G.R. No. L-11232; March 28, 1958
INTERNATIONAL TOBACCO CO., INC., petitioner, vs. HON. NICASIO YATCO, ETC., respondent.

FACTS

Petitioner International Tobacco Co., Inc., through its treasurer, filed a claim for P100,000 against the estate of the deceased Co Keng in Special Proceeding Q-587 of the Court of First Instance of Rizal. The administrator of the estate, Francisco Co Keng, filed a verified answer admitting the indebtedness and offering no objection to the approval of the claim. The claim was set for hearing. During the proceedings, the Assistant City Attorney, representing the regional agent of the Internal Revenue, requested deferments of action on the claim pending completion of the BIR report on estate and inheritance taxes, which the court granted. On the hearing date of July 10, 1956, the Assistant City Attorney appeared ready to submit the BIR report, but the petitioner’s representative, Pedro T. Mendiola, failed to appear on time. The respondent Judge forthwith dismissed the claim for lack of interest. About ten minutes later, Mendiola, the administrator, and his counsel arrived and were informed of the dismissal. They verbally moved for reconsideration, but the court ordered the motion to be put in writing. A verified motion for reconsideration was filed the next day, explaining that Mendiola’s delay was due to unforeseen traffic congestion and asserting the claimant’s continued interest in the valid, just, and subsisting claim, which was admitted by the estate and had no objection from the Internal Revenue Office. The respondent Judge denied the motion for reconsideration.

ISSUE

Whether the respondent Judge committed a grave abuse of discretion in dismissing the claim and denying the motion for reconsideration, and whether certiorari is the proper remedy to annul the orders of dismissal.

RULING

Yes. The Supreme Court granted the petition, set aside the orders of dismissal, and ordered the respondent Judge to hear and decide the petitioner’s claim. The Court found that the respondent Judge acted hastily in dismissing the claim and committed a grave abuse of discretion in denying the well-founded motion for reconsideration. The petitioner never lost interest in the claim, which involved a considerable sum admitted by the estate administrator. The failure to appear on time, satisfactorily explained by traffic congestion, did not warrant dismissal, especially after a motion for reconsideration was filed. While appeal is ordinarily the proper remedy, in this case, certiorari is appropriate to correct the grave abuse of discretion, as applying the ordinary rule might leave the abuse uncorrected and deprive the petitioner of its substantial right to a P100,000 claim already admitted as unpaid. The Court emphasized that rules should be liberally construed to avoid depriving parties of their rightful claims.