G.R. No. L-42141 April 30, 1979
ALBERTO R. SALANGA, LUCIANO SALANGA and RODOLFO CHUA, petitioners, vs. THE HONORABLE COURT OF APPEALS, PROGRESSIVE COMMERCIAL BANK, and THE HONORABLE ONOFRE A. VILLALUZ in his capacity as Presiding Judge of the Court of First Instance of Rizal, respondents.

FACTS

Petitioners were defendants in a collection case filed by Progressive Commercial Bank. They raised the defense that the loan was payable from the proceeds of a television program, which became impossible to continue after the declaration of Martial Law, thus suspending their obligation. After several postponements, the new presiding judge, respondent Judge Onofre A. Villaluz, issued a notice of hearing. The notice was a mimeographed form titled “Notice of Hearing,” but below it, the typewritten words “Hearing on Incidents & Motions” were added. Petitioners’ counsel received this notice.
On the scheduled date, counsel did not appear, instead sending a client to verbally request a postponement due to a conflicting hearing in another court. Respondent Judge deemed the non-appearance as a waiver and issued an order allowing the bank to present its evidence ex-parte. Petitioners immediately moved for reconsideration, arguing the ambiguous notice led them to believe the setting was only for pending incidents, not for trial on the merits. The trial court denied their motions.

ISSUE

Whether the respondent judge committed grave abuse of discretion in proceeding with an ex-parte hearing and denying reconsideration, thereby depriving petitioners of due process.

RULING

Yes. The Supreme Court reversed the Court of Appeals and nullified the trial court’s order. The core legal principle is that due process mandates a party be given the opportunity to be heard. The notice of hearing was fundamentally ambiguous. The juxtaposition of the standard heading “Notice of Hearing” with the specifically typewritten “Hearing on Incidents & Motions” created confusion, reasonably leading petitioners’ counsel to conclude the setting was not for the main trial. This ambiguity effectively deprived petitioners of their day in court.
When a procedural rule, such as the proper interpretation of a notice, is applied in a manner that overrides substantial justice and prejudices a party’s right to defend themselves, such rigid application cannot be sustained. The law favors the hearing of cases on their merits. Petitioners alleged a substantive defense concerning the suspensive condition of the loan payment. Technicalities of procedure must yield to the paramount right to due process. The trial judge’s act of proceeding with the ex-parte hearing under these circumstances constituted grave abuse of discretion. The case was remanded to the trial court to allow petitioners to present their evidence.