G.R. No. L-19885 - Crisologo vs. Dural

On November 8, 1951, the appellants mortgaged a house and lot in Cauayan, Isabela (totaling 2,364 square meters) to the Rehabilitation Finance Corporation (RFC), now known as the Development Bank of the Philippines (DBP), to secure a loan of P25,000.00.
Due to failure to pay the debt, the property was foreclosed and extrajudicially sold at public auction.
The DBP, as the highest bidder with an amount of P25,515.94, was issued a "Certificate of Sale" by the Provincial Sheriff of Isabela, which was later confirmed by the court.

A week before the expiration of the one-year redemption period, the appellants sought the assistance of the appellee, Alfredo L. Dural, to enable them to exercise their right to redeem the property.
Arrangements were made resulting in:

The execution of a Deed of Assignment of Rights of Redemption by the appellants in favor of Dural on July 2, 1956.
A Supplementary Agreement to the deed, wherein the appellants sold their rights of redemption to Dural for P3,000.00.

Consequent to these agreements, Dural purchased the property from the DBP, and on August 15, 1956, DBP executed a "Deed of Conditional Sale" in Dural’s favor.
Dural took possession of the property and began collecting rents amounting to P265.00 monthly.

When the appellants later sought to redeem the property as per their alleged verbal understanding (that they could redeem at any time they had the money), Dural refused to allow the redemption.
The appellants then filed a complaint in the CFI of Isabela for reconveyance and damages, citing the prior promise to allow redemption.
In response, Dural moved to dismiss the complaint on the grounds that:

The lower court deferred ruling on the motion to dismiss until after the trial but allowed the defendant to later rely on those grounds as special defenses in his Answer.
Dural’s Answer reiterated the grounds for dismissal and interposed a counter-claim for actual damages (P2,000.00), moral damages (P50,000.00), and P5,000.00 for counsel fees.

The case was initially heard on January 19, 1958, with only one witness, Atty. Floro Crisologo, having testified for the appellants.
Several dates were set for continuances, with postponements on various grounds:

March 10, 1958: Hearing was postponed upon the motion of the parties.
June 16, 1959: Appearance failure allegedly due to misinformed hearing date.
December 10, 1960: Postponed on motion of the defendant’s counsel.
February 7, March 21, and April 18, 1961: Postponements made upon joint motion for an amicable settlement.

At the hearing scheduled on June 28, 1961, Atty. Mauro Verzosa, counsel for the appellants, failed to appear.
Plaintiff Eufrasia Capiao, however, appeared and submitted a telegram from Atty. Verzosa dated June 26, 1961, indicating his inability to attend due to illness.
The trial court ordered the dismissal of the complaint on July 12, 1961, reasoning that the repeated postponements and failure of counsel to appear were sufficient grounds for dismissal, noting that the plaintiffs had already had ample opportunity to present evidence.

On July 19, 1961, counsel for the appellants filed a verified Motion for Reconsideration, citing:

The appellee opposed the motion, contending that the failure to notify personally via telephone amounted to non-compliance with the proper rules for seeking a continuance.
After hearing the arguments, the trial court denied the Motion for Reconsideration.
The appellants then elevated the case on appeal, challenging the dismissal based solely on counsel’s failure to appear at the scheduled hearing.

Whether the lower court erred in dismissing the appellants’ complaint solely on the ground that their counsel failed to appear during the scheduled hearing on June 28, 1961.

The central issue is the propriety of dismissing a case due to counsel’s absence, considering the substantial compliance with the procedural requirements for a continuance.
Whether the repeated postponements, which were partly due to mutually agreed motions for continuance, mitigate or excuse the counsel’s failure to appear.