Malipol v. Tan
REITERATIONFacts
The Antecedents: On February 6, 1965, Pantaleon Malijan was walking on the shoulder of a road when he was hit by a gasoline tanker driven by Ernesto Labsan. The tanker's right wheel detached and ran over Malijan, who was on the ground. Malijan died that same night from possible traumatic cerebral hemorrhage due to the vehicular accident. The gasoline tanker was owned and operated by Lily Lim Tan in connection with her gasoline business. Procedural History: Prima Malipol, as mother and guardian of Malijan's minor children, filed a complaint for damages against Lily Lim Tan and Ernesto Labsan. Summons were served on May 19, 1966. Appellants failed to file an answer within the reglementary period. On June 10, 1966, the trial court declared them in default and allowed the plaintiffs to present evidence ex-parte. A decision was rendered on July 1, 1966, ordering the defendants to pay damages, with Lily Lim Tan being subsidiarily liable. The Petition: On September 21, 1966, appellants filed a motion to lift the order of default and for a new trial, alleging force majeure, lack of fault on the part of the driver, and due diligence on the part of the owner. They also cited the alleged abnormal mental condition of their lawyer, Atty. Daniel Chavez, and the misinformation given by him regarding the date of receipt of summons, as grounds for mistake and accident. The trial court denied this motion on October 10, 1966. The case was appealed to the Supreme Court.
Issue(s)
Whether the trial court erred in finding appellants lacked due diligence in filing their answer, thus justifying the order of default and denial of the motion to lift the same. Whether the alleged mistake and accident (specifically, the lawyer's abnormal mental condition and misinformation) constituted grounds to lift the order of default and grant a new trial under the Rules of Court. Whether the subsequent filing of a motion for extension of time to file an answer and the actual filing of an answer with alleged meritorious defenses should have warranted favorable consideration of appellants' motion to lift the order of default and for a new trial. Whether the trial court correctly categorized the liability of the employer Lily Lim Tan as merely subsidiary, rather than primary and direct, in an action based on quasi-delict.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance of Batangas, dated July 1, 1966, and the order dated October 10, 1966, denying the motion to lift the order of default and for a new trial, with a modification regarding the nature of the owner's liability. The Court held that the owner, Lily Lim Tan, is primarily and directly liable for the damages, not subsidiarily liable.
Ratio Decidendi
On Issue 1: The Supreme Court affirmed the trial court's finding that appellants did not exercise the diligence of an ordinary prudent person to ensure their answer was filed on time. Appellant Lily Lim Tan, a businesswoman, received the summons and complaint on May 19, 1966, and did not refer it to her lawyer, Atty. Daniel Chavez, until May 30, 1966, leaving only four days before the reglementary period expired on June 3, 1966. Despite Atty. Chavez's assurance via long-distance telephone, she failed to follow up to ensure the answer was actually filed, exhibiting a lack of concern for a significant claim of P36,600.00. The Court emphasized that while courts have discretion to set aside default orders, there must be a justifiable reason for the delay, and the burden is on the moving party to demonstrate such diligence, which was not met in this case. The Court reiterated the principle from Quirante, et al. vs. Verano, et al. (1971) and Asian Surety & Insurance Company, Inc. vs. Ong Ting, et al. (1966) that unless clear justifiable reason for delay is shown, the court will not ordinarily exercise its discretion in favor of the defaulting party. On Issue 2: The Supreme Court found appellants' contention that the delay was due to mistake and accident untenable. The alleged mistake by Atty. Chavez, telling Atty. Romulo R. de Castro on June 10, 1966, that the summons was received on May 30, 1966, could not have caused the default, as the reglementary period had already expired on June 3, 1966. Furthermore, the claim that Atty. Chavez was in an abnormal mental condition on May 30, 1966, was not supported by the record; his actions on that date, such as inquiring about the summons date and telephoning his client, indicated a sound mind aware of the case's importance. The Court stated that while Atty. Chavez's suicide on June 17, 1966, might suggest mental distress, it did not retrospectively prove incompetence or insanity on May 30, 1966, absent specific circumstances presented to the trial court. Therefore, the failure to file the answer on time was attributed to Atty. Chavez's mistake or negligence, which binds the appellants. The Court cited Section 3 of Rule 18 of the Rules of Court on the grounds for default. On Issue 3: The Supreme Court rejected the argument that the subsequent filing of a motion for extension on June 10, 1966, and an answer on June 20, 1966, should warrant lifting the default. These actions were taken after the reglementary period for filing the answer had already expired on June 3, 1966, and after the appellees had already filed a motion to declare default on June 8, 1966, which the court granted on June 10, 1966. The Court emphasized that for a motion to lift an order of default and for new trial to succeed under Rule 37, Sections 1(a) and 2, the moving party must present an affidavit of merit that states facts constituting a good and substantial defense, not mere conclusions. The appellants' allegations of force majeure, absence of fault, and due diligence were deemed mere conclusions, providing no factual basis for the court to assess the nature and merit of their probable defense, as reiterated in Rosario vs. Alonzo (1963). Consequently, the trial court correctly denied the motion. On Issue 4: The Supreme Court sua sponte corrected a flaw in the lower court's decision regarding the nature of appellant Lily Lim Tan's liability. The action was based on quasi-delict, not civil liability arising from a crime, as the complaint made no mention of a crime or conviction. Under Article 2180 of the Civil Code, which governs quasi-delicts, the liability of owners and managers of an establishment for damages caused by their employees is primary and direct, not subsidiary, as established in Barredo v. Garcia (1941) and Price Stabilization Corporation vs. Judge of the Court of First Instance of Manila, et al. (1955). Therefore, Lily Lim Tan was held primarily and directly liable, without prejudice to her right under Article 2181 of the Civil Code to demand reimbursement from her co-appellant Ernesto Labsan.
Main Doctrine
The Supreme Court affirmed the trial court's denial of the motion to lift the order of default and for a new trial, holding that the appellants failed to show justifiable reasons and due diligence for their failure to file an answer within the reglementary period. The Court also clarified that in cases of quasi delict, the employer's liability for the acts of its employees is primary and direct, not subsidiary.