CHINA BANKING CORPORATION, PLAINTIFF AND APPELLEE, VS. CHAN QUAN PANG ET AL., DEFENDANTS. CHA CHAT ET AL., APPELLANTS.

This
is an appeal taken by the defendants Cha Chat, Yee Ah On, Lun Hing
Tong, Yu Ping and Lui Kang from the judgment rendered by the Court of
First Instance of Manila, the dispositive part of which reads as
follows:

“Wherefore, let judgment be
entered against the defendant, Chan Quan Pang, ordering him to pay to
the plaintiff banking corporation, or to deposit in the office of the
clerk of this court within ninety (90) days from the date this judgment
becomes final, the sum of one hundred twenty-two thousand three hundred
sixty-four pesos and twenty-two centavos (P122,364.22) together with
the interest thereon at the rate of 12 per centum per annum from June
19, 1931, plus the sum of two thousand pesos (P2,000) for attorney’s
fees instead of the 10 per cent stipulated in the mortgage deed, with
costs of the suit; with the understanding that if payment thereof is
not made within the period above stated, the mortgaged land situated on
the southwestern side of Cuevas Street, Paco, and described in transfer
certificate of title No. 26087 of the register of deeds of the City of
Manila, together with the buildings and improvements thereon, shall be
ordered sold at public auction, the proceeds thereof to be applied to
the payment of the judgment. So ordered.”

In support of their appeal, the appellants assign the following alleged errors as committed by the court a quo in its decision, to wit:

“1.
The trial court erred in not setting aside its order of December 15,
1931, which reinstated and put into full force and effect its decision
rendered in this case on June 18, 1931.

“2. The trial
court erred in not holding that the defendants and appellants are
entitled to the relief they asked under section 113 of the Code of
Civil Procedure.

“3. The trial court erred in denying the
motion of the defendants and appellants for a new trial or a reopening
of the case notwithstanding the fact that its decision in question is
contrary to law and not justified by the evidence.”

On July 24 1930, the herein defendants and appellants, representing the
stockholders of the corporate entity Central Steam Laundry, and the
said corporation itself, brought an action in the Court of First
Instance of Manila, docketed as civil case No. 37680, against the board
of directors of the aforesaid corporation composed of Chan Quan Pang,
A. Sing, Cheng Ah Soy, Sam Lee, and Wong Tong, and the register of
deeds of the City of Manila, Gloria de Icaza de Massip, Julia de Icaza
Vda. de Casanovas and the China Banking Corporation, for the purpose of
annulling the said of the land described in certificate of title No.
14472 and in transfer certificate of title No. 26087, together with the
improvements thereon, alleging as their ground that it was fraudulently
and illegally acquired by Chan Quan Pang, then vice-president,
treasurer and director, at the same time, of the aforementioned Central
Steam Laundry.

The corresponding notice of litispendencia was served on December 3, 1930, and was noted on the reverse side of the transfer certificate of title No. 26087 (Exhibit P).

On October 16, 1930, the China Banking Corporation filed an action,
from which the present cause originated, in the same Court of First
Instance of the City of Manila, docketed as civil case No. 38274, to
recover from Chan Quan Pang the sum of P116,452.72 with interest
thereon at the rate of 12 per cent per annum, and in default of payment
thereof, to foreclose the mortgage constituted by the said defendant as
security for the payment of his debt to the said China Banking
Corporation. Inasmuch as this mortgaged property in question is the
same property which is involved in civil case No. 37680, the plaintiffs
in the latter case, Cha Chat et al., were included as party defendants
herein.

The China Banking Corporation, defendant in civil
case No. 37680, interposed a general denial and as a special defense
alleged that the action of the plaintiffs had prescribed.

In
civil case No. 38274, the defendant Chan Quan Pang never answered the
complaint nor appeared at the trial. The other defendants Cha Chat and
others filed their answer of general denial and interposed three
special defenses and requested that the two cases Nos. 37680 and 38274
be tried together on the ground that the same subject matter and
substantially the same parties are involved therein.

When
the two cases were called for trial on June 18, 1931, the
aforementioned defendants Cha Chat, Yee Ah On, Lun Hing Tong, Yu Ping
and Lui Kang, and their attorney Pedro Arteche, as well as Chan Quan
Pang, did not appear in spite of the fact that they were duly notified
of the said trial. Consequently, the court a quo declared
them in default and proceeded to receive the evidence of the plaintiff
China Banking Corporation, at the conclusion of which judgment was
rendered, ordering Chan Quan Pang to pay to the said corporation the
sum of P122,364.22 plus interest thereon and the sum of P2,000 as
attorney’s fees, or in default of payment thereof the mortgage
constituted by Chan Quan Pang shall be foreclosed to satisfy said
judgment.

The following day, June 19, 1931, the defendants,
Cha Chat et al., filed a motion asking, for the reasons stated therein,
that the decision rendered by the court on June 18, 1931, be set aside
and that civil case No. 38274 be set for hearing on August 4, 1931, the
day on which the other civil case No. 37680 was to be tried.

Granting said petition and that of July 13, 1931, the court a quo,
by its order of July 25, 1931, set aside its decision rendered in this
case on June 18, 1931, and decreed that the same be heard on August 4,
1931, together with civil case No. 37680.

Upon petition of the attorney for the said defendants, Cha Chat et al., the court a quo, for the last time, postponed the trial of the two cases to December 15, 1931.

When the civil case No. 37680 was called for hearing on December 15,
1931, Attorney Joaquin Yuseco appeared for the defendant-appellants who
were also present in court and asked for the postponement of the
hearing. The court denied the petition and ordered the said
defendant-appellants to present their evidence. The aforesaid attorney,
Joaquin Yuseco, stated in open court that he was not ready to proceed
with the trial. In view of this statement, the court a quo ordered the dismissal of the aforementioned civil case No. 37680.

The court a quo,
then, called this case for trial. The defendant-appellants who were
present, instead of appearing for themselves or through their attorney,
Joaquin Yuseco, left the court with their said attorney. In view of
this attitude of the defendant-appellants, the court a quo,
by its order dated December 15,1931, reinstated its decision of June
18, 1931, reproducing the dispositive part thereof which was quoted
above.

The principal question to be decided in this appeal
is whether or not, in accordance with the provisions of section 113 of
the Code of Civil Procedure, the defendant-appellants are entitled to
be relieved from the effects of the judgment by default of June 18,
1931, which was restored to its original force and effect by the
court’s order dated December 15, 1931.

In the motion filed
by the defendant-appellants on January 25, 1932, praying that the lower
court set aside its decision of June 18, 1931, and order a new hearing,
they alleged as their ground that they were deprived of their right to
be heard through error, inadvertence, surprise and excusable neglect.

As may be noted from the foregoing, the defendants themselves asked the
court that civil cases Nos. 37680 and 38274 be tried together on June
18, 1931, which petition was granted by the court in its order dated
March 24, 1931. Notwithstanding the fact that the said
defendant-appellants had been duly notified of the date of the hearing,
they neither appeared personally nor through their attorney, Pedro
Arteche. In view of their non-appearance, the court declared them in
default and after hearing the evidence presented by the
plaintiff-appellee, China Banking Corporation, rendered judgment in
civil case No. 38274. The aforesaid court, however, was very
accommodating for, on July 25, 1931, granting the petitions of the
defendants’ attorney, Pedro Arteche, dated June 19, and July 13, 1931,
it entered an order setting aside its decision of June 18, 1931, and
ordered a new hearing of the cases in question on August 4, 1931. Upon
petition of Attorney Pedro Arteche, the hearing of the two cases was
postponed for the last time to December 15, 1931, the date on which the
defendant-appellants refused to present evidence in civil case No.
37680 or appear as defendants in civil case No. 38274, thus causing the
dismissal of the first case and the reinstatement of the decision
rendered in the second case on June 1&, 1931.

The motion
for a new trial based on the ground of alleged excusable negligence
filed on January 25, 1932, was a second motion and referred to the
order entered on December 15, 1931, which reinstated the judgment by
default of June 18, 1931. During the hearing held on December 15, 1931,
the defendant-appellants not only refused to present their evidence as
plaintiffs in the aforementioned civil case No. 37680 giving as their
reason therefor that they were not prepared to do so, but also refused
to appear as defendants in civil case No. 38274, notwithstanding the
fact that they were accompanied by their attorney.

Hence,
the defendant-appellants were not in any way justified in not
presenting their evidence as plaintiffs in the said civil case No.
37680 and as defendants in civil case No. 38274, and they cannot now
claim that they have been deprived of their day in court without any
fault on their part.

Wherefore, there being no error in the judgment appealed from, it is hereby affirmed in toto, with the costs against the appellants. So ordered.

Malcolm, Abad Santos, Hull, and Imperial, JJ., concur.