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Transcript of Rule 9 (Outline, Case Digest & Fulltext)
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Outline: Rule 9Effect of Failure to Plead CIVIL PROCEDURE
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Lesson for August 30, 2014
Effect of Failure to Plead
1. Effect of failure to plead - Rule 9
a) Failure to plead defenses and objections - Sec. 1, Rule 9
- Garcia v. Mathis, G.R. No. L-48577, September 30, 1980
b) Failure to plead a compulsory counterclaim and cross-claim - Sec. 2, Rule 9
- Meliton v. CA, G.R. No. 101883, December 11, 1992
2. Default - Sec. 3, Rule 9
a) When a declaration of default is proper
- Rosario v. Alonzo, G.R. No. L-17330, June 29, 1963
b) Effect of an order of default - Sec. 3(a), Rule 9
- Co v. Acosta, G.R. No. 64591, January 17, 1985
- Boticano v. Chu, G.R. No. L-58036, March 16, 1987
c) Relief from an order of default - Sec. 3(b), Rule 9
- Denso (Phil.), Inc. v. IAC, G.R. No. 75000, February 27, 1987
- Lina v. CA, G.R. No. L-63397, April 9, 1985
d) Effect of a partial default - Sec. 3(c), Rule 9
- Lim Tanhu v. Ramolete, G.R. No. L-40098, August 29, 1975
e) Extent of relief - Sec. 3(d), Rule 9
- Pascua v. Hon. Florendo, G.R. No. L-39047, April 30, 1985
f) Actions where default is not allowed - Sec. 3(e), Rule 9
- Dela Cruz v. Hon. Ejercito, G.R. No. L-40895, November 6, 1975
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Failure to plead defenses and objections - Sec. 1, Rule 9
GARCIA vs MATHIS
G.R. No. L-48577, September 30, 1980
Facts:
In Civil Case No. D-4097 of the CFI of Pangasinan,
presided by the respondent judge, Sulpicio Garcia, the
petitioner herein, sued Colonel Paul C. Mathis in his
capacity as Base Commander, CAFB, acting for and in
behalf of the United States of America.
The complaint alleged that Garcia was a civilian
employee at Clark Air Force Base from May 26, 1949, to
August 23, 1956, when he was dismissed for alleged
bribery and collusion. He prayed inter alia that he be
reinstated to his former position, and paid back wages,
moral damages, attorney's fees and costs of the suit.
Defendant Mathis entered a special
appearance and filed a motion for the dismissal of thecomplaint upon the ground that the trial court had no
jurisdiction over his person because he was being sued as
the representative of a foreign sovereign "which has not
consented and does not now consent to the maintenance
of the present suit."
On June 7, 1978, the respondent judge issued an
Order, that the cause of action has already prescribed,
because paragraphs 3 and 5 of the complaint alleged that
the services of the plaintiff has been terminated on August
23, 1956.
Issue:
Whether or not respondent judge committed a
grave abuse of discretion amounting to lack of jurisdiction
when he dismissed the complaint on the ground of
prescription which Mathis did not raise in any of his
pleadings.
Held:
GR: Action will not be held to have prescribed if
prescription is not expressly invoked.XPN: When the plaintiff's own allegations in his complaint
show clearly that the action has prescribed.
The plaintiff's action had prescribed for he alleged
that he was removed on August 23, 1956 but the case was
filed only on November 18, 1977, after a lapse of more
than 21 years. Prescinding, therefore, the defense of
jurisdiction which is apparently meritorious, the complaint
was properly dismissed.
It is not incorrect to state that because of the
special appearance which Mathis had entered, he was
constrained to confine himself to showing that the trial
court did not have jurisdiction over his person and had to
exclude all other non-jurisdictional grounds in his motion
to dismiss otherwise he could be deemed to have
abandoned his special appearance and voluntarily
submitted himself to the jurisdiction of the court.
Petition, dismissed.
Failure to plead a compulsory counterclaim and cross-
claim - Sec. 2, Rule 9
MELITON vs CA
G.R. No. 101883, December 11, 1992
Facts:
Nelia Ziga, in her own behalf and as attorney-in-
fact of Alex A. Ziga and Emma A. Ziga-Siy, filed a complaint
(Civil Case No. RTC 88-1480 of the RTC of Naga City)against petitioner Lydia Meliton for rescission of a contract
of lease over a parcel of land.
Petitioner, as lessee, failed to deposit the one
month rental and to pay the monthly rentals due; that her
construction of a concrete wall and roof on the site of a
demolished house on the leased premises without the
lessor's written consent; and here unauthorized sublease
of the leased property to a third party.
Lydia Meliton filed an answer to the complaint
denying the material averments and setting up three
counterclaims for recovery of the value of her kitchenette
constructed on the leased parcel of land and which was
demolished by Ziga.
The RTC, on motion of Ziga contending that her
cause of action had already become moot and academic
by the expiration of the lease contract, dismissed the
complaint. The counterclaims of Meliton were also
dismissed for non-payment of the docket fees, ergo the
trial court's holding that thereby it had not acquired
jurisdiction over the same.
Spouses Meliton filed a complaint against Ziga forrecovery of the same amounts involved and alleged in
their counterclaims.
Ziga filed a motion to dismiss the complaint on
the ground that the cause of action was barred by prior
judgment. This was denied on the ground that the
dismissal of the petitioner's counterclaim is not an
adjudication on the merits as the court did not acquire
jurisdiction over the counterclaims for failure of Meliton to
pay the docket fees, hence the said dismissal does not
constitute a bar to the filing of the later complaint. Zigas
MR was denied.
Ziga filed a petition for certiorari with the SC. The
case was referred to the CA.
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CA granted the petition, and reversed the RTC
Decision. The respondents' counterclaim against the
petitioner is a compulsory counterclaim, it having arisen
out of or being necessarily connected with the transaction
or occurrence subject matter of the petitioner's complaint.
The failure of the respondents to seek a reconsideration of
the dismissal of their counterclaim or to take an appeal
therefrom rendered the dismissal final. Such dismissal
barred the prosecution of their counterclaim by another
action.
Hence, this petition.
Issues:
(1) Whether or not the counterclaims of petitioners are
compulsory in nature.YES
(2) Whether or not petitioners, having failed to seek
reconsideration of or to take an appeal from the order of
dismissal of their counterclaims, are already barred fromasserting the same in another action.NO
Held:
1. Whether or not the counterclaims of petitioners are
compulsory in nature.YES
Section 4 of Rule 9 of the Rules of Court, a
counterclaim is compulsory if (a) it arises out of, or is
necessarily connected with, the transaction or occurrence
which is the subject matter of the opposing party's claim;
(b) it does not require for its adjudication the presence of
third parties of whom the court cannot acquire
jurisdiction; and (c) the court has jurisdiction to entertain
the claim.
To determine whether the counterclaim is
compulsory or permissive, the "one compelling test of
compulsoriness" is the logical relationship between the
claim alleged in the complaint and that in the
counterclaim, that is, where conducting separate trials of
the respective claims of the parties would entail asubstantial duplication of effort and time, as where they
involve many of the same factual and/or legal issues.
In the Civil Case No. 88-1480, all the requisites of
a compulsory counterclaim are present. Zigas complaint
was for rescission of the contract of lease due to Lydia
Meliton's breach of her obligations under the said
contract. On the other hand, Melitons counterclaims were
for damages for unlawful demolition of the improvements
she introduced pursuant to her leasehold occupancy of the
premises, as well as for the filing of that civil suit which is
contended to be clearly unfounded. Both the claims arose
from the same contract of lease. The two actions are but
the consequences of the reciprocal obligations imposed by
law upon and assumed by the parties under their lease
contract.
In actions for ejectment or for recovery of
possession of real property, it is well settled that the
defendant's claims for the value of the improvements on
the property or necessary expenses for its preservation are
required to be interposed in the same action as
compulsory couterclaims.
CA correctly held that the counterclaims of
petitioners are compulsory in nature.
2. Whether or not petitioners, having failed to seek
reconsideration of or to take an appeal from the order of
dismissal of their counterclaims, are already barred from
asserting the same in another action.NO
In order that a prior judgment will constitute a
bar to a subsequent case, the following requisites mustconcur: (1) The judgment must be final; (2) The judgment
must have been rendered by a court having jurisdiction
over the subject matter and the parties; (3) The judgment
must be on the merits; and (4) There must be between the
first and second actions, identity of parties, of subject
matter, and of causes of action.
Civil Case No. RTC 88-1480 was dismissed upon
motion of Ziga under Section 2 of Rule 17. Dismissal is
without prejudice, except when otherwise stated in the
motion to dismiss or when stated to be with prejudice in
the order of the court. The order of dismissal of the first
case was unqualified, hence without prejudice and,
therefore, does not have the effect of an adjudication on
the merits. On a parity of rationale, the same rule should
apply to a counterclaim duly interposed and which is
likewise dismissed but not on the merits.
In the same order of dismissal of the complaint,
the counterclaims of petitioners were dismissed by reason
of the fact the court a quo had not acquired jurisdiction
over the same for non-payment of the docket fees. On
that score, the said dismissal was also without prejudice,since a dismissal on the ground of lack of jurisdiction does
not constitute res judicata, there having been no
consideration and adjudication of the case on the merits.
The dismissal of the case without prejudice
indicates the absence of a decision on the merits and
leaves the parties free to litigate the matter in a
subsequent action as though the dismissal action had not
been commenced. The discontinuance of a case not on the
merits does not bar another action on the same subject
matter. Evidently, the prior dismissal of herein petitioners'
counterclaims is not res judicata and will not bar the filing
of another action based on the same causes of action.
CA decision, reversed and set aside.
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When a declaration of default is proper
ROSARIO vs ALONZO
G.R. No. L-17330, June 29, 1963
Facts:
This is an action for partition of two parcels of
lands (in Ilocos Sur).
Plaintiffs: alleged that the said parcels of land belonged to
the conjugal partnership of their late father, Hilario
Rosario and Juana Alonzo, his second wife.
Defendants:alleged that out of the proceeds of the sale of
cattle they had inherited from their deceased father, Eleno
Manzano, they purchased the first parcel of land and had
been in possession thereof as owners for more than 20
years and paying the realty tax thereon; while the second
parcel of land was acquired through occupation andhomestead by Juana Alonzo and Roberto Hilario who had
in possession thereof as owners for more than 20 years
and also paying the realty tax thereon; that Hilario, the
second husband of Juana, was blind for 30 years and could
not have earned money to purchase any parcel of land;
thus, the action of the plaintiffs was reckless, groundless
and barred by statute of limitations; further prayed for the
dismissal of the complaint and payment of P300 as for
damages.
The parties submitted a partial agreed statement
of facts and reserved the right to present evidence. The
hearing was set, however, the defendants and their
counsel failed to appear. The plaintiffs rested its case after
presentation of their exhibits. The trial court rendered
judgment in favor of the plaintiffs. A motion for
reconsideration was filed by the defendants but it was
denied for no affidavit of merit was attached to the
motion. Another motion was filed for the setting aside of
the judgment and leave to present evidence. It was again
denied based on the first ground. The defendants
appealed to CA, which dismissed the aforesaid appeal.Thus, a petition for certiorari was filed to SC, but in its
Resolution, set aside the CA resolution, and remanded the
case to CA for judgment on the merits. The CA certified the
case to SC based on the grounds that the petitioners raised
legal questions only. Hence, this petition.
Issue:
Whether or not the declaration of default is
properNO
Held:
Having answered the complaint filed by the
appellees, the appellants were not and could not be in
default. The appellants complaint that in refusing to
relieve their counsel from the effects and consequences of
his failure to appear and defend their case, the lower court
committed, a grave injustice to their prejudice, for they
contend that such failure was due to his forgetfulness and
oversight.
Although the two motions for reconsideration
were sworn to by the attorney, for the appellants, still
such motions were not "accompanied with affidavits
showing the fraud, accident, mistake, or excusable
negligence relied upon, and the facts constituting the
petitioner's good and substantial cause of action or
defense, as the case may be, which he may prove if his
petition be granted," provided for and required in section
3 of Rule 38, as Rules of Court.
The order appealed from is affirmed, with costs
against the appellants.
Effect of an order of default - Sec. 3(a), Rule 9
CO vs ACOSTA
G.R. No. 64591, January 17, 1985
Facts:
Pepsi Cola Bottling Company of the Philippines,
Inc. (PEPSI), through Mr. C.M. Aboitiz issued three
purchase orders addressed to CTC Appliance Center for
12,000 units of refrigerators valued at P35,322,900.00.
Petitioner Rufino Co is the proprietor of the Center.
In a formal deed of assignment, petitioner Co
assigned his rights and interests to the three purchase
orders and to the money value of the deliveries made or to
be made thereunder to respondent Refrigerations
Industries, Inc. (RII).
PEPSI wrote a letter to the private respondents
informing them that it took notice of the assignments ofthe purchase orders by the petitioner and stated that it
was not recognizing the same.
In the course of time, 10,000 units of refrigerators
were delivered and paid. No problem arose from these
10,000 units.
PEPSI wrote a letter to the petitioner requesting
the delivery of 1,000 units of refrigerators and stating that
PEPSI will be talking directly to respondent RII through Mr.
Dominador Gana on the matter of storage fees.
From March 23, 1981 to May 21, 1981 PEPSI
received 1,000 units of refrigerators directly from
respondent RII. The total invoice price of these units was
P2,907,535.00.
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Private respondent RII sent a letter of demand to
PEPSI. PEPSI wrote private respondent RII acknowledging
receipt of the demand letter but stating that it does not
recognize and does not feel bound by the petitioners
assignment of the purchase orders. Private respondent RII
sent another letter of demand to PEPSI demanding
payment of the P2,907,535.00 within five days. PEPSI
informed respondent RII that there is no legal basis for the
demand and no reason for PEPSI to pay the 1,000 units. It
added further that respondent RIIs recourse is against the
petitioner.
Failing to collect from PEPSI, private respondent
RII sent a letter of demand to the petitioner demanding
payment, but the latter refused and failed to pay. Private
respondent RII and Delta Motors Corporation filed a civil
case for a sum of money with attachment before the Court
of First Instance of Rizal, against Pepsi Cola Bottling
Company of the Philippines, Inc. and petitioner Rufino Co.Private respondents filed a formal ex-parte
motion to dismiss the complaint against PEPSI. Attached to
the motion is an instrument entitled "Joint Release,
Waiver and/or Quitclaim" which covenants that Delta
Motors, RII, and PEPSI mutually agreed to release and
forever discharge each other from any and all liabilities or
causes of action arising out of the transaction involving the
1,000 units of refrigerators in order to maintain
harmonious business relations among the parties.
The respondent court issued an order, on
plaintiffs motion, dismissing the complaint against the
defendant PEPSI.
The private respondents filed an ex-parte motion
to declare the petitioner Rufino Co in default for having
failed to file his answer.
The respondent court issued an order declaring
Rufino Co in default and RII is allowed to present its
evidence ex-parte. The respondent court rendered its
decision in favor of the plaintiffs and against the defendant
Rufino Co, ordering the latter to pay the former the sum of
P2,907,535.00 plus the legal rate of interest therein fromdate of demand; the sum of P200,000.00 as and by way of
attorneys fees; plus the costs of suit.
Petitioner Co filed a "Petition for Relief from
Judgment".
Pending resolution of the petitioners petition for
relief from judgment, the respondent court issued a writ of
execution and, as a consequence, virtually all of the
petitioners real properties werelevied upon on execution
and advertised for sale at public auction.
The petitioner filed a motion for a restraining
order to restrain the writ of execution and thereafter, filed
an urgent motion for resolution of his petition for the
issuance of a restraining order.
The petitioner again filed an urgent
supplementary motion for a restraining order pending the
resolution of his petition for relief or a motion to dismiss
the case.
The petitioner filed still another urgent motion for
resolution of his petition for the issuance of a restraining
order pointing out that the respondent court had not
resolved his motion even as the date of sale in the sheriffs
notice for the sale on execution of his properties was only
a few days away.
The respondent court issued the following order
denying, for lack of merit, the "Petition for Relief from
Judgment" and the "Petition for the Issuance of a
Restraining Order filed by Rufino Co.
Supreme Court (SC) issued a temporary
restraining order enjoining the respondent Regional Trial
Court from taking further action in this civil case, more
particularly from taking any further proceedings relative tothe writ of execution in this civil case, until further orders.
Issue:
Considering that under the allegations of the
complaint, both the defendants PEPSI and Co are
indispensable parties, sued under a common cause of
action, may the plaintiff move to dismiss the case against
the PEPSI without notice to defendant Co? Yes
Held:
The petitioner contends that he and PEPSI are
indispensable parties sued under a common cause of
action and that if the complaint is dismissed insofar as
PEPSI is concerned, the court should have ordered also the
dismissal of the case insofar as it affects the petitioner.
According to him, it does not matter that the dismissal is
upon the evidence presented by the plaintiff or upon the
latters mere desistance, for in both instances, a lack of
sufficient legal basis must be the cause.
The private respondents state that the petitioner
is confusing the decision of the court a quo becauseinstead of questioning the order denying the petition for
relief from judgment, the petitioner assails the decision of
the court which has already become final and executory
with the writ of execution issued already being
implemented by the deputy sheriff.
Supreme Court agreed with the petitioner. The
private respondents complaint for a sum of money with
attachment against PEPSI and Co clearly shows that PEPSI
and the petitioner are indispensable parties to the case. In
fact the private respondents sued both PEPSI and the
petitioner under a common cause of action.
Likewise, the affidavit attached in support of the
complaint is framed in such a way that there can be no
doubt as to the intention of the private respondents in
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suing PEPSI and the petitioner herein as indispensable
parties.
SCs ruling in Lim Tanhu v. Hon. Ramolete is
applicable to the instant petition. The fact that in the case
of Lim Tanhu several defendants were declared in default
and the defenses set up by those who answered the
complaint were available to those who were in default,
while in the case at bar both PEPSI and the petitioner did
not answer the complaint, is of no moment because Lim
Tanhu cases ruling was based on the fact that all the
defendants therein were indispensable parties and the
plaintiff moved for the dropping of two defendants from
the complaint. The situation is similar to this case where
both PEPSI and Rufino Co were sued as indispensable
parties under a common cause of action, and on motion of
the private respondent PEPSI was dropped as a party
defendant.
Applying Tanhu ruling, SC found that therespondent court erred in (1) declaring petitioner Co in
default; (2) in hearing the plaintiffs evidence ex -parte on
December 3, 1982; (3) in rendering the decision dated
March 9, 1983; (4) in issuing the writ of execution and in
having the petitioners properties levied upon in
execution; (5) in having them advertised for sale, and
consequently, (6) in ordering them sold to answer for the
private respondents claim. After the lower court dropped
PEPSI as a party defendant in Civil Case No. 42815, the
respondent court lost authority to act further in the case
insofar as the petitioner is concerned.
Effect of an order of default - Sec. 3(a), Rule 9
BOTICANO vs CHU
G.R. No. L-58036, March 16, 1987
Facts:Petitioner Eliseo Boticano is the registered owner
of a Bedford truck with plate No. QC-870 which he was
using in hauling logs for a certain fee. One evening, while
loaded with logs, it was properly parked by its driver
Maximo Dalangin at the shoulder of the national highway
in Barrio Labi, Bongabon, Nueva Ecija when it was hit and
bumped at the rear portion by a Bedford truck bearing
plate No. QK-516 owned by private respondent Manuel
Chu, Jr. and driven by Jaime Sigua, the formers co-
defendant in this case. Manuel Chu, Jr. acknowledged
ownership thereof and agreed with petitioner to shoulder
the expenses of the repair of the damaged truck of the
latter.
When Manuel Chu, Jr. failed to comply with
aforesaid agreement as well as to pay damages
representing lost income despite petitioners demands,
the latter (plaintiff in the lower court), filed a complaint at
the Court of First Instance against private respondent
Manuel Chu, Jr. and Jaime Sigua, both as defendants in a
civil case.
Summons was issued but was returned unserved
for defendant Jaime Sigua because he was no longer
connected with San Pedro Saw Mill, Guagua, Pampanga,
while another copy of the summons for Manuel Chu, Jr.
was returned duly served on him thru his wife Veronica
Chu at his dwelling house.
Petitioner moved to dismiss the case against
Jaime Sigua and to declare Manuel Chu, Jr. in default for
failure to file responsive pleadings within the reglementary
period. The motion was granted by the lower court in an
order allowing petitioner to adduce his evidence ex parte.From the evidence adduced by the plaintiff
(petitioner), the trial court found that private respondent
Manuel Chu, Jr. is responsible for the fault and negligence
of his driver Sigua under Article 2180 of the Civil Code,
whose negligence and lack of due care was the immediate
and proximate cause of the damage to petitioners truck
and ruled in favor of plaintiff-petitioner.
On March 19, 1979 private respondent Manuel
Chu, Jr. filed with the trial court a "Notice of Appeal" and
an Urgent Motion for Extension of Time to File Record on
Appeal which was granted by the trial court on the same
date.
Atty. Hermenegildo D. Ocampo, counsel of record
of private respondent, filed a "Motion to Withdraw as
Counsel" while the new counsel Atty. Wilfredo G.
Laxamana entered his appearance and filed his record on
appeal.
Petitioner filed with the trial court a Motion to
Dismiss Appeal and for execution wherein private
respondents counsel personally appeared and opposed
petitioners motion. Petitioner filed his reply to opposition.The trial court issued an order denying aforesaid motion.
The trial court issued another order approving private
respondents Record on Appeal.
Court of Appeals issued its decision setting aside
the appealed judgment for being null and void and its
order denying petitioners motion for reconsideration.
Hence, this petition.
Issue:
If the defendant in the Regional Trial Court has
been declared in default, may he appeal the default
judgment that may subsequently be rendered even if he
has not asked the RTC to set aside the declaration of
default? Yes!
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Held:
The answer is in the affirmative. However a
distinction must be made as to the effects of such appeal.
(a) If an appeal is made without first asking the
RTC to set aside the declaration of default, and the
appellate court sets aside on said declaration, all he can
get is a review of the RTCs default judgment without the
opportunity of having the higher court consider defense
evidence (for the simple reason that no evidence was even
adduced by him in the RTC) (Rule 41, sec. 2, par. 3, Rules of
Court).
(b) If upon the other hand, the defendant first
asks the RTC to set aside the declaration of default (Rule
18, secs. 2 and 3, Rules of Court), and he is able to prevail,
the declaration will be set aside, and he will now have the
opportunity to present his evidence in the RTC. Thus, even
if he finally loses in the RTCs subsequent decision, his
defense can be considered, when appeal is made to theappellate tribunal. Of course, even if the default
declaration is not set aside despite his motion for the
setting aside, he will be entitled to all notices in the court
proceedings, and can file any pleading he may wish to file,
including the notice of appeal. (Rule 13, sec. 9, Rules of
Court).
Incidentally, the afore-mentioned rules apply to
default declarations in the Metropolitan Trial Courts, the
Municipal Trial Courts, and the Municipal Circuit Trial
Courts, for under Batas Pambansa Bilang 129, the said
inferior courts will follow the rules in the RTC. Note
however that in summary proceedings, there can be no
default declarations.
In the case at bar, there is no question that
summons was timely issued and received by private
respondent. In fact, he never denied actual receipt of such
summons but confined himself to the argument that the
sheriff should prove that personal service was first made
before resorting to substituted service.
This brings to the fore the question of procedural
due process. In Montalban v. Maximo, the Court ruled that"The constitutional requirement of due process exacts that
the service be such as may be reasonably expected to give
the notice desired. Once the service provided by the rules
reasonably accomplishes that end, the requirement of
justice is answered; the traditional notions of fair play are
satisfied; due process is served."
Indeed, such construction is but fair, and in
accord with substantial justice. The burden on a plaintiff is
not to be enlarged with a restrictive construction desired
by the defendant.
Finally in a last ditch effort, private respondent
insists that there was no valid service of summons because
private respondent is a partner and general manager in
San Pedro Sawmill. Consequently the wife of private
respondent to whom summons and complaint were
allegedly served not being partnership, cannot receive the
same under Section 13 of Rule 14 of the Rules of Court.
It has however been settled that actions must be
brought by the real parties in interest and against the
persons who are bound by the judgment obtained therein.
The title of the case both in the trial court, in the
Court of Appeals and in the Supreme Court shows that the
partnership is not a party. On the contrary, as previously
stated private respondent himself assumed the
responsibility of the accident and is now estopped to
disclaim the liabilities pertaining thereto.
From what has been discussed the following
conclusions are hereby made: jurisdiction was properly
acquired by the trial court over the person of respondent
thru both service of summons and voluntary appearance in
court; he was therefore properly declared in default for
not having filed any answer; despite respondents failureto file a motion to set aside the declaration of default, he
has the right to appeal the default judgment but in the
appeal only the evidence of the petitioner may be
considered, respondent not having adduced any defense
evidence; the Supreme Court agreed with the findings of
fact by the trial court, the same being unrebutted.
WHEREFORE, the assailed decision and resolution
of the Court of Appeals are REVERSED and SET ASIDE, and
the decision of the then Court of First Instance (now
Regional Trial Court) of Nueva Ecija, Cabanatuan City in
Civil Case No. 6754 "Eliseo Boticano v. Manuel Chu, Jr. and
Jaime Sigua" is hereby REINSTATED.
Relief from an order of default - Sec. 3(b), Rule 9
DENSO (PHIL.), INC. vs IAC
G.R. No. 75000, February 27, 1987
Facts:A fire broke out at the Nippondenso Building
which was owned by the Kayamanan Development
Corporation (KAYAMANAN), and was then under lease to
Denso (Phils), Inc. (DENSO). The fire caused extensive
damage. DENSO and its correspondent firm in Japan,
NIPPONDENSO, reportedly suffered losses amounting to
P6,131,976.65 and P682,212.58. On the other hand,
KAYAMANAN's loss was placed at P1,750,000.00.
KAYAMANAN instituted an action against DENSO
before the RTC for recovery of (a) unpaid rentals; (b) the
cost of repairing the damage caused by the fire to the
leased building, it being alleged that DENSO was bound to
bear said cost under their lease agreement; and (c)
unrealized monthly rents and attorney's fees.
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Summons was served on DENSO but summons
(together with the accompanying copy of the complaint)
was not referred by DENSO to its counsel until June 22,
1985. This prompted the latter to file on June 25, 1985 a
"MOTION FOR EXTENSION OF TIME TO FILE ANSWER,"
pleading the late referral, the need to attend to other legal
work of equal importance, as well as the time requirement
for study of the factual and legal points involved in the
action, and praying, in consequence, for an additional
period of 15 days from June 25 within which to present the
requisite responsive pleading. The motion closed with a
"Notice of Hearing" addressed to the Clerk of Court, asking
that the motion be submitted to the court for
consideration and approval immediately upon its receipt;
and a notation that a copy of the motion had been
furnished plaintiff KAYAMANAN's counsel.The copy of the
motion was actually received by KAYAMANAN's counsel
the following day, June 26, 1985 .Motion for extension was denied. KAYAMANAN
presented an "Ex parte Motion to Declare Defendant in
Default" asserting that the reglementary period of 15 days
for DENSO to file answer had expired on June 25, 1985
without any answer having been filed, but making no
reference to DENSO's motion for extension which, as
above stated, had been received by it on June 26, 1985.
Judge Guadiz promulgated an Order deeming the motion
for default to be "well-taken," and accordingly declaring
DENSO in default and setting the reception of
KAYAMANAN's evidence ex-parte.
DENSO learned of the order of default and the
judgment by default. It then filed a verified motion for
reconsideration of said order and judgment. Acting
thereon, the Trial Court promulgated an Order setting
aside, "in the interest of substantial justice," the order of
default as well as the decision; but hearing was
rescheduled only for the presentation of defendant
DENSO's evidence, the Court explicitly stating that the
evidence already presented (by KAYAMANAN) would
remain on record "without the right of cross examinationon the part of the defendant." The hearing was set on
October 2, 1985 but at DENSO's instance, was re-
scheduled on October 24, 1985.
DENSO submitted its formal motion for
reconsideration praying for the right to cross-examine
KAYAMANAN's witnesses. The record does not show that
any opposition to the motion was ever filed. DENSO
received notice of the Order of the Court dated October
24, 1985 (the date of the hearing), denying its (DENSO's)
motion to be allowed to cross-examine KAYAMANAN's
witnesses, and scheduling the initial hearing for the
presentation of the defense witnesses.
DENSO then asked for deferment of the hearing
so that it might elevate this adverse ruling to a higher
court. This was denied, and when DENSO declared itself as
not ready to proceed with the presentation of evidence,
the Court dictated an Order stating that "this being the
third time that defendant failed to present its evidence
notwithstanding the chance given to it, the 'Decision'
dated July 1, 1985 is revived."
Without awaiting service of the Order, DENSO
filed a petition for certiorari with the Intermediate
Appellate Court, praying for the annulment of the series of
orders of Judge Guadiz already referred to, starting with
the order of default of June 26, 1985 and culminating in
the order of January 9, 1986 reviving the judgment by
default.
The Intermediate Appellate Court (Fourth Special
Cases Division) considered the crucial issue to be "the
propriety or impropriety" of the order which, while setting
aside the previous order of default and the judgment by
default, prescribed that the evidence already presentedwould remain in the record and denied petitioner the right
to cross-examine the respondent's witnesses who had
testified at the ex-parte hearing. It declared unnecessary
further consideration of the order of default and judgment
by default thus set aside, and limited its review of the
proceedings to the question of whether or not the
petitioner was properly denied the right of cross-
examination.
Appellate Court ruled that the right of cross-
examination, while a part of due process so that denial
thereof amounts to depriving a party of his day in court, is
nonetheless waivable; that since petitioner received copy
of the order setting the judgment by default aside and
scheduling the case for hearing only for reception of
defendant's evidence without right to cross-examine
plaintiff's witnesses but did not move for its
reconsideration after a lapse of 38 days, such inaction
amounted to a waiver of the claimed right to cross-
examine; and, moreover, said motion for reconsideration
came too late because the order sought to be
reconsidered was by then already final, the applicableperiod of appeal being only fifteen (15) days from notice of
said order, and that (in any event) DENSO was guilty of
laches.
Issue:
Whether or not IAC is correct.
Held:
No. The Decision of the Intermediate Appellate
Court under review is reversed and set aside.
The error in these pronouncements is
immediately apparent. They assume that the order in
question is a final-and appealable order, when it is in
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fact interlocutory. The distinction between final and
interlocutory orders is a well-settled one.
The concept of "final" judgment, as distinguished
from one which has "become final" (or "executory" as of
right [final and executory]), is definite and settled. A "final"
judgment or order is one that finally disposes of a case,
leaving nothing more to be done by the Court in respect
thereto, e.g., an adjudication on the merits which, on the
basis of the evidence presented at the trial, declares
categorically what the rights and obligations of the parties
are and which party is in the right; or a judgment or order
that dismisses an action on the ground, for instance, of res
judicata or prescription. Once rendered, the task of the
Court is ended, as far as deciding the controversy or
determining the rights and liabilities of the litigants is
concerned. Nothing more remains to be done by the Court
except to await the parties' next move (which among
others, may consist of the filing of a motion for new trial orreconsideration, or the taking of an appeal) and ultimately,
of course, to cause the execution of the judgment once it
becomes 'final' or, to use the established and more
distinctive term, "final and executory." ...
xxx xxx xxx
Conversely, an order that does not finally dispose
of the case, and does not end the Court's task of
adjudicating the parties' contentions and determining their
rights and liabilities as regards each other, but obviously
indicates that other things remain to be done by the Court,
is "interlocutory," e.g., an order denying a motion to
dismiss under Rule 16 of the Rules, or granting a motion
for extension of time to file a pleading, or authorizing
amendment thereof, or granting or denying applications
for postponement, or production or inspection of
documents or things, etc. Unlike a "final" judgment or
order, which is appealable, as above pointed out, an
"interlocutory" order may not be questioned on appeal
except only as part of an appeal that may eventually be
taken from the final judgment rendered in the case.
That the order of September 3, 1985 wasinterlocutory in character is beyond cavil. In setting aside
the order of default and the succeeding judgment by
default, it left the case open for further proceedings
before the Trial Court, not the least of which was the
reception of evidence for the petitioner. Therefore, it
could not become final in the sense that final judgments
become "final and executory." No appeal therefrom would
lie except in the context and as part of an appeal from a
subsequent final judgment on the merits, and a motion for
reconsideration thereof was not subject to the limiting
fifteen-day period of appeal prescribed for final judgments
or orders.
Neither will the Court consider laches as having
set in by reason of petitioner's allowing thirty-eight (38)
days to pass before seeking a reconsideration of the order,
having in mind not only that such a relatively brief period
cannot by any reckoning be deemed an unreasonable
length of time, but also the fact that while laches is a
defense which operates independently of the statute of
limitations and is subject to no fixed periods, it is also
founded on equity and may be invoked only if the delay in
asserting a claim has worked a change in the conditions
such as would render unjust or inequitable the grant of the
relief sought.
Upon similar premises, this Court has consistently
held, since as early as in 1946, that motions for extension
of time to file record on appeal may be filed and passed
upon ex-parte, and the rulings on that point are applicable,
without differentiation, to motions for extension of time
to file answer.
While the order of default was in fact set aside by
the Trial Judge on motion of the petitioner, he failed toafford petitioner the complete relief that the arbitrary and
improper issuance of said order and of the earlier order
denying the motion for extension clearly called for. Ideally,
the slate should have been wiped clean by setting aside
also the hearing at which the respondent presented its
evidence ex-parte, so that the parties would stand on even
terms with neither having the advantage of the other.
Instead, the Judge prescribed that the evidence presented
by the KAYAMANAN would remain in the record without
right on the part of DENSO to cross-examine the witnesses
who had already testified, and by necessary implication,
also denied DENSO the right to object to the documentary
evidence submitted by respondent. This, too, was abuse of
discretion. If a defendant is improperly declared in default
his time to answer not having expired because of a
timely ex-parte motion for extension he should be
entitled to relief which should consist not only in the
admission of his responsive pleading, but of the right to
cross-examine the witnesses presented and to object to
the exhibits offered in his absence, if not indeed to have
trial commence all over again. He should not, under thesecircumstances, be penalized by loss of the right to cross-
examine. This would be grossly unwarranted and unfair; it
would amount to a denial of due process.
The Appellate Court's observation that "*** it
cannot be denied that the petitioner had other remedies
at hand after the court a quo had set aside the questioned
Order of default and Default Judgment ***" It is
somewhat perplexing. Given the character of said orders,
particularly of the order of default, this Court is hard put to
conceive how DENSO could have acted to protect its rights
otherwise than as it did here, namely by exhausting all
recourse toward a reconsideration before the Trial Court
and then applying for corrective relief in the Intermediate
Appellate Court. The petition is granted.
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Relief from an order of default - Sec. 3(b), Rule 9
LINA vs CA
G.R. No. L-63397, April 9, 1985
Facts:
Private respondent Northern Motors, Inc. filed
with the CFI Rizal (Pasig) a case for sum of money with
damages. Petitioner Alex Lina was served with summons
together with a copy of the complaint.
Then, when no answer or motion to dismiss was
filed by petitioner, Northern Motors, Inc. filed a motion to
declare him in default. The motion was set for hearing on
May 21, 1982.
Petitioner filed his opposition to the aforesaid
motion inviting attention to the fact that he had filed a
motion for extension of time to file responsive pleading
within the reglementary period.
Respondent judge (Hon. Pineda) issued an orderdeclaring Petitioner herein in default and allowing herein
private respondent to adduce its evidence ex parte.
Petitioner filed his answer to the complaint.
On July 28, 1982, respondent court rendered its
decision in favor of private respondent. Thereafter
petitioner filed a motion to set aside the said decision.
Respondent judge issued an order denying petitioner's
motion to set aside decision.
Petitioner filed with the CA a petition for
certiorari/prohibition.
CAdenied the petition on the ground that: it is
conclusively assumed that the respondent court, in
resolving the motion to declare defendant in default, had
taken into consideration the motion for extension,
especially because the ground of petitioner's opposition to
the motion to declare defendant in default is the fact that
he had asked for extension of time to file responsive
pleading. Now, then, when the respondent court declared
the defendant in default, it is a clear and inevitable
implication, without the need of an express statement to
that effect, although it would have been more desirable,that the motion for extension of nine to file responsive
pleading was denied. In other words, the Order of May 26,
1982 had the necessary and logical implication that the
petitioner's opposition to the motion to declare defendant
in default, based upon the ground that he had asked for
extension of time to file responsive pleading, was
disapproved or denied by the court.
Hence this petition.
Issue/s:
Whether or not certiorari is proper in a case
where judgment by default was rendered without an order
of default being furnished petitioner and where
meritorious defenses exist.
Held:
We agree with the CA. The granting of additional
time within which to file an answer to a complaint is a
matter largely addressed to the sound discretion of the
trial court. In the case at bar, it was on May 5, 1982 or 2
days before the expiration of the 15-dayreglementary
period given to defendant to file his responsive pleading
when petitioner moved for an extension of 20 days which
to file his answer. Upon motion of private respondent and
over the objection of petitioner, respondent judge issued
an order declaring petitioner in default.
Under the Rules of Court, the remedies available
to a defendant in the CFI are:
a) The defendant in default may, at any time
after discovery thereof and before judgment, file a
motion, under oath, to set aside the order of default on
the ground that his failure to answer was due to fraud,accident, mistake or excusable neglect, and that he has a
meritorious defense; (Sec. 3, Rule 18)
b) If the judgment has already been rendered
when the defendant discovered the default, but before
the same has become final and executory, he may file a
motion for new trial under Section 1 (a) of Rule 37;
c) If the defendant discovered the default after
the judgment has become final and executory, he may
file a petition for relief under Section 2 of Rule 38; and
d) He may also appeal from the judgment
rendered against him as contrary to the evidence or to
the law, even if no petition to set aside the order of
default has been presented by him. (Sec. 2, Rule 41)
Petitioner in this case did not avail himself of any
of the above remedies. Instead, he went to the appellate
court on certiorari/prohibition. On this point, respondent
appellate court aptly said: ... where the judgment
rendered by the respondent court is the one sought to be
annulled, a petition for relief, under Rule 38 of the
Revised Rules of Court, which is a remedy in the ordinarycourse of law, could have been just as plain, adequate
and speedy as certiorari.Such a remedy could have been
granted by the respondent court. And if the respondent
court still denies the petition, then petitioner can take an
appeal on the order denying the petition, and in the
course of such appeal petitioner can also assail the
judgment and the merits upon the ground that it is
supported by the evidence, or it is contrary to law. Thus,
the petition is DISMISSED.
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Effect of a partial default - Sec. 3(c), Rule 9
LIM TANHU vs RAMOLETE
G.R. No. L-40098, August 29, 1975
Facts:
A complaint filed on February 9, 1971 by
respondent Tan Put only against the spouses-petitioners
Antonio Lim Tanhu and DyOchay. Subsequently, in an
amended complaint dated September 26, 1972, their son
Lim TeckChuan and the other spouses-petitioners Alfonso
Leonardo Ng Sua and Co Oyo and their son Eng Chong
Leonardo were included as defendants.
In the amended complaint, respondent Tan alleged
that she "is the widow of Tee Hoon Lim Po Chuan, who
was a partner in the commercial partnership, Glory
Commercial Company ... with Antonio Lim Tanhu and
Alfonso Ng Sua that "defendant Antonio Lim Tanhu,
Alfonso Leonardo Ng Sua, Lim TeckChuan, and Eng ChongLeonardo, through fraud and machination, took actual and
active management of the partnership and although Tee
Hoon Lim Po Chuan was the manager of Glory Commercial
Company, defendants managed to use the funds of the
partnership to purchase lands and building's.
The admission of said amended complaint was
opposed by defendants upon the ground that there were
material modifications of the causes of action previously
alleged, but respondent judge nevertheless allowed the
amendment.
All of the included defendants filed single answer
with counterclaim, over the signature of their common
counsel, defendants denied specifically not only the
allegation that respondent Tan is the widow of Tee Hoon
because, according to them, his legitimate wife was
AngSiok Tin still living and with whom he had four (4)
legitimate children, a twin born in 1942, and two others
born in 1949 and 1965, all presently residing in Hongkong,
but also all the allegations of fraud and conversion quoted
above, the truth being, according to them, that proper
liquidation had been regularly made of the business of thepartnership and Tee Hoon used to receive his just share
until his death, as a result of which the partnership was
dissolved and what corresponded to him were all given to
his wife and children.
During the date set for the pre-trial, both of the two
defendants-spouses the Lim Tanhus and Ng Suas, did not
appear, for which reason, upon motion of plaintiff dated
February 16, 1973, in an order of March 12, 1973, they
were all "declared in DEFAULT as of February 3, 1973 when
they failed to appear at the pre-trial." They sought to hive
this order lifted thru a motion for reconsideration, but the
effort failed when the court denied it.
Thereafter, the trial started, but at the stage
thereof where the first witness of the plaintiff by the name
of Antonio Nuez who testified that he is her adopted son,
was up for re-cross-examination, said plaintiff
unexpectedly filed a motion to drop Lim Teck and Eng
Chong (two amongst the several defendants in the case).
The motion to drop was granted.
Subsequently, another order was issued:
Considering that defendants Antonio Lim Tanhu and his
spouse DyOchay as well as defendants Alfonso Ng Sua and
his spouse Co Oyo have been declared in default for failure
to appear during the pre-trial and as to the other
defendants the complaint had already been ordered
dismissed as against them.
A hearing of plaintiffs evidence ex-parte was
scheduled. Upon learning of these orders on October 23,
1973, the defendant Lim Teck Cheng, thru counsel, Atty.
Sitoy, filed a motion for reconsideration thereof, and on
November 1, 1974, defendant Eng Chong Leonardo, thru
counsel Atty. Alcudia, filed also his own motion forreconsideration and clarification of the same orders. These
motions were denied.
Respondent court rendered the impugned decision
but it does not appear when the parties were served
copies of this decision.
Subsequently, all the defendantsfiled a motion to
quash the order on the receipt of evidence ex parte.
Without waiting however for the resolution thereof, Lim
TeckChuan and Eng Chong Leonardo went to the Court of
Appeals with a petition for certiorari seeking the
annulment of the above-mentioned orders. The CA
dismissed the petition on the ground that it was
prematurely filed.
The petitioners now argue before the court that to
begin with, there was compulsory counterclaim in the
common answer of the defendants the nature of which is
such that it cannot be decided in an independent action
and as to which the attention of respondent court was
duly called in the motions for reconsideration. Besides,
and more importantly, under Section 4 of Rule 18,
respondent court had no authority to divide the casebefore it by dismissing the same as against the non-
defaulted defendants and thereafter proceeding to hear it
ex-parte and subsequently rendering judgment against the
defaulted defendants, considering that in their view, under
the said provision of the rules, when a common cause of
action is alleged against several defendants, the default of
any of them is a mere formality by which those defaulted
are not allowed to take part in the proceedings, but
otherwise, all the defendants, defaulted and not
defaulted, are supposed to have but a common fate, win
or lose. In other words, petitioners posit that in such a
situation, there can only be one common judgment for or
against all the defendant, the non-defaulted and the
defaulted.
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Thus, petitioners contend that the order of
dismissal of October 21, 1974 should be considered also as
the final judgment insofar as they are concerned, or, in the
alternative, it should be set aside together with all the
proceedings and decision held and rendered subsequent
thereto, and that the trial be resumed as of said date, with
the defendants Lim TeckChuan and Eng Chong Leonardo
being allowed to defend the case for all the defendants.
On the other hand, private respondent argues that
inasmuch as petitioners had been properly declared in
default, they have no personality nor interest to question
the dismissal of the case as against their non-defaulted co-
defendants and should suffer the consequences of their
own default.
Held:
Being declared in default does not constitute a
waiver of rights except that of being heard and ofpresenting evidence in the trial court. According to Section
2, "except as provided in Section 9 of Rule 13, a party
declared in default shall not be entitled to notice of
subsequent proceedings, nor to take part in the trial." That
provision referred to reads: "No service of papers other
than substantially amended pleadings and final orders or
judgments shall be necessary on a party in default unless
he files a motion to set aside the order of default, in which
event he shall be entitled to notice of all further
proceedings regardless of whether the order of default is
set aside or not." And pursuant to Section 2 of Rule 41, "a
party who has been declared in default may likewise
appeal from the judgment rendered against him as
contrary to the evidence or to the law, even if no petition
for relief to set aside the order of default has been
presented by him in accordance with Rule 38.
defaulted defendant is not actually thrown out of
court. While in a sense it may be said that by defaulting he
leaves himself at the mercy of the court, the rules see to it
that any judgment against him must be in accordance with
law. The evidence to support the plaintiff's cause is, ofcourse, presented in his absence, but the court is not
supposed to admit that which is basically incompetent.
Although the defendant would not be in a position to
object, elementary justice requires that, only legal
evidence should be considered against him. If the evidence
presented should not be sufficient to justify a judgment for
the plaintiff, the complaint must be dismissed. And if an
unfavorable judgment should be justifiable, it cannot
exceed in amount or be different in kind from what is
prayed for in the complaint.
Where a complaint states a common cause of
action against several defendants and some appear to
defend the case on the merits while others make default,
the defense interposed by those who appear to litigate the
case inures to the benefit of those who fail to appear, and
if the court finds that a good defense has been made, all of
the defendants must be absolved. In other words, the
answer filed by one or some of the defendants inures to
the benefit of all the others, even those who have not
seasonably filed their answer. The proper mode of
proceeding where a complaint states a common cause of
action against several defendants, and one of them makes
default, is simply to enter a formal default order against
him, and proceed with the cause upon the answers of the
others. The defaulting defendant merely loses his standing
in court, he not being entitled to the service of notice in
the cause, nor to appear in the suit in any way. He cannot
adduce evidence; nor can he be heard at the final hearing,
although he may appeal the judgment rendered against
him on the merits. (Rule 41, sec. 2.) If the case is finally
decided in the plaintiff's favor, a final decree is then
entered against all the defendants; but if the suit shouldbe decided against the plaintiff, the action will be
dismissed as to all the defendants alike.
It provides that when a complaint states a
common cause of action against several defendants, some
of whom answer, and the others make default, 'the court
shall try the case against all upon the answer thus filed and
render judgment upon the evidence presented by the
parties in court'. It is obvious that under this provision the
case is tried jointly not only against the defendants
answering but also against those defaulting, and the trial is
held upon the answer filed by the former; and the
judgment, if adverse, will prejudice the defaulting
defendants no less than those who answer. In other
words, the defaulting defendants are held bound by the
answer filed by their co-defendants and by the judgment
which the court may render against all of them. By the
same token, and by all rules of equity and fair play, if the
judgment should happen to be favorable, totally or
partially, to the answering defendants, it must
correspondingly benefit the defaulting ones, for it would
not be just to let the judgment produce effects as to thedefaulting defendants only when adverse to them and not
when favorable.
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Extent of relief - Sec. 3(d), Rule 9
PASCUA vs HON. FLORENDO
G.R. No. L-39047, April 30, 1985
Facts:
Petitioners, as plaintiffs, filed a complaint for
reconveyance with damages against the private
respondents, spouses Clemente and Juliana Castro. The
latter, as defendants, in lieu of filing an answer, filed a
motion to dismiss the complaint on the grounds that the
complaint states no cause of action and that the same is
already barred by the statute of limitations.
The trial court denied the respondents' motion
after finding that the grounds relied upon by them did not
appear on the face of the complaint. The court
subsequently declared the respondents in default for their
having failed to file an answer within the reglementary
period. Thus, the petitioners proceeded to present theirevidence ex-parte.
Not satisfied with the trial court's decision,
petitioners elevated the case to this Court through this
petition. The petitioners ask us to examine the following
alleged errors of the respondent court:
The petitioners contend that the trial court acted
with grave abuse of discretion when, after hearing their
evidence presented ex-parte, the respondents having been
declared in default, it dismissed the case on the ground
that the action had already prescribed. When the same
ground was earlier raised, the court denied the motion to
dismiss filed by the respondents. The petitioners argue
that because of its denying the motion to dismiss, the trial
court is estopped from dismissing the case on the same
ground.
Petitioners further contend that the court's
conclusion that they had knowledge of the sale executed
by their deceased brother, Martin Pascua about twenty
years ago is based merely on surmises and conjectures
because, in reality, it was only in 1973 when they came to
learn of the deed of sale executed by their deceasedbrother in 1951. In 1973, the deed was shown to them by
respondent Clemente Castro at the Agrarian office.
Therefore, the period of prescription should be counted
from the knowledge of the petitioners of the deed of sale
and not from the date it was executed.
Issue:
Whether or not the trial court erred in not
granting relief to plaintiffs although the defendants were
declared in default.
Held:
No. Petitioners' contention are without merit. The
petitioners raise as a second issue that the respondent
court had no alternative but to grant the relief prayed for
in their complaint as this was evident in the tenor of the
summons issued by said court which in part stated: ... if
you fail to appear within the time aforesaid, the plaintiff
will take judgment against you by default and demand
from this Court the relief applied for in said complaint. ...
Petitioners also anchor their contention on Rule
18, Section 1 of the Rules of Court which provides:
Judgment by default.If the defendant fails to
answer within the time specified in these rules, the court
shall, upon motion of the plaintiff and proof of such
failure, declare the defendant in default. Thereupon the
court shall proceed to receive the plaintiff's evidence and
render judgment granting him such relief as the complaint
and the facts proven may warrant. This provision applies
where no answer is made to a counter-claim, cross-claim
or third-party complaint within the period provided in this
Rule.Nowhere in the aforequoted provision nor in the
summons issued by the respondent court is it stated that
the petitioners are automatically entitled to the relief
prayed for, once the respondents are declared in default.
Favorable relief can be granted only after the
court has ascertained that the evidence offered and the
facts proven by the presenting party, petitioners in this
case, warrant the grant of the same. Otherwise, it would
be meaningless to require presentation of evidence if
everytime the other party is declared in default, a decision
would automatically be rendered in favor of the non-
defaulting party and exactly according to the tenor of his
prayer. This is not contemplated by the Rules nor is it
sanctioned by the due process clause.
Actions where default is not allowed - Sec. 3(e), Rule 9
DELA CRUZ vs HON. EJERCITOG.R. No. L-40895, November 6, 1975
Facts:
Milagros de la Cruz was charged with bigamy in
the Court of First Instance of Pampanga, Angeles City
Branch IV for having married Sergeant Dominick L. Gaccino
on September 15, 1973 while her prior marriage to
Teodoro G. David was undissolved.
Milagros de la Cruz filed in the same court at its
San Fernando Branch III a complaint for the annulment of
her marriage to Sergeant Gaccino on the ground of duress.
Judge Castaeda rendered a decision annulling the
marriage of Milagros de la Cruz to Gaccino. No appeal was
taken from that decision. It became final. In view of the
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annulment of her second marriage, Milagros de la Cruz
filed a motion to dismiss the bigamy charge. The private
prosecutor and the prosecuting fiscal opposed the motion.
Judge BienvenidoEjercito denied it on the ground
that the decision in the annulment case is not controlling
in the criminal case because the parties and the issues in
the two cases are not the same.
That refusal of Judge Ejercito to dismiss the
bigamy case, not withstanding the judicial pronouncement
that her second marriage was a nullity, prompted Milagros
de la Cruz to file the instant special civil action
of certiorariand prohibition.
Issue:
Whether or not the bigamy case became moot or
untenable after the second marriage, on which the
prosecution for bigamy is based, was annulled.
Held:
In the annulment case that the second marriage
contracted by Milagros de la Cruz with Sergeant Gaccino
was a nullity is determinative of her innocence and
precludes the rendition of a verdict that she committed
bigamy. To try the criminal case in the face of such a
finding would be unwarranted.
And even supposing arguendothat the decree
annulling the second marriage was questionable or
erroneous because it was issued in a judgment by default,
still that would not prevent the decree from having legal
effect. "An erroneous judgment is not a void judgment"
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G.R. No. L-48577 September 30, 1980
SULPICIO A. GARCIA, petitioner,
vs.
COLONEL PAUL C. MATHIS, in his capacity as Base Commander,
Clark Air Force Base (CAFB) or his SUCCESSOR, and the
HONORABLE COURT OF FIRST INSTANCE OF PANGASINAN,
Branch IV, Dagupan City, respondents.
ABAD SANTOS,J.:
Petition for certiorari to set aside the Order of the respondent
judge, dated June 4, 1978, dismissing petitioner's Complaint
against the private respondent and another Order, dated July 7,
1978, denying a motion to reconsider the aforesaid order.
The factual background can be briefly stated as follows.
In Civil Case No. D-4097 of the Court of First Instance ofPangasinan presided by the respondent judge, Sulpicio Garcia,
the petitioner herein, sued Colonel Paul C. Mathis in his capacity
as Base Commander, CAFB, acting for and in behalf of the United
States of America. The complaint, which was filed on November
8, 1977, alleged that Garcia was a civilian employee at Clark Air
Force Base from May 26, 1949, to August 23, 1956, when he was
dismissed for alleged bribery and collusion. He prayed inter
alia that he be reinstated to his former position, and paid back
wages, moral damages, attorney's fees and costs of the suit.
The defendant Mathis entered a special appearance and filed a
motion for the dismissal of the complaint upon the ground that
the trial court had no jurisdiction over his person because he wasbeing sued as the representative of a foreign sovereign "which
has not consented and does not now consent to the maintenance
of the present suit."
On June 7, 1978, the respondent judge issued an Order as
aforesaid the text of which reads as follows:
Without considering the issue of jurisdiction
raised by the defendant in his motion to
dismiss the above-entitled case, the Court
finds that the cause of action has already
prescribed, because paragraphs 3 and 5 of
the complaint alleged that the services of theplaintiff has been terminated on August 23,
1956.
WHEREFORE, the above-entitled case is
hereby dismissed.
The only issue in this case is whether or not the respondent judge
committed a grave abuse of discretion amounting to lack of
jurisdiction when he dismissed the complaint on the ground of
prescription which the defendant did not raise in any of his
pleadings.
It is true that an action will not be held to have prescribed ifprescription is not expressly invoked. However there are
exceptions to this rule and one of them is when the plaintiff's
own allegations in his complaint show clearly that the action has
prescribed. (Philippine National Bank vs. Pacific Commission
House, G.R. No. L-22675, March 28, 1969, 27 SCRA 766). In this
case the complaint shows clearly that the plaintiff's action had
prescribed for he alleged that he was removed on August 23,
1956 (par. 5) but the case was filed only on November 18, 1977,
after a lapse of more than 21 years. Prescinding, therefore, the
defense of jurisdiction which is apparently meritorious, the
complaint was properly dismissed.
It is not amiss to state here that because of the specialappearance which the defendant had entered, he was
constrained to confine himself to showing that the trial court did
not have jurisdiction over his person and had to exclude all other
non-jurisdictional grounds in his motion to dismiss otherwise he
could be deemed to have abandoned his special appearance and
voluntarily submitted himself to the jurisdiction of the court.
(Republic vs. Ker z Co., Ltd; G.R. No. L-21609, Sept. 29,1966, 18
SCRA 207).
WHEREFORE, finding the petition to be without merit, the same
is hereby dismissal without any special pronouncement as to
costs.
SO ORDERED.
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G.R. No. 101883 December 11, 1992
SPOUSES LYDIA and VIRGILIO MELITON,* petitioners,
vs.
COURT OF APPEALS and NELIA A. ZIGA, represented by her
Attorney-in-Fact RAMON A. AREJOLA,**respondents.
REGALADO,J.:
In its judgment in CA-G.R. No. 250911
promulgated on August 9,
1991, respondent Court of Appeals annulled and set aside the
orders dated February 22, 1991 and March 18, 1991 of the
Regional Trial Court of Naga City, Branch 27, in Civil Case No. RTC
89-1942 thereof and ordered the dismissal of petitioner's
complaint filed herein, hence this appeal bycertiorari.
On June 22, 1988, private respondent Nelia Ziga, in her own
behalf and as attorney-in-fact of Alex A. Ziga and Emma A. Ziga-
Siy, filed a complaint, docketed as Civil Case No. RTC 88-1480 ofthe Regional Trial Court, Branch 27, Naga City,2
against herein
petitioner Lydia Meliton for rescission of a contract of lease over
a parcel of land situated at Elias Angeles Street, Naga City.
Alleged as grounds therefor were said petitioner's failure, as
lessee, to deposit the one month rental and to pay the monthly
rentals due; her construction of a concrete wall and roof on the
site of a demolished house on the leased premises without the
lessor's written consent; and here unauthorized sublease of the
leased property to a third party.
On July 29, 1988, petitioner Lydia Meliton filed an answer to the
complaint denying the material averments thereof and setting up
three counterclaims for recovery of the value of her kitchenette
constructed on the leased parcel of land and which was
demolished by private respondent, in the amount of P34,000.00;
the value of the improvements introduced in the kitchenette to
beautify it, in the amount of P10,000.00, plus the value of the
furniture and fixtures purchased for use in the kitchenette in the
amount of P23,000.00; and moral damages in the amount of
P20,000.00 aside from attorney's fees of P5,000.00 and P250.00
per court appearance, with litigation expenses in the amount of
P1,000.00.3
On May 29, 1989, the trial court, on motion of private
respondent contending that her cause of action had already
become moot and academic by the expiration of the lease
contract on February 7, 1989, dismissed the complaint. Thecounterclaims of petitioner Lydia Meliton were also dismissed for
non-payment of the docket fees, ergo the trial court's holding
that thereby it had not acquired jurisdiction over the same.4
On December 6, 1989, petitioners Lydia Meliton and Virgilio
Meliton filed a complaint against private respondent for recovery
of the same amounts involved and alleged in their counterclaims
in Civil Case No. RTC 88-1480, which complaint was docketed as
Civil Case No. RTC 89-19425and likewise assigned to Branch 27
of the same trial court.
On February 15, 1991, private respondent filed a motion to
dismiss the complaint on the ground that the cause of actiontherein was barred by prior judgment in Civil Case No. RTC 88-
1480, the order of dismissal wherein was rendered on May 29,
1989.6
On February 22, 1991, the court below denied private
respondent's motion to dismiss the complaint in Civil Case No.
RTC 89-1942 on the ground that the dismissal of the petitioner's
counterclaims in Civil Case No. RTC 88-1480 is not an
adjudication on the merits as the court did not acquire
jurisdiction over the counterclaims for failure of petitioner Lydia
Meliton to pay the docket fees, hence the said dismissal does not
constitute a bar to the filing of the later complaint.7
Private respondent's motion for reconsideration of the foregoing
order was denied by the lower court for lack of merit in its order
of March 18, 1991. 8 Dissatisfied therewith, private respondent
filed a petition for certiorariwith this Court. In our resolution
dated April 29, 1991, we referred this case to the Court of
Appeals for proper determination and disposition pursuant to
Section 9, paragraph 1, of B.P. Blg. 129,9
where it was docketed
as CA-G.R. SP No. 25093.
In a decision promulgated on August 9, 1991, the Court of
Appeals granted the petition, the pertinent part of which reads:
xxx xxx xxx
The respondents' counterclaim against the
petitioner in Civil Case No. RTC 88-1480
(Annex E, petition) is a compulsory
counterclaim, it having (arisen) out of or
being necessarily connected with the
transaction or occurrence subject matter of
the petitioner's complaint. The failure of the
respondents to seek a reconsideration of the
dismissal of their counterclaim or to take an
appeal therefrom rendered the dismissal
final. Such dismissal barred the prosecution
of their counterclaim by another action(Section 4, Rule 9, Revised Rules of Court;
Javier vs. IAC, 171 SCRA 605).
The respondent Court, therefore, in issuing
the orders complained of (Annexes G and I,
petition), gravely abused its discretion
amounting to lack of jurisdiction.
WHEREFORE, the petition for certiorari is
GRANTED. Accordingly, the orders
complained of (Annexes G and I, petition) are
annulled and set aside and the respondents'
complaint in Civil Case No. RTC 89-1942before the respondent Court, DISMISSED.
Costs against the respondents, except the
respondent Court.10
Petitioners are now before use, assailing the said judgment of the
Court of Appeals and praying for the annulment thereof.
The present petition requires the resolution of two principal
issues, to wit: (1) whether or not the counterclaims of petitioners
are compulsory in nature; and (2) whether or not petitioners,
having failed to seek reconsideration of or to take an appeal from
the order of dismissal of their counterclaims, are already barred
from asserting the same in another action.
1. Considering Section 4 of Rule 9 of the Rules of Court, a
counterclaim is compulsory if (a) it arises out of, or is necessarily
connected with, the transaction or occurrence which is the
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subject matter of the opposing party's claim; (b) it does not
require for its adjudication the presence of third parties of whom
the court cannot acquire jurisdiction; and (c) the court has
jurisdiction to entertain the claim.
It has been postulated that while a number of criteria have been
advanced for the determination of whether the counterclaim is
compulsory or permissive, the "one compelling test of
compulsoriness" is the logical relationship between the claimalleged in the complaint and that in the counterclaim, that is,
where conducting separate trials of the respective claims of the
parties would entail a substantial duplication of effort and time,
as where they involve many of the same factual and/or legal
issues.
The phrase "logical relationship" is given meaning by the purpose
of the rule which it was designed to implement. Thus, a
counterclaim is logically related to the opposing party's claim
where, as already stated, separate trials of each of their
respective claims would involve a substantial duplication of effort
and time by the parties and the courts. Where multiple claims
involve many of the same factual issues, or where they areoffshoots of the same basic controversy between the parties,
fairness and considerations of convenience and of economy
require that the counterclaimant be permitted to maintain his
cause of action.11
In the aforesaid Civil Case No. 88-1480, all the requisites of a
compulsory counterclaim are present. The counterclaims, as this
term is now broadly defined, are logically related to the
complaint. Private respondent's complaint was for rescission of
the contract of lease due to petitioner Lydia Meliton's breach of
her obligations under the said contract. On the other hand,
petitioner's counterclaims were for damages for unlawful
demolition of the improvements she introduced pursuant to her
leasehold occupancy of the premises, as well as for the filing of
that civil suit which is contended to be clearly unfounded.
Both the claims therein of petitioners and private respondent
arose from the same contract of lease. The rights and obligations
of the parties, as well as their potential liability for damages,
emanated from the same contractual relation. Petitioners' right
to claim damages for the unlawful demolition of the
improvements they introduced on the land was based on their
right of possession under the contract of lease which is precisely
the very same contract sought to be rescinded by private
respondent in her complaint. The two actions are but the
consequences of the reciprocal obligations imposed by law upon
and assumed by the parties under their aforesaid lease contract.
That contract of lease pleaded by private respondent constitutes
the foundation and basis relied on by both parties for recovery of
their respective claims.
The relationship between petitioners' counterclaims and private
respondent's complaint is substantially the same as that which
exists between a complaint for recovery of land by the owner
and the claim for improvements introduced therein by the
possessor. As we have ruled, in actions for ejectment or for
recovery of possession of real property, it is well settled that the
defendant's claims for the value of the improvements on the
property or necessary expenses for its preservation are required
to be interposed in the same action as compulsory couterclaims.In such cases, it is the refusal of the defendant to vacate or
surrender possession of the premises that serves as the vital link
in the chain of facts and events, and which constitutes the
transaction upon which the plaintiff bases his cause of action. It is
likewise an "important part of the transaction constituting the
subject matter of the counterclaim" of defendant for the value of
the improvements or the necessary expenses incurred for the
preservation of the property. They are offshoots of the same
basic controversy between the parties, that is, the right of either
to the possession of the property.12
On the foregoing considerations, respondent Court of Appeals
correctly held that the counterclaims of petitioners arecompulsory in nature.
2. Petitioners having alleged compulsory counterclaims, the next
point of inquiry is whether or not petitioners are already barred
from asserting said claims in a separate suit, the same having
been dismissed in the preceding one. The answer is in the
negative.
It is indeed the rule, embodied in Section 4, Rule 9 of the Rules of
Court, that a counterclaim not set up shall be barred if it arises
out of or is necessarily connected with the transaction or
occurrence that is the subject matter of the opposing party's
claim and does not require for its adjudication the presence ofthird parties of whom the court cannot acquire jurisdiction.
However, said rule is not applicable to the case at bar.
Contrary to the claim of private respondent, it cannot be said
that therein petitioners failed to duly interpose their causes of
action as counterclaims in the previous action. Petitioners' claims
were duly set up as counterclaims in the prior case but the same
were dismissed by reason of non-payment of docket fees. The
ruling of respondent Court of Appeals to the effect that the
failure of petitioners to appeal or to move for reconsideration of
the said order of dismissal bars them from asserting their claims
in another action cannot be upheld.
Firstly, where a compulsory counterclaim is made the subject of a
separate suit, it may be abated upon a plea ofauter action
pendantor litis pendentiaand/or dismissed on the ground of res
judicata,13
depending on the stage or status of the other suit.
Both defenses are unavailing to private respondent. The present
action cannot be dismissed either on the ground of litis
pendentia since there is no other pending action between the
same parties and for the same cause, nor on the ground of res
judicata.
In order that a prior judgment will constitute a bar to a
subsequent case, the following requisites must concur: (1) thejudgment must be final; (2) the judgment must have been
rendered by a court having jurisdiction over the subject matter
and the parties; (3) the judgment must be on the merits; and (4)
there must be between the first and second actions, identity of
parties, of subject matter, and of causes of action.14
The first case, Civil Case No. RTC 88-1480, was dismissed upon
motion of private respondent, plaintiff therein, under Section 2
of Rule 17. Dismissal thereunder is without prejudice, except
when otherwise stated in the motion to dismiss or when stated
to be with prejudice in the order of the court.15
The order of
dismissal of the first case was unqualified, hence without
prejudice and, therefore, does not have the effect of anadjudication on the merits. On a parity of rationale, the same rule
should apply to a counterclaim duly interposed therein and which
is likewise dismissed but not on the me