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Republic of the Philippines

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-40307 April 15, 1988
FILOIL MARKETING CORPORATION (now Petrophil
Corporation), plaintiff/appellee,
vs.
DY PAC & CO., INC., defendant/appellant.
Meneses, Magno, Leynes, Gamboa & Cabusora Law Offices for plaintiff-appellee.
Semaco P. Sacmar for defendant-appellant.

FELICIANO, J.:
This case was certified to us by the Court of Appeals in its Resolution dated 20
February 1975, as one raising only questions of law.
On 19 March 1969, an action for collection of a sum of money with interest was
commenced by plaintiff Filoil Marketing Corporation (now Petrophil Corporation) in
the City Court of Manila against defendant Dy Pac & Co., Inc., alleging that from
1961 to 1965, plaintiff had sold and delivered on credit petroleum products to
defendant, who became indebted to it in the total amount of P 2,123.69; that
notwithstanding repeated demands, defendant refused to pay.
In its Answer with Counterclaim, defendant Dy Pac & Co., Inc., admitted the credit
transactions alleged by plaintiff but denied indebtedness, alleging lack of cause of
action, payment and prescription.
At the hearing set on 17 June 1969, neither defendant nor his counsel appeared;
plaintiff was allowed to present its evidence ex parte, and accordingly, the City
Court of Manila, Branch 3, rendered a decision on the same date ordering
defendant to pay plaintiff the sum of P2,123.69 plus 6% interest thereon,
attorney's fees and costs.

Upon denial of its motion for reconsideration, defendant appealled to the Court of
First Instance of Manila, which appeal was subsequently assigned to Branch 19
thereof.
By 30 January 1973, the lower court, in accordance with Republic Act No.
6031, 1 immediately set the case for pre-trial, with a warning that no further
postponements would be granted.
On 23 March 1973, the lower court issued a pre-trial order, the fun text of which
follows:
When this case was called for pre-trial, the parties were duly
represented by their respective counsel. Filoil Marketing was
represented also by Mr. Rodolfo Bondoc, Accountant. Counsel
for defendant manifested that he is duly authorized to enter into
this pre-trial and promises to submit said authority within three
(3) days from today, as required by the Rules, otherwise, the
Court will not recognize his authority for pre-trial. The plaintiff
duly adopted his exhibits already marked in the lower court and
also adopted the markings in said court. In addition, he asked
that the decision in the City Court, found on page 17 of the
records, be marked as Exhibits "F" and that the letter addressed
to the defendant dated February 7, 1968 be marked as Exhibit
"G" to "G-". These were all admitted by the defendant.
Defendant presented as its exhibits, Exhibit "1", a cash voucher
dated February 16,1965, which was admitted by the plaintiff,
Exhibits "2" and "3" letters of defendant Filoil Marketing
Corporation, both of which were also admitted by the plaintiff.
The Court finds that this is just a matter of adjustment of
accounts by the plaintiff and the defendant, who are hereby
ordered to prepare a stipulation of facts based on their exhibits
already marked and submit the same to the Court within thirty
(30) days from today. It is also ordered that in the stipulation of
facts, the parties define the issues to be resolved by the Court
and if they are submitting the case for decision on the basis of
their exhibits. The parties are warned that if they cannot submit
the stipulation off acts, the Court will dismiss the appeal, the
case having been filed on August 14, 1969 and up to the
present no trial has been conducted. 2 (Emphasis supplied)

In a subsequent Order dated 24 May 1973, the trial court dismissed defendant's
appeal for failure of the parties to submit the required stipulation of facts and
ordered the immediate return of the records to the City Court for execution.
A subsequent motion to reconsider the order of dismissal having been denied,
defendant-appellant took this appeal to the Court of Appeals, which, as already
noted, certified the case to us as involving only questions of law. This case,
without an appellee's brief, was submitted for decision on 17 March 1975.
Appellant claimed, in its brief, that it was deprived of its day in court and urged
that the trial court erred (a) in dismissing its appeal on the ground that the parties
failed to submit a stipulation of facts and (b) in finding that defendant's counsel
had not filed his authority to appear during pre- trial. 3

submittedex parte. We hold that the trial court's Order of 24 May 1973 in effect
denied defendant-appellant its right to due process and must hence be set aside.
Under Section 33 (1) of B.P. Blg. 129, a suit for the collection of a sum of money
not exceeding P20,000.00 would fall within the exclusive original jurisdiction of the
Metropolitan Trial Courts, Municipal Trial Courts and the Municipal Circuit Trial
Courts. This case, however, was pending before the Court of First Instance of
Manila on 14 February 1983, while this appeal remained before this Court where it
has been since 17 March 1975.
Applying the Resolution of this Court en banc dated 14 February 1983, which
established guidelines for the distribution of cases pending upon implementation
of B.P. Blg. 129 and which provided in pertinent part as follows:

We find merit in this appeal.

I. PENDING CASES AS OF FEBRUARY 14, 1983:

There is no law which compulsorily requires litigants to stipulate at pre-trial on the


facts and issues that may possibly crop up in a particular case, upon pain of
dismissal of such case. The process of securing admissions whether of facts or
evidence is essentially voluntary, since stipulations of facts, like contracts, bind
the parties thereto who are not allowed to controvert statements made therein.
The trial court may, of course, advise and indeed urge the parties during the pretrial conference to try to arrive at a stipulation of facts principally for their own
convenience and to simplify subsequent proceedings by Identifying those facts
which are not really controverted and do not need to be proved. Courts, however,
cannot compel the parties to enter into an agreement upon the facts. Where the
parties are unable to arrive at a stipulation of agreed facts and do not reach an
amicable settlement of their controversy, the court must close the pre-trial
proceedings and go forward with the trial of the case. The court a quo, therefore,
committed serious or reversible error in dismissing appellant's appeal from the
then City Court of Manila solely upon the ground that the parties had failed to
comply with the court's Order to submit a stipulation of facts. The trial court's
desire speedily to dispose of the case which had been pending for almost four (4)
years in that sala is understandable and praiseworthy; but it cannot justify the
Order of dismissal. Defendant's appeal from the decision of the City Court of
Manila was entitled to a regular trial; under Section 45 of Republic Act No. 296
(the Judiciary Act of 1948) as amended by Republic Act No. 6031, the defendantappellant was entitled to have its affirmative defenses and counterclaim passed
upon by the Court of First Instance in a trial de novo. It is perhaps noteworthy that
defendant-appellant had never been afforded the benefit of a trial, even by the
City Court which had rendered its judgment on the evidence of the plaintiff

General Rule. All pending cases as of February 14,1983


shall be distributed, by raffle, among all branches in a multiple
sala seat with incumbent judges except as herein provided:
xxx xxx xxx
3. All pending cases in the Regional Trial Courts (under the
former Judiciary Act, the Courts of First Instance, Circuit
Criminal Courts, Juvenile and Domestic Relations Court and
Court of Agrarian Relations) shall remain with the Regional Trial
Courts even though there may have been a change of
jurisdiction provided in Batas Pambansa Blg. 129.
By way of example:
a. Cases in the Regional Trial Courts where the amount
involved is above P10,000.00 up to P20,000.00 exclusive of
interest and costs shall remain therein even though the
jurisdiction of the Metropolitan Trial Courts, the Municipal Trial
Courts, and Municipal Circuit Trial Court has been increased to
P20,000.00;
xxx xxx xxx (Emphasis supplied)

this case should remain with and be remanded to the Court of First Instance of
Manila.
ACCORDINGLY, the Order dated 24 May 1973 of the Court of First Instance of
Manila, dismissing the appeal of defendant-appellant, is hereby SET ASIDE. This
case is REMANDED to the Regional Trial Court of Manila for trial on the merits.
No pronouncement as to costs.
SO ORDERED.
Fernan, (Chairman), Gutierrez, Jr., Bidin and Cortes, JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 164375

October 12, 2006

RODOLFO PAREDES, TITO ALAGO AND AGRIPINO BAYBAY,


SR., petitioners,
vs.
ERNESTO VERANO and COSME HINUNANGAN, respondent.

Civil Case No. R-3111 also of the RTC of Maasin City, Southern Leyte, Branch
24.4
In their answer, petitioners denied having violated the Compromise Agreement.
They alleged that like them, respondents were not actual residents of Barangay
Tagnipa where the "road right of way" was established and that respondent
Cosme Hinunangan had already sold his only remaining lot in the vicinity to
petitioner Rodolfo Paderes.5
Subsequent to the answer, petitioners filed a motion to dismiss on the ground of
lack of cause of action.6 The trial court, presided by Judge Bethany G. Kapili,
denied the motion to dismiss.7 Petitioners elevated the order of denial to the Court
of Appeals and thereafter to this Court, both to no avail.8
Petitioners asked Judge Kapili to inhibit himself from the case. The judge denied
the motion.9

DECISION

TINGA, J.:
The central issue in this case is whether the absence of the counsel for
defendants at the pre-trial, with all defendants themselves present, is a ground to
declare defendants in default and to authorize plaintiffs to present evidence ex
parte.
The relevant facts are uncomplicated.
The protracted legal battle between the parties began with a complaint for the
establishment of a right of way filed by petitioners herein as plaintiffs against
respondents as defendants.1 The complaint, docketed as Civil Case No. 2767 of
the Regional Trial Court (RTC) of Maasin City, Southern Leyte, Branch 24,
culminated in a judgment by compromise dated 26 April 1994.2 In the
Compromise Agreement, respondent Cosme Hinunangan granted a two (2)
meter-wide right of way in favor of petitioners in consideration of the amount
of P6,000.00 which petitioners agreed to pay.3
Alleging that petitioners had blocked the passage way in violation of the
Compromise Agreement, on 28 September 1999, respondents filed a complaint
for specific performance with damages against petitioners. It was docketed as

Pre-trial was initially set for 24 April 2003, but this was reset to 3 June 2003 on
motion of respondents' counsel. But the pre-trial set on 3 June 2003 did not push
through either because none of the parties appeared.
So, pre-trial was reset to 11 November 2003. Petitioner Baybay's counsel moved
to reset it to another date on account of a conflicting hearing. However, petitioner
Baybay, who is the father of the counsel for petitioners, was present in court along
with the other defendants, when the case was called on 11 November 2003. The
RTC was informed then of a proposed settlement between the parties, although
respondent Baybay qualified his reaction by telling the court
that he would first have to inform his lawyer and the co-defendants of the said
proposal. The RTC then commented unfavorably on the absence of petitioners'
counsel, expressing disappointment towards his attitude, even making note of the
fact that not once had the counsel appeared before the RTC, even though the
case had already reached the Supreme Court over the denial of the motion to
dismiss.10 At the same time, the RTC acceded and reset the pre-trial for 23
January 2004.11
Shortly before the new pre-trial date, counsel for petitioners filed a Manifestation
of Willingness to Settle With Request for Cancellation dated 5 January
2004.12 Apart from manifesting his willingness to settle the complaint, petitioners'
counsel through the Manifestation suggested to the opposing counsel that he be
informed of the terms of the proposed settlement. Correspondingly, petitioners'
counsel requested the cancellation of the 23 January 2004 hearing.

However, the hearing did push through on 23 January 2004. The private
respondents and their counsel were present. So were petitioners Baybay and
Paderes, and co-defendant Alago, but not their counsel.

delay a case and defeat the ends of justice but to promote respect for the law and
legal processes."19
We reverse the trial court and the Court of Appeals.

An order of even date formalized what had transpired during the hearing. The
RTC allowed respondents to present their evidence ex parte, "for failure of the
defendants['] counsel to appear before [the RTC]".13 Petitioners filed a motion for
reconsideration, but this was denied by the RTC.14
Thus, petitioners filed a petition for certiorari with the Court of Appeals, assailing
the orders of the RTC. However, on 28 April 2004, the Court of Appeals dismissed
the petition outright,15 for failure to attach duplicate original copies of the annexes
to the petition other than the RTC Orders dated 23 January 2004 and 17 February
2004 (attaching photocopies instead), as well as for failure to submit such other
pleadings relevant and pertinent to the petition. Petitioners filed a Motion for
Reconsideration with Motion to Admit Additional Exhibits, adverting to the
documents previously missing from the petition but attached to the motion.
On 13 July 2004, the Court of Appeals issued a Resolution denying the motion for
reconsideration. In doing so, the Court of Appeals resolved the petition on its
merits, as it ruled that "even with the submission by petitioners of the required
pleadings and documents, the instant petition must nevertheless fail."16 The
appellate court quoted extensively from the transcripts of the hearings of 11
November 2003 and 23 January 2004. It conceded that under Section 5, Rule 18
of the 1997 Rules of Civil Procedure, it is the failure of the defendant, and not
defendant's counsel, to appear at the pre-trial that would serve cause to allow
plaintiff to present evidence ex parte. Nevertheless, the Court of Appeals noted
that petitioner Baybay had made it clear that he would never enter into any
amicable settlement without the advice of his counsel. Thus, the Court of Appeals
concluded that Judge Kapili's "hands were tied," explaining, thus: "He was held
hostage by the blatant display of arrogance exhibited by petitioner's counsel in
assiduously failing to appear before the trial court. Were he to close his eyes to
the reprehensible scheme of Atty. Baybay in delaying the disposition of the main
case, the resulting impass would only strain further the meager resources of the
court and prejudice the rights of private respondents."17
The Court of Appeals then cited Sps. Ampeloquio, Sr. v. Court of
Appeals,18 wherein the Court held that if every error committed by the trial court
were to be a proper object of review by certiorari, then trial would never come to
an end and the appellate court dockets would be clogged with petitions
challenging every interlocutory order of the trial court. It concluded that the acts of
Judge Kapili did not constitute grave abuse of discretion equivalent to lack of
jurisdiction.
Finally, the trial court admonished petitioners' counsel to "bear in mind that as an
officer of the court, he is tasked to observe the rules of procedure, not to unduly

A preliminary observation. The Court of Appeals had initially dismissed the petition
lodged by petitioners on account of their failure to attach several relevant
pleadings, citing Section 3, Rule 46 of the 1997 Rules of Civil Procedure. Before
this Court, petitioners devote some effort in arguing that the Court of Appeals
erred in dismissing the petition on that procedural ground, while respondents in
their comment similarly undertook to defend the appellate court's action on that
point. We do not doubt that under Section 3, Rule 46 of the 1997 Rules of Civil
Procedure, the Court of Appeals has sufficient discretion to dismiss the petition for
failure of petitioner to comply with the requirements enumerated in the section,
including "such material portions of the record as are referred to [in the petition],
and other documents relevant or pertinent thereto."20 At the same time,
"[d]ismissal of appeals purely on technical grounds is frowned upon and the rules
of procedure ought not to be applied in a very rigid, technical sense, for they are
adopted to help secure, not override, substantial justice, and thereby defeat their
very aims."21 Thus, the Court has not hesitated to view Section 3 of Rule 46 with a
liberal outlook, ruling for example that it was not necessary to attach certified true
copies of such material portions of the record as referred to therein.22
The situation in this case bears similarity to that which transpired in CortezEstrada v. Heirs of Samut.23 Therein, the petitioner had failed to attach material
documents to her petition before the Court of Appeals. The Court of Appeals held
the petition was dismissible for such procedural infirmities, yet it nonetheless
proceeded to rule against the petitioner on the merits. The Supreme Court agreed
with the appellate court that the petition was procedurally infirm, yet found partial
merit in its arguments and consequently granted partial relief in favor of the
petitioner. In this case, the Court of Appeals, in resolving the motion for
reconsideration, proceeded to make a judgment on the merits. Similarly, this Court
finds ample basis to review the decision of the trial court as affirmed by the
appellate court, notwithstanding the procedural flaw that originally accompanied
the petitiona flaw which petitioners did seek to remedy when they belatedly
attached the relevant documents to their motion for reconsideration.
Ultimately, there are important reasons to consider the case on the merits. This
case affords the Court the opportunity to clarify the authority granted to a trial
judge in relation to pre-trial proceedings.
The order of the RTC allowing respondents to present evidence ex parte was
undoubtedly to the detriment of petitioners. Since the RTC would only consider
the evidence presented by respondents, and not that of petitioners, the order
strikes at the heart of the case, disallowing as it does any meaningful defense
petitioners could have posed. A judgment of default against a defendant who
failed to attend pre-trial, or even any defendant who failed to file an answer,

implies a waiver only of their right to be heard and to present evidence to support
their allegations but not all their other rights.24
The Constitution guarantees that no person shall be deprived of property without
due process of law. One manner by which due process is assured is through the
faithful adherence to the procedural rules that govern the behavior of the partylitigants. The Rules of Court do sanction, on several instances, penalties for
violation of the Rules that causes the termination of an action without a ruling on
the merits, or bars one party from litigating the same while permitting the other to
do so. We noted earlier that Section 3, Rule 46 authorizes the dismissal of an
original petition before the Court of Appeals for failure to append material portions
of the record. Pursuant to Section 5, Rule 17, the failure of the plaintiff to appear
on the date of the presentation of his/her evidence in chief on the complaint is
ground for the court to dismiss the complaint, without prejudice to the right of the
defendant to prosecute the counterclaim in the same or in a separate action. And
under Section 5, Rule 18, the failure of the plaintiff or defendant to appear during
pre-trial authorizes the court to either dismiss the complaint, if the plaintiff were
absent; or to allow the plaintiff to present evidence ex parte, if the defendant were
absent.
The operation of the above-cited provisions may defeat the cause of action or the
defense of the party who violated the procedural rule. Yet it could not be said that
any resultant adverse judgment would contravene the due process clause, as the
parties are presumed to have known the governing rules and the consequences
for the violation of such rules. In contrast, the same presumption could not attach
if a party were condemned to the same outcome even if the party did not violate a
prescribed rule of procedure. Any ruling that disposes of an action or precludes a
party from presenting evidence in support or against thereof must have basis in
law,25 and any ruling so intentioned without legal basis is deemed as issued with
grave abuse of discretion.26 In the end, a person who is condemned to suffer loss
of property without justifying legal basis is denied due process of law.
Simply put, nothing in the Rules of Court authorizes a trial judge to allow the
plaintiff to present evidence ex parteon account of the absence during pre-trial of
the counsel for defendant.
Sections 4 and 5 of Rule 18 warrant examination:
SEC. 4. Appearance of Parties. It shall be the duty of the parties and
their counsel to appear at the pre-trial. The non-appearance of a party
may be excused only if a valid cause is shown therefor or if a
representative shall appear in his behalf fully authorized in writing to
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and of documents.

SEC. 5. Effect of failure to appear. The failure of the plaintiff to appear


when so required pursuant to the next preceding section shall be cause
for dismissal of the action. The dismissal shall be with prejudice, unless
otherwise ordered by the court. A similar failure on the part of the
defendant shall be cause to allow the plaintiff to present his evidence ex
parte and the court to render judgment on the basis thereof.
Section 4 imposes the duty on litigating parties and their respective counsel
during pre-trial. The provision also provides for the instances where the nonappearance of a party may be excused. Nothing, however, in Section 4 provides
for a sanction should the parties or their respective counsel be absent during pretrial. Instead, the penalty is provided for in Section 5. Notably, what Section 5
penalizes is the failure to appear of either the plaintiff or the defendant, and not
their respective counsel.
Indeed, the Court has not hesitated to affirm the dismissals of complaints or the
allowance of plaintiffs to present evidence ex parte on account of the absence of a
party during pre-trial. In United Coconut Planters Bank v. Magpayo,27 the
complaint was dismissed because although the counsel for complainant was
present during the pre-trial hearing, the Court affirmed such dismissal on account
of said counsel's failure to present any special power of attorney authorizing him
to represent the complainant during pre-trial.28 In Jonathan Landoil International
Co. v. Mangudadatu,29 the defendant and its counsel failed to appear during pretrial, and the complainants were allowed to present evidence ex parte. After an
adverse decision was rendered against the defendant, it filed a motion for new
trial in which it cited the illness of defendant's counsel as the reason for his nonappearance during pre-trial. While the Court acknowledged that such argument
was not a proper ground for a motion for new trial, it also noted that the
appearance of the defendant during pre-trial was also mandatory, and that the
defendant failed to justify its own absence during pre-trial.30
There are two cases which, at first blush, may seem to affirm the action of the
RTC. In the disbarment case ofMiwa v. Medina,31 a lawyer was suspended from
the practice for one (1) month for, among others, failing to appear during pre-trial,
thus leading to the declaration of his client, the defendant, in default. At the same
time, the Court in Miwa did take the defendant herself to task for also failing to
appear during pre-trial, observing that "the failure of a party to appear at pre-trial,
given its mandatory character, may cause her to be non-suited or considered as in
default."32
In Social Security System v. Chaves,33 the Social Security System (SSS) itself
was named as the defendant in a complaint filed with the RTC of Cagayan de Oro
City. The pre-trial brief was filed by the acting assistant branch manager of the
SSS in Cagayan de Oro City, who happened to be a lawyer and who also entered
his appearance as counsel for the SSS. However, said lawyer was not present
during pre-trial, and the SSS was declared in default and the complainants
allowed to present their evidence ex parte. The Court affirmed such order of

default, noting other procedural violations on the part of SSS, such as the fact that
the motion for reconsideration to lift the order of default lacked verification, notice
of hearing and affidavit of merit.
Notwithstanding, the Court is not convinced that SSS is ample precedent to affirm
an order of default where even though the defendant was present during pre-trial,
defendant's counsel failed to appear for the same hearing. The Court in SSS did
not make any categorical declaration to this effect. Moreover, it can be observed
that inSSS, the counsel himself, the acting assistant branch manager of the SSS,
would have been in addition, the representative of the SSS itself, a juridical
person which can only make an appearance during pre-trial through a natural
person as its duly authorized representative. The Court of Appeals decision
upheld in SSS, cited extensively in our decision therein, expressly affirmed the
order of default on the ground that "it is the discretion of the trial judge to declare a
party-defendant as in default for failure to appear at a pre-trial conference."
However, in SSS, neither the Court of Appeals nor this Court expressly laid
relevance to the fact that the counsel himself, as opposed to the defendant, had
not attended the pre-trial.
Upon the other hand, Africa v. Intermediate Appellate Court34 illuminates the
proper standard within which to view the instant petition. It appeared therein that
on the day of the pre-trial, counsel for the defendant (therein petitioner) had
arrived ten minutes after the case was called. Within that ten-minute span, the trial
court had issued an order in open court declaring the defendant in default and
authorizing the plaintiff to present its evidence ex parte. A mere two days later, the
trial court rendered judgment in favor of plaintiff. The Court reversed the trial court,
holding that the order of default was issued with grave abuse of discretion. The
reasoning of the Court was grounded primarily on the doctrinal rule that frowned
against "the injudicious and often impetuous issuance of default orders,"35 which
led in that case to "a deni[al of the defendant's] basic right to be heard, even after
his counsel had promptly explained the reason for his tardiness at the pre-trial."36
Still, it would not be proper to consider Africa as the governing precedent herein,
influential as it may be to our disposition. It was not clear from the narration
in Africa whether the defendant himself was absent during the pre-trial, a
circumstance which is determinative to this petition. Moreover, the Court's tone
in Africa indicated that it was animated by a liberal philosophy towards the
procedural rule, implying that the trial court's reversed action was nonetheless
adherent to the strict letter of the rule. Whether or not the trial court in Africa acted
conformably with the rules depends upon the presence or absence of the
defendant therein during pre-trial. It can no longer be discerned whether the Court
so ruled in Africa notwithstanding the presence or absence of the defendant
therein. It would be disingenuous though to assume, as a means of applying that
case as precedent herein, that the defendant was actually present during the pretrial in Africa.

Hence, we pronounce that the absence of counsel for defendants at pre-trial does
not ipso facto authorize the judge to declare the defendant as in default and order
the presentation of evidence ex parte. It bears stressing that nothing in the Rules
of Court sanctions the presentation of evidence ex parte upon instances when
counsel for defendant is absent during pre-trial. The Rules do not countenance
stringent construction at the expense of justice and equity.37 As the Court has
previously enunciated:
We cannot look with favor on a course of action which would place the
administration of justice in a straightjacket for then the result would be a
poor kind of justice if there would be justice at all. Verily, judicial orders,
such as the one subject of this petition, are issued to be obeyed,
nonetheless a non-compliance is to be dealt with as the circumstances
attending the case may warrant. What should guide judicial action is
the principle that a party-litigant is to be given the fullest
opportunity to establish the merits of his complaint or defense
rather than for him to lose life, liberty or properties on
technicalities.38
Due process dictates that petitioners be deprived of their right to be heard and to
present evidence to support their allegations if, and only if, there exists sufficient
basis in fact and in law to do so.39 There being a manifest lack of such basis in this
case, petitioners would be unjustly denied of the opportunity to fully defend
themselves should the Court affirm the questioned orders which were evidently
issued by the RTC with grave abuse of discretion. The better and certainly more
prudent course of action in every judicial proceeding is to hear both sides and
decide on the merits rather than dispose of a case on technicalities.40
While counsel is somewhat to blame for his non-attendance at pre-trial,
incidentally the operative act which gave birth to the controversy at bar, it would
be most unfair to penalize petitioners for what may be the deficiency of their
lawyer when the consequent penalty has no basis in law. Particularly mitigating in
the instant case is the fact that the counsel for private respondents intimated, at
an earlier hearing, a possibility of an amicable settlement to the case. Then,
counsel for petitioners submitted a manifestation41 requesting therein that the
parties be given ample time to respectively discuss their proposals and counterproposals and that the hearing for 23 January 2004 be moved to a later date as
may be agreed upon by the parties for submission of their possible compromise
agreement. It may well have been that counsel for petitioners labored under the
false understanding that a compromise agreement was an imminent possibility.
The Court nonetheless notes that counsel was remiss in assuming that his motion
to reset the scheduled hearing would necessarily be granted by the court a quo.
Be that as it may, there is no clear demonstration that the acts of the counsel of
petitioners were intended to perpetuate delay in the litigation of the case.
Assuming arguendo that the trial court correctly construed the actions of the
counsel of petitioners to be dilatory, it cannot be said that the court was powerless

and virtually without recourse but to order the ex parte presentation of evidence
by therein plaintiffs. We are in some sympathy with the judge who was obviously
aggrieved that the case was dragging on for an undue length of time. But even so,
there were other remedies available to the court.
Among the inherent powers of the courts expressly recognized by the Rules
include the authority to enforce order in proceedings before it,42 to compel
obedience to its judgments, orders and processes,43 and to amend and control its
process and orders so as to make them conformable to law and
justice.44 Moreover, the Code of Judicial Conduct empowers the courts to
judiciously take or initiate disciplinary measures against lawyers for
unprofessional conduct.45 A show cause order to counsel would have been the
more cautious and reasonable course of action to take under the circumstances
then prevailing. In failing to do so, the trial court impetuously deprived petitioners
of the opportunity to meaningfully present an effective defense and to adequately
adduce evidence in support of their contentions.
WHEREFORE, the instant petition is hereby GRANTED and the resolutions of the
Court of Appeals affirming the Orders of the Regional Trial Court in Civil Case No.
R-3111 dated 23 January 2004 and 17 February 2004 are REVERSED. No costs.
SO ORDERED.
Quisumbing, Chairperson, Carpio, Carpio Morales, and Velasco, Jr., JJ., concur.

Republic of the Philippines


SUPREME COURT
Manila
SECOND DIVISION

G.R. No. 94005. April 6, 1993.


LUISA LYON NUAL, herein represented by ALBERT NUAL, and ANITA NUAL
HORMIGOS, petitioners,
vs.
THE COURT OF APPEALS and EMMA LYON DE LEON in her behalf and as
guardian ad litem of the minors HELEN SABARRE and KENNY SABARRE,
EDUARDO GUZMAN, MERCEDEZ LYON TAUPAN, WILFREDO GUZMAN,
MALLY LYON ENCARNACION and DORA LYON DELAS PEAS, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; ONCE IT BECOMES
FINAL, MAY NO LONGER BE MODIFIED IN ANY RESPECT; EXCEPTIONS.
In the case of Manning International Corporation v. NLRC, (195 SCRA 155, 161
[1991]) We held that ". . ., nothing is more settled in the law than that when a final
judgment becomes executory, it thereby becomes immutable and unalterable. The
judgment may no longer be modified in any respect, even if the modification is
meant to correct what is perceived to be an erroneous conclusion of fact or law,
and regardless of whether the modification is attempted to be made by the Court
rendering it or by the highest Court of land. The only recognized exceptions are
the correction of clerical errors or the making of so-called nunc pro tunc entries
which cause no prejudice to any party, and, of course, where the judgment is
void." Furthermore, "(a)ny amendment or alteration which substantially affects a
final and executory judgment is null and void for lack of jurisdiction, including the
entire proceedings held for that purpose."
2. ID.; ID.; ID.; ID.; REMEDY OF AGGRIEVED PARTY. In the case at bar, the
decision of the trial court in Civil Case No. 872 has become final and executory.
Thus, upon its finality, the trial judge lost his jurisdiction over the case.
Consequently, any modification that he would make, as in this case, the inclusion
of Mary Lyon Martin would be in excess of his authority. The remedy of Mary Lyon
Martin is to file an independent suit against the parties in Civil Case No. 872 and
all other heirs for her share in the subject property, in order that all the parties in
interest can prove their respective claims.

DECISION
CAMPOS, JR., J p:
This is a petition for review on certiorari of the decision ** dated February 22,
1990 of the Court of Appeals in CA-G.R. CV No. 14889 entitled "Emma Lyon de
Leon, et al., plaintiffs-appellees versus Luisa Lyon Nual, now deceased herein
represented by Albert Nual, et al., defendants appellants," dismissing petitioners'
appeal and affirming the trial court's order *** dated January 9, 1987 for the
inclusion of Mary Lyon Martin as one of the heirs who shall benefit from the
partition.
The facts as culled from the records of the case are as follows.
This case originated from a suit docketed as Civil Case No. 872 filed by Emma
Lyon de Leon in her behalf and as guardian ad litem of the minors Helen Sabarre
and Kenny Sabarre, Eduardo Guzman, Mercedes Lyon Taupan, Wilfredo
Guzman, Mally Lyon Encarnacion and Dona Lyon de las Peas, (herein private
respondents) against Luisa Lyon Nual, now deceased and herein represented by
her heirs, Albert Nual and Anita Nual Hormigos (herein petitioners), for partition
and accounting of a parcel of land located in Isabela, Basilan City. Subject parcel
of land was formerly owned by Frank C. Lyon and May Ekstrom Lyon, deceased
parents of Helen, Dona, Luisa, Mary, Frank and William James. Private
respondents claimed that said parcel of land, formerly covered by Transfer
Certificate of Title No. 3141 in the name of Frank C. Lyon, has been in possession
of petitioner Luisa Lyon Nual since 1946 and that she made no accounting of the
income derived therefrom, despite demands made by private respondents for the
partition and delivery of their shares.
On December 17, 1974, after trial and hearing, the then Court of First Instance
(now Regional Trial court) rendered its judgment in favor of private respondents
and ordered the partition of the property but dismissing private respondents'
complaint for accounting. The dispositive portion of the judgment reads as follows:
"WHEREFORE, judgment is hereby rendered ordering the partition of the land
covered by Transfer Certificate of Title No. 3141 among the plaintiffs and
defendant. The parties shall make partition among themselves by proper
instruments of conveyance, subject to the Court's confirmation, should the parties
be unable to agree on the partition, the court shall appoint commissioners to make
the partition, commanding them to set off to such party in interest such part and
proportion of the property as the Court shall direct. Defendant is further ordered to
pay plaintiffs attorney's fees in the sum of P2,000.00." 1

On July 30, 1982, the order of partition was affirmed in toto by the Court of
Appeals in CA-G.R. No. 57265-R. The case was remanded to the court of origin
for the ordered partition. 2

On January 3, 1987, the private respondents filed motion for clarification as to


whether the partition of property is to be confined merely among the party
plaintiffs and defendants, to the exclusion of Mary Lyon Martin. 12

On May 17, 1984, an order for the issuance of the writ of execution was issued by
the court a quo. 3

On January 9, 1987, the lower court issued the assailed order directing the
inclusion of Mary Lyon Martin as co-owner with a share in the partition of the
property, to wit:

On July 17, 1984, Mary Lyon Martin, daughter of the late Frank C. Lyon and Mary
Ekstrom Lyon, assisted by her counsel filed a motion to quash the order of
execution with preliminary injunction. In her motion, she contends that not being a
party to the above-entitled case her rights, interests, ownership and participation
over the land should not be affected by a judgment in the said case; that the order
of execution is unenforceable insofar as her share, right, ownership and
participation is concerned, said share not having been brought within the
Jurisdiction of the court a quo. She further invokes Section 12, Rule 69 of the
Rules of Court. 4

"After a perusal of the decision of the Court of Appeals CA-G.R. No. 57265-R,
where this case was appealed by the unsatisfied parties, there is a finding that
Mary now Mary Lyon Martin is one of the legitimate children of Frank C. Lyon and
Mary Ekstrom. (Page 3 of the decision).
In view of this finding, it would be unfair and unjust if she would be left out in the
partition of this property now undertaking (sic) by the said court appointed
commissioners.

On June 26, 1985, the trial court issued an order revoking the appointment of the
three commissioners and in lieu thereof, ordered the issuance of a writ of
execution. 5

WHEREFORE, premises considered, the court appointed commissioners is


hereby directed to include Mary Lyon Martin as co-owner in the said property
subject of partition with the corresponding shares adjudicated to her.

On February 4, 1986, the said court issued an order appointing a Board of


Commissioners to effect the partition of the contested property. 6

SO ORDERED." 13

On May 28, 1986, the trial court dismissed the motion to quash order of execution
with preliminary injunction filed by Mary Lyon Martin and directed the partition of
the property among the original party plaintiffs and defendants. 7
On September 24, 1986, the Commissioners manifested to the trial court that in
view of the fact that the name of Mary Lyon Martin also appears in the Transfer
Certificate of Title, she could therefore be construed as one of the heirs. A ruling
from the trial court was then sought. 8
On September 29, 1986, the lower court issued an order directing the counsel of
Emma Lyon de Leon to furnish the court within five days from receipt thereof all
the names the of heirs entitled to share in the partition of the subject property. 9
On October 1, 1986, the petitioners filed a manifestation praying that the court
issue an order directing the partition of the property in consonance the decision
dated December 17, 1974 of the trial court the order of said court dated May 28,
1986. 10
Without ruling on the manifestation, the lower court issued an order directing the
Board of Commissioners to immediately partition the said property. 11

Petitioners' motion for reconsideration 14 of the aforesaid order was denied by the
trial court. 15
On February 22, 1990 the Court of Appeals rendered its decision dismissing
petitioners' appeal, the dispositive portion of which reads as follows:
"WHEREFORE, premises considered, there being no legal impediment to the
inclusion of Mary Lyon Martin by the court-appointed Board of Commissioners as
one of the heirs who shall benefit from the partition, the instant appeal is
DISMISSED for lack of merit.
NO COSTS.
SO ORDERED." 16
Petitioners' motion for reconsideration was denied on June 6, 1990. 17
Petitioners filed this petition for review alleging that the Court of Appeals has
decided questions of substance contrary to law and the applicable decisions of
this Court, for the following reasons:

"1.) BY SUSTAINING THE ORDER OF THE REGIONAL TRIAL COURT


DIRECTING THE COURT APPOINTED BOARD OF COMMISSIONERS TO
INCLUDE MARY L. MARTIN TO SHARE IN THE PARTITION OF THE
PROPERTY IN LITIGATION DESPITE THE FACT, OVER WHICH THERE IS NO
DISPUTE, THAT SHE HAS NOT LITIGATED EITHER AS A PARTY PLAINTIFF
OR DEFENDANT IN CIVIL CASE NO. 872, IT HAS REFUSED TO RECOGNIZE
THAT THE REGIONAL TRIAL COURT HAS NO JURISDICTION TO AMEND OR
MODIFY THE JUDGMENT IN CIVIL CASE NO. 872 AND THE REGIONAL TRIAL
COURT'S ORDER DATED 28 MAY 1986 WHICH HAS BECOME FINAL AND
EXECUTORY.
2.) WHEN THE COURT OF APPEALS HAS CATEGORICALLY STATED THAT
MARY L. MARTIN "NEVER LITIGATED AS ONE OF THE PLAINTIFFS IN SAID
CASE," AND HER ONLY PARTICIPATION THEREIN WAS SIMPLY CONFINED
"AS A WITNESS FOR DEFENDANT-SISTER LUISA LY ON NUAL," AND TO
ALLOW HER TO SHARE IN THE PARTITION THIS LATE WITHOUT
REQUIRING A PROCEEDING WHERE THE PARTIES COULD PROVE THEIR
RESPECTIVE CLAIMS, IS TANTAMOUNT TO DENYING THE NUALS OF
THEIR RIGHT TO DUE PROCESS. 18
The crux of this case is whether of not the trial court may order the inclusion of
Mary L. Martin as co-heir entitled to participate in the partition of the property
considering that she was neither a party plaintiff nor a party defendant in Civil
Case No. 872 for partition and accounting of the aforesaid property and that the
decision rendered in said case has long become final and executory.
Petitioners contend that the trial court's decision dated December 14, 1974 in Civil
Case No. 872 ordering the partition of the parcel of land covered by Transfer
Certificate of Title No. 3141 among plaintiffs and defendants has long become
final and executory. Hence the trial court has no jurisdiction to issue the
questioned Order dated January 9, 1987 ordering the Board of Commissioners to
include Mary Lyon Martin to share in the partition of said property despite the fact
that she was not a party to the said case. Said Order, therefore, resulted in an
amendment or modification of its decision rendered in Civil Case No. 872.
We find merit in the instant petition.

In the ease of Manning International Corporation v. NLRC, 19 We held that ". . .,


nothing is more settled in the law than that when a final judgment becomes
executory, it thereby becomes immutable and unalterable. The judgment may no
longer be modified in any respect, even if the modification is meant to correct
what is perceived to be an erroneous conclusion of fact or law, and regardless of
whether the modification is attempted to be made by the Court rendering it or by
the highest Court of land. The only recognized exceptions are the correction of
clerical errors or the making of so-called nunc pro tunc entries which cause no
prejudice to any party, and, of course, where the judgment is void."
Furthermore, "(a)ny amendment. or alteration which substantially affects a final
and executory judgment is null and void for lack of jurisdiction, including the entire
proceedings held for that purpose." 20
In the case at bar, the decision of the trial court in Civil Case No. 872 has become
final and executory. Thus, upon its finality, the trial judge lost his jurisdiction over
the case. Consequently, any modification that he would make, as in this case, the
inclusion of Mary Lyon Martin would be in excess of his authority.
The remedy of Mary Lyon Martin is to file an independent suit against the parties
in Civil Case No. 872 and all other heirs for her share in the subject property, in
order that all the parties in interest can prove their respective claims.
WHEREFORE, the petition is GRANTED. The Order dated January 9, 1987 of the
trial Court as affirmed by the Court of Appeals is hereby REVERSED and SET
ASIDE. The decision of the trial court dated December 17, 1974 in Civil Case No.
872 is hereby REINSTATED.
SO ORDERED.
Narvasa, C .J ., Padilla, Regalado and Nocon, Jr., JJ ., concur.