Five Star Bus Co. v. Court of Appeals

G.R. No. 120496 (July 17, 1996)

Facts:

This case involves a petition for review on certiorari filed by Five Star Bus Co., Inc. and Carlos Salonga against the Court of Appeals and the Regional Trial Court of Kalookan City. The case originated from a civil suit filed by Pedro and Lydia Santos, who sought damages for the death of their son, Joey Santos, in a vehicular accident involving a bus owned by Five Star Bus Co. and driven by Salonga. The accident occurred on April 27, 1992, when the bus, while traveling from Pangasinan to Manila, collided with an oncoming trailer truck due to alleged gross negligence on the part of the bus driver.

The Santos couple claimed that the bus driver acted recklessly, leading to the fatal accident that resulted in the death of their son and another passenger. They filed a complaint on July 15, 1992, seeking P50,000 for the death of their son, P50,000 for moral damages, P20,000 for funeral expenses, and P20,000 for attorney's fees.

In response, the petitioners contended that the accident was caused by the negligence of the trailer truck driver, who allegedly encroached into the bus's lane. The trial court scheduled a pre-trial conference for October 15, 1992, but neither the petitioners nor their counsel appeared, nor did they file a pre-trial brief. Consequently, the trial court declared the petitioners in default and allowed the respondents to present their evidence ex parte.

On November 4, 1992, the trial court ruled in favor of the respondents, awarding them damages totaling P122,000. The petitioners subsequently filed a motion to set aside the order of default, claiming that their former counsel had resigned prior to the pre-trial and that they were not properly notified. The trial court denied this motion, leading to an appeal to the Court of Appeals, which affirmed the trial court's decision but added an award for moral damages.

Legal Issues:

1. Did the trial court err in declaring the petitioners in default for failing to appear at the pre-trial conference?
2. Was the additional award of moral damages by the Court of Appeals justified, given that the respondents did not appeal the trial court's decision?

Arguments:

• Petitioners' Arguments:

  • The petitioners argued that they were not properly notified of the pre-trial conference, as their former counsel had resigned, and they were not informed of the proceedings.
  • They contended that the trial court's decision was null and void due to the alleged violation of their right to due process.
  • They also claimed that the trial court acted hastily in rendering its decision shortly after the presentation of evidence.

• Respondents' Arguments:

  • The respondents maintained that the petitioners were duly notified of the pre-trial conference and that it was the responsibility of their counsel to inform them.
  • They argued that the trial court acted within its authority in declaring the petitioners in default and allowing the ex parte presentation of evidence.
  • They supported the additional award of moral damages, asserting that the loss of their son warranted such compensation.

Court's Decision and Legal Reasoning:

The Supreme Court found the petition partly meritorious. It upheld the trial court's declaration of default, emphasizing that the notice of the pre-trial conference was properly served to the petitioners' counsel, who had the obligation to inform them. The Court reiterated that a party is bound by the actions of their counsel, and the trial court did not err in proceeding with the case after the default declaration.

However, the Court agreed with the petitioners regarding the additional award of moral damages. It ruled that since the respondents did not appeal the trial court's decision, they could not seek to modify the judgment by requesting additional damages. The Court emphasized the principle that a party who has not appealed is bound by the terms of the judgment.

Significant Legal Principles Established:

1. Duty of Counsel: The ruling reinforced the principle that a party is bound by the actions and omissions of their counsel, including the duty to notify clients of important court proceedings.
2. Default and Ex Parte Proceedings: The Court clarified that a trial court is not required to receive evidence ex parte on the same day it declares a party in default, allowing for a reasonable time for the defaulted party to respond.
3. Appeal and Modification of Judgment: The decision highlighted that a party who does not appeal a judgment cannot seek to modify it through subsequent claims for additional damages.