Magtoto v. Dela Cruz
REITERATIONFacts
The Antecedents: Respondent Leonila Dela Cruz filed a Complaint for Specific Performance with Damages against petitioners Ruben C. Magtoto and Artemia Magtoto for the unpaid balance of the purchase price of three parcels of land. Leonila alleged that she sold the properties to Ruben for P11,952,750.00, for which Ruben issued postdated checks. After the Deed of Absolute Sale was executed and the titles delivered, Ruben exercised acts of dominion over the properties. However, most of the checks were dishonored, leaving an unpaid balance of P9,497,750.00. Procedural History: The spouses Magtoto were served summons and were granted several extensions to file their Answer, with the final extension expiring on August 2, 2003. Instead of filing an Answer, they filed a Motion to Dismiss on August 4, 2003, which was denied on September 11, 2003. Their counsel, Atty. Noel T. Canlas, filed an Ex-Parte Motion to Withdraw Appearance on September 25, 2003, citing loss of contact with his clients. Leonila filed a Motion to Declare Defendants in Default on January 23, 2004, which was granted on March 23, 2004, after the RTC noted that the spouses Magtoto had not yet engaged new counsel. Leonila then presented evidence ex parte. On June 25, 2004, the spouses Magtoto, through new counsel, filed an Omnibus Motion to Lift Order of Default and to Admit Attached Answer, which was denied by the RTC for being belated and for lack of an affidavit of merit. The RTC subsequently rendered a Decision ordering the spouses Magtoto to pay the unpaid balance and attorney's fees. The spouses Magtoto appealed to the Court of Appeals (CA), which dismissed their appeal for lack of merit. Their motion for reconsideration was also denied. The Petition: The spouses Magtoto filed a Petition for Certiorari with the Supreme Court, assailing the CA's Decision and Resolution. They argued that the CA gravely abused its discretion in blaming them solely for the delay and in accusing them of delaying proceedings by availing of their right to file a motion to dismiss.
Issue(s)
Whether the Court of Appeals gravely abused its discretion amounting to lack or excess of jurisdiction when it erroneously blamed the petitioners for the delay in filing their Answer. Whether the Court of Appeals gravely abused its discretion amounting to lack or excess of jurisdiction when it erroneously accused the petitioners of delaying the proceedings for availing of their right to file a Motion to Dismiss.
Ruling
The petition is DISMISSED. The May 31, 2006 Decision and the October 25, 2006 Resolution of the Court of Appeals in CA-G.R. CV No. 85286 are AFFIRMED.
Ratio Decidendi
On the issue of whether the Court of Appeals gravely abused its discretion in blaming the petitioners for the delay in filing their Answer: The Supreme Court affirmed the CA's ruling, holding that the spouses Magtoto's failure to file a timely Answer was solely attributable to their own fault. The Court noted that the spouses Magtoto thrice requested extensions to file their Answer, and even after the final extension expired on August 2, 2003, they failed to file it, instead filing a Motion to Dismiss two days later. Their counsel's withdrawal of appearance on September 25, 2003, occurred after their period to file an Answer had already expired. The Court found their attempts to shift blame to the RTC for not resolving the withdrawal motion, or to Leonila for the initial dismissal of the case, to be unpersuasive and indicative of desperate efforts to attribute negligence to others. The Court emphasized that the spouses Magtoto failed to be vigilant in protecting their cause and did not take remedial actions even after being reminded by the RTC. Therefore, the RTC correctly declared them in default. On the issue of whether the Court of Appeals gravely abused its discretion in accusing the petitioners of delaying proceedings by filing a Motion to Dismiss: The Supreme Court found no grave abuse of discretion. The Court clarified that while filing a Motion to Dismiss is a right provided under the Rules of Court, the subsequent failure to file an Answer within the reglementary period after the denial of such motion, without valid justification, constitutes a procedural lapse. The spouses Magtoto's failure to file their Answer for nine months after the denial of their Motion to Dismiss, and three months after being declared in default, was deemed unreasonable and unjustified. Furthermore, their Omnibus Motion to Lift Order of Default was denied not only for being belated but also for failing to comply with the requirements of Section 3(b), Rule 9 of the Rules of Court, specifically the absence of an affidavit of merit showing that their failure to answer was due to fraud, accident, mistake, or excusable negligence, and that they had a meritorious defense. The Court found no evidence of such circumstances and noted that their purported defenses were mere allegations unsupported by evidence.
Main Doctrine
A party declared in default cannot have the order of default set aside without showing that their failure to answer was due to fraud, accident, mistake, or excusable negligence, and that they possess a meritorious defense. The failure to file a timely answer, without a valid justification, is solely attributable to the party's own fault, and they cannot shift the blame to the court or opposing counsel.