Case Digest: PHILIPPINE NATIONAL BANK v. DEANG MARKETING CORPORATION et al.

PHILIPPINE NATIONAL BANK

v. 

DEANG MARKETING CORPORATION et al.

573 SCRA 375 (2008), SECOND DIVISION

Deang Marketing Corporation (DMC), et al. filed before the Regional Trial Court (RTC) a complaint against Philippine National Bank (PNB) for reformation of contract and specific performance claiming that the dacion en pago arrangement forged by them already transformed DMC‘s loan obligation.

Summons was served on PNB requiring it to Answer until May 5, 2006. DMC subsequently filed a Motion to Declare PNB in Default. The RTC thereafter received a Motion for Extension of Time to File Answer. On May 16, 2006, RTC granted PNB’s Motion. DMC filed a Motion for Reconsideration of RTC‘s order denying their Motion to Declare PNB in default. The RTC denied such motion. DMC subsequently assailed RTC‘s Orders of May 16, 2006 and August 9, 2006 via certiorari to the Court of Appeals (CA). The CA annulled the RTC‘s orders.

ISSUE:

Whether or not the CA erred in declaring PNB in default

HELD:

PNB‘s Motion for Extension of Time to File Answer was laden with glaring lapses. It had, following the reglementary 15-day period after service of summons (unless a different period is fixed by the court), until May 5, 2006 within which to file an Answer or appropriate pleading. It filed the Motion for Extension, however, via a private courier on May 14, 2006, which was received by the trial court on May 15, 2006 or ten days late.

It is a basic rule of remedial law that a motion for extension of time to file a pleading must be filed before the expiration of the period sought to be extended. The court’s discretion to grant a motion for extension is conditioned upon such motion’s timeliness, the passing of which renders the court powerless to entertain or grant it. Since the motion for extension was filed after the lapse of the prescribed period, there was no more period to extend.

PNB was not candid enough to aver in the Motion for Extension that the period had lapsed, as it still toyed with the idea that it could get away with it. The allegations therein were crafted as if the said motion was timely filed. Notably, the May 16, 2006 Order expressed no inkling that the motion was filed out of time. The trial court either was deceived by or it casually disregarded the apparent falsity foisted by petitioner.

In denying DMC’s Motion for Reconsideration of its grant of PNB’s Motion for Extension, the RTC ruled that it was inclined to reconsider or lift an order of default. By such ruling, the trial court preempted the dictates of orderly procedure by unduly anticipating and signifying a slant toward the remedies and arguments yet to be availed of and raised by PNB.

In the present case, no satisfactory reason was adduced to justify the tardiness of the Answer and no compelling reason was given to justify its admission. The intention to delay was rather obvious. The Court thus finds PNB’s negligence inexcusable, as the circumstances behind and the reasons for the delay are detestable.