FIRST DIVISION

G.R. No. 177729               September 28, 2011

PHILIPPINE EXPORT AND FOREIGN LOAN GUARANTEE CORPORATION (now TRADE AND INVESTMENT
DEVELOPMENT CORPORATION OF THE PHILIPPINES), Petitioner,
vs.
AMALGAMATED MANAGEMENT AND DEVELOPMENT CORPORATION, FELIMON R. CUEVAS, AND JOSE A. SADDUL,
JR., Respondents.

Facts:

Petitioner Philippine Export and Foreign Loan Guarantee Corp. is a GOCC whose mandate is to secure foreign loans granted to
domestic entities. Respondent in this case is AMDC, together with its President Cuevas and Vice President Sadul.

AMDC obtained a loan from NCBSA (National Commercial Bank of Saudi Arabia) in the amount of SR 3.3 Million ( Php 9 Million)
to finance its working capital requirements and its hauling project in Middle East. In relation to said loan, petitioner PEFLGC
issued a letter of guaranty in favor of NCBSA as the lending bank upon the request of AMDC. In order to secure the guaranty,
AMPI – sister company of AMDC, acted as the accommodation mortgagor and executed in favor of PEFLGC a real estate
mortgage. Additionally, AMDC executed a Deed of Undertaking together with Cuevas and Saddul, the latter two binding
themselves solidary liable with the former for whatever damage PEFLGC would incur in relation to the guaranty.

Later on, AMDC defaulted in paying its obligations to NCBSA and upon demand, it is PEFLGC who paid the obligations. The
latter being subrogated to the rights of NCBSA against AMDC, it demanded payment from AMDC, Cuevas and Saddul. Still,
AMDC and two other respondents failed to pay and this prompted PEFLGC to extrajudicially foreclose the real estate mortgage.
Eventually, petitioner became the highest bidder and acquired the mortgaged properties but the proceeds were insufficient.
Subsequently, petitioner filed complaint for the deficiency against the respondents herein.

RTC decided in favor of petitioner and ordered payment of the deficiency of the payment for the loan. However, RTC dismissed
the case against Cuevas and Saddul. On appeal to the CA, the decision of RTC was affirmed in toto. This led to the present
case.

Note that one of the contentions of petitioner is that the liability of Cuevas and Saddul on the deficiency of claim is an admitted
fact in the pre-trial order and in effect it was an error for the RTC to dismiss the case against Cuevas and Saddul.

ISSUE:

Whether or not liability of Cuevas and Saddul on the deficiency claim was already an admitted fact under the pre-trial order.

HELD:

The Supreme Court rules that nowhere in the pre-trial order were it stated that Cuevas and Saddul already admitted their liability
on the petitioner's deficiency claim. Their admissions in the pre-trial order referred only to 1) the fact that they and AMDC had
received advances in large amounts from the petitioner, and 2) that the real estate mortgage securing the loan had already been
foreclosed. Indeed that question on whether Cuevas and Saddul were liable on the deficiency claim was properly subject to the
determination of RTC and the CA, notwithstanding the silence of the pre-trial order on it, because such issue was deemed
necessarily included in or inferred from the stated issue of whether there was a deficiency still to be paid by AMDC, Cuevas and
Saddul.

It is true that the issues to be tried between the parties in a case shall be limited to those defined in the pre-trial order pursuant to
Section 7, Rule 18 of the Rules of Court. However, a pre-trial order is not intended to be a detailed catalogue of each and every
issue that is to be taken during the trial, for it is unavoidable that there are issues that are impliedly included among those listed
or that may be inferable from those listed by necessary implication which are as much integral parts of the pre-trial order as
those expressly listed.

At any rate, it remains that the petitioner impleaded Cuevas and Saddul as defendants, and adduced against them evidence to
prove their liabilities. With Cuevas and Saddul being parties to be affected by the judgment, it was only appropriate for the RTC
to inquire into and determine their liability for the purpose of arriving at a complete determination of the suit. Thereby, the RTC
acted in conformity with the avowed reason for which the courts are organized, which was to put an end to controversies, to
decide the questions submitted by the litigants, and to settle the rights and obligations of the parties.