proof. Modification removes retention withholding, as contract (Clause 2[d]) and engineer confirm surety bond suffices for defects.
Main Doctrine
Under Sections 4, 5, and 6 of Rule 18 of the Rules of Civil Procedure, the failure of the defendant and its counsel to appear at the pre-trial conference or to file the required pre-trial brief has the same effect, allowing the plaintiff to present its evidence ex parte and the court to render judgment based thereon, with non-appearance excusable only upon showing a valid cause subject to the trial court's sound discretion or appearance by a fully authorized representative. The amended rules deleted the phrase 'as in default' for semantical accuracy but retained the adverse consequences to ensure expeditious proceedings. A motion for postponement is a privilege, not a right, and repeated dilatory tactics justify denial to uphold the trial court's duty against deliberate delays. The negligence, mistakes, or gross negligence of counsel bind the client, as counsel holds implied authority for procedural acts, and clients must exercise diligence in monitoring their case. Issues of counsel's negligence cannot be raised for the first time on appeal, and extraneous matters like subsequent disbarment do not retroactively excuse prior lapses.