G.R. No.

209605, January 12, 2015 or not a party who had been declared “as in default” might still
participate in the trial of the case. Only respondent, however,
complied with the directive. In its Order,9 dated April 27, 2011,
NEIL B. AGUILAR AND RUBEN
the MCTC held that since the proceedings were being heard ex
CALIMBAS, Petitioners, v. LIGHTBRINGERS CREDIT
parte, the petitioners who had been declared “as in default” had
COOPERATIVE, Respondent.
no right to participate therein and to cross-examine the
witnesses. Thereafter, respondent filed its formal offer of
DECISION evidence.10chanRoblesvirtualLawlibrary

MENDOZA, J.: MCTC Ruling

On May 9, 2012, the MCTC resolved the consolidated cases in

This is a petition for review on certiorari filed by petitioners Neil three separate decisions. In Civil Case No. 1428, 11 the MCTC
B. Aguilar (Aguilar) and Ruben Calimbas (Calimbas), seeking to dismissed the complaint against Tantiangco because there was
reverse and set aside the April 5, 20131  and October 9, no showing that she received the amount being claimed.
20132 Resolutions of the Court of Appeals (CA) in CA-G.R. SP Moreover, the PNB check was made payable to “cash” and was
No. 128914, which denied the petition for review outright, encashed by a certain Violeta Aguilar. There was, however, no
assailing the January 2, 2013 Decision3 of the Regional Trial evidence that she gave the proceeds to Tantiangco. Further, the
Court, Branch 5, Dinalupihan, Bataan (RTC) and the May 9, dates indicated in the cash disbursement voucher and the PNB
2012 Decision4 of the First Municipal Circuit Trial Court, check varied from each other and suggested that the voucher
Dinalupihan, Bataan (MCTC). could refer to a different loan.

In the lower courts, one of the issues involved was the proper The decisions in Civil Case No. 142912 and 1430,13 however,
application of the rules when a party does not appear in the found both Calimbas and Aguilar liable to respondent for their
scheduled pre-trial conference despite due notice. In this respective debts. The PNB checks issued to the petitioners
petition, the dismissal by the CA of the petition filed under Rule proved the existence of the loan transactions. Their receipts of
42 for failure to attach the entire records has also been put to the loan were proven by their signatures appearing on the
question, aside from the veracity of indebtedness issue. dorsal portions of the checks as well as on the cash
disbursement vouchers. As a matter of practice, banks would
The Facts allow the encashment of checks only by the named payee and
subject to the presentation of proper identification. Nonetheless,
This case stemmed from the three (3) complaints for sum of the MCTC ruled that only the amount shown in the PNB check
money separately filed by respondent Lightbringers Credit must be awarded because respondent failed to present its
Cooperative (respondent) on July 14, 2008 against petitioners bookkeeper to justify the higher amounts being claimed. The
Aguilar and Calimbas, and one Perlita court also awarded attorney’s fees in favor of respondent. The
Tantiangco (Tantiangco) which were consolidated before the dispositive portion of the decision in Civil Case No. 1429
First Municipal Circuit Trial Court, Dinalupihan, Bataan (MCTC). reads:chanroblesvirtuallawlibrary
The complaints alleged that Tantiangco, Aguilar and Calimbas 
were members of the cooperative who borrowed the following
WHEREFORE, premises considered, judgment is hereby
funds:chanroblesvirtuallawlibrary
rendered in plaintiff’s favor and against the defendant, ordering
the latter to pay plaintiff the amount of P60,024.00 with interest
1. In Civil Case No. 1428, Tantiangco allegedly borrowed at the rate of 12% per annum from April 4, 2007 until fully paid,
P206,315.71 as evidenced by Cash Disbursement plus P15,000.00 as attorney’s fees.
Voucher No. 4010 but the net loan was only
P45,862.00 as supported by PNB Check No. Costs against the defendant.
0000005133.5chanRoblesvirtualLawlibrary
SO ORDERED.14
2. In Civil Case No. 1429, petitioner Calimbas allegedly
borrowed P202,800.18 as evidenced by Cash And in Civil Case No. 1430, the dispositive portion
Disbursement Voucher No. 3962 but the net loan was states:chanroblesvirtuallawlibrary
only P60,024.00 as supported by PNB Check No.
0000005088;6chanRoblesvirtualLawlibrary WHEREFORE, premises considered, judgment is hereby
rendered in plaintiff’s favor and against the defendant, ordering
3. In Civil Case No. 1430, petitioner Aguilar allegedly the latter to pay the plaintiff the amount of ?76,152.00 with
borrowed P126,849.00 as evidenced by Cash interest at the rate of 12% per annum from February 28, 2007
Disbursement Voucher No. 3902 but the net loan was until fully paid.
only P76,152.00 as supported by PNB Check No.
0000005026;7 Defendant is further directed to pay attorney’s fees equivalent
to 25% of the adjudged amount.

Costs against the defendant.

Tantiangco, Aguilar and Calimbas filed their respective answers.
They uniformly claimed that the discrepancy between the SO ORDERED.15
principal amount of the loan evidenced by the cash
disbursement voucher and the net amount of loan reflected in On July 12, 2012, a notice of appeal16 was filed by the
the PNB checks showed that they never borrowed the amounts petitioners, and on August 15, 2012, they filed their joint
being collected. They also asserted that no interest could be memorandum for appeal17 before the Regional Trial Court,
claimed because there was no written agreement as to its Branch 5, Bataan (RTC). Aguilar and Calimbas argued out that
imposition. had they been allowed to present evidence, they would have
established that the loan documents were bogus. Respondent
On the scheduled pre-trial conference, only respondent and its produced documents to appear that it had new borrowers but
counsel appeared. The MCTC then issued the Order,8 dated did not lend any amount to them. Attached to the joint
August 25, 2009, allowing respondent to present evidence ex memorandum were photocopies of the dorsal portions of the
parte. Respondent later presented Fernando Manalili (Manalili), PNB checks which showed that these checks were to be
its incumbent General Manager, as its sole witness. In his deposited back to respondent’s bank account.
testimony, Manalili explained that the discrepancy between the
amounts of the loan reflected in the checks and those in the RTC Ruling
cash disbursement vouchers were due to the accumulated
interests from previous outstanding obligations, withheld share On January 2, 2013, the RTC rendered separate decisions in
capital, as well as the service and miscellaneous fees. He stated, Civil Case No. DH-1300-1218 and Civil Case No. DH-1299-
however, that it was their bookkeeper who could best explain 1219 which affirmed the MCTC decisions. It held that the PNB
the details. checks were concrete evidence of the indebtedness of the
petitioners to respondent. The RTC relied on the findings of the
Aguilar and Calimbas insisted that they should have the right to MCTC that the checks bore no endorsement to another person
cross-examine the witness of respondent, notwithstanding the or entity. The checks were issued in the name of the petitioners
fact that these cases were being heard ex parte. In the interest and, thus, they had the right to encash the same and
of justice, the MCTC directed the counsels of the parties to appropriate the proceeds. The decretal portions of the RTC
submit their respective position papers on the issue of whether decision in both cases similarly read:chanroblesvirtuallawlibrary

Page 1 of 4
WHEREFORE, premises considered, the appeal is hereby give a glance on the merits of their case brought before the CA.
DENIED. The Decision dated May 9, 2012 of the First Municipal
Circuit Trial Court (1st MCTC), Dinalupihan-Hermosa, Bataan is On February 7, 2014, respondent filed its comment26 contending
hereby affirmed in toto. that the petitioners had no excuse in their non-compliance with
Section 2, Rule 42. They claim that the court records were not
SO ORDERED. attached because these were soaked in flood water in August
2012, but the RTC rendered its decision in January 2013. The
On January 18, 2013, the petitioners filed their joint motion for petitioners failed to secure a certification from the RTC that
reconsideration/new trial20 before the RTC. Aguilar and Calimbas these records were indeed unavailable.
reiterated their position that they did not receive the proceeds
of the checks. As an alternative prayer, petitioners moved that On May 21, 2014, the petitioners filed their reply before this
the RTC remand the case to the MCTC for a new trial on account Court,27 adding that the elevation of the entire records of the
of the Sinumpaang Salaysay of Arcenit Dela Torre, the case was not a mandatory requirement, and the CA could
bookkeeper of respondent. exercise its discretion that it furnished with the entire records of
the case by invoking Section 7, Rule 42 of the Rules of
On February 11, 2013, the RTC issued separate orders 21 denying Court.cralawred
the motion of the petitioners. It explained that all the issues
were already passed upon and the supposed newly discovered The Court’s Ruling
evidence was already available during appeal, but the
petitioners failed to present the same in time.
First Procedural Issue
CA Ruling
On the sole assignment of error, the Court agrees with the
Aggrieved, Aguilar and Calimbas filed a petition for petitioners that Section 2, Rule 42 does not require that the
review22 before the CA on March 11, 2013. It was dismissed, entire records of the case be attached to the petition for review.
however, in the questioned resolution,23 dated April 5, 2013, The provision states:chanroblesvirtuallawlibrary
stating that the petition was formally defective because the
“verification and disclaimer of forum shopping” and the
Sec. 2. Form and contents. - The petition shall be filed in seven
“affidavit of service” had a defective jurat for failure of the
(7) legible copies, with the original copy intended for the court
notary public to indicate his notarial commission number and
being indicated as such by the petitioner, and shall (a) state the
office address. Moreover, the entire records of the case,
full names of the parties to the case, without impleading the
inclusive of the oral and documents evidence, were not attached
lower courts or judges thereof either as petitioners or
to the petition in contravention of Section 2, Rule 42 of the
respondents; (b) indicate the specific material dates showing
Rules of Court.
that it was filed on time; (c) set forth concisely a statement of
the matters involved, the issues raised, the specification of
A motion for reconsideration24 was filed by the petitioners which
errors of fact or law, or both, allegedly committed by the
sought the leniency of the CA. They attached a corrected
Regional Trial Court, and the reasons or arguments relied upon
verification and disclaimer of forum shopping and affidavit of
for the allowance of the appeal; (d) be accompanied by
service. They asked the CA to simply order the RTC to elevate
clearly legible duplicate originals or true copies of the
the records of the case pursuant to Section 7, Rule 42 of the
judgments or final orders of both lower courts, certified
Rules of Court. Moreover, the petitioners could not attach the
correct by the clerk of court of the Regional Trial Court,
records of the case because the flooding caused by “Habagat” in
the requisite number of plain copies thereof and of the
August 2012 soaked the said records in water.
pleadings and other material portions of the record as
would support the allegations of the petition. [Emphasis
In the other questioned resolution, dated October 9, 2013, the
and underscoring supplied]
CA denied the motion because the petitioners still failed to
attach the entire records of the case which was a mandatory
The abovequoted provision enumerates the required documents
requirement under Section 2, Rule 42.
that must be attached to a petition for review, to wit: (1) clearly
legible duplicate originals or true copies of the judgments or
Hence, this petition.
final orders of both lower courts, certified correct by the clerk of
court of the Regional Trial Court; (2) the requisite number of
SOLE ASSIGNMENT OF ERROR plain copies thereof; and (3) of the pleadings and other material
portions of the record as would support the allegations of the
THE COURT OF APPEALS COMMITTED GRAVE ABUSE OF petition. Clearly, the Rules do not require that the entire records
DISCRETION AMOUNTING TO LACK OR IN EXCESS OF of the case be attached to the petition for review. Only when
JURISDICTION WHEN IT DISMISSED THE PETITION FOR these specified documents are not attached in the petition will it
REVIEW FILED BEFORE IT BY THE PETITIONERS UNDER suffer infirmities under Section 3, Rule 42, which
RULE 42 OF THE RULES OF COURT CITING THAT THE SAID states:chanroblesvirtuallawlibrary
PETITION IS FORMALLY DEFECTIVE FOR FAILURE OF THE
PETITIONERS TO SUBMIT WITH THE SAID PETITION THE
Sec. 3. Effect of failure to comply with requirements. - The
ENTIRE RECORDS OF THE APPEALED CIVIL CASE NOS.
failure of the petitioner to comply with any of the foregoing
DH-1300-12 AND DH-1299-12.25
requirements regarding the payment of the docket and other
lawful fees, the deposit for costs, proof of service of the petition,
The petitioners argue that contrary to the findings of the CA,
and the contents of and the documents which should
they substantially complied with the required form and contents
accompany the petition shall be sufficient ground for the
of a petition for review under Section 2, Rule 42 of the Rules of
dismissal thereof.
Court. There is nothing in the provision which requires that the
entire records of the appealed case should be endorsed to the
In Canton v. City of Cebu,28 the Court discussed the importance
CA. Such requirement would definitely be cumbersome to poor
of attaching the pleadings or material portions of the records to
litigants like them.
the petition for review. “[P]etitioner’s discretion in choosing the
documents to be attached to the petition is however not
They assert that they submitted the following pleadings and
unbridled. The CA has the duty to check the exercise of this
material portions of the court records in their petition for
discretion, to see to it that the submission of supporting
review: (1) certified copies of the decisions, orders or
documents is not merely perfunctory. The practical aspect of
resolutions of the RTC and the MCTC; (2) complaints against the
this duty is to enable the CA to determine at the earliest
petitioners attached with documents used by respondent in its
possible time the existence of prima facie merit in the
formal offer of evidence; (3) answer of the petitioners;  (4)
petition.”29 In that case, the petition was denied because the
order of the MCTC declaring the petitioners in default; (5)
petitioner failed to attach the complaint, answer and appeal
respondent’s formal offer of evidence; (6) notice of appeal; (7)
memorandum to support their allegation.
joint memorandum of appeal; and (8) joint motion for
reconsideration/new trial. According to the petitioners, these
In Cusi-Hernandez v. Diaz,30 a case where the petitioner did not
pleadings and records were sufficient to support their petition
attach to her petition for review a copy of the contract to sell
for review.
that was at the center of controversy, the Court nonetheless
found that there was a substantial compliance with the rule,
Assuming that there was a reason to dismiss the petition on
considering that the petitioner had appended to the petition for
account of technicalities, the petitioners argue that the CA
review a certified copy of the decision of the MTC that contained
should not have strictly applied the rules of procedure and
a verbatim reproduction of the omitted contract.
provided leniency to the petitioners. They also ask the Court to

Page 2 of 4
 speedy disposition of cases. Hailed as the most important
Recently, in Galvez, v. CA,31 it was held that attaching the other procedural innovation in Anglo-Saxon justice in the nineteenth
records of the MTC and the RTC were not necessary based on century, it paved the way for a less cluttered trial and resolution
the circumstances of the case. The petitioner therein was not of the case. It is, thus, mandatory for the trial court to conduct
assailing the propriety of the findings of fact by the MTC and the pre-trial in civil cases in order to realize the paramount
RTC, but only the conclusions reached by the said lower courts objective of simplifying, abbreviating and expediting
after their appreciation of the facts. In dealing with the trial.37chanRoblesvirtualLawlibrary
questions of law, the CA could simply refer to the attached
decisions of the MTC and the RTC. In the case at bench, the petitioners failed to attend the pre-
trial conference set on August 25, 2009. They did not even give
Thus, the question in the case at bench is whether or not the any excuse for their non-appearance, manifestly ignoring the
petitioners attached the sufficient pleadings and material importance of the pre-trial stage. Thus, the MCTC properly
portions of the records in their petition for review. The Court issued the August 25, 2009 Order,38 allowing respondent to
rules that the petition was in substantial compliance with the present evidence ex parte.
requirements.
The MCTC even showed leniency when it directed the counsels
The assignment of error32 in the petition for review clearly raises of the parties to submit their respective position papers on
questions of fact as the petitioners assail the appreciation of whether or not Aguilar and Calimbas could still participate in the
evidence by the MCTC and the RTC. Thus, aside from the trial of the case despite their absence in the pre-trial
decisions and orders of the MCTC and the RTC, the petitioners conference. This gave Aguilar and Calimbas a second chance to
should attach pertinent portions of the records such as the explain their non-attendance and, yet, only respondent
testimony of the sole witness of respondent, the copies of the complied with the directive to file a position paper. The MCTC, in
cash disbursement vouchers and the PNB checks presented by its Order,39 dated April 27, 2011, properly held that since the
respondent in the MCTC. In the petition for review, the proceedings were being heard ex parte, Aguilar and Calimbas
petitioners attached respondent’s complaints before the MCTC had no right to participate therein and to cross-examine the
which contained the photocopies of the cash disbursement witness.
vouchers and PNB checks. These should be considered as ample
compliance with Section 2, Rule 42 of the Rules of Court. Thus, as it stands, the Court can only consider the evidence on
record offered by respondent. The petitioners lost their right to
Second Procedural Issue present their evidence during the trial and, a fortiori, on appeal
due to their disregard of the mandatory attendance in the pre-
Nevertheless, instead of remanding the case to the CA, this trial conference.
Court deems it fit to rule on the merits of the case to once and
for all settle the dispute of the parties. Substantive Issue

The rule is that a court can only consider the evidence And on the merits of the case, the Court holds that there was
presented by respondent in the MCTC because the petitioners indeed a contract of loan between the petitioners and
failed to attend the pre-trial conference on August 25, 2009 respondent. The Court agrees with the findings of fact of the
pursuant to Section 5, Rule 18 of the Rules of Court. 33 The MCTC and the RTC that a check was a sufficient evidence of a
Court, however, clarifies that failure to attend the pre-trial loan transaction. The findings of fact of the trial court, its
does not result in the “default” of the defendant. Instead, calibration of the testimonies of the witnesses and its
the failure of the defendant to attend shall be cause to allow the assessment of the probative weight thereof, as well as its
plaintiff to present his evidence ex parte and the court to render conclusions anchored on the findings are accorded high respect,
judgment on the basis thereof. if not conclusive effect.40chanRoblesvirtualLawlibrary

The case of Philippine American Life & General Insurance The case of Pua v. Spouses Lo Bun Tiong 41 discussed the weight
Company v. Joseph Enario34 discussed the difference between of a check as an evidence of a loan:chanroblesvirtuallawlibrary
non-appearance of a defendant in a pre-trial conference and the
declaration of a defendant in default in the present Rules of Civil In Pacheco v. Court of Appeals, this Court has expressly
Procedure. The decision states: recognized that a check constitutes an evidence of indebtedness
and is a veritable proof of an obligation. Hence, it can be used in
Prior to the 1997 Revised Rules of Civil Procedure, the phrase lieu of and for the same purpose as a promissory note. In fact,
"as in default" was initially included in Rule 20 of the old rules, in the seminal case of Lozano v. Martinez, We pointed out that a
and which read as follows:ChanRoblesVirtualawlibrary check functions more than a promissory note since it not only
Sec. 2. A party who fails to appear at a pre-trial conference may contains an undertaking to pay an amount of money but is an
be non-suited or considered as in default. "order addressed to a bank and partakes of a representation
It was however amended in the 1997 Revised Rules of Civil that the drawer has funds on deposit against which the check is
Procedure. Justice Regalado, in his book REMEDIAL LAW drawn, sufficient to ensure payment upon its presentation to the
COMPENDIUM, explained the rationale for the deletion of the bank." This Court reiterated this rule in the relatively recent Lim
phrase "as in default" in the amended provision, to v. Mindanao Wines and Liquour Galleria stating that a check, the
wit:ChanRoblesVirtualawlibrary entries of which are in writing, could prove a loan transaction.42
1. This is a substantial reproduction of Section 2 of the former
Rule 20 with the change that, instead of defendant being There is no dispute that the signatures of the petitioners were
declared "as in default" by reason of his non-appearance, this present on both the PNB checks and the cash disbursement
section now spells out that the procedure will be to allow the ex vouchers. The checks were also made payable to the order of
parte presentation of plaintiff’s evidence and the rendition of the petitioners. Hence, respondent can properly demand that
judgment on the basis thereof. While actually the procedure they pay the amounts borrowed. If the petitioners believe that
remains the same, the purpose is one of semantical propriety or there is some other bogus scheme afoot, then they must
terminological accuracy as there were criticisms on the use of institute a separate action against the responsible personalities. 
the word "default" in the former provision since that term is Otherwise, the Court can only rule on the evidence on record in
identified with the failure to file a required answer, not the case at bench, applying the appropriate laws and
appearance in court. jurisprudence.

If the absent party is the plaintiff, then his case shall be As to the award of attorney’s fees, the Court is of the view that
dismissed. If it is the defendant who fails to appear, then the the same must be removed. Attorney's fees are in the concept
plaintiff is allowed to present his evidence ex parte and the of actual or compensatory damages allowed under the
court shall render judgment on the basis thereof. Thus, the circumstances provided for in Article 2208 of the Civil Code, and
plaintiff is given the privilege to present his evidence without absent any evidence supporting its grant, the same must be
objection from the defendant, the likelihood being that the court deleted for lack of factual basis.43 In this case, the MCTC merely
will decide in favor of the plaintiff, the defendant having stated that respondent was constrained to file the present suit
forfeited the opportunity to rebut or present his own on account of the petitioners’ obstinate failure to settle their
evidence.35chanRoblesvirtualLawlibrary obligation. Without any other basis on record to support the
award, such cannot be upheld in favor of respondent. The
The pre-trial cannot be taken for granted. It is not a mere settled rule is that no premium should be placed on the right to
technicality in court proceedings for it serves a vital objective: litigate and that not every winning party is entitled to an
the simplification, abbreviation and expedition of the trial, if not automatic grant of attorney’s
indeed its dispensation.36More significantly, the pre-trial has fees.44chanRoblesvirtualLawlibrarychanrobleslaw
been institutionalized as the answer to the clarion call for the

Page 3 of 4
WHEREFORE, the petition is PARTIALLY GRANTED.

In accord with the discourse on the substantive issue, the

January 2, 2013 decision of the Regional Trial Court, Branch 5,
Dinalupihan, Bataan, is AFFIRMED. The award of attorney's
fees is, however, DELETED.

SO ORDERED.cralawlawlibrary

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