G.R. No. L-11002; April 17, 1958
PHILIPPINE NATIONAL BANK, plaintiff-appellant, vs. ISIDORO DE LA CRUZ, defendant-appellee.

FACTS

On October 8, 1946, Isidoro de la Cruz obtained a loan of P5,000 from the Philippine National Bank (PNB), secured by a mortgage on a property in Dasmariñas, Cavite. De la Cruz failed to pay the obligation. PNB foreclosed the mortgage, and the property was sold at public auction to PNB as the highest bidder for P5,000. As of January 5, 1953, the total indebtedness amounted to P7,879.29. After applying the P5,000 proceeds from the sale, a deficiency of P2,879.29 remained. On June 22, 1954, PNB filed a complaint to recover this deficiency.
In his answer, de la Cruz contended that the auction sale price of P5,000 was grossly inadequate and unconscionable, as the property’s value far exceeded the debt, and thus the sale should have extinguished his obligation.
The hearing was set for October 19, 1954. On October 18, counsel for de la Cruz filed an urgent motion for postponement, bearing the written conformity of PNB’s counsel (“No objection: for 30 days”), stating that the parties needed time to explore an amicable settlement. The trial court denied the motion, calling it “contrary to law and to the Rules of Court,” and dismissed the complaint for PNB’s non-appearance at the hearing. PNB filed a motion for reconsideration, explaining its counsel’s conformity was based on the chance for settlement and that the lawyer handling the case had suddenly fallen ill on the hearing date (supported by an affidavit). The court denied the motion. PNB appealed.

ISSUE

Whether the trial court abused its discretion in denying the motion for postponement and dismissing the complaint.

RULING

Yes, the trial court abused its discretion. The order of dismissal is set aside, and the case is remanded for further proceedings.
While the granting or denial of a motion for postponement is discretionary, such discretion must be sound, reasonable, and not arbitrary or capricious. The motion, being the first postponement request and aimed at facilitating an amicable settlement, was based on reasonable grounds. Courts should favor and encourage extrajudicial settlements where possible, as they minimize expense and trouble and often benefit both parties.
The trial court’s basis for denial—that the motion was “contrary to law,” likely referring to Rule 31, Section 4 of the Rules of Court limiting postponements to one month—was erroneous. The motion, while praying for inclusion in the next court calendar (which could exceed one month), was modified by PNB counsel’s written conformity specifying “for 30 days.” Thus, the motion did not violate the Rules.
Furthermore, although a party cannot presume a postponement will be granted to justify non-appearance, PNB’s explanation (counsel’s illness and the unchallenged reason for seeking postponement) warranted leniency. The dismissal for non-appearance was therefore improper.