Certiorari Cannot Substitute for a Lost Appeal in Factual Review Cases

The Supreme Court has long held that the special civil action of certiorari under Rule 65 of the Rules of Court is not a universal remedy for every adverse ruling. In Philippine Deposit Insurance Corporation v. Court of Appeals (G.R. No. 151280, June 10, 2004), the Court reiterated a fundamental rule: certiorari cannot be used as a substitute for a lost appeal. The case also clarifies when a trial court may validly order a party to present evidence ex parte for repeatedly failing to appear at pre-trial.

The Facts of the Case

Several borrowers obtained sugar crop and agricultural loans from Pacific Banking Corporation (PaBC). When PaBC became insolvent, it was placed under liquidation, and the Philippine Deposit Insurance Corporation (PDIC) was designated as its liquidator.

In 1992, Republic Act No. 7202 (The Sugar Restitution Law) was enacted. Section 3 of the law provided for the condonation of interest charged by banks in excess of 12% per annum, as well as the recomputation of loans with a 13-year amortization period. The borrowers requested that this provision be applied to their loans, but the bank and PDIC refused, claiming the law applied only to loans from government financial institutions.

The borrowers filed separate complaints to compel the application of R.A. 7202. The cases were consolidated before the Regional Trial Court of Bacolod City.

The Default Order

The trial court set pre-trial for June 14, 1996. Over the next three years, the pre-trial was repeatedly reset—often at the instance of the defendants or their counsel. By August 1999, the court had grown impatient. When the defendants again failed to appear at the pre-trial on August 19, 1999, the court ordered the plaintiffs to present their evidence ex parte.

The defendants moved for reconsideration, but the trial court denied it, noting that the case had been stuck at the pre-trial stage for over three years. The defendants then filed a petition for certiorari with the Court of Appeals, alleging grave abuse of discretion. The CA dismissed the petition, and the defendants elevated the matter to the Supreme Court.

The Supreme Court's Ruling

The Supreme Court dismissed the petition for two independent reasons.

First, certiorari was the wrong remedy. The Court noted that the petitioners had received the CA decision on September 12, 2001. After their motion for reconsideration was denied, they had until December 21, 2001 to file a petition for review on certiorari under Rule 45. Instead, they filed a petition for certiorari under Rule 65 on January 21, 2002—a month after the deadline had lapsed.

The Court was emphatic: certiorari cannot be used as a substitute for an appeal that has already been lost. It lies only where there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. While the Court has discretion to treat a certiorari petition as one for review under Rule 45, it will only do so when the petition is filed within the reglementary period for appeal. Here, it was not.

Second, even on the merits, there was no grave abuse of discretion. The Court defined grave abuse of discretion as a capricious and whimsical exercise of judgment equivalent to an excess or lack of jurisdiction. The abuse must be so patent and gross as to amount to an evasion of a positive duty or a virtual refusal to perform a duty enjoined by law.

The Court found no such abuse. Under Section 5, Rule 18 of the Rules of Court, the failure of a defendant to appear at pre-trial is a cause to allow the plaintiff to present evidence ex parte and for the court to render judgment based thereon. The petitioners' consistent failure to appear at pre-trial over a three-year period justified the trial court's order.

As the Court of Appeals correctly observed, even assuming the trial judge was strict in enforcing the rules, being strict is "an ocean away from being gravely abusive" of discretion.

Practical Takeaways

• Certiorari is not a safety net. If a party misses the deadline to appeal under Rule 45, filing a petition for certiorari under Rule 65 will not revive the case. The Court will dismiss it as an improper substitute for a lost appeal.
• Pre-trial attendance is mandatory. Repeated failure to appear at pre-trial carries real consequences. A defendant who fails to appear may be declared in default, and the plaintiff may be allowed to present evidence ex parte.
• Strict enforcement is not abuse. A trial court's strict application of procedural rules—even if it results in an adverse order—does not by itself constitute grave abuse of discretion.
• Know the deadlines. The reglementary period to appeal is 15 days from receipt of the decision or resolution. Missing it, without a compelling reason, is fatal.
• Meritorious defenses do not excuse procedural lapses. A party cannot claim a strong defense to justify repeated non-appearance at pre-trial.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.