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DY TEBAN TRADING v. PETER C. DY

FACTS:

Facts: The petitioner, Dy Teban Trading, Inc. (DTTI), filed a petition for review on certiorari to reverse the Decision of the Court of Appeals (CA) nullifying the Orders of the Regional Trial Court (RTC) in Butuan City. DTTI, a domestic closed corporation owned by the Dy siblings, instituted an action for injunction against Peter C. Dy, Johnny C. Dy, and Ramon C. Dy before the RTC. Respondents, on the other hand, filed an action for dissolution of the corporation. DTTI alleged that Johnny C. Dy had misappropriated cash sales and stocks from the Montilla branch for personal benefit or that of Peter C. Dy and Ramon C. Dy. As a result, DTTI decided to close the Montilla branch, but respondents forcibly opened it. The cases were jointly heard by Branch 33 of the RTC. During the trial, the cross-examination of a witness, Lorencio C. Dy, was postponed several times. On June 18, 2007, neither of the respondents' counsels attended the hearing, and the petitioner moved to declare respondents to have waived their right to cross examine Lorencio C. Dy. The RTC granted the motion and gave the petitioner time to file their offer of exhibits. Respondents filed a motion for reconsideration, arguing that they were deprived of their right to due process. The motion was denied by the RTC.

In another excerpt from the same case, the defendants, who are majority stockholders of DTTI, are accused by DTTI of encroaching on its business and causing damage. During the trial, the defendants’ counsel failed to appear on scheduled cross-examination dates, and the RTC declared that the defendants have waived their right to cross-examine the witness. The defendants filed a petition for certiorari before the Court of Appeals (CA) questioning the RTC's orders but did not pray for a temporary restraining order (TRO).

Furthermore, the RTC granted DTTI's motion for admission of exhibits and ordered the defendants to begin presenting their evidence on a specified date. However, the defendants failed to appear and filed an urgent motion for continuance, citing the pending certiorari case in the CA and their application for a TRO or preliminary injunction. DTTI opposed the motion, arguing that the case should proceed due to the absence of a TRO or preliminary injunction and the need for speedy disposition. The RTC denied the motion, declaring defendants to have waived their right to present evidence.

To determine jurisdiction, the Court applied the relationship and nature of the controversy tests. The complaint filed by DTTI alleged that the defendants colluded to forcibly open DTTI's branch store and prevent DTTI from using it. The complaint did not allegedly involve disagreements between stockholders or seek a determination of rights under the Corporation Code, articles of incorporation, or by-laws. The Court agreed with the Court of Appeals' finding that the complaint filed by DTTI was a civil action for injunction and not an intra-corporate dispute. The Court clarified that a civil action for injunction falls within the general jurisdiction of the RTCs and rejected defendants' contention that the RTC had no jurisdiction over the civil action for injunction.

ISSUES:

  1. Whether the RTC had jurisdiction over the civil action for injunction filed by DTTI.

  2. Whether the respondents waived their objection to the procedural propriety of the case.

  3. Whether the respondents lost their right to cross-examine the witness due to the lack of preparation and absence of their counsel.

  4. Whether the trial court correctly declared that the respondents waived their right to cross-examination.

  5. Whether or not the respondents waived their right to cross-examination.

  6. Whether or not the respondents waived their right to present evidence.

  7. Whether or not the trial court was justified in holding that respondents waived their right to present evidence.

  8. Whether or not the respondents were given sufficient opportunity to participate in the proceedings.

RULING:

  1. The RTC had jurisdiction over the civil action for injunction filed by DTTI. While the designation of Special Commercial Courts was intended to expedite the resolution of commercial cases, it does not abdicate the RTC's general jurisdiction over ordinary civil cases under BP 129. The designation is merely a procedural tool, and the RTC's general jurisdiction is still retained. The issue of the case being mistakenly raffled to a commercial court is a question of procedure, not jurisdiction. Furthermore, the respondents waived their objection to this issue by submitting to the authority of the RTC and participating in the proceedings.

  2. The right to cross-examine a witness is a fundamental right and part of due process. However, the right is personal and may be waived expressly or impliedly. In cases where the waiver is only implied, it depends on the surrounding facts of each particular case. A party may be deemed to have waived their right to cross-examine a witness if they were given the opportunity to do so but failed to avail themselves of it for reasons attributable to themselves alone. In this case, the respondents repeatedly failed and refused to cross-examine despite the time and opportunities granted to them. Therefore, they waived their right to cross-examine.

  3. Yes, the respondents lost their right to cross-examine the witness due to the lack of preparation and absence of their counsel. The court held that the respondents alone must suffer the consequences of their counsel's negligence, as it was their responsibility to adequately prepare for the cross-examination and ensure their presence during the hearing.

  4. Yes, the trial court correctly declared that the respondents waived their right to cross-examination. The court found that the trial court had consistently given the respondents several opportunities to conduct the cross-examination, even granting their motions for postponement despite unmeritorious reasons. However, the respondents continually failed to attend the hearing without explanation. The court held that there was never any insurmountable obstacle to the respondents' conduct of the cross-examination and their failure to do so was purely attributable to them and their counsel.

  5. The respondents waived their right to cross-examination. The court correctly declared that the respondents had repeatedly failed to appear during the scheduled cross-examination, despite being given ample opportunities to do so.

  6. The respondents also waived their right to present evidence. The court held that the repeated postponements by the respondents, as well as their failure to file any motions or valid reasons for their non-appearance, amounted to an implied waiver of their right to present evidence.

  7. The trial court was justified in holding that respondents waived their right to present evidence. The respondents and their lawyers chose not to appear in the hearing set for presentation of their evidence, instead just filing a motion for continuance. However, there is no law or rule requiring the trial court to postpone the proceedings due to the pendency of a certiorari case before the higher court. Section 7, Rule 65 of the Rules of Court explicitly mandates that the trial court should proceed with the principal case within ten days from the filing of a certiorari petition, in the absence of a temporary restraining order or a preliminary injunction. The motion for continuance did not present any valid ground, and considering the undue delay in the proceedings, the trial court properly held that respondents waived their right to present evidence.

  8. The respondents were given sufficient opportunity to participate in the proceedings. The order setting the case for hearing for the presentation of their evidence was issued with enough time for respondents to prepare. While they had the option to file a motion for continuance, it was not guaranteed to be granted. The respondents should have appeared before the trial court prepared to present their evidence in case their motion was denied. Their failure to do so cannot be blamed on the trial court. The trial court's refusal to further delay the case was in line with its duty to ensure the progress of the trial despite the deliberate delay and refusal to proceed on the part of one party.

PRINCIPLES:

  • Civil actions for injunction fall within the general jurisdiction of the RTCs.

  • The designation of Special Commercial Courts is a procedural tool to expedite the resolution of commercial cases, but it does not abdicate the RTC's general jurisdiction over ordinary civil cases.

  • Waiver of the right to cross-examine a witness may be express or implied, and a waiver is valid and recognized in our jurisdiction.

  • The right to cross-examine is sufficiently protected when there is a real opportunity to conduct a cross-examination, and the absence of actual cross-examination does not violate due process.

  • Lawyers are duty-bound to obey and respect court orders. When unable to attend a hearing, the proper course of action is to move for the court to set the hearing at another date. The grant of a motion for postponement is a privilege addressed to the court's sound discretion.

  • A party moving for postponement should be in court on the day set for trial if the motion is not acted upon favorably before that day.

  • A lawyer who has two hearings set on the same day cannot assume that the court will grant a continuance. It is ethical for the lawyer to inform the prospective client of the situation and give them the option to retain another attorney.

  • Failure to exercise the right to cross-examine a witness due to reasons purely attributable to the party and their counsel may result in a waiver of the right to cross-examination.

  • The right to cross-examine and the right to present evidence may be waived either expressly or impliedly.

  • The discretion of the trial court to grant or deny motions for postponement must be exercised wisely, considering the circumstances of each case and with the goal of achieving substantial justice.

  • The interests of due process, speedy disposition of cases, and the adversarial system must be balanced when determining whether a party has waived their right to present evidence.

  • Courts must be cautious in holding a party to have waived their right to present evidence, ensuring that the party has been given sufficient opportunity to participate in the proceedings.

  • Parties have a duty to exercise their right to due process properly and not to use it as an excuse for negligence or dilatory tactics.

  • Granting a motion for postponement is within the court's discretion and is not a matter of right. Parties should not assume that their motion for postponement will be granted, and should be prepared to proceed with the hearing in case their motion is denied.

  • Section 7, Rule 65 of the Rules of Court mandates that the trial court should proceed with the principal case within ten days from the filing of a certiorari petition, in the absence of a temporary restraining order or a preliminary injunction.

  • The trial court has the duty to ensure the progress of the trial despite the deliberate delay and refusal to proceed on the part of one party.