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[PHILIPPINE NATIONAL BANK v. ILONE CONSTRUCTION GO.](https://www.lawyerly.ph/juris/view/c2f1c?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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105 Phil. 703

[ G.R. No. L-9636, May 15, 1959 ]

PHILIPPINE NATIONAL BANK, PLAINTIFF AND APPELLEE, VS. ILONE CONSTRUCTION GO., INC., AND PIO JOVEN, DEFENDANTS AND APPELLANTS.

D E C I S I O N

ENDENCIA, J.:

This appeal has been certified to this Tribunal by  the Court of Appeals in its Resolution of July 14, 1955, not only because the lone question raised  is purely of law, but also for the  reason that  the   amount  involved  exceeds P50,000.

After the issues have been joined in civil case No. 14121 of the court of first instance of Manila, entitled Philippine National Bank, plaintiff, versus Hone Construction Co., Inc., and Pio Joven, defendants, for the collection of an aggregate amount of P134,623.93 spread over six causes of action, plus  interest  and attorney's  fees; and after several postponements, its  hearing was finally set for September 18, 1953, at 2:30 p.m., with due notice to the parties.  On September 17th, the day prior to the scheduled hearing, however, Atty. Jimenez B. Buendia for the defendants filed an urgent motion dated September 15th and served upon plaintiff's counsel on September 16th, praying for the postponement of the hearing "to another date next week  or soon thereafter as the Court calendar permits,"  by reason of the illness of his client expressed in  a telegram from Bangued, Abra. which was attached to said motion.  The record does not show any written or verbal order of the lower court either  denying the motion or  postponing the hearing to another  date; neither is there  a showing of any notice to the parties relative to the action taken  thereof, if any, by the  court.   For  unknown reasons, however, and without written or verbal notice to defendants or their counsel, the hearing was calendared for October 15, 1953,  at 8:30 a.m.  Again there is no showing what transpired  on that date and hour as there was no order issued by the court, either written or verbal, nor minutes taken of the proceedings.

From the transcript of stenographic notes purportedly taken down on the morning of October 17, 1953,  we gather that presiding Judge Demetrio B. Encarnacion allegedly commissioned deputy clerk of court Vicente Guasch  who, in turn, supposedly deputized stenographer B.  Ma.  Punsalan, ;to  receive the evidence in  the case.  Said transcript is prefixed in the following language;

"TRANSCRIPT

of the stenographic notes taken  down by the undersigned Court Stenographer during the hearing of the above-entitled and numbered case had in open court, before him, duly deputized or commissioned, thru the Deputy Clerk of the Branch of this  Court, by the Hon. DEMETRIO B. ENCARNACION, Judge presiding over this Sala, to  receive the evidence in said case.  (See Court Order to the effect.)

October 17, 1953
Morning Session"

It appears,  however, that there was no written order  of deputation,  or minutes showing it  other than the aforequoted headnote  of stenographer Punsalan made  in his transcript.  Neither was  there a written order setting the hearing before the stenographer on October 17,1953, or any notice to defendants' counsel to that effect.

On the aforesaid  date,  plaintiff presented its evidence before the stenographer in the absence of defendants and their counsel,  and on the  basis of the evidence thus taken, Judge  Encarnacion rendered  a decision  in favor  of the plaintiff, dated May 4, 1954,  at Pasig, Rizal,  for Manila, wherein, among  others, His  Honor stated  "Celebrose  la vista de esta causa el  dia 17  de Octubre de 1958, comparecio  el abogado Angel  Ilagan,  en representation  de  la entidad demandante, no habiendolo hecho los demandados, ni ninguna persona en su representacion."  Upon receipt  on May 12, 1954, of the copy of the decision, Atty. Buendia for the defendants filed a verified motion to set aside the judgment  not only on the ground that it was based upon  an ex-parte hearing conducted merely by a  stenographer who was not duly  deputized, but that counsel never has been notified of the hearing.  Judge Froilan Bayona, who took the  place  of Judge  Encarnacion  and before  whom said motion was heard, denied the petition in his order dated July 12, 1954.  On July 17, 1954, Atty.  Buendia, now  in representation only of Hone  Construction Co.,  Inc., filed a verified motion for reconsideration. Meantime, the other defendant, Pio Joven, engaged the services of the law firm of Diaz & Baizas who, on  July 18, 1954, also filed a verified motion for the reconsideration of the order of July 12th. Both motions having been denied, the two defendants filed separate motions for new  trial, which were likewise denied by the  court in its order  of July  31, 1954.  Hence  the appeal.

Appellant  Pio Joven claims that  the lower court erred
"in trying the above-entitled case  on October  15,  1958, without previous  proper notice thereof to the defendants-appellants or their counsel, resulting in the failure of the latter to attend and to present their  evidence at such trial, and in subsequently rendering judgment on the basis, solely of the plaintiff-appellee's evidence, in violation of the fundamental constitutional right  of every  person of  due process before he may be deprived of either life, liberty or property."
and  appellant  Ilone Construction Co., Inc., assigns  quite the same error in the following language:
"The lower court erred in deciding this case on May 4, 1954, a copy of which was  received on May 12, 1954,  because said decision  was rendered after an ex-parte hearing, without notice to the defendants-appellants who filed their answer with counterclaim in accordance with  the Rules of Court and the law, and  the decision is in violation of the fundamental constitutional right of every person to be heard under the due process clause of the  Constitution before  he may be deprived of life, liberty or property,"
The  appeal  is justified.  As  related in the  facts  set down hereinbefore, the petition for postponement  filed by appellants on September 17th has never been acted upon by the  court, otherwise the action  taken would have  appeared  in a written order.   This, however, does  not exist. And even if such order were ever entered, the defendants or their counsel were never notified thereof.

With regard  to  the  authority given to  deputy  clerk Vicente Guash to receive the evidence, no formal order to that effect is found in the record; neither  was any written order issued authorizing  stenographer Punsalan to receive the evidence, and were such authority given verbally,  the defendants were certainly never notified thereof.

As to the reception of evidence before the stenographer scheduled for the morning of October 17, 1953, again no order was issued to that effect, nor notice sent to defendants for the purpose.  It could not  be said, either,  that said defendants were in default and therefore not entitled to notice, as they have duly filed their answer to the complaint. The  mere fact that defendants failed to appear at the scheduled hearing on September 18th on account of their having filed an urgent petition  for postponement the day before, does not deprive them of their right to be notified of any and all ulterior proceedings, specially with regard the presentation of evidence.

Considering  that  the  sum  claimed in the  complaint amounts to P134,623.93, plus interest, the lower court, m deciding the case in favor of the plaintiff without giving defendants any opportunity, for lack of notice, to present their defense and adduce  evidence  in support  of their counterclaim in the sum of P292,000,  has certainly  denied them their right to due process and  to have their  day in court; consequently, the decision is null and void ab initio.

Under the Rules of Court, the clerk of court is charged with the duty to  serve notice of hearings and postponements to the parties, either personally or by  mail, so that they could  appear and have their day in court during the trial of their cases.   In the case at bar, however, the defendants were  not notified 1)  of  the resolution, if any regarding  their  urgent motion for  postponement  dated September  15th,  and 2) of the hearing before either deputy clerk  Guash or stenographer  Punsalan,  by reason of which  they failed to  appear.

Plaintiff contends,  however,  that  the defendants have no right to ask this Tribunal to set aside the decision because they  did not take any step to ascertain the status of the  case, thus  they were guilty of  negligence and have abandoned  their interest.  This reasoning does not merit serious consideration, for it is a naked fact that the court never entered a formal order either granting or denying the  motion for  postponement of September  15th,  and if there were a verbal  resolution at all on the matter, the defendants were certainly not  notified thereof.  Plaintiff likewise claims that the defendants have no right to assume that their  motion for postponement  would be granted by the court; but again it is undisputed that the presentation of evidence was postponed because the court delegated its reception to  deputy clerk  Guash  who, in  turn,  deputized stenographer Punsalan to receive and take it down.  Indeed this is a case wherein glaringly improper procedure has been adopted notwithstanding that the amount involved is quite  considerable.

Wherefore, the decision appealed from is  hereby  set aside,  and the case remanded to  the court of origin for further proceedings, without costs.

Paras,  C.  J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, and Concepcion, JJ.,  concur.

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