Philworth vs PCIB (G.R. No. 161878 June 05, 2013)

Philworth Asia’s Inc vs Philippine Commercial International Bank
G.R. No. 161878 June 05, 2013

Facts: On May 31, 1991, the former Philippine Commercial International Bank (PCIB) sued petitioners in the RTC to recover upon an unpaid debt (Civil Case No. 911536), alleging that on September 22, 1988, petitioner Philworth Asia, Inc. (Philworth) had borrowed P270,000.00 from PCIB to be paid on or before November 8, 1988 in accordance with a promissory note; that petitioners Spouses Luisito and Elizabeth Mactal (Mactals) and Spouses Luis and Eloisa Reyes (Reyeses) had executed a deed of suretyship binding themselves to pay Philworth’s obligations under the promissory note should Philworth refuse to perform its obligation; that Philworth had paid only partially, leaving an unpaid balance of P225,533.33, inclusive of interest and penalty charges; that Philworth had not paid its balance despite repeated demands; and that attempts to collect from the Mactals and Reyeses had likewise failed. On July 5, 1991, the Reyeses filed their answer with special and affirmative defenses, specifically countering that PCIB had no cause of action against them; that Luis Reyes had signed the promissory note as an employee of Philworth, but had not signed the deed of suretyship in November 1988 because he had already resigned from Philworth on October 16, 1988; that Luisito Mactal, the President and General Manager of Philworth, should be the person liable under the deed of suretyship; that PCIB had not made demands upon all the parties; and that PCIB did not exhaust all the available properties of Philworth before bringing the suit also against them. JUNE2013 In their answer filed on August 20, 1991, the Mactals averred that the defendants had substantially paid their obligation, but that PCIB had unreasonably refused to properly account for and credit the payments; that PCIB had been charging exorbitant and unconscionable interest, penalties and other charges; and that if the previous payments were duly credited, the unpaid balance would only be minimal. The first pre-trial conference, which was set on May 19, 1994, was moved several times afterwards, until the parties were notified that the conference would finally be held on April 25, 1995. On April 3, 1995, petitioners sought the transfer of the conference of April 25, 1995 to May 2, 1995. They later on further moved for the conference to be held on May 12, 1995. But no conference was held on May 12, 1995. Instead, the conference was reset on two later dates, i.e., June 2, 1995 and July 21, 1995. Although petitioners again moved to reset the conference on June 1, 1995, the RTC denied petitioners’ motion for postponement on June 2, 1995, and declared them as in default because of their non-appearance and allowed PCIB to present evidence ex parte.

Issue: Whether or not petitioners were denied due process.

Held: No. It is basic that as long as a party is given the opportunity to defend his interest in due course, he would have no reason to complain, for it is this opportunity to be heard that makes up the essence of due process. Where opportunity to be heard, either through oral argument or through pleadings, is accorded there can be no denial of procedural due process. The most basic tenet of due process is the right to be heard. Where a party had been afforded an opportunity to participate in the proceedings but failed to do so, he cannot complain of deprivation of due process.

Due process is satisfied as long as the party is accorded an opportunity to be heard. If it is not availed of, it is deemed waived or forfeited without violating the Bill of Rights.

Petitioners were not denied their right to be heard. As outlined above, the RTC set the case several times for the pre-trial and the trial. In so doing, the RTC undeniably relaxed the rigid application of the rules of procedure out of its desire to afford to petitioners the opportunity to fully ventilate their side on the merits of the case. The RTC thereby acted with liberality. This was in line with the time honored principle that cases should be decided only after giving all the parties the chance to argue and prove their respective sides. Here, however, they apparently stretched the limits of the RTC’s liberality, to the point of abusing it. A review of the proceedings has given the Court the impression that they deliberately delayed the presentation of their evidence by asking postponements of the hearings. The pattern of delay that followed indicated that they did not intend to present any evidence in their favor, and that they were simply temporizing as a way of avoiding the inevitable adverse outcome of the case. Otherwise, they and their counsel would have easily completed the task of presenting their evidence and shunned the delays. They did present Ms. Garcia on direct examination, but they thereafter did not see to the completion of her testimony.


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