G.R. No. L-26325 November 15, 1982
PACWELD STEEL CORPORATION, plaintiff-appellee, vs. ASIA STEEL CORPORATION, defendant-appellant.

FACTS

Pacweld Steel Corporation filed a complaint to collect an outstanding balance from Asia Steel Corporation based on a May 21, 1964 agreement where Asia Steel acknowledged a P40,000.00 debt. Partial payments were made, but three post-dated checks were dishonored, leaving a balance of P15,900.00. The trial court declared Asia Steel in default after it failed to appear at a scheduled pre-trial conference despite a denied motion for postponement. Asia Steel subsequently filed multiple motions to lift the default order but repeatedly failed to appear at the hearings set for these very motions.

ISSUE

Whether the trial court committed grave abuse of discretion in declaring Asia Steel in default and in refusing to set aside the default order.

RULING

The Supreme Court affirmed the trial court’s decision, finding no error or abuse of discretion. The legal logic is anchored on the mandatory nature of pre-trial under the Rules of Court and the trial court’s sound discretion in default matters. The Court emphasized that pre-trial attendance by parties and counsel is compulsory, and failure to appear authorizes a declaration of default. The discretion to maintain or set aside a default order rests with the trial court, and its action is presumed correct. Asia Steel’s initial non-appearance at pre-trial, compounded by its subsequent failures to attend hearings on its own motions to lift the default, demonstrated a lack of interest in defending the suit and a pattern of conduct aimed at delay. This justified the trial court’s refusal to set aside the default and its proceeding to render judgment based on Pacweld’s ex-parte evidence. The appeal was dismissed for lack of merit.