FACTS:

Interworld Assurance Corporation, now known as Philippine Pryce Assurance Corporation, was sued by Gegroco, Inc. for the collection of a sum of money relating to surety bonds issued by Interworld Assurance Corporation on behalf of Sagum General Merchandise. Interworld Assurance Corporation admitted to issuing the bonds but denied liability, stating that the checks used for premium payment were dishonored and that the bonds only guaranteed payment of Sagum General Merchandise's obligations.

The case was scheduled for a pre-trial conference, and Interworld Assurance Corporation received notice of the conference, but failed to appear due to its inability to contact its Vice-President for operations. The pre-trial conference was then rescheduled. Interworld Assurance Corporation filed a motion to admit a third-party complaint, which the court admitted and ordered the service of summons on the third-party defendants.

However, Interworld Assurance Corporation once again failed to appear for the rescheduled pre-trial conference. As a result, the court considered Interworld Assurance Corporation in default and allowed Gegroco, Inc. to present evidence ex parte. The trial court eventually rendered a decision in favor of Gegroco, Inc., and Interworld Assurance Corporation's motion for reconsideration and new trial was denied.

On appeal, the Court of Appeals affirmed the trial court's decision. Interworld Assurance Corporation raised various errors in its appeal, including the issue of whether the case was ripe for pre-trial conference and the alleged lack of notice regarding the third-party complaint.

ISSUES:

1. Whether the case was already ripe for pre-trial conference when the trial court set it for the holding thereof.

2. Whether the Court of Appeals erred in relying on the ruling in Manchester Development Corporation v. Court of Appeals and disregarding the doctrine in Sun Insurance Office, Ltd. (SIOL) v. Asuncion.

3. Whether it would be useless and a waste of time to remand the case for further proceedings as the defendant has no meritorious defense.

RULING:

1. The case was already ripe for pre-trial conference when the trial court set it for the holding thereof. The trial court correctly argued that no answer to the third party complaint is forthcoming as petitioner never initiated the service of summons on the third party defendant. The court also noted that all copies of notices and orders issued by the court for petitioner's counsel were returned with the notation "Return to Sender, Unclaimed."

2. The Court of Appeals did not err in relying on the ruling in Manchester Development Corporation v. Court of Appeals and disregarding the doctrine in Sun Insurance Office, Ltd. (SIOL) v. Asuncion. The Court of Appeals affirmed the decision of the trial court based on the valid arguments presented by the trial court and not solely on the cited cases.

3. It is not useless and a waste of time to remand the case for further proceedings as the defendant has no meritorious defense. The trial court correctly ruled based on the evidence presented and acted in accordance with the rules and procedures.

PRINCIPLES:

• Pre-trial is mandatory in any action with the main objective being to simplify, abbreviate, and expedite trial, if not to fully dispense with it.

• Parties are obliged to appear for pre-trial and cannot disregard the court's order to be present.

• Service by registered mail is complete upon actual receipt by the addressee, but if the addressee fails to claim the mail within five days from the date of first notice, service shall take effect at the expiration of such time.