Philippine National Bank v. Fernandez
REITERATIONFacts
The Antecedents: The Philippine National Bank (PNB), as judicial administrator of an estate, filed a complaint against Segundo Fernandez for the recovery of P10,000.00 based on a promissory note dated February 16, 1948. Procedural History: Fernandez moved to dismiss the complaint on the ground of prescription, which was denied. Subsequently, PNB moved to declare Fernandez in default. Fernandez then filed a motion for an extension of time to file an answer, followed by his answer. The trial court initially denied PNB's motion for default, stating there was no proof of service of the denial of the motion to dismiss. However, upon PNB's ex-parte motion for reconsideration, the court set aside its previous order, declared Fernandez in default, and proceeded to hear the case ex-parte. Judgment was rendered in favor of PNB. Fernandez filed a verified petition for relief from judgment, which was denied. He appealed to the Court of Appeals, which certified the case to the Supreme Court due to purely legal issues. The Appeal: Appellant Segundo Fernandez argued that he was not in default when PNB filed its motion for reconsideration and that he was entitled to notice of said motion. He contended that the trial court erred in reconsidering its order of November 8, 1958, without notice to him. The Supreme Court, however, examined the merits of the defense presented in Fernandez's answer, particularly the defense of prescription.
Issue(s)
Whether the trial court erred in declaring the defendant in default without prior notice of the motion for reconsideration. Whether the defendant presented a meritorious defense warranting relief from judgment.
Ruling
The Supreme Court affirmed the order of the trial court denying the petition for relief from judgment. The Court found that while the defendant had a right to be heard, his failure to file his answer within the reglementary period meant he was effectively in default. More importantly, the defense of prescription raised in his answer was untenable, as it admitted written demands for payment were made, which interrupted the prescriptive period.
Ratio Decidendi
On Issue 1: The Court acknowledged that technically, the defendant might have been entitled to notice of the motion for reconsideration, as the order of November 8, 1958, had not declared him in default. However, the Court emphasized that the basis for that order was erroneous, and the defendant's answer was indeed filed late. The Court noted that even if he had been heard on the motion for reconsideration, the fact that his answer was filed late would remain undisputed. Therefore, any procedural defect in not providing notice of the motion for reconsideration did not warrant setting aside the judgment, especially in light of the lack of a meritorious defense. On Issue 2: The Court found that the defense of prescription, as alleged in the defendant's answer, was untenable. The answer itself admitted that the defendant had received written demands for payment from the plaintiff before the ten-year prescriptive period expired. Pursuant to Article 1155 of the Civil Code, prescription of actions is interrupted by a written extrajudicial demand by the creditor. Since the defendant could not establish a valid defense of prescription, his petition for relief from judgment, which requires a meritorious defense, was correctly denied by the trial court. The Court concluded that there was no point in granting the relief sought by the appellant.
Main Doctrine
The Supreme Court affirmed the denial of a petition for relief from judgment, holding that while a party generally has a right to be heard on motions, this right is circumscribed when the party is in default. Furthermore, even if procedural errors occurred, a petition for relief will not prosper without a showing of a meritorious defense, as demonstrated by an examination of the answer to the complaint.