G.R. No. 179999 - Anson Trade Center, Inc. vs. Pacific Banking Corp.

Petitioners are Anson Trade Center, Inc. (ATCI), Anson Emporium Corporation (AEC), and Teddy Keng Se Chen (Chen); ATCI and AEC engage in retail/wholesale general merchandising. Chen is Vice Head of the said entities.
Respondent is Pacific Banking Corporation (PBC), a closed banking institution under liquidation, represented by its liquidator, the President of the Philippine Deposit Insurance Corporation (PDIC).

ATCI obtained multiple loans from respondent totaling ₱4,350,000.00 on various dates between 1982 and 1984.
AEC received a loan of ₱1,000,000.00 from respondent on 26 October 1984.
To secure these loans, Chen, with the late Keng Giok (President of ATCI and AEC), executed two Continuing Suretyship Agreements on 16 September 1981 and 1 March 1982 on behalf of ATCI and AEC. These Agreements granted respondent a lien on any of the obligors' moneys or properties deposited or left with respondent.

Petitioners defaulted on loan payments despite repeated demands by respondent.
Respondent filed a collection suit before the Regional Trial Court (RTC) of Manila, Branch 52, docketed as Civil Case No. 01-102198.

On 14 January 2002, Chen filed a Motion to Dismiss instead of an Answer; petitioners ATCI, AEC, and Keng Giok’s Estate also filed a joint Motion to Dismiss.
Respondent opposed; parties filed replies.
RTC did not act on Motions to Dismiss for a long period; respondent moved to resolve the motion in 2003.
On 4 November 2004, RTC denied Motions to Dismiss but dropped Keng Giok as defendant since deceased.
Petitioner jointly answered the complaint thereafter.
Pre-trial was held on 4 April 2005 with all parties present; arbitration was attempted but unsuccessful, referred back to trial.
Second pre-trial was scheduled on 10 October 2005; respondent failed to appear.

Petitioners moved to dismiss for respondent’s non-appearance; RTC granted dismissal without prejudice on 10 October 2005.
Respondent filed Motion for Reconsideration, citing excusable negligence and interest of justice; RTC denied the motion on 17 January 2006.

Respondent filed a Petition for Certiorari under Rule 65 before the CA to annul the RTC dismissal orders, arguing grave abuse of discretion due to the dismissal on respondent’s non-appearance.
CA, in its Decision dated 31 May 2007, annulled the RTC dismissal orders, citing the need for liberal construction of rules to promote substantial justice and that the absence was excusable due to PDIC’s reorganization and lack of manpower.
CA refused to reconsider in a Resolution dated 16 October 2007.

Petitioners elevated the case to the Supreme Court, raising the following issues:

Whether the reversal of the dismissal was proper under the Rules of Civil Procedure and jurisprudence.
Whether the RTC abused its discretion in dismissing the complaint for non-appearance at pre-trial.

Whether the reversal by the Court of Appeals of the RTC’s Order dismissing respondent’s complaint due to non-appearance at pre-trial was consistent with the 1997 Rules on Civil Procedure and applicable jurisprudence.

Whether the RTC abused its discretion in dismissing the respondent’s complaint because of its non-appearance at the pre-trial conference.