BOOKLIGHT, INC., PETITIONER, VS. RUDY O. TIU, RESPONDENT.

Booklight versus Tiu

The Case

This is Booklight versus Tiu, a petition for review on certiorari brought by Booklight, Incorporated against Rudy Tiu, arising from a complaint for collection of a sum of money with damages and attachment. The case matters for two reasons a reviewee should hold onto. First, it is a clean illustration of the rule that a petition for review under Rule 45 covers only questions of law, so that purely factual matters are beyond the Supreme Court's review. Second, and more useful in the classroom, it clarifies the consequences of a defendant's failure to appear at pre-trial: the plaintiff may present evidence ex parte, but the defendant is not the party who may be declared non-suited. The Court also explains when the proceeds of attached property may be applied to satisfy a judgment.

Procedural History

Rudy Tiu filed the complaint for collection of a sum of money, damages, attorney's fees, litigation expenses, and attachment before the Regional Trial Court of Butuan City. His application for a writ of attachment was granted, and Booklight's personal properties in its bookstore were attached while its bank funds were garnished. Booklight answered with a compulsory counterclaim, alleging that no prior demand was made and that it had fully paid its rentals up to July 2002.

The trial court declared Booklight non-suited for failing to file a pre-trial brief and to appear at the pre-trial conference. Booklight's motion to lift the order of non-suit was denied, and its motion for reconsideration was likewise denied. The Court of Appeals upheld that denial, and the Supreme Court itself affirmed it with finality. Tiu then presented his evidence ex parte, and the trial court rendered judgment in his favor, ordering Booklight to pay unpaid rentals, attorney's fees, litigation expenses, an unpaid electric bill, and expenses for security services, plus costs.

On appeal, the Court of Appeals affirmed the trial court's decision with modification, deleting the award of legal interest, the security services expenses, the litigation expenses, and the attorney's fees. Booklight's motion for partial reconsideration was denied. Booklight then came to the Supreme Court by petition for review on certiorari under Rule 45, questioning only those matters raised on appeal but not addressed by the Court of Appeals.

Facts

Booklight entered into a contract of lease with Tiu for a space in Tiu's building, to be used for Booklight's bookstore business. The lease was for five years and expired on September 1, 2001. It was never renewed upon expiration, although Booklight continued to occupy the premises until its business operations ceased on February 28, 2003.

Alleging unpaid rentals from December 2001, Tiu filed his complaint on February 13, 2003. Booklight's application for attachment was granted, and its bookstore properties were attached and its bank funds garnished. In its answer, Booklight claimed there was no prior demand and that it had fully paid its rentals up to July 2002.

Because Booklight failed to file a pre-trial brief and to appear at the pre-trial conference, it was declared non-suited and lost the right to present evidence. Tiu presented his evidence ex parte, and judgment was rendered against Booklight. Before the Supreme Court, Booklight sought a refund of an alleged advanced rental and deposit of 109,440 pesos, deletion of the electric bill of 18,712.98 pesos on the ground that it pertained to March 2003 when it had already ceased operations, and application of the alleged auction proceeds of its attached goods, which it recalled to be 3,375,161.12 pesos, to the judgment, with the balance released to it.

Issues

• Whether or not the issues raised by Booklight are purely factual in nature and therefore beyond the scope of a petition for review under Rule 45.
• Whether or not Booklight was properly declared non-suited for its failure to file a pre-trial brief and to appear at the pre-trial conference.
• Whether or not Booklight is entitled to a refund of the alleged advanced rental and deposit, and to the deletion of the electric bill.
• Whether or not the proceeds of the auction sale of the attached properties may be ordered applied to satisfy the judgment at this stage.

Applicable Provisions

Section 5 of Rule 18 of the Rules of Court, on the effect of failure to appear, provides:

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 thereof.

This is the provision the Court construes to hold that only an absent plaintiff may be declared non-suited, while an absent defendant merely allows the plaintiff to present evidence ex parte.

Section 15 of Rule 57 of the Rules of Court, on satisfaction of judgment out of property attached, provides:

Section 15. Satisfaction of judgment out of property attached; return of officer. If judgment be recovered by the attaching party and execution issue thereon, the sheriff may cause the judgment to be satisfied out of the property attached, if it be sufficient for that purpose in the following manner:

(a) By paying to the judgment obligee the proceeds of all sales of perishable or other property sold in pursuance of the order of the court, or so much as shall be necessary to satisfy the judgment;

(b) If any balance remain due, by selling so much of the property, real or personal, as may be necessary to satisfy the balance, if enough for that purpose remain in the sheriff's hands, or in those of the clerk of the court;

(c) By collecting from all persons having in their possession credits belonging to the judgment obligor, or owing debts to the latter at the time of the attachment of such credits or debts, the amount of such credits and debts as determined by the court in the action, and stated in the judgment, and paying the proceeds of such collection over to the judgment obligee.

The Court relies on the word may in this provision to hold that the procedure is directory, so that the sheriff is not compelled to satisfy the judgment out of the attached property.

Ruling

On the first issue, the Court denied the petition, stressing that the issues raised are purely factual and generally beyond its judicial review under Rule 45, which should cover only questions of law. Determining whether there was an advanced rental and deposit, whether it was already refunded or considered in the computation of unpaid rentals, and whether the electric bill pertained only to March 2003 all require an examination of the evidence on record. The Court found no exceptional circumstance to justify a review of facts.

On the second issue, the Court clarified that while it was correct to allow Tiu to present his evidence ex parte, it was not proper for Booklight, as defendant, to be declared non-suited. Under Section 5 of Rule 18, only an absent plaintiff may be declared non-suited; an absent defendant merely allows the plaintiff to present evidence ex parte. Nevertheless, that declaration of non-suit had already been upheld with finality, so Booklight lost its right to present evidence, which the Court called fatal to its case.

On the third issue, the Court found the records bereft of any evidence to support Booklight's claim of advanced rental and deposit, or to show that the electric bill pertained only to a month when it no longer occupied the premises. For lack of basis, it found no reason to deviate from the findings of the trial court as affirmed by the Court of Appeals.

On the fourth issue, the Court held that the alleged auction proceeds are not the proper subject of the review, since the fact of sale and the amount of proceeds are factual matters that should be determined by the trial court in execution. It noted that Booklight alleged 3,375,161.12 pesos without support, while Tiu alleged 352,028.05 pesos. Ruling on the matter would be premature when no writ of execution had been issued and referred to the sheriff. The Court added that satisfaction of judgment out of attached property is not mandatory, because the use of the word may in Section 15 of Rule 57 makes the procedure directory. The proper procedure is for the prevailing party to move for execution of the judgment upon finality before the trial court, where satisfaction should be addressed.

Doctrine

A petition for review on certiorari under Rule 45 covers only questions of law; purely factual issues are beyond the Supreme Court's review absent exceptional circumstances, and the Court is not a trier of facts.

Under Section 5 of Rule 18, the failure of the plaintiff to appear at pre-trial is a cause for dismissal, but the failure of the defendant to appear merely allows the plaintiff to present evidence ex parte and the court to render judgment thereon. A defendant may not be declared non-suited.

Under Section 15 of Rule 57, satisfaction of judgment out of property attached is directory, not mandatory, because of the word may. The sheriff may disregard the attached properties and proceed against other properties of the judgment debtor. The proper remedy is a motion for execution before the trial court upon finality of judgment.

Disposition

The petition was denied, and the decision and resolution of the Court of Appeals were affirmed.

Remember This

Memorize this line: only an absent plaintiff may be declared non-suited; an absent defendant merely lets the plaintiff present evidence ex parte. Examiners use this case to test the consequences of failure to appear at pre-trial under Rule 18 and the rule that Rule 45 reaches only questions of law.