Macaraig v. Dy Sun
REITERATIONFacts
The Antecedents: On June 9, 1953, spouses Vicente Dy Sun, Sr. and Gloria R. Dy Sun filed an action against Primitivo A. Macaraig and Francisco A. Quisumbing to recover P23,000 in damages, P2,000 in attorney's fees, and costs, arising from a vehicular collision on June 4, 1953. Summons was served on Quisumbing, but Macaraig could not be found. The court ordered summons by publication for Macaraig, requiring him to answer by September 15, 1953. Procedural History: Quisumbing answered, attributing the collision to the negligence of the plaintiffs' driver. Macaraig failed to appear and was declared in default. The case proceeded to hearing. On February 24, 1954, Macaraig, having returned to Manila from Pangasinan, learned of the default order. The next day, he hired a lawyer who filed a verified motion to set aside the default order, explaining Macaraig's absence and stating he had a valid defense. The court refused to act on the motion without a prior hearing. The court rendered judgment against Macaraig on April 20, 1954, ordering him to pay P22,251.51. Quisumbing appealed. Macaraig filed a motion for reconsideration and to set aside the default order, which was denied, and he also appealed. The record was elevated to the Court of Appeals. The Petition: Quisumbing filed a petition for new trial based on Macaraig's acquittal in a criminal case for physical injuries arising from the same collision. The Court of Appeals granted Quisumbing's motion for new trial and remanded the case to the court of origin for further proceedings, allowing Quisumbing to present evidence of diligence and the criminal acquittal. However, the Court of Appeals affirmed the lower court's decision against Macaraig, holding his failure to appear was a deliberate attempt to evade the law. Macaraig filed the present petition for review.
Issue(s)
Whether the Court of Appeals was justified in denying Macaraig's petition to set aside the order of default. Whether Macaraig's failure to appear was due to accident, mistake, or excusable negligence, or a deliberate attempt to evade the law. Whether denying Macaraig an opportunity to present his defense constituted an abuse of discretion.
Ruling
The Supreme Court set aside the decision of the Court of Appeals with respect to Macaraig and remanded the case to the court of origin to allow him to answer the complaint and present evidence in support of his defense. No costs were awarded.
Ratio Decidendi
On the denial of Macaraig's petition to set aside the order of default: The Court held that while the granting of a motion to set aside an order of default is within the discretion of the court, this discretion must be exercised legally and soundly. The Court found that Macaraig appeared as soon as he learned of the case and the default order, promptly filed a verified motion explaining his absence and asserting a valid defense, and appeared with counsel during the trial before the plaintiffs completed their evidence. The only procedural lapse was the failure to give the required three-day notice, which the Court considered insubstantial given the circumstances and the lack of objection to the motion's merits. The Court cited Coombs vs. Santos (24 Phil., 446) for the principle that denying relief under Section 113 of the Rules of Court when the case falls within its letter and spirit amounts to an abuse of discretion. On Macaraig's failure to appear: The Court of Appeals characterized Macaraig's failure to appear as a deliberate attempt to evade the law. However, the Supreme Court found that Macaraig's actions, upon learning of the case, indicated a desire to defend himself. His immediate appearance with counsel and the filing of a motion to set aside the default order, coupled with his subsequent acquittal in the criminal case arising from the same incident, suggested that his initial absence might not have been entirely deliberate or inexcusable. The Court emphasized that Macaraig had a meritorious defense, as evidenced by his acquittal in the criminal case. On whether denying Macaraig an opportunity to present his defense constituted an abuse of discretion: The Court concluded that equity demanded Macaraig be given an opportunity to present his evidence. The Court noted that the case against co-defendant Quisumbing was still ongoing, as the Court of Appeals had granted his motion for a new trial. Therefore, allowing Macaraig to present his evidence would not cause prejudice to the plaintiffs and would serve the interest of establishing the truth. The Court reiterated that a legal discretion must be exercised according to law, and denying relief when warranted constitutes an abuse of that discretion.
Main Doctrine
While the granting of a motion to set aside an order of default rests in the discretion of the court, this discretion must be a legal discretion, exercised soundly and according to law. A denial of relief under Section 113 of the Rules of Court (now Rule 38) when the case falls within its letter and spirit constitutes an abuse of discretion, especially when the defendant promptly appears, explains the failure to appear, and demonstrates a meritorious defense, and no substantial prejudice would be caused to the plaintiff.