Villa-Rey Transit, Inc. v. Bello
REITERATIONFacts
The Antecedents: Respondents, the Tejada heirs, filed a complaint for damages with preliminary attachment against Villa-Rey Transit, Inc. and its incorporators, seeking compensation for the death of Felipe Tejada, a passenger in petitioner's bus due to a vehicular accident on July 17, 1961. Procedural History: Petitioner received summons on August 18, 1961, with a deadline to answer on September 2, 1961. A motion for a 15-day extension was filed on September 1, 1961, and the court granted 10 days from September 2, 1961. On September 12, 1961, within the extended period, the defendants filed a Motion to Dismiss, arguing that the incorporators were not liable to third parties for unpaid subscriptions. On September 14, 1961, the respondents filed a Petition Ex-Parte to declare petitioner in default, asserting that the Motion to Dismiss was only for the incorporators and not for Villa-Rey Transit, Inc. On September 18, 1961, respondents moved to drop the incorporators. The respondent Court declared Villa-Rey Transit, Inc. in default on September 18, 1961, noting the absence of a responsive pleading and that the Motion to Dismiss was not a responsive pleading. The incorporators were subsequently dropped from the complaint. On September 23, 1961, the respondent Court rendered a default judgment against Villa-Rey Transit, Inc., awarding damages totaling P70,100.00. On September 26, 1961, an ex-parte petition for execution was granted, and properties were levied. Petitioner filed a Motion to Lift Order of Default on September 27, 1961, alleging accident, mistake, or excusable negligence, and that the Motion to Dismiss was a responsive pleading. This motion, along with a motion to lift the order of execution, was denied on October 2, 1961. On the same date, petitioner filed a Motion for New Trial or to Set Aside Judgment. The Petition: Petitioner filed a petition for certiorari and injunction with the Supreme Court, alleging that the respondent Court acted without jurisdiction or with grave abuse of discretion in declaring petitioner in default and in not lifting or suspending the writ of execution. The Court issued a preliminary injunction on October 6, 1961.
Issue(s)
Whether the respondent Court acted without, or in excess of jurisdiction, or with grave abuse of discretion in declaring petitioner in default. Whether the respondent Court acted without, or in excess of jurisdiction, or with grave abuse of discretion in not lifting or suspending the writ of execution pending resolution of the motions for new trial and to set aside the judgment.
Ruling
The petition is denied for lack of merit. The injunction issued is dissolved, and costs are taxed against the petitioner.
Ratio Decidendi
On the issue of default and grave abuse of discretion: The Supreme Court held that the respondent Court had jurisdiction over the case and that the orders issued were in the exercise of such jurisdiction. Even if the findings of the respondent Court were erroneous, not every error in proceedings or erroneous conclusion of law or fact constitutes grave abuse of discretion. The Court noted that a motion to dismiss is not a responsive pleading, and the motion filed by the defendants pertained to the incorporators, not the petitioner corporation itself. Therefore, the declaration of default was based on the petitioner's failure to file a responsive pleading within the granted period. The Court also found that the petition for certiorari was premature because the petitioner had filed motions for new trial and to set aside the judgment, but brought the matter to the Supreme Court before the trial court had an opportunity to rule on these motions. This premature filing deprived the lower court of the chance to correct any perceived errors. On the issue of lifting the writ of execution: The Court affirmed the denial of the motion to lift the order of execution. The issuance of a writ of execution is a matter of right when a party has been declared in default and a default judgment has been rendered. The writ of execution would only be affected if the order of default and the subsequent judgment were set aside by the trial court. Since the petition for certiorari was found to be without merit, the denial of the motion to lift the execution was proper.
Main Doctrine
A motion to dismiss is not a responsive pleading. The filing of a motion to dismiss, even if filed within the extended period, does not prevent a party from being declared in default if no answer is filed within the said period. Furthermore, a petition for certiorari is premature if the trial court has not yet had the opportunity to rule on pending motions for new trial or to set aside the judgment.