GR 177828; (February, 2009) (Digest)
G.R. No. 177828 February 13, 2009
ANNABELLE DELA PEÑA and ADRIAN VILLAREAL, Petitioners, vs. THE COURT OF APPEALS and RURAL BANK OF BOLINAO, INC., Respondents.
FACTS
On October 20, 1983, respondent Rural Bank of Bolinao, Inc. extended a loan of ₱81,000.00 to petitioners, evidenced by a promissory note payable on or before October 14, 1984. Petitioners failed to pay the obligation in full. After demands, respondent filed a collection case (Civil Case No. 838) with the Municipal Trial Court (MTC) of Bolinao, Pangasinan. Petitioners failed to appear at the pre-trial on October 17, 1995, were declared in default, and respondent presented evidence ex parte. The MTC rendered a decision on November 2, 1995, ordering petitioners to pay the loan balance, interest, penalties, and other fees.
On appeal, the Regional Trial Court (RTC) remanded the case to the MTC for further proceedings to clarify the loan date and set aside the declaration of default. After remand, respondent amended its complaint. On November 16, 2000, petitioners again failed to appear, and respondent presented evidence ex parte. The MTC reiterated its 1995 decision on November 28, 2000.
Petitioners appealed again. On June 14, 2001, the RTC set aside the MTC decision and remanded the case, finding a violation of due process as petitioners were not given an opportunity to present evidence. Upon remand, petitioners filed an Answer admitting the loan but alleging substantial payment. The MTC set multiple pre-trial dates, all of which were postponed upon petitioners’ motions. On January 30, 2004, petitioners failed to appear for pre-trial. Upon respondent’s motion, the MTC allowed ex parte presentation of evidence and later rendered a decision on August 16, 2004, ordering petitioners to pay.
Petitioners appealed to the RTC, arguing the MTC decision failed to state the law on which it was based and that they were denied due process. On May 25, 2005, the RTC set aside the MTC decision and remanded the case, finding the decision a nullity for lack of legal basis and lack of due process.
Respondent appealed to the Court of Appeals (CA). On October 31, 2006, the CA reversed the RTC, reinstating the MTC decision. The CA found petitioners had sufficient notice of the January 30, 2004 pre-trial, which they had chosen and confirmed, and their failure to appear justified the ex parte proceedings. The CA denied petitioners’ motion for reconsideration on May 8, 2007.
ISSUE
1. Whether the Court of Appeals erred in reinstating the MTC decision which allegedly failed to state the law on which its findings were based, contrary to Section 1, Rule 36 of the 1997 Rules of Civil Procedure.
2. Whether the Court of Appeals erred in reinstating the MTC decision even when the lower court omitted and failed to issue an order after the pre-trial conference proceedings.
3. Whether the affirmation of the MTC decision by the Court of Appeals amounted to a denial of petitioners’ constitutional right to due process.
RULING
The Supreme Court DENIED the petition. The Court held:
1. On the first issue, while the MTC decision did not explicitly cite the law, it was based on the promissory note and the evidence on record. The failure to cite the law did not render the decision void, as the findings were sufficiently grounded on the evidence presented.
2. On the second issue, the absence of a pre-trial order was not fatal. The MTC had the authority to proceed with the ex parte presentation of evidence due to petitioners’ repeated failure to appear for pre-trial despite notice and multiple postponements at their instance.
3. On the third issue, petitioners were not denied due process. They were given ample opportunity to be heard but repeatedly failed to attend scheduled pre-trial conferences. Their failure to appear, after several postponements they themselves sought, constituted a waiver of their right to present evidence. Due process does not require endless patience; petitioners’ conduct showed a lack of good faith.
The Supreme Court affirmed the CA decision, ordering petitioners to pay respondent the loan amount of ₱77,722.67 with 12% interest per annum and a 3% penalty charge from October 14, 1984 until fully paid, plus ₱40,000.00 as attorney’s fees.