National Power Corporation v. Baysic
REITERATIONFacts
The Antecedents: Private respondents Emma Y. Baysic and Narcisa G. Santiago, representing 488 retirees of the National Power Corporation (NPC), filed a Petition for Mandamus with Prayer for Accounting and Motion for Evidentiary Hearing before the Regional Trial Court (RTC), Quezon City – Branch 83. They sought their alleged gratuity pay and financial assistance as retired employees of NPC, which accrued before the enactment of Republic Act No. 9136 (EPIRA). Petitioners averred that their obligation for financial assistance and benefits only applied to personnel employed as of the EPIRA law's enactment. Procedural History: Private respondents moved to strike out petitioners' Answer for improper verification. The RTC, by Order dated January 30, 2009, expunged petitioners' Answer. Subsequently, by Order dated November 5, 2009, the RTC declared petitioners in default. Petitioners' motion to lift the Order of Default and admit their Answer was denied by the RTC on May 18, 2010. The RTC then rendered a default judgment against petitioners. Aggrieved, petitioners filed a Petition for Certiorari and Prohibition with the Court of Appeals (CA), assailing the RTC's dispositions, including the default judgment. Private respondents filed a motion to strike out the amended petition, arguing that appeal was the proper remedy, not certiorari. By Resolution dated March 4, 2014, the CA granted the motion and dismissed the amended petition, ruling that appeal was available and thus certiorari was improper. Petitioners' motion for reconsideration was denied by the CA on August 11, 2014. The Petition: Petitioners seek from the Supreme Court the reversal of the CA's resolutions, praying that their Amended Petition for Certiorari and Prohibition be declared a proper remedy against the RTC's default judgment.
Issue(s)
Whether a petition for certiorari under Rule 65 of the Rules of Court is the proper remedy to assail a default judgment rendered by the trial court when the petitioner alleges grave abuse of discretion amounting to excess of jurisdiction in the declaration of default. Whether the trial court erred in considering the petitioners' Answer as an unsigned pleading due to alleged lack of proper verification.
Ruling
The Supreme Court granted the petition, reversed and set aside the Resolutions dated March 4, 2014 and August 11, 2014 of the Court of Appeals, and directed the Court of Appeals to resolve the Amended Petition for Certiorari and Prohibition on the merits.
Ratio Decidendi
On the propriety of certiorari: The Court held that while appeal is generally the remedy for default judgments, a petition for certiorari under Rule 65 is available when a party charges the trial court with grave abuse of discretion amounting to excess of jurisdiction in declaring them in default and rendering judgment against them. The Court cited David v. Judge Gutierrez-Fruelda, et al. and Martinez v. Republic of the Philippines citing Matute v. Court of Appeals to support the principle that a party improvidently declared in default has the option to file a petition for certiorari to nullify the order of default and the subsequent default judgment, especially when grave abuse of discretion is alleged. The Court emphasized that in light of the petitioners' vigorous assertion of grave abuse of discretion, the remedy of appeal was not plain, speedy, and adequate, making certiorari the proper recourse. The Court of Appeals erred in dismissing the petition on the ground of improper remedy. On the alleged error of the trial court: Although the Court of Appeals was directed to resolve the merits of the petition, the Supreme Court noted that petitioners were interposing a prima facie meritorious defense involving the issue of disbursement of public funds. This indicated that the issue of the trial court's alleged error in considering the Answer as an unsigned pleading and in declaring petitioners in default warranted a full examination on the merits by the Court of Appeals, aligning with the higher interest of substantial justice to give petitioners their day in court.
Main Doctrine
A petition for certiorari under Rule 65 of the Rules of Court is a proper remedy to assail a default judgment when the petitioner alleges grave abuse of discretion amounting to excess of jurisdiction on the part of the trial court in declaring the party in default and rendering judgment against them, even if the remedy of appeal is available.