In Booklight, Inc. v. Rudy O. Tiu, the Supreme Court addressed the repercussions of a party’s failure to participate in pre-trial proceedings. The Court upheld the lower courts’ decisions, emphasizing that a party declared non-suited due to absence from pre-trial loses the right to present evidence. This ruling reinforces the importance of adhering to court procedures and the consequences of failing to do so, particularly concerning the presentation of evidence and the review of factual matters on appeal. It also clarified the procedural aspects related to the execution of judgments and the satisfaction thereof from attached properties, ensuring adherence to due process.

Lost in Procedure: Can a Party Overturn a Default Judgment Due to Missed Pre-Trial?

This case stems from a collection suit filed by Rudy O. Tiu (respondent) against Booklight, Inc. (petitioner) for unpaid rentals. Booklight, the bookstore, leased space from Tiu, but the relationship soured when alleged unpaid rentals accumulated after the lease period. Tiu filed a case, and a writ of attachment was issued, affecting Booklight’s properties and funds. However, Booklight’s failure to file a pre-trial brief and appear at the pre-trial conference led to the RTC declaring them non-suited, meaning they were effectively defaulted. The central legal question revolves around whether Booklight could later appeal factual findings when it had been prevented from presenting evidence due to its procedural default. The court proceedings then continued with Tiu presenting his evidence ex parte.

The RTC ruled in favor of Tiu, ordering Booklight to pay a substantial sum for unpaid rentals, attorney’s fees, litigation expenses, and other charges. On appeal, the CA affirmed the RTC’s decision but modified it by deleting the awards for legal interest, security service expenses, litigation expenses, and attorney’s fees. Dissatisfied, Booklight elevated the case to the Supreme Court, arguing that the CA failed to address its claims for a refund of advanced rental and deposit, and that the electric bills included in the judgment were for a period after it had ceased operations. Additionally, Booklight sought credit for the alleged proceeds from the auction sale of its attached goods and garnished funds.

The Supreme Court denied Booklight’s petition, firmly grounding its decision on the procedural lapse committed by Booklight. The Court reiterated the general principle that petitions for review under Rule 45 of the Rules of Court should only cover questions of law, not factual issues. The Court acknowledged exceptions to this rule but found none applicable in this case. The Court pointed out that the questions raised by Booklight—regarding the advanced rental and deposit, the electric bills, and the proceeds of the auction sale—were all factual in nature, requiring an examination of evidence that Booklight had forfeited its right to present.

Building on this principle, the Court emphasized the consequence of Booklight being declared non-suited. Because of this declaration, the Court highlighted that Booklight had lost its right to present evidence to support its claims. The absence of any evidence on record to substantiate Booklight’s claims regarding advanced rental, deposit refunds, or the period covered by the electric bills proved fatal to its case. The Court found no basis to deviate from the findings of the RTC, as affirmed by the CA, regarding these matters.

Concerning the proceeds from the auction sale of attached properties, the Supreme Court deemed this issue not properly before it. The Court noted the factual dispute regarding the amount of the proceeds, with Booklight alleging a significantly larger sum than what the respondent claimed was turned over to the RTC Clerk of Court. These were factual matters that should be presented before, and determined by, the trial court during the execution of the final judgment. As the Court emphasized that a writ of execution had not been issued, it would be unwarrantedly premature to rule on the matter. The Court clarified that its intervention would only be warranted if the sheriff refused to follow the outlined procedure in the execution of judgment under the Rules.

Furthermore, the Supreme Court clarified that the satisfaction of judgment out of property attached is not mandatory. Citing Section 15, Rule 57 of the Rules of Court, the Court pointed out that the use of the word “may” makes the procedure directory, meaning the sheriff has discretion. The sheriff may disregard the attached properties and proceed against other properties of the judgment debtor, if necessary. In the case, 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 .”

The Court in Booklight, Inc. v. Rudy O. Tiu also took the opportunity to clarify the terminology used by the lower courts. While it was correct to allow respondent to present his evidence ex parte for petitioner’s failure to file a pre-trial brief and to appear in the pre-trial conference, it was not proper for petitioner, being the defendant in the case, to be declared “non-suited” under the Rules of Court. The Court clarified that Section 5, Rule 18 of the Rules of Court provides that if the absent party is the plaintiff, then he may be declared non-suited and his case dismissed; if it is the defendant who fails to appear, then the plaintiff may be allowed to present his evidence ex parte and the court to render judgment on the basis thereof.

In conclusion, the Supreme Court affirmed the CA’s decision, underscoring the importance of adhering to procedural rules and the consequences of failing to do so. The Court emphasized that issues related to the execution of judgment should be addressed before the trial court in the proper execution proceedings.

FAQs

What was the key issue in this case?	The key issue was whether the petitioner could appeal factual findings when it had been declared non-suited for failing to file a pre-trial brief and appear at the pre-trial conference, thus losing the right to present evidence.
What does it mean to be declared “non-suited”?	To be declared non-suited means that a party, typically the plaintiff, has failed to prosecute their case, leading to its dismissal. In this case, the court incorrectly declared the defendant non-suited; the correct procedure would have been to allow the plaintiff to present evidence ex parte.
What is the significance of a pre-trial conference?	A pre-trial conference is a crucial stage in litigation where parties and the court discuss case management, simplification of issues, and the possibility of settlement. Failure to participate can lead to adverse consequences, such as being declared non-suited or having evidence presented ex parte.
What does “ex parte” presentation of evidence mean?	“Ex parte” presentation of evidence means that one party presents evidence without the other party being present or having the opportunity to cross-examine witnesses or present opposing evidence. This typically occurs when the other party has defaulted or failed to participate in the proceedings.
Can factual findings be appealed to the Supreme Court?	Generally, the Supreme Court only reviews questions of law, not questions of fact. Factual findings made by lower courts are typically binding unless there are exceptional circumstances, such as a clear error or misapprehension of facts.
What happens to attached properties after a judgment?	After a judgment, attached properties may be used to satisfy the judgment debt. However, the sheriff has discretion in how to proceed, and the judgment creditor must move for execution of the judgment before the attached properties can be sold or used to satisfy the debt.
Is the satisfaction of judgment from attached properties mandatory?	No, the satisfaction of judgment from attached properties is not mandatory. The sheriff may choose to proceed against other properties of the judgment debtor if necessary.
What is the proper procedure for executing a judgment?	The proper procedure for executing a judgment involves the prevailing party moving for execution before the trial court, submitting certified copies of the judgment, and providing notice to the adverse party. The trial court then issues a writ of execution to the sheriff, who enforces the judgment.

This case underscores the importance of procedural compliance in legal proceedings. Booklight’s failure to adhere to court rules resulted in the loss of its opportunity to present evidence and challenge the claims against it. The Supreme Court’s decision serves as a reminder of the consequences of procedural missteps and the need for diligent participation in all stages of litigation.

For inquiries regarding the application of this ruling to specific circumstances, please contact ASG Law through contact or via email at frontdesk@asglawpartners.com.

Disclaimer: This analysis is provided for informational purposes only and does not constitute legal advice. For specific legal guidance tailored to your situation, please consult with a qualified attorney.
Source: Booklight, Inc. v. Rudy O. Tiu, G.R. No. 213650, June 17, 2019