Republic of the
Supreme Court
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SPOUSES HUMBERTO |
G.R. No. 153696 |
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Present: |
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Petitioners, |
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PANGANIBAN, CJ.,
Chairperson, |
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- versus - |
YNARES-SANTIAGO, |
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AUSTRIA-MARTINEZ, |
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HON. EMMANUEL C. |
CALLEJO, SR. and |
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CARPIO, Presiding Judge of |
CHICO-NAZARIO, JJ. |
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RTC, Branch 16, |
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and METROPOLITAN BANK |
Promulgated: |
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and TRUST COMPANY, |
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Respondents. |
September 11, 2006 |
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D E C I S I O N
AUSTRIA-MARTINEZ,
J.:
Before us is a petition for review on
certiorari under Rule 45 of the Rules of Court filed by spouses Humberto delos
The antecedent facts of the case as
summarized by the CA are as follows:
On
On
Acting on the motion, the lower
court, presided over by Hon. Emmanuel C. Carpio (or
“respondent judge”), issued an order dated
On
On the same date,
On
On
On
On
Aggrieved, petitioners filed a Petition for Certiorari
with the CA ascribing grave abuse of discretion committed by the trial court amounting
to lack of jurisdiction in issuing the Orders dated February 12 and 16, 2001,
declaring them in default and denying their Opposition to Metropolitan Bank and
Trust Company’s (Metrobank) Motion to Declare them in
Default, respectively; and the Orders dated March 5 and 21, 2001 denying their Motion
to Lift the Order of Default and their Motion for Reconsideration,
respectively.
In a Decision dated
The CA further found unmeritorious the
contention of petitioners that they were declared in default without giving
them ample time to file an opposition to Metrobank’s Motion
to Declare them in Default; that under Section 3, Rule 9 of the Rules of Court,
it is provided that the court shall, upon motion of the claiming party with
notice to the defending party in default, and proof of such failure, declare
the defending party in default; and that since it is clear from the records
that the reglementary period for filing an answer had
expired with no responsive pleading filed by petitioners, the trial court had
properly declared them in default. The
CA further declared that even assuming that the trial court committed a
procedural lapse in declaring petitioners in default before the scheduled
hearing of Metrobank’s motion, such error is not so
serious as to constitute grave abuse of discretion.
Hence, the instant petition filed by
petitioners raising the following issues, to wit:
1. Whether or not the procedural lapse committed by Honorable Public Respondent in issuing an Order declaring petitioners’ [sic] in default on 12 February 2001 or four (4) days before the scheduled hearing of Metrobank’s Motion to declare petitioners’ [sic] in default on 16 February 2001 is so serious as to constitute grave abuse of discretion.
2. Whether or not LITIS PENDENTIA raised by petitioners’ [sic] as an affirmative defense is a meritorious defense.
3. Whether or not it is beyond the authority of the Honorable Trial Court to rule on the issue of LITIS PENDENTIA simply and chiefly because the defendants failed to seasonably raise it.
4. What constitutes Affidavit of Merit? [6]
Petitioners claim that the trial
court committed grave abuse of discretion
in declaring them in default in its Order dated February 12, 2001, which
was four days before the hearing set on Metrobank’s
Motion to Declare them in Default; that their failure to file their Answer
within the reglementary period was due to the fact that
the services of their counsel of choice could not be secured within the period;
that they had filed their Motion to Admit Answer and their Answer as well as their
Opposition to respondent’s motion to declare them in default on
Petitioners aver that under Section 1,
Rule 9 of the Rules of Court, defenses like the “court has no jurisdiction, litis pendentia, res judicata and prescription” can be taken cognizance of by the
court despite the fact that they are not in a motion to dismiss or Answer; that
the trial court should have looked into their affirmative defense of litis pendentia raised
in their Answer since it is a meritorious defense as it is a ground for a
dismissal of a complaint. They further contend
that although the affirmative defense of litis
pendentia had reached the trial court’s
attention, it still refused to pass judgment on said legal concern; that the
defense of litis pendentia
raised in their Answer is sufficient to show that the affidavit of merit showed
a meritorious defense; that the procedural lapse committed by the trial court
would cause the unlawful deprivation of their property rights through undue haste.
In its Comment, Metrobank
contends that petitioners failed to file a motion for reconsideration before
filing the instant petition which would vest authority for this Court to assume
jurisdiction; that the rule on declaration of default did not expressly mandate
the trial court to conduct a hearing of the motion as it merely requires that
the notice of the motion was made to the defending party; that the trial court
declared petitioners in default since they failed to file their Answer within
the reglementary period; that assuming arguendo that the trial court committed procedural
lapse in declaring petitioners in default before the scheduled hearing, there is
still no grave abuse of discretion committed by the trial court since even if
the hearing was held, it would not make any difference as petitioners failed to
file their Answer within the reglementary period.
Metrobank further argues that petitioners’
negligence is not excusable because if they have consulted the associates of
Atty. Pantojan, they would definitely be advised to ask
for an extension of time to file their answer; that petitioners failed to
present a meritorious defense since aside from merely stating in general terms
their claim of litis
pendentia as
a defense, the same is misplaced because Civil Case No. 28,362-2001
pending in RTC of Davao City, Branch 16, and Civil
Case No. 27,875-2000 filed by petitioners in RTC of Davao
City, Branch 10, have separate and distinct causes of action; that the trial
court is correct in not ruling on the issue of litis
pendentia as petitioners’ Answer was not
admitted as part of the records of the case.
Petitioners filed their Reply contending
that appeal by certiorari under Rule 45 does not require prior filing of
a motion for reconsideration; that the procedural lapse committed by the trial
court in declaring petitioners in default before the scheduled hearing should
not be tolerated since petitioners’ land and building are at stake; and that
they should not be faulted for not consulting the associates of Atty. Pantojan as they reposed their trust and confidence in him.
Petitioners and Metrobank filed their respective memoranda. Metrobank’s Memorandum no longer questioned petitioners’ non-filing of a motion for reconsideration of the CA decision.
Prefatorily, we agree with petitioners that in appeal by certiorari, the prior filing of a motion for reconsideration is not required.[7]
The principal issue before us is
whether or not the CA erred in upholding the Orders of the trial court declaring
petitioners in default and denying their Motion to Lift Order of Default.
We rule in the affirmative.
Section 3, Rule 9 of the Rules of Court
provides:
Sec. 3. Default; declaration of — If the defending party fails to answer within the time allowed therefor, the court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court.
Clearly, there are three requirements which must be complied
with by the claiming party before the court may declare the defending party in
default, to wit: (1) the claiming party must file a motion asking the court to
declare the defending party in default; (2) the defending party must be
notified of the motion to declare him in default; (3) the claiming party must
prove that the defending party has failed to answer within the period provided
by the Rule.
In filing motions, Section 4, Rule 15 of the Rules of Court,
specifically provides:
Sec. 4. Hearing of motion. – Except for motions
which the court may act upon without prejudicing the rights of the adverse
party, every written motion shall be set
for hearing by the applicant. (Emphasis supplied)
x x x x
Prior to the present rule on default introduced by the 1997
Rules of Civil Procedure, as amended,
Section 1 of the former Rule 18 on default is silent on whether or not there is
need for a notice of a motion to declare defendant in default.[8] The Court then ruled that there is no need.[9] However,
the present rule expressly requires that the motion of the claiming party
should be with notice to the defending party.[10] The purpose of a notice of a motion is to
avoid surprises on the opposite party and to give him time to study and meet
the arguments.[11] The notice of a motion is required when the
party has the right to resist the relief sought by the motion and principles of
natural justice demand that his right be not affected without an opportunity to
be heard.[12]
Therefore, as the present rule on default requires the
filing of a motion and notice of such motion to the defending party, it is not
enough that the defendant failed to answer the complaint within the reglementary period to be a sufficient ground for
declaration in default. The motion must also be heard.
In this case, it is not disputed that petitioners were
served summons on
We could not see any justifiable reason why the trial court
chose not to hear the petitioners on the date and time fixed in Metrobank’s motion, and instead, hastily granted the motion
before it could be heard on the ground that it had found the motion to be
impressed with merit. Indeed, in totally
disregarding the purpose for which the filing of a motion and notice to
defending party are required by the Rules, the trial court had acted in a despotic
manner that is correctly assailed through a petition for certiorari
which petitioners have seasonably filed with the CA.
Again, respondent Judge acted capriciously when he totally
ignored petitioners’ Opposition to Metrobank’s Motion
to Declare them in Default and denied their Motion to Admit Answer, both filed
on
A mere perusal of the Answer attached to the Motion to Admit
Answer would readily reveal that petitioners raised a special and affirmative
defense the other action pending between the same parties for the same cause. Petitioners alleged that they entered into
several loan agreements with Metrobank involving an
aggregate amount of P12,500,000.00 which was the basis of petitioners’
causes of action in a civil case they earlier filed against Metrobank
with the RTC of Davao City, Branch 10, docketed
as Civil Case No. 27,875-2000, for
damages, fixing of interest rates, application of excess interest payments;
that the principal obligation of P12,500,000.00 includes all other loans
which petitioners have with Metrobank; that the P500,000.00
obligation covered by the promissory note subject of the instant Civil Case No.
28,362-2001 is part of the P12,500,000.00 loan of petitioners, subject
of Civil Case No. 27,875-2000 that was earlier filed; and that a written copy
of the P500,000.00 loan was not attached to the complaint.
Thus, the trial court is deemed to have been apprised of the
affirmative defense of litis pendentia.
Instead of unceremoniously discarding petitioners’ Opposition and Motion
to Admit Answer[15] which were filed before the scheduled date of
hearing of the motion to declare petitioners in default, it behooved upon the
trial court to delve into the merits of the Opposition and the Answer.
The trial court then should have been guided by Section 11, Rule
11 of the Rules of Court, to wit:
Sec. 11. Extension
of time to plead. - Upon motion and on such terms as may be just, the court
may extend the time to plead provided in these Rules.
The court may also, upon like terms, allow an answer
or other pleading to be filed after the time fixed by these Rules.
and Section 1, Rule 9 of the 1997 Rules of Procedure which
provides:
Sec. 1.
Defenses and objections not pleaded. - Defenses and objections
not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or
the evidence on record that the court has no jurisdiction over the subject
matter, that there is another action pending between the same parties for the
same cause, or that the action is barred by a prior judgment or by statute of
limitations, the court shall dismiss the claim.
Under Rule 11, it is within the discretion of the trial
court to permit the filing of defendant’s answer even beyond the reglementary period, provided there is justification for
the belated action, and there was no showing that the defendant intended to
delay the case. Petitioners may be
considered to have committed excusable negligence when they waited for the
counsel of their choice who was out of town which caused the delay in filing
their Answer; and the Motion to Admit Answer was filed before the scheduled
date of hearing on the Motion to Declare Petitioners in Default, showing that
petitioners had no intention to delay the case.
Under Rule 9, the trial court may motu
proprio dismiss the claim when it appears from
the pleadings or evidence on the record that there is another cause of action
pending between the same parties for the same cause. With the alleged affirmative defense of litis pendentia,
the trial court had justifiable compelling reason to recall its premature
Order declaring petitioners in default.
In a case,[16] we
found the trial court to have gravely abused its discretion when it declared
defendants in default; that the answer should be admitted because it had been
filed before it was declared in default and no prejudice was caused to
plaintiff; and that the hornbook rule is that default judgments are generally
disfavored.[17]
In this case, since the Order dated
Basic elementary sense of fairness,
liberality and substantial justice so dictate that the premature Order be
considered as null and void. It is the
avowed policy of the law to accord both parties every opportunity to pursue and
defend their cases in the open and relegate technicality to the background in
the interest of substantial justice.[18]
Since the Order dated
We reiterate the ruling in Akut
v. Court of Appeals,[19] where we found that the trial court committed grave
abuse of discretion in declaring therein petitioners in default and in denying their
motion to set aside the order of default, thus:
The controlling principle ignored by
respondent court is that it is within sound judicial discretion to set aside an
order of default and to permit a defendant to file his answer and to be heard
on the merits even after the reglementary period for
the filing of the answer has expired. This
discretion should lean towards giving party-litigants every opportunity to
properly present their conflicting claims on the merits of the controversy
without resorting to technicalities. Courts
should be liberal in setting aside orders of default, for default judgments are
frowned upon, and unless it clearly appears that reopening of the case is
intended for delay, it is best that the trial courts give both parties every
chance to fight their case fairly and in the open, without resort to
technicality. x x
x
x x x Moreover, petitioners' answer shows that they have a prima
facie meritorious defense. They
should, therefore, be given their day in court to avoid the danger of
committing a grave injustice if they were denied an opportunity to introduce
evidence in their behalf.
Our ruling in Mercader
v. Bonto[20]
and the copious precedents therein cited that "considering that the
late filing of defendants' answer was due to excusable negligence and that they
appear to have a meritorious defense; that defendants filed an answer before
they were declared in default; and that the late filing of the answer did not
in any way prejudice or deprive the plaintiff of any substantial right, nor was
there intention to unduly delay the case, WE hold that the respondent judge
committed an abuse of discretion in declaring the defendants in default and in
refusing to set aside the order of default" is fully applicable to the
case at bar.
Time and again the Court has enjoined
trial judges to act with circumspection and not to precipitately declare
parties in default, needlessly compelling the aggrieved party to undergo the
additional expense, anxiety and delay of seeking the intervention of the
appellate courts and depriving them of the much needed time and attention that
could instead have well been devoted to the study and disposition of more
complex and complicated cases and issues.[21] (Emphasis supplied)
In sum, we find that the RTC Order declaring petitioners in
default and its subsequent Order denying petitioners’ Motion to Lift Order of Default
are null and void; and the CA erroneously upheld the assailed Orders of the
trial court.
WHEREFORE, the petition for review is GRANTED.
The Decision of the Court of Appeals
dated April 30, 2002 in CA-G.R. SP No. 64961 is REVERSED and SET ASIDE.
The Order of Default of the Regional
Trial Court is SET ASIDE and the Answer filed by petitioners is deemed ADMITTED. The trial court is DIRECTED to
continue with deliberate speed with the proceedings in the case below.
Costs against private respondent.
SO ORDERED.
MA. ALICIA AUSTRIA-MARTINEZ
Associate
Justice
WE CONCUR:
Chief Justice
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CONSUELO YNARES-SANTIAGO Associate Justice |
ROMEO J. CALLEJO, SR. Associate Justice |
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MINITA V. CHICO-NAZARIO Associate Justice |
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, it is hereby certified that the conclusions in the above Decision
were reached in consultation before the case was assigned to the writer of the
opinion of the Court’s Division.
ARTEMIO V.
PANGANIBAN
Chief Justice
[1] Penned by Justice Edgardo P. Cruz, concurred in by Justices Mariano C. del Castillo and Regalado E. Maambong; CA rollo, pp. 115-121.
[2]
Entitled “Sps. Humberto delos
[3]
Docketed as Civil Case No.
28,362-2001.
[5]
CA rollo,
pp. 115-117.
[6]
Rollo,
pp. 16-17.
[7] Atty.
Paa v. Court of Appeals, 347 Phil. 122, 136
(1997).
[8] Oscar M. Herrera, Comments on the 1997 Rules of Civil Procedure as amended, Volume VII, p. 101, 1997 edition.
[9]
[10]
Rules of Court, Rule 9, Section 3.
[11] Herrera,
Remedial Law, Volume I, p. 733, 2000 edition.
[12]
[13]
Records, pp. 13-14.
[14]
[15]
Set for hearing on the same
day that the hearing on the motion to declare petitioners in default was set.
[16]
[17]
[18]
Republic of the
[19] 201
Phil. 680 (1982).
[20]
G.R. No. L-48564,
[21]
Supra note 19, at 687-688.