Otero v. Tan
REITERATIONFacts
The Antecedents: Roger Tan filed a complaint for collection of sum of money and damages against Roberto Otero, alleging that Otero purchased petroleum products on credit from February 2000 to May 2001, accumulating an unpaid balance of P270,818.01. Despite verbal demands, Otero failed to settle the obligation. Procedural History: Otero failed to file an answer to the complaint filed with the Municipal Trial Court in Cities (MTCC), leading to his declaration in default. The MTCC subsequently rendered a decision in favor of Tan. Otero appealed to the Regional Trial Court (RTC), which affirmed the MTCC's decision. Otero then filed a petition for review with the Court of Appeals (CA), which also affirmed the lower courts' rulings. This petition for review on certiorari under Rule 45 is the current matter before the Supreme Court. The Petition: Roberto Otero seeks to annul and set aside the Court of Appeals' decision, arguing that the statements of account presented by Roger Tan as evidence were inadmissible because their authenticity and due execution were not established by Tan, as the preparer, Betache, was not presented as a witness. Otero contends that the lower courts erred in admitting these private documents without proper authentication, thereby violating his right to due process and failing to prove the material allegations of the complaint.
Issue(s)
Whether Otero, having been declared in default, may still raise the failure of Tan to authenticate the statements of account in appellate proceedings. Whether Tan was able to prove the material allegations of his complaint, considering the admissibility of the statements of account and other evidence presented.
Ruling
The petition is denied. The Decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of whether Otero may raise the failure to authenticate statements of account despite being in default: The Court clarified that while a defendant declared in default loses their standing in court and the right to present defenses, they retain the right to appeal the judgment by default. However, the grounds for such an appeal are limited to the plaintiff's failure to prove material allegations, the decision being contrary to law, or the judgment amount being excessive. The Court disagreed with the CA's conclusion that defaulting automatically waives all defenses, including objections to the admissibility of evidence. The Court emphasized that even in default cases, the plaintiff must substantiate their claims with competent and admissible evidence. Therefore, Otero could raise the issue of the admissibility of the statements of account as it pertained to Tan's failure to prove his material allegations. On the issue of whether Tan proved the material allegations of his complaint: The Court ruled that the statements of account presented by Tan were inadmissible as evidence because they were private documents that were not authenticated as required by Section 20, Rule 132 of the Rules of Court. The person who prepared the statements, Betache, was not presented as a witness. However, the Court found that despite the inadmissibility of the statements of account, Tan was still able to prove his claim by a preponderance of evidence. This was based on the testimonies of his employees who testified that Otero purchased petroleum products on credit and failed to pay. The Court gave credence to these testimonial evidences, which were also given weight by the lower courts, and found that Otero had an outstanding obligation to Tan.
Main Doctrine
A defendant declared in default retains the right to appeal the judgment by default, but the grounds are limited to the plaintiff's failure to prove material allegations, the decision being contrary to law, or the judgment amount being excessive. However, the plaintiff must still substantiate their allegations with competent evidence, and inadmissible evidence, even if presented ex parte, cannot form the basis of a judgment.