Uy vs. First Metro Integrated Steel Corp.

A motion for new trial grounded on excusable negligence requires that the negligence be one which ordinary diligence and prudence could not have guarded against, and must be accompanied by an affidavit of merit stating facts—not mere conclusions or opinions—constituting a valid defense the movant may prove if a new trial is granted; repeated failure of counsel to attend scheduled hearings without justification constitutes inexcusable negligence, and the client's concurrent negligence in failing to monitor the progress of the case bars relief.

First Metro Integrated Steel Corporation (FMISC) is a private corporation engaged in the sale of deformed steel bars. Petitioner Elpidio S. Uy issued a Metrobank check in the amount of ₱695,811.00 as payment for steel bars delivered to Midland Integrated Construction Company (MICC) and Robert Juan Uy (Robert). The check was dishonored upon presentment, prompting FMISC to file a complaint for sum of money with prayer for a writ of preliminary attachment. The dispute centers on whether petitioner's repeated failure to present evidence—attributed to his counsel's negligence—entitled him to a new trial under the Rules of Court.

On July 5, 1999, FMISC filed a complaint for sum of money with prayer for a writ of preliminary attachment against Robert Juan Uy, Midland Integrated Construction Company (MICC), and petitioner Elpidio S. Uy before the Regional Trial Court of Manila, Branch 3, docketed as Civil Case No. 99-94408. The complaint alleged that on June 3, 5, and 6, 1998, FMISC delivered deformed steel bars valued at ₱695,811.00 to MICC, Robert, and petitioner. On June 9, 1998, Robert delivered to FMISC Metrobank Check No. 042892 in the amount of ₱695,811.00, issued by petitioner as payment. The check was dishonored upon presentment, and despite demands, all three refused to pay.

In their Answer with Counterclaim and Crossclaim, Robert and MICC alleged they were strangers to the contract between FMISC and petitioner, that Robert merely referred petitioner to FMISC, and that petitioner left his check in Robert's office which was picked up by FMISC's collector. They further claimed the steel bars were delivered to and received by petitioner's representatives, as certified by Paul Eldrich V. Uy, petitioner's son. Petitioner, in his own Answer with Counterclaim, claimed he had no business transaction with FMISC; he admitted issuing the check but stopped payment because it was not intended as payment to FMISC.

After the reception of evidence for FMISC, Robert, and MICC, the trial court set the initial hearing for petitioner's evidence on February 28, 2001. This was cancelled because petitioner allegedly had influenza. The hearing was reset to April 26, 2001 and May 10, 2001, but was again cancelled and moved to October 25, 2001 and December 13, 2001. During the October 25, 2001 hearing, petitioner was represented by Atty. Lucas C. Carpio, Jr. as collaborating counsel, but no evidence was presented and the hearing was cancelled and rescheduled to December 13, 2001. On December 10, 2001, Atty. Molina withdrew his appearance as petitioner's counsel with petitioner's consent. On December 13, 2001, Atty. Danilo Bañares entered his appearance and requested a resetting to February 14 and 28, 2002, which was granted.

On February 14, 2002, Atty. Bañares appeared but instead of presenting evidence, requested another postponement. On February 28, 2002, Atty. Bañares arrived late. Upon motion of FMISC, the trial court ordered that petitioner's right to present evidence was deemed waived and directed the parties to file their respective memoranda. The case was deemed submitted for decision on November 18, 2002. On March 7, 2003, the trial court rendered judgment ordering petitioner to pay ₱690,000 with 12% interest per annum from July 1998 until fully paid, ₱110,000 as attorney's fees, and costs of suit. Petitioner received a copy of the decision on April 4, 2003.

On April 21, 2003, petitioner through Atty. Carpio, Jr. filed a Motion for New Trial on the ground of gross negligence of his counsel in failing to attend the hearing for reception of evidence, allegedly impairing his right to due process. The trial court denied the motion in an Order dated October 1, 2003. Petitioner then filed a petition for certiorari with the Court of Appeals, which dismissed the petition on August 27, 2004, holding that the motion for new trial was filed out of time and that certiorari was not the proper remedy. The CA denied reconsideration on February 22, 2005, prompting the present petition.

• Timeliness and Proper Remedy: Petitioner argued that the Court of Appeals erred in denying due course to the petition for certiorari on technical grounds, specifically the purported failure to file the motion for new trial within the reglementary period and the assertion that the only remedy for denial of a motion for new trial is appeal rather than certiorari under Rule 65.
• Grave Abuse of Discretion: Petitioner maintained that the trial court committed grave abuse of discretion tantamount to lack or excess of jurisdiction in denying the motion for new trial, asserting that his counsel's gross negligence in failing to attend hearings deprived him of due process.

• Timeliness of Filing: Whether the motion for new trial was filed within the reglementary period, given that the last day for filing fell on a Saturday.
• Propriety of Certiorari: Whether a petition for certiorari under Rule 65 is the proper remedy from an order denying a motion for new trial.
• Excusable Negligence: Whether the negligence of petitioner's counsel in failing to attend seven scheduled hearings constitutes excusable negligence warranting a new trial under Rule 37.
• Sufficiency of Affidavit of Merit: Whether the affidavit of merit accompanying the motion for new trial satisfied the requirement of stating facts constituting a valid defense.
• Deprivation of Due Process: Whether petitioner's counsel's negligence amounted to a deprivation of due process of law.

• Timeliness of Filing: Yes. The motion was filed on time, April 21, 2003 being the next working day following April 19, 2003, a Saturday, pursuant to Section 1, Rule 22 of the Rules of Court.
• Propriety of Certiorari: Yes. A petition for certiorari under Rule 65 is the proper remedy from an order denying a motion for new trial, since Section 1, Rule 41 expressly provides that no appeal may be taken from such an order and that the aggrieved party may file the appropriate special civil action under Rule 65.
• Excusable Negligence: No. Counsel's failure to attend seven scheduled hearings without justification constituted inexcusable negligence, not the excusable neglect required under Section 1, Rule 37, as ordinary diligence and prudence could have guarded against it.
• Sufficiency of Affidavit of Merit: No. The affidavit of merit contained only conclusions—"meritorious defense" and "good cause"—rather than factual statements showing the nature and merit of the defense petitioner could prove if a new trial were granted.
• Deprivation of Due Process: No. Petitioner was given multiple opportunities to be heard and to present evidence but squandered them; the right to due process safeguards the opportunity to be heard, not the right to compel a court to wait indefinitely.

• Timeliness of Filing: The records disclosed that while the motion for new trial was received by the trial court on April 28, 2003, the Registry Receipt and the stamp on the envelope showed it was filed and served by registered mail on April 21, 2003, a Monday. April 19, 2003—the last day for filing—fell on a Saturday. Section 1, Rule 22 of the Rules of Court provides that if the last day of the period falls on a Saturday, Sunday, or legal holiday, the time shall not run until the next working day. The motion was therefore filed on the next working day and was timely.

• Propriety of Certiorari: Section 9, Rule 37 provides that the remedy for an order denying a motion for new trial is to appeal the judgment or final order. However, this provision must be read in conjunction with Section 1, Rule 41, which states that no appeal may be taken from an order denying a motion for new trial or reconsideration, and that in such instances the aggrieved party may file an appropriate special civil action under Rule 65. The filing of a petition for certiorari with the Court of Appeals from the denial of the motion for new trial was therefore proper.

• Excusable Negligence: Section 1, Rule 37 permits a motion for new trial on grounds of fraud, accident, mistake, or excusable negligence which ordinary prudence could not have guarded against. Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against. The trial court scheduled the hearing for reception of petitioner's evidence seven times. The first was cancelled due to influenza; subsequent hearings were cancelled or postponed at counsel's request without justification. On October 25, 2001, collaborating counsel Atty. Carpio, Jr. appeared but presented no evidence. On December 13, 2001, new counsel Atty. Bañares requested a resetting. On February 14, 2002, Atty. Bañares moved for postponement. On February 28, 2002, he arrived late. The trial court accommodated these requests to accord petitioner due process, but counsel's failure to attend without justifiable reason constituted inexcusable neglect. Moreover, petitioner's own negligence was concurrent: he was absent at hearings, failed to present evidence through multiple counsel, and could not plausibly claim ignorance of the case's progress when he hired new counsel. Notably, Atty. Carpio, Jr.—who assisted in preparing the motion for new trial alleging former counsel's gross negligence—had himself appeared as collaborating counsel on October 25, 2001 but likewise presented no evidence.

• Sufficiency of Affidavit of Merit: Rule 37 requires that motions for new trial founded on excusable negligence be accompanied by affidavits of merit—affidavits showing facts, not mere conclusions or opinions, constituting the valid cause of action or defense the movant may prove if a new trial is granted. A new trial would serve no purpose if the defense is nil or ineffective. Petitioner's affidavit of merit did not contain clear statements of facts constituting a good and valid defense. The allegations of "meritorious defense" and "good cause" were mere conclusions providing no basis for determining the nature and merit of the case. The motion and affidavit also failed to mention the evidence petitioner was prevented from introducing or allege that such evidence would change the outcome.

• Deprivation of Due Process: The right to due process safeguards the opportunity to be heard and to submit evidence in support of one's defense. Petitioner was given several opportunities to be heard and to submit evidence but squandered them. Gross negligence is not among the grounds for a motion for new trial, and counsel's negligence—however characterized—cannot liberate petitioner from the effects of his failure to present countervailing evidence. Blunders and mistakes resulting from ignorance, inexperience, or incompetence of counsel do not qualify as grounds for new trial, as admitting them would ensure no end to litigation so long as new counsel could allege prior counsel's deficiencies.

• Excusable Negligence as Ground for New Trial — Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against, and by reason of which the aggrieved party has probably been impaired in his rights. Counsel's repeated failure to attend scheduled hearings without justification, where the court accommodated postponements to accord due process, constitutes inexcusable neglect that cannot ground a new trial. The client's concurrent negligence in failing to monitor the case further bars relief.

• Affidavit of Merit Requirement — A motion for new trial based on fraud, accident, mistake, or excusable negligence must be accompanied by an affidavit of merit stating facts—not mere conclusions or opinions—constituting the movant's good and substantial defense, which he may prove if a new trial is granted. Conclusory allegations of "meritorious defense" or "good cause" are insufficient; the affidavit must also mention the evidence the movant was prevented from introducing and allege that such evidence would change the outcome.

• Remedy for Denial of Motion for New Trial — While Section 9, Rule 37 states that the remedy for denial of a motion for new trial is appeal, Section 1, Rule 41 expressly prohibits appeal from an order denying a motion for new trial and provides that the aggrieved party may instead file the appropriate special civil action under Rule 65. Certiorari is therefore the proper remedy.

• Due Process as Opportunity to Be Heard — The right to due process safeguards the opportunity to be heard and to submit evidence in support of one's claim or defense. A party given multiple opportunities to present evidence who squanders them cannot claim deprivation of due process. Counsel's inexcusable neglect does not amount to the client's deprivation of due process.

• Binding Effect of Counsel's Negligence — Blunders and mistakes in the conduct of proceedings resulting from ignorance, inexperience, or incompetence of counsel do not qualify as grounds for new trial. Admitting such errors as valid reasons for reopening cases would put a premium on willful commission of errors by counsel to secure new trials, and there would be no end to litigation.

• "Negligence to be excusable must be one which ordinary diligence and prudence could not have guarded against." — This passage states the canonical formulation of excusable negligence under Rule 37, establishing the standard against which counsel's conduct is measured in motions for new trial.

• "An affidavit of merit should state facts, and not mere opinion or conclusions of law." — This defines the requirement for affidavits accompanying motions for new trial, distinguishing factual statements from legal conclusions and establishing that conclusory allegations are insufficient.

• "Indeed, from lethargy is misfortune born." — This aphoristic statement encapsulates the Court's view that a party who squanders multiple opportunities to present evidence cannot later claim deprivation of due process through counsel's negligence.

• "If such were to be admitted as valid reasons for re-opening cases, there would never be an end to litigation so long as a new counsel could be employed to allege and show that the prior counsel had not been sufficiently diligent, experienced or learned." — This passage articulates the policy rationale against recognizing counsel's incompetence or inexperience as a ground for new trial, emphasizing the imperative of finality in litigation.

• Azucena vs. Foreign Manpower Services, G.R. No. 147955, October 25, 2004 — Cited for the proposition that excusable negligence must be one which ordinary diligence and prudence could not have guarded against.
• First International Paper Corporation vs. Pelaez, G.R. No. 164871, August 22, 2006 — Cited alongside Azucena for the standard of excusable negligence in motions for new trial.
• Ferrer vs. Yang Sepeng, 158 Phil. 368 (1974) — Cited for the requirement that motions for new trial based on excusable negligence must be accompanied by affidavits of merit showing facts constituting a valid defense.
• Malipol vs. Tan, 55 Phil. 202 (1974) — Cited for the requirement that the affidavit of merit must state facts constituting the movant's good and substantial defense, and that an affidavit should state facts, not mere conclusions of law.
• Banting vs. Maglapuz, G.R. No. 158867, August 22, 2006 — Cited for the proposition that gross negligence is not a ground for a motion for new trial and that counsel's negligence cannot liberate a party from the effects of failure to present evidence.
• Air Philippines Corporation vs. International Business Aviation Services, Phils., Inc., G.R. No. 151963, September 9, 2004 — Cited for the ruling that counsel's resort to dilatory schemes—multiple motions to extend, nonappearance at pretrials, failure to file a pretrial brief—did not constitute gross negligence, and for the principle that a party cannot feign lack of awareness of the progress of the case.
• Rivera vs. Court of Appeals, 452 Phil. 1014 (2003) — Cited for the proposition that blunders and mistakes resulting from counsel's ignorance, inexperience, or incompetence do not qualify as grounds for new trial.

• Section 1, Rule 22, Rules of Court — Provides that if the last day of a period falls on a Saturday, Sunday, or legal holiday in the place where the court sits, the time shall not run until the next working day. Applied to hold that the motion for new trial, filed on April 21, 2003 (Monday), was timely because the last day for filing, April 19, 2003, fell on a Saturday.
• Section 9, Rule 37, Rules of Court — Provides that the remedy for an order denying a motion for new trial is to appeal the judgment or final order. Read in conjunction with Section 1, Rule 41 to determine the proper remedy.
• Section 1, Rule 41, Rules of Court — Provides that no appeal may be taken from an order denying a motion for new trial or reconsideration, and that in such instances the aggrieved party may file an appropriate special civil action under Rule 65. Applied to confirm that certiorari was the proper remedy.
• Section 1, Rule 37, Rules of Court — Enumerates the grounds for a motion for new trial: (a) fraud, accident, mistake, or excusable negligence which ordinary prudence could not have guarded against and by reason of which the aggrieved party has probably been impaired in his rights. Applied to hold that counsel's failure to attend seven scheduled hearings without justification did not constitute excusable negligence.

Panganiban, C.J. (Chairperson), Austria-Martinez, Callejo, Sr., and Chico-Nazario, J.J., concurred.

None.