PIONEER INSURANCE & SURETY CORP. AND HADJI ESMAYATEN LUCMAN, PETITIONERS-APPELLANTS, VS. THE HON. AGAPITO HONTANOSAS, JUDGE OF THE COURT OF FIRST INSTANCE OF CEBU, BRANCH XI AND…

We reverse the decision of the Court of Appeals^[1]
promulgated on October 30, 1972 in CA-G.R. No. 00951-R entitled “Pioneer
Insurance & Surety Corp., et al., petitioners, vs. Hon. Judge Agapito Hontanosas, et al.,
respondents,” which decision had denied for lack of merit the petition
filed therein for certiorari, prohibition, and/ or mandamus with
preliminary injunction seeking to nullify the order of default of February 29,
1972 and the decision of March 9, 1972 in Civil Case No. R-12069, entitled
“Ben Rodriguez, et al. vs. Allied Overseas Commercial Co., et al.”
issued by the respondent Presiding Judge of the Court of First Instance of Cebu.

The case commenced on October 12, 1970 when Allied Overseas
Commercial Co., Ltd., a foreign corporation domiciled in Hongkong,
filed in the Court of First Instance of Manila a complaint against the
respondent-appellee Ben Uy
Rodriguez for the collection of a sum of money arising out of a transaction
between them in the amount of P450,533.00, the agreed peso equivalent of the
HK$418,279.60 balance unpaid.  Plaintiff
therein having prayed for the issuance of a writ of preliminary attachment, the
same was granted by the Court against Rodriguez upon the filing by said
plaintiff of a bond in the amount of P450,000.00, which petitioner?appellant
Pioneer Insurance & Surety Corp. duly posted.  The corres­ponding levy in attachment was
made by annotation on the properties of Rodriguez which consisted of 4 pieces
of lots; notices of garnishment on different Cebu
banks turned out negative, while personal properties found at the Rodriguez
residence, although attached, were, however, not removed therefrom.

A motion to dismiss the complaint was thereupon filed by
Rodriguez, followed by an application for damages against the bond, praying
that he be permitted to present evidence of damages he sustained by reason of
the wrongful attachment, and to enforce said claim against the surety on its
bond, alleging further that otherwise his claim against the bond will forever
be barred as said claim cannot be the subject of an independent civil action
under Sec. 20, Rule 57 of the Rules of Court. 
The court in its order of December
22, 1970 dismissed the complaint on the ground of improper venue
since defendant Rodriguez was a resident of Cebu,
and lifted the writ of preliminary attachment, setting the hearing on the claim
for damages against the bond on January
14, 1971.

With the intention of filing a separate civil action in the Court
of First Instance of Cebu, respondent-appellee Rodriguez withdrew his claim for damages against
Pioneer Insurance and Surety Corp., which motion for withdrawal was granted by
the Court.  Thereafter, the respondents-appellees Rodriguez spouses filed a complaint for damages
on February 15, 1971 against Pioneer Insurance & Surety Corp. and Allied
Overseas Commercial Co. (the Hongkong-based
corporation), docketed as Civil Case No. R-12069, Court of First Instance of Cebu presided by respondent Judge Hon. Agapito
Hontanosas, the complaint praying that Rodriguez be
declared as not in any manner indebted to the defendant Allied Overseas
Commercial Co. and that Pioneer Insurance & Surety Corp. be held liable for
damages, attorney’s fees and expenses of litigation by reason of the wrongful
and malicious attachment issued by the Manila Court.

Defendant Pioneer Insurance and Surety Corp. filed its answer to
the complaint (Civil Case No. R-12069) alleging affirmative and special
defenses.  With respect to the other
defendant Allied Overseas Commercial Co., summons was
coursed thru the Philippine Consulate General in Hongkong
which turned it down as it had no authority to serve the process under the
Rules of Court.

On April 27, 1971,
defendant Pioneer Insurance & Surety Corp. filed a motion for a preliminary
hearing of its affirmative defenses of lack of cause of action and bar by prior
judgment and/or abandonment, which are grounds for a motion to dismiss.  This was denied by the respondent Judge in
his Order dated May 15, 1971,
so also was the motion for reconsideration per its Order of June 2, 1971.

On May 5, 1971,
the case was called for pre-trial. 
Plaintiffs with counsel attended; defendant Pioneer Insurance &
Surety Corp., thru counsel was present. 
The other defendant, Allied Overseas Commercial Co. was not yet
summoned, hence absent.  The parties
manifested failure to settle the case amicably, thus the Court set the trial of
the case on the merits for June 11,
1971.

A petition for certiorari and prohibition was then filed
by Pioneer Insurance and Surety Corp. on August 3, 1971 in the Court of
Appeals, CA-G.R. No. 00369-R (Record on Appeal, p. 133) with prayer to enjoin a
hearing scheduled on August 7, 1971, alleging that respondent Judge committed grave
abuse of discretion amounting to lack and/or excess of jurisdiction in denying
the motion for preliminary hearing.  The
Court of Appeals in its Resolution dated August
7, 1971 dismissed this petition for certiorari.  (Record on Appeal, pp. 133-137)

An amended complaint was now submitted to and admitted by the
Court on August 14, 1971 by
impleading petitioner-appellant Hadji
Esmayaten Lucman as
additional defendant, making allegations tending to show confabulation between
the new defendant and the foreign-based corporation to collect a non-existent
debt.  To the amended complaint, Pioneer
Insurance & Surety Corp. filed its answer.

Lucman, having been impleaded
as assignee of defendant Allied Overseas Commercial Co., filed a motion to
dismiss on the ground of auter action
pendant, that is an action pending in the Court of First Instance of Rizal, Civil Case No. 14351 between the same parties, with
the same allegations and defenses and counterclaims.  On November
25, 1971, respondent Judge denied the motion to dismiss, whereupon Lucman filed his answer to the amended complaint.

Upon an ex parte motion of
Rodriguez, the Court declared Lucman in default in
its Order of January 10, 1972 and thereafter promulgated a decision dated
January 28, 1972 against Lucman only, ordering him to
pay damages in the amount of P150,000.00; declaring that Rodriguez was not in
any manner indebted to Lucman or to Allied Overseas
Commercial Co., and that the Metropolitan Bank & Trust Co.  (Cebu
Branch) Check No. CB2169 (xerox copy marked Exhibit
M) issued by Rodriguez to pay the indebtedness was a forgery.

Lucman moved on February 11, 1972 to set aside the order of
default and to admit the answer earlier filed by him to the amended
complaint.  On February 21, 1972, respondent Judge set aside the
order of default against Lucman including the
decision against him, the dispositive portion of
which order reads as follows:

“WHEREFORE, the Order of Default dated January 10, 1972 as well as the decision
(Re:  Hadji Esmayaten Lucman) dated January
281, 1972, are hereby reconsidered and set aside.  Let the hearing of this case on the merits be
scheduled as previously set for February
28, 1972 at 8:30 o’clock
in the morning.

The parties thru their respective counsels are to be immediately
notified of this order.  The Clerk of
Court is directed to notify defendant Hadji Esmayaten Lucman thru counsel
Atty. Eriberto D. Ignacio at Rm. 414, Madrigal Bldg.,
Escolta, Manila
by telegram.

SO ORDERED.

Cebu City,
Philippines, February 21, 1972.

(SGD.)
AGAPITO HONTANOSAS

JUDGE”

(Record on Appeal, pp.
297-298)

Forthwith, the clerk of court sent the telegram notices in the
following wise:

“YOUR
MOTION SET ASIDE ORDER, DEFAULT AND DECLARE PROCEEDINGS NULL AND VOID RE CIVIL
CASE BEN RODRIGUEZ ET AL VERSUS HADJI ESMAYATEN LUCMAN GRANTED STOP PRETRIAL
SHALL PROCEED AS PREVIOUSLY SCHEDULED FEBRUARY 28 1972 MORNING”

(Record on Appeal, p. 298)

Counsel for the petitioners received the telegram notices on February
21, 1972; and on February 23, 1972 counsel filed an urgent motion for
postponement of the pre-trial, claiming that he was not aware of any such
pre-trial having been previously set for February 28, 1972 in the morning, as
indeed no such pre-trial can as yet be set as the issues with respect to the
amended complaint are not yet fully joined since plaintiffs have not answered
the compulsory counterclaims separately set up by the defendants in said
amended complaint; neither has there been a valid service of summons to the
foreign corporation Allied Overseas Commercial Co. Ltd. of Hongkong,
nor have plaintiffs asked that said foreign corporation be dropped from the
amended complaint; that counsel has a hearing in Manila of a criminal case
which is of intransferable character, and prayed that
the pre-trial be set at some other date in March, preferably either March 22 or
23, 1972 at 9:00 a.m. which were the only free dates for the month of March
1972 in the calendar of the counsel. 
(Record on Appeal, pp. 301-303)

Apparently, the above urgent motion for postponement although
sent through registered airmail special delivery and received by the
Dispatching Section of the Post Office of Cebu on
February 28, 1972 (Resolution, Court of Appeals, Record on Appeal, pp. 365-366)
was not received by the Court for on February 28, 1972 when the case was
called, an order was issued by the Court postponing the pretrial of the case to
March 20, 1972 in view of the absence of the defendants and counsel
notwithstanding notices of hearing and telegrams sent to them, on the condition
that should defendants be found that as of February 28, 1972 or earlier they
had received said notices, plaintiffs will be allowed to present their evidence
and the defendants will be declared in default for failure to appear at the
pre-trial.  (Record on Appeal, pp.
304-305)

Upon verification from the Radio Communications of the Philippines
that the telegrams mentioned above were delivered and received by the
addressees on February 21, 1972,
the Court on February 29, 1972
declared the defendants in default and allowed the plaintiffs to present their
evidence in support of their complaint before the Clerk of Court.  (Record on Appeal, pp. 306-307).  The evidence was thereupon presented and on
March 9, 1977 the respondent Judge promulgated his Decision declaring that the
plaintiff Rodriguez is not in any manner indebted to defendant Lucman or to Allied Overseas Commercial Co., declaring the
personal check of the plaintiff to be a forgery; that the attachment of
properties of plaintiff in the Manila case was wrongful and mali­cious, and
ordering defendant Pioneer Insurance and Surety Co. to pay P350,000.00 as moral
damages, P50,000.00 as exemplary damages and P50,000.00 for expenses of
litigation in Manila.  Defendant Lucman was also ordered to pay plaintiffs the sum of
P50,000.00 as exemplary damages and P30,000.00 as attorney’s fees.

Within the 30 days reglementary period
to perfect the appeal, defendants Pioneer Insurance & Surety Corp. and Hadji Esmayaten Lucman filed the Notice of Appeal and the Original Record
on Appeal, the latter ordered corrected and amended but finally approved by the
Court on July 31, 1972.

Meanwhile, petitioners filed on April 4, 1972 before the Court of
Appeals a petition for certiorari, prohibition and/or mandamus
with preliminary injunction (CA-G.R. No. 00951-R) seeking to nullify the order
of default of February 29, 1972 and the Decision of March 9, 1972 of respondent
Judge, to command said Judge to elevate the records of the case for review and
to prohibit him from enforcing his decision and from taking further action in
the case, No. 12069.

On April 13, 1972,
the Court of Appeals promulgated its resolution dismissing the petition aforestated and ruled among others as follows:

“Furthermore, petitioners instant remedy is not proper because
of their own admission that appeal is available from the decision of respondent
Judge (Discussion, pp. 12-13 of their-Petition).  This is shown by the handwriting at the upper
right hand corner of Annex R (Decision) when they received the decision on March 25, 1972 and the period to
appeal will expire on April 24, 1972.

We are not,
therefore, convinced that the remedy of appeal is inadequate, considering that
whatever errors respondent Judge might have committed can be assigned as
specific errors on appeal.  It has been
consistently held that certiorari is not available where the remedy of
appeal is present.  xx”

(Record on Appeal, p. 373)

On a motion for reconsideration, the Court of Appeals
reconsidered the resolution cited above, and issued another resolution dated July 25, 1972 giving due course to
the petition and required the respondents to answer the petition (not a motion
to dismiss), and among others, stated, to wit:

“Upon this fact alone, we believe, as petitioners contend that
although appeal is available, such remedy is not sufficiently speedy and
adequate to cure the defects in the proceedings therein or to remedy the
disadvantageous position of petitioners because, since they were deprived of
raising any issue or defense that they have in the respondent court by reason
of the order of default, they cannot raise said issues or defenses for the
first time on appeal.”

(Rollo,
p. 98)

The petition having been given due course, the respondents herein
answered the same, and on October 30, 1972, the Court of Appeals rendered its
Decision denying the petition for lack of merit, and held among others, thus –

“Finally, we are not also convinced that the remedy of appeal
is inadequate under the circumstances obtaining in the principal case.  Whatever errors respondent Judge might have
committed in his order or judgment may be assigned as specific errors in their
appeal.  This Court can review any and
all such errors of fact and law in the appeal.”

(Rollo,
p. 138)

Petitioners filed a motion for reconsideration which was denied,
hence this appeal by certiorari from the decision of the Court of
Appeals and is now before Us being assailed and faulted on three principal
issues:  1.  the illegality of the order of default and
the decision arising therefrom; 2.  the inadequacy of the remedy of appeal; and
3.  the lack of jurisdiction of the Court
in the principal case.

The petitioner’s main thrust in this legal attack is directed to
the order dated February 29, 1972 declaring defendants (now the petitioners) in
default at the second pre-trial hearing and allowing the plaintiffs (the
present private respondents) to present evidence ex parte
before the Clerk of Court, which evidence uncontradicted
and unrebutted was lifted almost en toto as the basis of the decision granting damages so
enormous and so huge in amount as to exceed the bounds of reason and fairness.

The procedure for the pre-trial of a case is laid down by Rule
20, Revised Rules of Court, which provides, to wit:

Sec. 1.  Pre-trial
mandatory.  – In any action, after the
last pleading has been filed, the court shall direct the parties and their
attorneys to appear before it for a conference to consider:

(a)  
The possibility of an amicable
settlement or of a submission to arbitration;

(b)  
The simplification of the issues;

(c)  
The necessity or desirability of
amendments to the pleadings;

(d)  
The possibility of obtaining
stipulations or admissions of facts and of documents to avoid unnecessary
proofs;

(e)  
The limitation of the number of
witnesses;

(f)    
The advisability of a preliminary
reference of issues to a commissioner;

(g)  
Such other matters as may aid in
the prompt disposition of the action.

Sec. 2.  Failure to appear at
pre-trial conference.  – A party who fails
to appear at a pre-trial conference may be non-suited or considered as in
default.

Sec. 3 allows the court to render judgment on the pleadings or a
summary judgment as justice require. 
Sec. 4 directs that a record of the pre-trial results be made; and Sec.
5 requires the court to prepare a pretrial calendar of cases for consideration
as above provided, and that upon the submission of the last pleading in a
particular case, it shall be the duty of the clerk of court to place such case
in the pre-trial calendar.

Unquestionably, the present Rules make pre-trial mandatory.  And the reason for making pre-trial mandatory
is that pre-trial conferences bring the parties together, thus making possible
an amicable settlement or doing away with at least the non-essentials of a case
from the beginning.  (Borja
vs. Roxas, 73 Phil. 647).

Philippine jurisprudence has laid down the legal doctrine that
while it is true that it is mandatory for the parties and their attorneys to
appear before the trial court for a pre-trial conference to consider inter
alia the possibility of an amicable
settlement, the rule was by no means intended as an implacable bludgeon
but as a tool to assist the trial court in the orderly and expeditious conduct
of trials.  The rule is addressed to the
sound discretion of the trial court. 
(Rice and Corn Administration vs. Ong Ante,
et. al., G. R. No. L-30558, Oct. 4,
1971).

Both client and counsel must appear at the pre-trial.  This is mandatory.  Failure of the client to appear is a ground
for dismissal.  (American Ins. Co. vs.
Republic 1967D Phil. 63; Hone Ins. Co. vs. United States Lines Co., 1967D Phil.
401, cited in Saulog vs. Custom-built Manufacturing
Corp. No. L-29612, Nov. 15, 1968;
Taroma v. Sayo, L-37296, Oct. 30, 1975 (67 SCRA 508)).

In the case of Insurance Co. of North America vs. Republic, et.
al., G. R. No, L-26794, Nov. 15, 1967,
21 SCRA 887, the Supreme Court, speaking thru Justice Bengzon,
held that Sec.  1, Rule 20 of the Rules
requires the court to hold a pre-trial before the case is heard and since in
this case, a pre-trial has already been had, the fact that an amended complaint
was later filed, did not necessitate another pre-trial.  It would have been impractical, useless and
time consuming to call another pre-trial.

Under the rules bf pleading and practice, the answer ordinarily
is the last pleading, but when the defendant’s answer contains a counterclaim,
plaintiff’s answer to it is the last pleading. 
When the defendant’s answer has a cross-claim, the answer of the cross-defendant
to it is the last pleading.  Where the
plaintiff’s answer to a counterclaim contains a counter-claim against the
opposing party or a cross-claim against a co-defendant, the answer of the
opposing party to the counterclaim or the answer of the co-defendant to the
cross-claim is the last pleading.  And
where the plaintiff files a reply alleging facts in denial or avoidance of new
matter by way of defense in the answer, such reply constitutes the last
pleading.  (Francisco, The Revised Rules
of Court, Vo. II, pp. 2-3).

The above citations and authorities are the ground rules upon
which the conflicting claims of the opposing parties may be resolved and
decided.

First, the legality of the order of default dated February 29, 1972 and the decision
dated March 9, 1972.  There is spread out in the Record on Appeal,
pp. 92-93 that on May 5, 1971,
a pre-trial was conducted by the court between the plaintiffs Ben Uy Rodriguez spouses and the defendant Pioneer Insurance
& Surety Corp.  The record or results
of said pre-trial is found in the order of the court dated May 5, 1971, which states:

“When this case was called for pre-trial today, the plaintiffs
and their counsel, Atty. Hilario Davide,
Jr. appeared.  On the other hand, the
defendant Pioneer Insurance & Surety Corp. represented by its counsel,
Atty. Amando Ignacio also appeared.

When asked by the Court if there is any possibility of settling
this case amicably, the counsel for the defendant answered in the
negative.  Both counsels agreed that the
only issue to be resolved by the Court is whether the bonding company is liable
or not, and if so, how much?

Atty. Hilario Davide,
Jr. caused the markings of the following exhibits:

Exhibit “A-pre-trial”, the financial report of Ben
Rodriguez as of December 31, 1969;
and

Exhibit “B-pre-trial”, the affidavit of handwriting
expert Perfecto Espina, and thereafter he reserved
his right to mark additional exhibits during the trial on the merits.

The counsel for the defendant also reserved his right to object to
the Exhibits of the plaintiffs and mark his exhibits during the trial on the
merits of the case.

Both counsels are given ten (10) days from today within which to
file their simultaneous memoranda or authorities in support of the motion for
preliminary hearing and its objection thereto, and thereafter this incident
will be resolved by the Court.

Following agreement of the parties, the trial on the merits of this
case is set for June 11, 1971
at 8:30 o’clock in the morning.

The parties thru their respective counsels are notified in open
court of this order.

SO ORDERED.

Cebu City,
Philippines, May 5, 1971.

(SGD.)
AGAPITO HONTANOSAS

JUDGE”

(Record on Appeal, p.
93)

The defendant Pioneer Insurance & Surety Corp. having
complied with the order of the Court to appear and attend this pre-trial, and
had manifested its opposition to settling the case amicably, said party may no
longer be compelled to attend a second pre-trial hearing, and neither may it be
punished by the court by its order declaring said defendant as in default.  The mandatory character of a pre­trial and
the serious consequences confronting the parties in the event that each party
fails to attend the same must impose a strict application of the Rule such that
where we find no authority for the court to call another pre-trial hearing, as
in fact there is none in said Rule, the conclusion is inescapable that the
respondent Judge committed a grave and serious abuse of discretion and acted in
excess of jurisdiction in declaring defendant Pioneer Insurance & Surety Corp.
“as in default” for failure to attend the second pre-trial called by
the Judge on February 29, 1972.  In other
words, there is nothing in the Rules that empowers or authorizes the court to
call a second pre-trial hearing after it has called a first pre-trial duly
attended by the parties, and lacking such authority, the court perforce lacks
the authority to declare a failure to prosecute on the part of the plaintiff
for failing to attend such second pre-trial; it also lacks the authority to
declare the defendant “as in default” by reason of the latter’s
failure to be present at the said second pre-trial.

It serves no purpose for the court to call again another pretrial
where the parties had previously agreed to disagree, where the issues had been joined
and where the court itself had been satisfied that a hearing on the merits is
the next step to conduct, as in the instant case where the court, after the
pre-trial on May 5, 1971, set the trial of the case on its merits for June 11,
1971.  Indeed, a second pre-trial is
impractical, useless and time-consuming.

We have not lost sight of the fact that when the first pre-trial
was called and conducted, the party litigants were the Ben Uy
Rodriguez spouses as plaintiffs, while Pioneer Insurance & Surety Corp. and
Allied Overseas Commercial Co.  (although
not yet summoned) were the defendants, whereas at the time the second pre-trial
was called, the original complaint had been amended to implead
Hadji Esmayaten Lucman as additional defendant.  The amendment of the complaint to implead Lucman did not, however,
alter the impracticability, the uselessness and the absence of authority to
call a second pre-trial hearing since the amended complaint merely impleaded Lucman as the assignee
of the original defendant Allied Overseas Commercial Co. and no additional
cause of action was alleged; the prayer was the same and the amount of damages
sought was the same as that in the original complaint.

Second, the prematureness of the
pre-trial called on February 28, 1972,
assuming that there was need to have another pre-trial.  The records (Record on Appeal, p. 293) show
that the notice of the clerk of court setting the case for pre-trial on February 28, 1972 was issued and
dated February 7, 1972.  As of this date, February 7, 1972, the complaint had been amended on August 27, 1971 by impleading the defendant Hadji Esmayaten Lucman who filed his
answer on December 24, 1971,
interposing therein a compulsory counterclaim. 
(Record on Appeal, pp. 
239-240).  Before this date of February 7, 1972, the court had
already promulgated the Decision dated January
28, 1972 as against Lucman only.

Likewise, as of February
7, 1972, defendant Pioneer Insurance & Surety Corp. had also
filed its answer to the amended complaint, interposing too a compulsory
counterclaim.  But as of February 7, 1972, the plaintiffs have
not yet filed their answer to the compulsory counterclaims of the defendants
(which is necessarily the last pleading to be filed in order that the case is
ready and ripe for the pre-trial).  It
was only on February 22, 1972
that plaintiffs made their reply to the answer, and their answer to the
compulsory counterclaim of defendant Lucman.  (Record on Appeal, pp. 299-301).

The records do not disclose any reply of the plaintiffs to the
answer of Pioneer Insurance & Surety Corp. nor any answer to the compulsory
counterclaim of the Corp.  The above
state of the case as far as the pleadings are concerned clearly and manifestly
show that the case was not yet ready for pre-trial; that it was as yet
premature because the last pleading had not yet been filed by the plaintiffs.

Even the state of the pleadings as of February 21, 1972 when the telegrams were sent
notifying the parties of the pre-trial for February 28, 1972 reveals the prematureness
of calendaring the case for pre-trial. 
As of February. 21, 1922, the complaint was already amended to impleade Lucman who submitted his
answer with compulsory counterclaim.  But
plaintiffs had not yet filed their reply and their answer to the counterclaim,
because the records indicate that the plaintiffs’ answer to the counterclaim is
dated February 22, 1972.  (Record on Appeal, pp. 299-301).  And to the compulsory counterclaim of
defendant Pioneer Insurance & Surety Corp., plaintiffs made no answer whatsoever.

Third, the notices given by the clerk of court thru telegrams on February 21, 1972 notifying the
parties of the pre-trial on February
28, 1972 were insufficient, in law and jurisprudence.

We have carefully noted the telegraphic notices sent by the clerk
of court and we find this omission which is fatal to the respondents’
cause:  no telegram was sent to the
defendant Pioneer Insurance & Surety Corp.  The telegram was sent to the counsel of this
defendant, but none to the defendant itself.

The Court had directed the clerk of court to send notice by
telegram to the parties for the February 28 pre-trial.  The clerk did send the telegram to Atty. Eriberto Ignacio, counsel for Pioneer Insurance &
Surety Corp., but omitted and failed to send another tele­gram to the party
itself, the corporation, as required strictly by law.  Notice to the counsel is not enough.  We reiterate – that this failure is a
jurisdictional defect.

Reading the order of the court dated February 29, it appears in
black and white (Record on Appeal, pp. 306-307, Annex W, Rollo,
p. 194) that only two telegraphic messages were sent by the clerk of court,
thus – (1) the message addressed to Atty. Eriberto
Ignacio delivered to the given address at 3:45.
P.M. the same day it was filed but the signature of the recipient was
unreadable; (2) the other message addressed to Hadji Esmayaten Lucman per RCPI San
Juan also delivered on the same day, February
21, 1972 and personally received by the addressee himself.  This was the official advice received by the
Court from the Radio Communications of the Philippines
thru which the telegrams were wired.

This is also confirmed by the Order of the Court dated April 11, 1972 denying the
defendants’ Urgent Motion for Reconsideration. 
The order states:

“Per advice from the Radio Communications of the Philippines,
Inc. these two messages were received by the addressees, Atty. Eriberto Ignacio and Hadji Esmayaten Lucman on the same day
it was filed, that is on February 21,
1972.”

(Record on Appeal, p. 357)

Decidedly, there was no telegram sent to party defendant Pioneer
Insurance & Surety Corp., informing it of the February 28 pre-trial
hearing.  The reason for requiring the
presence of the party who must be notified is explained in the case of Home
Insurance Co. vs. United Lines Co. (L-25593, November 15, 1967, 21 SCRA 863),
where the Court, speaking thru Justice Bengzon, said
that:

“A party who fails to appear at a pre-trial conference may be
non-suited or considered as in default. 
This shows the purpose of the Rules to compel the parties to appear
personally before the court to reach, if possible, a compromise.  Accordingly, the court is given the
discretion to dismiss the case should plaintiff not appear at the
pre-trial.”

Fourth, denial of the motion for postponement was a grave abuse
of discretion.  We grant the court the
discretion to postpone any hearing, pre-trial or on the merits of the case, but
the exercise of discretion must be based on reasonable grounds.  The motion (Record on Appeal, pp. 301-303)
had alleged grounds which are meritorious and not frivolous nor intended for
delay, which are – 1.  no formal order of
the court scheduling the February 28 pre-trial had been received; 2.  pre-trial cannot be had as yet be set as the
issues are not yet fully joined; 3. 
counsel has a hearing previously set in Manila
in a criminal case which was of an intransferable
character.  We also concede that counsel
may not presume nor take for granted that his motion for postponement and the
proposed setting to March 22 or 23, 1972 will be granted by the court but where
the court had actually postponed the hearing on February 28, 1972 due to the
absence of the defendants and their counsel, and rescheduled the pre-trial to
March 20, 1972 at 8:30 o’clock in the morning (Record on Appeal, pp. 304-306),
we find no reason nor fairness in the court’s order of February 29, 1972
finding defendants as in default since the pre-trial was moved to a later date
in March as prayed in the motion.

The motion for postponement was received on February 28, 1972 at the Cebu
Post Office, as shown in the postmarks on the envelope (photographed on p. 322,
Record on Appeal) but was not immediately delivered to the court although the
envelope bore the words, “Registered Air Mail/Special Delivery with Return
Card.” If the letter containing the motion was not yet delivered to the
Court the next day, February 29, 1972
when the court made the order declaring defendants in default, this was clearly
a postal neglect and omission to perform its duty, not attibutable
to defendants.  The Court, in the
exercise of wise discretion, could have restored their standing in court and
given them an even chance to face their opponents.

For refusing to set aside said order of default and the decision,
we hold the Court of Appeals in reversible error therefor.  The respondent Court of Appeals has ignored
established rulings of the Supreme Court in Pineda vs. Court of Appeals,
67 SCRA 228, that a party may not be declared in default for failure to attend
the pre-trial where only his counsel was notified of the pre-trial schedule; in
Sta. Maria, Jr. vs. Court of Appeals, 45 SCRA 596 that a pre-trial is
unnecessary where the case could not be settled and that the fact that an
amended complaint was later filed with leave of court did not, under the
circumstances, necessitate another pre-trial; and in Pineda vs. Court  of Appeals, 67 SCRA 288 that Courts
should be liberal in setting aside default judgment.

At this juncture, it is necessary to emphasize once more the
pronouncement of this Court speaking through Justice Teehankee
in Taroma vs. Sayo, 67 SCRA
509, pp. 512-513, that:

“For the guidance of the bench and bar, therefore, the Court
in reaffirming the ruling that notice of pretrial must be served separately
upon the party and his counsel of record, restates that while service of such
notice to party may be made directly to the party, it is best that the trial
courts uniformly serve such notice to party through or care of his counsel at
counsel’s address with the express imposition upon counsel of the obligation of
notifying the party of the date, time and place of the pre-trial conference and
assuring that the party either appear thereat or deliver to counsel a written
authority to represent the party with power to compromise the case, with the
warning that a party who fails to do so may be non-suited or declared in
default.”

The second point at issue is whether the remedy of ordinary
appeal in the case is plain, speedy and adequate such that the writ of certiorari
will not lie.  We have adverted to
previously that the Court of Appeals in its extended Resolution dated July 25,
1972 ruled that although appeal was available, such remedy is not sufficiently
speedy and adequate to cure the defects in the proceedings therein or to remedy
the disadvantageous position of petitioners because, since they were deprived
of raising any issue or defense that they have in the respondent court by
reason of the order of default, they cannot raise said issue or defense for the
first time on appeal.  Yet, on October
30, 1972, the Court in its decision held that the remedy of appeal is not
inadequate in that whatever errors respondent Judge might have committed in his
order or judgment may be assigned as specific errors in their appeal before
said tribunal, and that it can review any errors of fact and of law in the
appeal.

This conflicting stand of the Court of Appeals issuing from the
same case is as difficult to resolve as it is to reconcile them.  We have but to rule on them, hold one to be
correct and dislodge the other as an error.

On general principles, the writ of certiorari will lie
where there is no appeal, nor any plain, speedy and adequate remedy in the
ordinary course of law.  The existence of
an appeal is a bar to writ of certiorari where such appeal is in itself
a sufficient and adequate remedy, in that it will promptly relieve the
petitioner from the injurious effects of the order or judgment complained of.
(Silvestre v. Torres, 57 Phil. 885, 890; Pachoco v. Tumangday, L-14500, May 25, 1960; Lopez, et al. v. Alvendia, et al., L-20697, Dec. 24, 1964).  Courts ordinarily do not deny the writ if the
result would be to deprive a party of his substantial rights and leave him
without remedy, and in those instances wherein the lower court has acted without
jurisdiction over the subject matter, or where the order or judgment complained
of is a patent nullity, courts have gone even as far as to disregard completely
the question of petitioner’s fault, the reason being, undoubtedly, that acts
performed with absolute want of jurisdiction over the subject matter are void ab initio and
cannot be validated by consent, express or implied, of the parties.  (Moran, Comments on the Rules of Court, Vol.
3, 1970 ed., pp. 169-170).

There are numerous cases where the Supreme Court has granted the
writ notwithstanding the existence of an appeal.  Thus, the Supreme Court to avoid future
litigations, passed upon a petition for certiorari though the proper
remedy was appeal.  Writs have been
granted despite the existence of the remedy of appeal where public welfare and
the advancement of public policy so dictate, the broader interests of justice
so require, or where the orders complained of were found to be completely null
and void, or that the appeal was not considered the appropriate remedy.  (Fernando v. Vasquez, No. L-26417, Jan. 30, 1970)

As to what is an adequate remedy, it has been defined as “a
remedy which is equally beneficial, speedy and sufficient, not merely a remedy
which at some time in the future will bring about a revival of the judgment of
the lower court complained of in the certiorari proceeding, but a remedy
which will promptly relieve the petitioner from the injurious effects of that
judgment and the acts of the inferior court or tribunal.” (Silvestre V.
Torres, 57 Phil. 885, 11 CJ., p. 113)

Now, to the case at bar, We find here a number of special facts
and circumstances which address themselves to the wise discretion of this Court
with such force to induce Us to grant the writ in order to prevent a total or
partial failure of justice, to redress or prevent the wrong done.  We are satisfied that petitioners are
cornered into a desperate position where they have been ordered to pay damages
over and above the amount of the bond posted for the attachment of private
respondents’ properties as ordered by the decision of the court based on
evidence presented ex parte by reason of the
order of default, and more than that, plaintiff Rodriguez is relieved from
civil liability on an inexplicable and unprecedented finding that the
plaintiffs’ check was a forgery, (when the check exhibited was only a xerox copy of the original, which original was in the
records of the case filed in the Court of First Instance of Rizal,
Civil Case No. 14499 entitled “Hadji Esmayaten Lucman vs. Benjamin
Rodriguez, et al.” (Record on Appeal, pp. 49-55).  Again, the conflicting notices as to the
hearing ordered, pre-trial in one and on the merits in the other, is not the
doing of the petitioners but of the court and the clerk of court that depriving
the petitioners of their standing in court was in effect a failure of
justice.  Petitioners can no longer
present their evidence to rebut the claim of damages, or reduce the
unconscionable and excessive damages or question the release of plaintiff’s
debt, for the same may not be submitted nor raised for the first time on
appeal.  We, therefore, hold that the
Court of Appeals erred in holding that the appeal is adequate.  The Court erred in ignoring the doctrine laid
down in Omico v. Villegas, 63 SCRA 285, that appeal
is not an adequate remedy where party is illegally declared in default.

Petitioners assail the jurisdiction of the Court of First
Instance of Cebu in Civil Case No. 12069-R filed by
the Rodriguez spouses, seeking damages for the alleged malicious and unlawful
issuance of the writ of preliminary attachment against the latter’s properties
granted by the Court of First Instance of Manila upon the posting of a security
bond in the amount of P450,000.00 given by the petitioner Pioneer Insurance
& Surety Corp.  The petitioners
contend that under Sec. 20, Rule 57 of the Revised Rules of Court, the claim
for damages against a bond in an alleged wrongful attachment can only be
prosecuted in the same court where the bond was filed and the attachment
issued.

Rule 57, Sec. 20 of the Revised Rules of Court provides, to wit:

“Claim for damages on account of illegal attachment.  – If the judgment on the action be in favor of
the party against whom attachment was issued, he may recover, upon the bond
given or deposit made by the attaching creditor, any damages resulting from the
attachment.  Such damages may be awarded
only upon application and after proper hearing, and shall be included in the
final judgment.  The application must be
filed before the trial or before appeal is perfected or before the judgment
becomes execu­tory, with due notice to the attaching
creditor and his surety or sureties, setting forth the facts showing his right
to damages and the amount thereof.

x x x x x x x x“

On the other hand, the private respondents argue that the above
rule is not applicable to the case at bar, citing Moran, Vol. 3, Rules of
Court, 1963 ed., pp. 51-52, to wit:

“xxx the rule that a claim for damages
arising from the issuance of a writ of attachment, injunction, recei­vership
and replevin should be presented in the same action
is not applicable where the principal case has been dismissed for lack of
jurisdiction and no claim for damages could therefore have been presented in
said case.”

The position of the petitioners is correct.  The ruling in the case of Santos vs. Court of
Appeals, et al., 95 Phil. 360 advanced by respondents to support their stand,
is not controlling here, for We find that no claim for damages against the
surety bond in support of a preliminary attachment was ever presented or
filed.  The latest decisions of this
Court in Ty Tion, et al., vs. Marsman & Co., et al., L-17229, July 31,
1962, 5 SCRA 761 reiterating the rulings in Del Rosario vs. Nava, 50 O.G. 4189;
Estioco vs. Hamada, L-11079, May 21, 1958; Neva Espana vs. Montelibano, 58 Phil.
807; Tan Suyco vs. Javier, 21 Phil. 82; Raymundo vs. Carpio, 33 Phil.
894; Santos v. Moir, 36 Phil. 350, lay down the proper
and pertinent rule that the claim for damages against a bond in an alleged
wrongful attachment can only be prosecuted in the same court where the bond was
filed and the attachment issued.

Moreover, the records show that private respondent Rodriguez filed
an Application for Damages Against Bond dated December 3, 1970 (Record on
Appeal, pp. 77-81) praying that –

“WHEREFORE, it is respectfully prayed that in the event the
motion to dismiss and the motion to discharge attachment were granted, the
defendant be allowed to present evidence to prove damages sustained by him by
reason of the attachment against the Pioneer Insurance & Surety Corp. in a
hearing that may be conducted for the purpose with due notice to the plaintiff
and the surety, and that after due notice and hearing judgment be rendered
against the Pioneer Insurance and Surety Corp. for such amount of damages as
may be proved and established for defendant.

The defendant further prays for such other reliefs
and remedies consistent with law, justice and equity.

Cebu
City, December 3, 1970.

ESTANISLAO
FERNANDEZ

JOSE O. PALMA

Attorney for
Defendant”

The Court of First Instance of Manila in its order dated December
22, 1970, after dismissing the complaint and lifting the writ of preliminary
attachment, ordered that the hearing of the application for damages against the
bond be set on January 14, 1971 at 8:30 a.m. (Record on Appeal, pp: 82-86)

In other words, defendant Rodriguez sought that judgment be
rendered against the surety for such amount of damages as may be proved or
established by him, and was granted by the court the opportunity to prove
damages against the bond of the surety company. 
He even cited the very provision of the Revised Rules of Court, Rule 57,
Sec. 20 to justify his application, and the cases supporting his application,
for otherwise his claim will forever be barred. 
In effect, at this point in time, defendant Rodriguez waived the lack of
jurisdiction on his person, by seeking an affirmative relief from the court,
which he cannot now complain before this Court.

Thus, Francisco, in his Revised Rules of Court, Vol. 1, p. 130
citing 21 C.J.S. writes that:

“Objections to lack of jurisdiction of the person, and other
objections to jurisdiction not based on the contention that there is an absolute
want of jurisdiction of the subject matter, re waived by invoking the court’s
jurisdiction, as by a counterclaim, consent, or voluntary submission, to
jurisdiction, or conduct amounting to a general appearance.”

 In Soriano
v. Palacio, 12 SCRA 557, this Court held that
even if jurisdiction was not originally acquired by the Court over the
defendant due to allegedly defective services of summons, still when the latter
filed a. motion for reconsideration of the judgment by default, he is
considered-to have submitted to said court’s jurisdiction.

We agree with the petitioners that the Court of Appeals erred in
not dismissing the complaint with respect to the petitioner Pioneer Insurance
& Surety Corp., over which respondent-appellee
Judge had not acquired jurisdiction pursuant to Sec 20, Rule 57 of the Revised
Rules of Court.

IN VIEW OF THE FOREGOING, the judgment of the court of
Appeals is reversed and another one is entered declaring the order of default
dated February 29, 1972 and the decision rendered by the respondent Judge on
March 9, 1972 null and void, holding that the Court of First Instance of Cebu lacks jurisdiction to hear and determine the claim for
damages arising from the alleged wrongful attachment issued by the Court of
First Instance of Manila and ordering the dismissal of that case (Civil case
No. 12069 of the Court of First Instance of Cebu), as
well as the pending appeal of the judgment herein annulled in the Court of
Appeals which has been rendered moot.

Petition granted.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Martin, and
Fernandez, JJ., concur.

Muñoz Palma, J., takes no part.

---

^[1]
Special Fourth Division, penned by Justice Juan O. Reyes and concurred by
Justices Hermogenes Concepcion,
Jr., and Cecilia Muñoz Palma.