G.R. No. 125034 July 30, 1998
VICTORY LINER INC., petitioner, vs. COURT OF APPEALS and VIRON TRANSPORTATION COMPANY, respondents.

FACTS

On June 22, 1994, private respondent Viron Transportation Company filed an action for damages against petitioner Victory Liner, Inc., arising from a vehicular accident on May 6, 1994, before the Metropolitan Trial Court (MeTC) of Manila, Branch 4. After petitioner filed its Answer, the pre-trial was scheduled for April 27, 1995, but was reset to May 23, 1995, at 2:00 p.m., upon petitioner’s motion. On May 23, 1995, Atty. Atilano B. Lim, counsel for petitioner, arrived at the sala of Presiding Judge Leonardo P. Reyes after the court had adjourned its session. No representative from Victory Liner, Inc. was present. Consequently, the MeTC declared petitioner in default and allowed private respondent to present evidence ex-parte. Petitioner filed a Motion to lift Order of Default, citing heavy traffic and counsel’s unfamiliarity with the court’s location as reasons for the late arrival. The MeTC denied the motion, ruling that the justifications were unacceptable, that there was no showing of a special power of attorney authorizing counsel to represent the defendant at pre-trial, and that the defendant’s absence would have prevented the pre-trial from proceeding anyway. Petitioner’s Motion for Reconsideration was also denied. The Court of Appeals affirmed the MeTC’s orders. Petitioner then filed the present Petition for Review on Certiorari.

ISSUE

Whether the Court of Appeals acted with grave abuse of discretion in affirming the MeTC’s Orders declaring petitioner in default and denying its motion for reconsideration.

RULING

The Supreme Court dismissed the petition and affirmed the decision of the Court of Appeals. The Court held that the MeTC did not err in declaring petitioner in default and refusing to lift the order. Under Section 2, Rule 20 of the Revised Rules of Court, a party who fails to appear at a pre-trial conference may be considered as in default. The Court emphasized that the obligation to appear at pre-trial requires not just physical presence but preparedness, and if a party is represented by a lawyer or another person, that representative must have “special authority” to make substantive agreements on behalf of the client. The Court found that petitioner failed to substantiate its counsel’s claim of having a special power of attorney to represent the company at the pre-trial. The alleged justifications for the late arrival—heavy traffic and unfamiliarity with the court—were deemed unacceptable by the trial court, a factual finding entitled to great weight. The Court also ruled that procedural rules must be followed, and petitioner did not present the most persuasive reasons to justify their relaxation. Therefore, the default order was proper.