Trajano v. Cruz
REITERATIONFacts
The Antecedents: Petitioners Pedro Trajano and Frank Trajano were sued by private respondents Segundina Vda. de Ferrer et al. for the recovery of P24,650.00, representing the alleged value of improvements (two giant patis tanks, steelmatting gate and fences, and a toilet bowl with water closet) destroyed or damaged by the petitioners in the leased premises. Procedural History: Petitioners were served summons on August 12, 1976, through an employee who did not immediately deliver it, and they allegedly found the summons after the reglementary period for filing an answer had expired. On September 22, 1976, petitioners filed a "Motion for Admission of Answer" with their Answer, but without proof of service, which was initially set for October 6, 1976, and reset to October 27, 1976. Meanwhile, on October 13, 1976, respondents filed an "Ex-Parte Motion to Declare Defendants in Default," set for hearing on October 20, 1976. On October 26, 1976, the trial court issued an order declaring petitioners in default. At the hearing of petitioners' motion on October 27, 1976, the court initially denied it but later reconsidered, considering it submitted for resolution upon realizing it was filed before the motion for default. On November 4, 1976, the trial court issued an order granting the "Motion for Admission of Answer." Respondents moved for reconsideration, which was set for December 1, 1976. Petitioners' counsel was given five days to file an opposition but mailed it on December 13, 1976. On January 21, 1977, the trial court granted respondents' motion for reconsideration, set aside its November 4, 1976 order, and reinstated the order of default. Petitioners' subsequent motion for reconsideration was denied on March 21, 1977. The Petition: Petitioners filed a petition for review on certiorari seeking the reinstatement of the November 4, 1976 order.
Issue(s)
Whether the trial court committed an abuse of discretion in declaring petitioners in default despite the filing of the Answer prior to the motion for default.
Ruling
The petition is meritorious. The questioned orders dated January 21, 1977, and March 21, 1977, are lifted and set aside. The order dated November 4, 1976, is reinstated, and the case is remanded to the trial court for trial on the merits.
Ratio Decidendi
On Issue 1: The Court ruled that under Section 1, Rule 11 of the Rules of Court, a party is declared in default only 'upon motion of the plaintiff and proof of such failure.' Applying Villacrusis v. Estenzo, the Court emphasized that a judge cannot declare a party in default motu proprio. Because the petitioners filed their 'Motion for Admission of Answer' on September 22, 1976, whereas the respondents only moved for default on October 13, 1976, the petitioners were not yet legally in default. The Court noted that respondents were not prejudiced by the late filing and showed no diligence in exercising their right to seek a default declaration earlier. Furthermore, the petitioners demonstrated 'good and substantial defenses' in their Answer, such as the allegation that the improvements they supposedly destroyed were either already missing or remain intact. Citing Bañares v. Flordeliza, the Court held that refusing to set aside a default when a valid defense is presented without intent to delay constitutes an abuse of discretion. Finally, the Court stressed that the policy of the law is to have every litigated case tried on the merits, as default judgments are an 'expedient' that can result in positive injustice.
Main Doctrine
A court cannot motu proprio declare a party in default. A party should not be declared in default if their answer is filed before the plaintiff moves for default, especially when the delay is not attributable to the defendant and the answer presents substantial defenses, in the interest of justice.