Republic of the Philippines

Court of Appeals
Manila

SPECIAL FIRST DIVISION

SOUTH ASIALINK CREDIT CA-G.R. CV No. 113711*

CORPORATION, represented
by GINALYN G. BOLINA,
Plaintiff-Appellee,
Members:

Salazar-Fernando, R.A., Chairperson

- versus - Quimpo-Sale, A.M.W., and
**
Pascua, B.S., JJ.

Promulgated:
CHARLES STEPHEN V.
November 22, 2021
ALDAY, __________________

Defendant-Appellant.
x- - - – - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION

Quimpo-Sale, J.

On appeal is the Decision1 of the Regional Trial Court,

Branch 67, Pasig City in Civil Case No. R-PSG-16-00137-CV
granting plaintiff-appellee's complaint for collection of sum of
money with damages.

THE FACTS

Defendant-appellant Charles Stephen V. Alday, on July 22,

2015, applied for a car loan with plaintiff-appellee South Asialink

* This case was re-raffled to the ponente on February 24, 2021 as part of her initial caseload.
** Designated as Third Member vice Associate Justice Marie Christine Azcarraga-Jacob per Office
Order No. 321-21-RSF dated November 11, 2021.
1 Dated July 1, 2019 penned by Presiding Judge Ira Fretzie C. Cruz-Rojo, Rollo, pp. 11-17.
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Credit Corporation.2 On July 30, 2015, defendant-appellant was

granted a loan in the amount of Php 1,120,000.00, payable in 36
monthly installments starting August 30, 2015 until July 30, 2018
with monthly interest of 1.03%, plus additional penalties and
other charges in case of default, as evidenced by a Disclosure
Statement of Loan/Credit Transaction signed by defendant-
appellant.3

As part of the loan agreement, defendant-appellant

executed a Promissory Note dated July 30, 20154 and issued 36
postdated checks in favor of plaintiff-appellee. The car loan was
used to purchase a Toyota Hi-Ace Grandia 2013 Model with Plate
Number UQC 387. Defendant-appellant however did not pay all
his monthly installments.

On April 26, 2016, plaintiff-appellee sent a letter,5 through

counsel, to defendant-appellant demanding that he settle his
obligation in the entire amount. The relevant portion of the letter
reads:

“It appears that despite having defaulted on payment of your amortizations

which, to date, amounts to ONE MILLION TWO HUNDRED SEVENTY
NINE THOUSAND FOUR HUNDRED FORTY OF PHILIPPINE PESOS
[Php1,279,440.00] as of April 26, 2016 exclusive of penalties, interests and
legal costs, and notwithstanding prior demand, you have failed and refused,
as you, to date, continue to fail and to refuse, to settle your monetary
obligation.

FINAL DEMAND is, thus, hereby made for you to either settle your
obligation in its entire amount within five (5) calendar days from receipt
hereof. Otherwise, we shall be constrained to avail of every conceivable
remedy accorded us by law, inclusive of, but not limited to CIVIL and/or
CRIMINAL actions against you, if only to protect our client's legitimate
interests, assessing you, among others, legal costs in the amount of at least
Php10,000.00 for in our client's favor.”

2 Exhibit "B," Record, p. 197.

3 Exhibit "D," Record, p. 199.
4 Exhibit "C," Record, p. 198.
5 Exhibit "I," Record, p. 202.
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Defendant-appellant despite receipt of the letter was unable

to settle his obligations. On June 17, 2016, plaintiff-appellee filed a
complaint6 for collection of sum of money with damages against
defendant-appellant. This was docketed as Civil Case No. R-PSG-
16-00137-CV before the Regional Trial Court, Branch 67, Pasig
City.

In the complaint, plaintiff-appellee alleged that defendant-

appellant defaulted paying the monthly loan installments as some
of the postdated checks issued were dishonored upon
presentment and that, upon default and pursuant to the
acceleration clause in the Promissory Note, the entire obligation
became due and demandable on February 29, 2016. It was prayed,
among others, that defendant-appellant pay Php1,313,558.40
inclusive of 15% penalty and 10% penalty interest for each
dishonored check.

After service of summons, defendant-appellant had until

July 20, 2016 to file an answer.7 No answer was filed. Thus, on
August 12, 2016, plaintiff-appellee filed a motion to declare
defendants in default.8 On August 15, 2016, the trial court issued
an initial Order9 giving defendant-appellant 10 days from receipt
to file comment on the said motion. On the same date, defendant-
appellant's counsel filed an entry of appearance 10 and an ex parte
motion for extension of time to file answer. 11 Thereafter, still on
the same date, the trial court issued another order granting the ex
parte motion, giving defendant-appellant until August 25, 2016 to
file an answer. The answer was filed on August 24, 2016.12
6 Record, pp. 4-6.
7 Officer's Return, July 7, 2016, Record, p. 21.
8 Record, pp. 23-24.
9 Record, p. 27.
10 Record, p. 28.
11 Record, pp. 30-31.
12 Record, pp. 37-40.
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In the Answer, defendant-appellant denied the material

allegations in the complaint and alleged: (a) sometime in
December 2015, the vehicle purchased from the loan was involved
in an accident leaving the vehicle severely damaged and no
longer fit for use; (b) the parties had an initial agreement that
defendant-appellant will surrender the vehicle to the plaintiff-
appellee and give it authority to sell as evidenced by a Voluntary
Surrender with Authority to Sell so that plaintiff-appellee may be
entitled to the proceeds of the sale; (c) he never received any
demand letter regarding any default in payment, thus, his
obligation has not yet become due and demandable; (d) there is
no unjustified refusal to pay on his part and; (e) the reason for the
non-payment of the remaining balance was due to unforeseen
circumstances beyond his control.

The trial court issued, on August 25, 2016, an Order denying

the motion to declare defendant in default and thereby referred
the case for mediation.13 The trial court likewise set the
preliminary conference for the marking and comparison of
documentary evidence on November 22, 2016, and the pre-trial
conference tentatively on November 28, 2016.

Due to failure of mediation, the case was referred for

Judicial Dispute Resolution (JDR) proceedings. On December 5,
2016, defendant-appellant did not appear, thus, JDR was reset to
February 6, 2017.14 The pre-trial conference and preliminary
conference for marking were also reset to March 6, 2017 and
February 7, 2017, respectively.

13 Record, pp. 65-66.

14 Record, p. 74.
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On February 6, 2017, defendant-appellant again did not

appear..15 Both JDR and pre-trial conference were reset to March
13, 2017 and April 24, 2017, respectively.

On February 7, 2017, defendant-appellant also did not

appear for the marking and comparison of documentary
evidence.16

Thereafter, plaintiff-appellee filed its pre-trial brief on

February 16, 201717 while defendant-appellant filed his pre-trial
brief on March 10, 201718 as attached to a notice of change of
address.

Due to failure of JDR, the tentative setting of pre-trial

conference on April 24, 2017 was cancelled and reset to May 26,
2017, and a new preliminary conference was scheduled on May 5,
2017.19 On May 8, 2017, the preliminary conference was reset to
May 26, 2017 while the pre-trial conference was rescheduled to
August 11, 2017 because the acting presiding judge attended a
regional conference for judges in Australia.20

On August 9, 2017, defendant-appellant filed a motion for

resetting of the pre-trial conference on the ground that he will be
in Vietnam from August 10, 2017 to August 13, 2017 for a client
detained for an offense punishable by death. On August 11, 2017,
the trial court granted the motion and reset the pre-trial
conference to November 3, 2017. Meanwhile, a new preliminary
conference was conducted but defendant-appellant was not able

15 Record, p. 76.
16 Record, p. 81.
17 Record, pp. 82-85.
18 Record, pp. 91-93.
19 Order, March 27, 2017, Record, p. 101.
20 Record, p. 122.
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to present any document for marking despite the fact that he

attached several documents in his answer.21

On November 3, 2017, the pre-trial conference was

rescheduled to February 23, 2018 due to the unavailability of the
court stenographer.22 On February 23, 2018, the pre-trial
conference was reset to April 13, 2018 as the acting presiding
judge was indisposed.23 On April 13, 2018, the pre-trial conference
was reset to June 1, 2018 as the acting presiding judge attended a
forum on plea bargaining in drugs cases. 24 On June 1, 2018, both
parties jointly moved for a resetting of the pre-trial conference to
September 7, 2018.25 On September 7, 2018, the pre-trial
conference was again rescheduled to November 20, 2018 on the
ground that the newly appointed presiding judge had not yet
assumed office.26

At the scheduled pre-trial conference on November 20, 2018,

the representative of plaintiff-appellee and its counsel were
present while defendant-appellant and his counsel did not appear
despite due notice. Instead, a representative of defendant-
appellant's counsel appeared and manifested that counsel, Atty.
Glenn P. Nuestro, had a conflict of schedule. Thus, plaintiff-
appellee's counsel prayed that plaintiff-appellee be allowed to
present evidence ex parte. The trial court, in the Order of
November 20, 2018, granted the prayer and set the presentation of
plaintiff-appellee's evidence ex parte on January 22, 29 and
February 12, 2019.27

21 Record, pp. 132-133.

22 Record, p. 139.
23 Record, p. 141.
24 Record, p. 145.
25 Record, p. 152.
26 Record, p. 185.
27 Record, p. 206.
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On November 28, 2018, defendant-appellant filed a motion

to lift order of default alleging that he had a previously scheduled
promulgation of judgment in another criminal case and prayed
that, in the interest of substantial justice and in order not to
deprive defendant-appellant the opportunity to present evidence,
the order of default must be lifted.

The trial court, in an Order on February 4, 2019, denied the

motion to lift order of default.28

On April 2, 2019, the trial court proceeded with the plaintiff-

appellee's presentation of evidence ex parte, admitted all the
exhibits of plaintiff-appellee, and ordered the case submitted for
resolution.29

On July 1, 2019, the trial court rendered a Decision granting

the complaint for collection of sum of money with damages. The
dispositive portion of the Decision reads:

“WHEREFORE, Plaintiff's Complaint for Collection of Sum of

Money with Damages is GRANTED. Accordingly, Defendant CHARLES
STEPHEN V. ALDAY is hereby ordered to pay Plaintiff:

1. the amount of EIGHT HUNDRED SIXTY FOUR THOUSAND ONE

HUNDRED TWELVE PESOS (P864,112.00), plus interest of 12% a year from
29 February 2016 until the finality of this Decision and 6% thereafter until
full payment;

2. penalty interest on the unpaid principal amount at the rate of 6% per

annum commencing on 29 February 2016 until fully paid;

3. legal interest of 6% per annum on the interests (in Nos. 1 and 2)

commencing from the finality of this judgment until fully paid;

4. Attorney's fees of P10,000.00

5. Cost of suit of P31,338.40.

SO ORDERED.”

28 Order, February 4, 2019, Record, pp. 217-218.

29 Record, p. 224.
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Without filing a motion for reconsideration, defendant-

appellant now comes before this Court assigning a lone error:

THE ISSUE
"I. THE HONORABLE COURT ERRED IN DENYING THE MOTION TO
LIFT THE ORDER OF DEFAULT FILED BY THE DEFENDANT-
APPELLANT THEREBY DENYING THE LATTER TO PRESENT
EVIDENCE ON HIS BEHALF."

THE RULING

This appeal is without merit.

Section 1, Rule 41 of the Rules of Court provides that an

appeal may be taken from a judgment or final order that
completely disposes of the case, or of a particular matter therein
when declared by these Rules to be appealable. No appeal may be
taken from the following:

"(a) An order denying a motion for new trial or reconsideration;

(b) An order denying a petition for relief or any similar motion seeking
relief from judgment;
(c) An interlocutory order;
(d) An order disallowing or dismissing an appeal;
(e) An order denying a motion to set aside a judgment by consent,
confession or compromise on the ground of fraud, mistake or duress, or
any other ground vitiating consent;
(f) An order of execution;
(g) A judgment or final order for or against one or more of several parties
or in separate claims, counterclaims, cross-claims and third-party
complaints, while the main case is pending, unless the court allows an
appeal therefrom; and
30
(h) An order dismissing an action without prejudice."

As enumerated above, no appeal may be taken from an

interlocutory order. The error alleged by appellant pertains to the
denial of his order of default. Hence, the subject of this appeal is

30 Emphasis supplied.
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not the Decision of the trial court but the Order of February 4,
2019 denying defendant-appellant's motion to lift order of default.

The Order denying defendant-appellant's motion to lift

order of default is an interlocutory order. The proper remedy
therefore is a special civil action under Rule 65 of the Rules of
Court.

Assuming arguendo that appeal is the proper remedy, it still

cannot be granted.

Sections 4 and 5, Rule 18 of the Rules of Court governs the

appearance of parties and the effect of failure to appear during
the pre-trial prior to the effectivity of A.M. No. 19-10-20-SC 2019. 31
Thus:
“Section 4. Appearance of parties. — It shall be the duty of the
parties and their counsel to appear at the pre-trial. The non-appearance
of a party may be excused only if a valid cause is shown therefor or if a
representative shall appear in his behalf fully authorized in writing to
enter into an amicable settlement, to submit to alternative modes of
dispute resolution, and to enter into stipulations or admissions of facts
and of documents. (n)

Section 5. Effect of failure to appear. — The failure of the plaintiff to

appear when so required pursuant to the next preceding section shall be
cause for dismissal of the action. The dismissal shall be with prejudice,
unless otherwise ordered by the court. A similar failure on the part of
the defendant shall be cause to allow the plaintiff to present his
evidence ex parte and the court to render judgment on the basis
32
thereof.”

As can be gleaned from the foregoing provisions, the

appearance of a party and his counsel at the pre-trial is
mandatory. The non-appearance of a party may be excused only
on valid grounds or if a representative appears on his behalf duly
authorized in writing to enter into an amicable settlement or

31 2019 Proposed Amendments to the 1997 Rules of Civil Procedure.

32 Emphasis supplied.
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submit to alternative modes of dispute resolution, and to enter

into stipulations and admissions of facts and of documents.
Failure to appear by the defendant shall be cause to allow plaintiff
to present evidence ex parte.

Here, both defendant-appellant and his counsel did not

appear at the pre-trial conference. And both were not able to
provide a valid cause for their non-appearance.

First, defendant-appellant and counsel were duly notified as

early as September 7, 201833 about the pre-trial conference on
November 20, 2018. Defendant-appellant did not appear, neither
did he authorize any person to appear on his behalf. With respect
to counsel, the motion to lift order of default states that Atty.
Glenn P. Nuestro was then attending to another client in a
criminal case for promulgation of judgment before the Regional
Trial Court (RTC), Branch 77 of Quezon City and a copy of the
Order34 issued by Branch 77 regarding the criminal case was
attached to the motion. A reading of the Order of Branch 77
shows that it is dated November 9, 2018 and that it states the
resetting of the promulgation of judgment to November 20, 2018.
Before the hearing on November 20, 2018, defendant-appellant’s
counsel had time to file a motion to reset the pre-trial conference,
but he did not do so.

Second, the record shows that the pre-trial conference was

reset for at least 8 times for various reasons in a span of almost 2
years since the termination of the JDR. Thus, both parties had
more than ample time to prepare for the pre-trial conference.

33 Record, p. 185.
34 Record, p. 210.
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Third, the record also shows that defendant-appellant’s
counsel is not Atty. Nuestro alone but the Basa Nuestro Lano
Paraoan Parducho Law Office. Any lawyer of said office can
appear on behalf of defendant-appellant for pre-trial.

IN VIEW WHEREOF, the appeal is DENIED. The Decision

of the Regional Trial Court (RTC), Branch 67, Pasig City in Civil
Case No. R-PSG-16-00137-CV is hereby AFFIRMED.

SO ORDERED.

Original signed

ANGELENE MARY W. QUIMPO-SALE

Associate Justice

WE CONCUR:

Original signed
REMEDIOS A. SALAZAR-FERNANDO
Presiding Justice

Original signed
BONIFACIO S. PASCUA
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is

hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer
of the opinion of the Court.

Original signed
REMEDIOS A. SALAZAR-FERNANDO
Presiding Justice
Chairperson, Special First Division