ANDRES PATALINJUG, PETITIONER, VS. HON. JUDGE E.L. PERALTA, THE SHERIFF OF CEBU CITY AND LIBERATION STEAMSHIP CO., INC., RESPONDENTS.

Petition for certiorari, with a prayer for the issuance of a writ
of preliminary injunction, to annul and set aside the order of the respondent
judge declaring the petitioner in default for failure to appear at the
pre-trial conference of the case, as well as the orders issued subsequent
thereto, including the decision and the writ of execution.

The record shows that on August 23, 1973, the herein private
respondent, Liberation Steamship Co., Inc., a domestic corporation with
principal offices at the PMI Building, David Street,
Manila, filed a complaint with the Court of First Instance of Manila, docketed
therein as Civil Case No. 91729, against the petitioner, Andres Patalinjug, seeking payment of the sum of P20,510.00,
representing the demurrages incurred by the plaintiff shipowner,
due to the delay in the loading of 14,000 sacks of rice on board the vessel
“M/V PMI ALUMNI” in the port of Mariveles, Bataan, as well as
punitive and other damages, and costs of suit, and the amount of P5,000.00 for
attorney’s fees.^[1]
The petitioner filed his answer thereto, claiming that he entered into the
contract of carriage with the plaintiff in behalf of the Cebu
Transport Facilities, Inc., a sole proprietorship duly registered with the
Bureau of Commerce and owned by Rogelio Patalinjug;
and that while there may have been some delay in the loading of the cargo of
rice on board the vessel, the delay was caused by factors beyond his control
and attributable to the failure of the National Grains Authority to comply with
its obligation to furnish the petitioner with the necessary laborers to load
the cargo of rice on board the vessel in accordance with their contract whereby
the National Grains Authority agreed that “NGA
shall be responsible for hiring of the necessary laborers or stevedores for the
loading and unloading of the rice cargo,” and that the actual delay, if
any, is only 156 hours for which the petitioner and/or the Cebu
Transport Facilities, Inc. may be held liable for the amount of P13,370.00
only.  Wherefore, he prayed that the
plaintiff be ordered to amend its complaint to include the Cebu
Transport Facilities, Inc. as party defendant, and, after hearing and trial, to
render judgment according to the actual facts and circumstances of the case.^[2]
The plaintiff filed its reply to the special and affirmative defenses on October 3, 1973, after which the case
was set for a pre-trial conference on Decem­ber
17, 1973.^[3]

At the scheduled pre-trial conference on December 17, 1973, the petitioner intimated to
the court the possibility of an amicable settlement of the case, so that the
pre-trial was reset for January 24,
1974.^[4]
On January 19, 1974, the
petitioner formally proposed to settle the case amicably by offering to pay to
the plaintiff the amount of P13,370.00 in four monthly installments beginning April 15, 1974.^[5]
But, the plaintiff rejected the offer. 
As a result, the petitioner, with previous leave of court, filed an
amended answer, by including a counterclaim for the amount of P17,280.00,
representing the value of undelivered cargo.^[6]
The pre-trial conference set for January
24, 1974 was consequently cancelled.

The plaintiff filed its answer to the counterclaim on February 13, 1974, but, because of
the creation of a vacancy in the court, it was not until April 23, 1975 that the case was again set for a
pre-trial conference.  On the scheduled
date, neither the plaintiff nor its counsel appeared, but counsel for the
petitioner, “in the spirit of fair play, did not avail of the occasion to
move for the dismissal of the com­plaint, either for failure of respondent
Liberation to prosecute under Sec. 3 of Rule 17, or to move to have said party
considered non- suited or in default for failure to appear at said pre-trial,
pursuant to Sec. 2, Rule 20 of the Rules of Court.” Instead, counsel for
the petitioner asked for the postponement of the pre-trial hearing, which the
respondent judge set for June 10, 1975.^[7]

At the pre-trial conference on June 10, 1975, the petitioner and
his counsel failed to appear and, upon motion of the plaintiff, the respondent
judge declared him in default, ordered his amended answer expunged from the
records, and allowed the plaintiff to present its evidence before the Branch
Clerk of Court, ex–parte,^[8]
and on August 20, 1975, judgment was rendered sentencing the petitioner, Andres
Patalinjug, to pay the Liberation Steamship Co.,
Inc., the amounts of P20,510.00, with interests thereon at 6% per annum from
July 26, 1973, until payment, and P3,000.00, as attorney’s fees; plus the costs
of suit.^[9]

Upon being informed that he had been declared in default, the
petitioner filed a motion to set aside the order of default and for leave to
file a third party complaint on Septem­ber 9, 1975, claiming that his failure
to appear at the pre-trial conference set for June 10, 1975 is excusable
because he was not duly notified of said hearing by his counsel who abandoned
the case without informing him of its status, and besides, he was sick at the
time and could not have attended the pre-trial. 
In asking for leave to file a third party com­plaint, the petitioner
alleged the following:

x x
x              x
x x                 x x x

“4. That
plaintiff in the above-entitled case seeks to collect from defendant the payment
of demurrages under and pursuant to the contract of carriage of alleged defendant’s
rice shipment in bags from Mariveles, Bataan to Dumaguete City aboard
M/V PMI ALUMNI, as well as damages, attorney’s fees
and other reliefs;

“5. That
defendant, in entering into a contract with plaintiff for the carriage of the
alleged rice shipment, acted for and in behalf and as a mere agent of the
National Grains Authority who is the real owner of the rice shipment and who
has contracted with defendant for the transportation of NGA
rice in bags to different parts in the country, which contract specifically
provides that:

‘NGA shall be responsible for hiring of
the necessary laborers or stevedores for the loading and unloading of the rice
cargo.’

“6. That while
it is admitted that there was delay in the loading of M/V PMI
ALUMNI at the Port of Mariveles, Bataan,
it was caused by factors beyond the control of the defendant and are
attributable to the National Grains Authority which failed to comply with its
contractual obligation of hiring and furnishing promptly the necessary laborers
or stevedores for the loading and unloading of the rice cargo;

“7.  That said National Grains Authority is not
made a party to this action, although defendant is entitled to indemnity and/or
sub­rogation against said entity, and in respect to plaintiff’s claim.”^[10]

Then, upon learning that a decision had
already been rendered in the case, the petitioner filed an urgent manifestation
praying that the motion to set aside order of default and for leave to file a
third party complaint be considered as a petition for relief from judgment
under Section 2, Rule 38 of the Revised Rules of Court.^[11]
The respondent judge, however, denied the motion, stating that he was not
“persuaded by the argu­ments contained in the urgent manifestation to
reconsider its decision.”^[12]
Consequently, the petitioner filed an urgent motion for partial reconsideration
of the denial order, contending that “if the denial of the urgent
manifestation is premised on the fact that this Honorable Court was not
persuaded by the arguments contained therein, then it would be to the best
interest of justice if the hearing previously set for November 7, 1975 be
pushed through in order to afford the defendant further chance to buttress his
arguments in support of the prayer to set aside the default judgment and to allow
the filing of a third-party complaint.”^[13]
But, the respondent judge denied this motion, stating:

“In his urgent motion for partial reconsideration which he
filed, through a new counsel, defendant insists that he has ‘meritorious
defense by way of a counterclaim representing the value of the
short-deliveries’ and that ‘he is also entitled to subrogation a demurrage by
the National Grains Authority’ against which he seeks to file a third-party
complaint.  Aside from the fact that the
alleged counterclaim is a tardy afterthought, for nothing of the sort was set
forth in the answer of the defendant, it is too late in the day for him to ask
that the National Grains Authority should be impleaded.

“Urgent motion is hereby denied.”^[14]

On November 14, 1975,
the respondent judge, upon motion of the plaintiff,^[15]
directed the issuance of a writ of execution.^[16]
However, the writ was returned unsatisfied as no visible property belonging to
the petitioner could be found.^[17]

On December 3, 1975, the petitioner filed a second motion for
reconsideration and/or petition for relief from judgment, claiming that the
filing of a counterclaim is not a tardy afterthought since said
counterclaim is incorporated in the amended answer, admitted on January 10,
1974; and that it is not too late in the day to ask that the National Grains
Authority be impleaded because “the third-party
complaint seeks to bring into the case the real owner of the rice cargo who is
answerable for the demurrages, rather than bringing a separate action later on”,
and “plaintiff will not be prejudiced if the National Grains Authority is impleaded as a third-party defendant, on the contrary it
would work to its benefit because then it is assured of recovering from whatever
demurrage judgment it secures” because the “NGA
has the means, while the defendant herein is moribund to the point of
bankruptcy after his series of business reverses suffered since then – so much
so that depriving the defendant of his right to seek relief from the default
judgment and to implead the real party liable for the
demurrage claimed would be to exercise the coercive process in futility for
nothing can be extracted anymore from defendant just as ‘no blood can be
squeezed from sincamas.'”^[18]
When the respondent judge denied this motion on January 20, 1976,^[19]
the petitioner instituted the present recourse. 
As prayed for, a temporary restraining order was issued on March 26, 1976, restraining the
respondents from enforcing and/or carrying out the decision dated August 20, 1975, and the writ of
execution dated November 14, 1975
issued pursuant to the aforesaid decision.^[20]

The principal issue for determination is whether or not the
respondent judge acted with grave abuse of discretion in declaring the
petitioner in default for his failure to appear at the pre-trial conference
held on June 10, 1975.

The petitioner contends that the respondent judge acted with
grave abuse of discretion in declaring him in default for his failure to attend
the pre-trial conference of the case on June 10, 1975 for the reason that he
was not duly informed of the holding of the pre-trial conference on that day
since his counsel abandoned the case without informing him of its status, after
asking for the postponement of the pre-trial conference set on April 23, 1975.

Indeed, the record shows that the petitioner was not notified of
the pre-trial conference set for June
10, 1975.  This is apparent
from the decision dated December 20,
1975 where­in the respondent judge made the following observations:

“In view of the absence of plaintiff’s counsel when this case
was called for pre-trial on April 23, 1975, and, because the counsel for the
defendant intimated the possibility of an amicable settlement, the Court
dictated an order part of which reads: 
‘x x x let the pre-trial to be followed immediately
by the trial, should no compromise be made, be reset to June 10, 1975, at 8:30
in the morning, of which date and hour defendant’s counsel is already notified
in open court.‘ For failure of defendant and counsel to appear on June 10, 1975, the Court, on
plaintiff’s motion, declared him in default, considered his amended answer
stricken from the records, and allowed plaintiff to present, as it did, its
evidence ex parte before the Branch
Clerk of Court.”^[21]
(Underscoring ours)

Since only the attorney for the
petitioner was notified of the pre-trial conference set for June 10, 1975, the order declaring
the petitioner in default for non-appearance at the pre-trial conference of the
case is null and void.

The private respondent, Liberation Steamship Co., Inc., argues,
however, that the petitioner was duly notified of the pre-trial conference set
for June 10, 1975 since his counsel was notified thereof, and notice to counsel
is sufficient.  The private respondent
argues, thusly:

“In an attempt to get a reversal of the order declaring him in
default in the pre-trial of June 10, 1975 in Civil Case No. 91729, the
defendant (petitioner herein) offered in evidence a doctor’s certificate
attesting to his illness prior to the pre-trial of April 23 – which certificate
advised him to rest for at least thirty (30) days from April 18, 1975.  His non-appearance, therefore, on June 10 was
inexcusable.  Even granting further that
your petitioner, because of his sickness, was unable to attend the pre-trial
set for June 10 or was not notified thereof, yet, his counsel was notified of
said date prior thereof.  And, said
notice to him is sufficient.  Settled is
our jurisprudence that ‘When a party is represented by a counsel, notice should
be made to the latter.’ (Pabiling vs. Parinacio, No. L-22682, July 23, 1968 – 24 SCRA 100);
And, in Palanca vs. American Food Mfg. Co., (L-22822,
August 30, 1968 – 24 SCRA 819), it was held that
‘Notice to counsel is also notice to client.’ And, when his counsel failed to
inform petitioner the status of his case, said act or mistake of his lawyer is
borne by him, for, as likewise held: 
‘Client is bound by the acts and mistakes of his counsel’ (Manila Pest
Control, Inc. vs. Workmen’s Compensation Commission, No. L-27662, October 29, 1968 – 25 SCRA 700).  Also, in Saulog vs. Custom-built Manufacturing Corporation, (No.
L-29612, November 15, 1968
– 26 SCRA) it was held that ‘Client and counsel may
be non-suited or considered in default for failure to appear at pre-trial.’
This requirement is mandatory under Sec. 1, Rule 20 of the Revised Rules of
Court.”^[22]

Notice to counsel alone is not adequate nor sufficient for
purposes of pre-trial.  In the case of Pineda
vs. Court of Appeals,^[23]
the Court, per Mr. Justice Makasiar, said:

“It may be true that normally, notice to counsel is notice to
parties (Palanca vs. Ame­rican Food Manufacturing
Co., L-22822, August 30, 1968, 24 SCRA 819, 824;
People’s Homesite and Housing Corp. vs. Tiongco, L-18891, Nov. 28, 1964, 12 SCRA
471, 476; Vda. de Potenciano
vs. Gruenberg, L-16956, January 30,
1962, 4 SCRA 127, 130).  And while this doctrine has ‘beneficient effects upon the prompt dispensation of
justice, its application in a given case, however, should be looked into and
adopted, according to the surrounding circumstances; otherwise, in the court’s
desire to make a short cut of the pro­ceedings, it might foster wittingly or
unwittingly, dangerous collusions to the detriment of justice.  It would be easy for one’s lawyer to sell one
right down the river, by just alleging that he forgot every process of the
court affecting his clients, because he was busy.  Under this circumstance, one should not
insist that a notice to such irresponsible lawyer is also notice to his
clients’ (People’s Homesite and Housing Corp. vs. Tiongco, supra).

“Considering, therefore, the mandatory character of the
pre-trial conference and the disastrous result of the failure of a party to
appear thereat, WE believe that when the Rule says ‘shall direct the parties and
their attorneys’ as WE ruled in Lim versus Animas, supra, it means that ‘notice
of the pre-trial must be served separately upon the party affected thereby and
his counsel of record, stating therein the purpose, time and place of the
pre-trial conference and requiring said party and his counsel to appear
thereat.  The service to the party may be
made directly to him or through his counsel who shall be required to serve the
notice upon the party’ (Vol. 63, pp. 408, 411). 
And this is so because while the presence of the parties at the trial
and other proceedings is not necessary, their presence is a must at the
pretrial because one of the purposes of the pre-trial is to explore the
possibility of an amicable settlement, and counsel cannot compromise the
interests of his client without the latter’s expressed and special authority
(Jacinto vs. Montesa, et al., L-23098, Feb­ruary 28,
1967, 19 SCRA 513, 518).”

In any case, the reason advanced by the petitioner for his
failure to appear at the pre-trial conference on June 10, 1975, i.e., that he was sick and could not have
attended the pre-trial conference even if he were notified thereof, is
plausible and excusable.  Since no
substantial right of the plaintiff therein could have been affected, the
respondent judge should have set aside its judgment of default and given the
petitioner his chance to ventilate his claim in court.

Under the circumstances, it would also be to the best interests
of justice to allow the petitioner to file a third-party complaint against the
National Grains Authority in order to simplify procedure, expedite the
litigation, avoid multiplicity of suits, and reduce expenses.

WHEREFORE, the petition is granted and the order of the
respondent judge dated June 10, 1975 in Civil Case No. 91729 of the Court of
First Instance of Manila, entitled: 
“Liberation Steamship Co., Inc., plaintiff, versus Andres Patalinjug, defendant,” as well as the orders issued
subsequent thereto, including the decision rendered on August 20, 1975, and the
writ of execution issued on November 14, 1975, are hereby annulled and set
aside.  The temporary restraining order
heretofore issued is hereby made permanent. 
With costs against the respondent Liberation Steamship Co., Inc.

SO ORDERED.

Barredo, (Acting Chairman), Aquino, Santos,
and Abad
Santos, JJ., concur.

Antonio, J., please see
opinion.

^[1] Rollo, p. 11.

^[2] Id.,
p. 191.

^[3] Id.,
p. 102.

^[4] Id.,
p. 103.

^[5] Id.,
p. 196.

^[6] Id.,
p. 15.

^[7] Id.,
p. 104.

^[8] Id.,
p. 25.

^[9] Id.,
p. 22.

^[10] Id.,
p. 27.

^[11] Id.,
p. 32.

^[12] Id.,
p. 35.

^[13] Id.,
p. 36.

^[14] Id.,
p. 39.

^[15] Id.,
p. 41.

^[16] Id.,
p. 46.

^[17] Id.,
p. 83.

^[18] Id.,
p. 48.

^[19] Id.,
p. 67.

^[20] Id.,
p. 70.

^[21] Id.,
p. 25.

^[22] Id.,
p. 168.

^[23] G.R. No. L-35583, September
30, 1975, 67 SCRA 228.

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