Anson and Cheng vs. Pacific Banking Corporation

Facts:

Petitioners Anson Trade Center Inc. (ATCI) and Anson Emporium Corporation (AEC) are corps. engaged in retail and wholesale general merchandising and Cheng is the Vice Head.

Respondent bank is a closed banking institution undergoing liquidation process by PDIC.

ATCI obtained loan amounting to P4,350,000.00 and AEC P1,000,000 from respondent bank. As a security, Chen along with the late Keng Giok provided two Continuing Surety Agreements. It provided that respondent bank has the right to retain a lien upon any or all properties in the accounts of ATCI and AEC.

Petitioners did not pay their loans despite several attempts.

Petitioner Chen filed Motions to Dismiss instead of filing an Answer to the Complaint.

AEC, ATCI, and the Estate of Keng Giok filed their replies. Keng Giok was then dropped as a defendant because he was long dead prior to the proceedings.

A pre-trial conference was held. The possibility of an amicable settlement was explored but it was unsuccessful. The respondents then failed to attend the next scheduled pre-trial.

Petitioners filed a Motion to Dismiss on the ground of the non-appearance of respondent in the pre-trial – Granted

Respondent filed a MR and prayed for the relaxation of the rule on non-appearance in pre-trials citing excusable negligence and interest of justice - Denied

Respondent filed a Petition for Certiorari before CA. It alleged that their absence was not deliberate or intentional. Further, PDIC was undergoing a reorganization which resulted to trimming their

manpower handling the litigation work. – Granted

Issue: W/N respondent’s non-appearance in the pre-trial is excusable

Ruling: Yes

Pre-trial – a procedural device intended to clarify and limit the basic issues raised by the parties and to take the trial of cases out of the realm of surprise and maneuvering.

Rule 18, Sec. 5 provides that non-appearance by the plaintiff in the pre-trial shall be the cause for dismissal of the action. However, Rule 18, Sec. 4 provides that non-appearance of a party of a party may be excused if there is a valid cause.

SC found a valid cause in the case at bar – Respondents did not intentionally snub the proceedings. This was caused by the reorganization of PDIC.

Petition DENIED.