Asian Surety v. Relucio
REITERATIONFacts
The Antecedents: Plaintiff Asian Surety & Insurance Company filed an action for collection of sums of money against Ong Ting and Ricardo Relucio. Summons were served on both defendants, but neither filed an answer, leading to their declaration in default. Procedural History: The trial court rendered a judgment by default on March 6, 1963, holding Ong Ting and Ricardo Relucio jointly and severally liable for P3,000 plus interest, P9,000 plus interest, and P300 for attorney's fees. The first amount was for a surety bond paid to Gloria Yap Ting Wah for Ong Ting, and the second was for an accommodation co-maker of a promissory note signed by Ong Ting, Relucio, and Ong Chin. The defendants had signed indemnity agreements to reimburse the plaintiff for payments made on the bonds. The Petition: On July 17, 1963, defendant Relucio filed a motion to lift the order of default and set aside the judgment, alleging that his failure to answer was due to "accident, mistake and/or excusable negligence" and that he possessed a valid and meritorious defense. The trial court denied this motion for lack of merit. Only Relucio appealed.
Issue(s)
Whether the lower court erred in denying the motion to lift the order of default and set aside the judgment on the ground of accident, mistake, and/or excusable negligence. Whether the defendant had a valid, just, and meritorious defense.
Ruling
The Supreme Court affirmed the order of the lower court, holding that the defendant's failure to file an answer was due to inexcusable negligence and that it was unnecessary to pass upon the substantial aspect of the litigation given the circumstances.
Ratio Decidendi
On the issue of excusable negligence: The Court found the explanation provided by Avelina Manapat, wife of the defendant Ricardo Relucio, to be unworthy of consideration. Manapat, a literate businesswoman, accepted the summons intended for her husband who was in the province. Instead of informing her husband or seeking an extension, she delivered the summons and complaint to the principal defendant, Ong Ting, who assured her it would be settled amicably. The Court noted that Manapat must have understood the summons, which clearly stated the requirement to file an answer within 15 days. Her failure to communicate with her husband, who could have been reached by wire or letter, and her subsequent forgetting of the matter, constituted negligence that was not excusable under the law. The Court cited Manzanillo v. Jaramilla to emphasize that a party seeking to set aside a default judgment must show diligence, and that failure to communicate with the defendant when the summons was accepted on his behalf is not legally excusable. On the issue of a valid defense: The Court held that since the defendant had lost his standing in court due to his failure to file an answer within the reglementary period and his negligence not being excusable, it became unnecessary to pass upon the substantial aspect of the litigation, including the alleged valid defense.
Main Doctrine
The failure of a defendant to file an answer due to the negligence of a third party, even if that third party is the defendant's spouse, is not considered excusable negligence if the spouse is literate and understood the summons, and failed to take reasonable steps to inform the defendant or seek an extension of time. The burden of showing diligence rests on the moving party seeking to set aside a default judgment.