G.R. No.

205249 October 15, 2014

SPOUSES BENEDICT and SANDRA MANUEL, Petitioners,

vs.
RAMON ONG, Respondent.

DECISION

LEONEN, J.:

This resolves a petition1 for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure,
praying that the June 28, 2012 decision2 and the December 19, 2012 resolution3 of the Court of
Appeals in CA-G.R. SP No. 119270 be reversed and set aside. The assailed June 28, 2012 decision
dismissed for lack of merit the petition for certiorari under Rule 65 of the 1997 Rules of Civil
Procedure filed by petitioners Benedict and Sandra Manuel (the Spouses Manuel) and sustained the
November 30, 2010 and February 16, 2011 orders of the Regional Trial Court, La Trinidad,
Benguet.4 The assailed December 19, 2012 resolution of the Court of Appeals denied the Spouses
Manuel’s motion for reconsideration. The Regional Trial Court’s November 30, 2010 order denied
their motion to lift order of default, while its February 16, 2011 order denied their motion for
reconsideration.5

On December 21, 2009, respondent Ramon Ong (Ong) filed with the Regional Trial Court, La
Trinidad, Benguet, a complaint for accion reivindicatoria.6 Ong charged the Spouses Manuel with
having constructed improvements — through force, intimidation, strategy, threats, and stealth — on
a property he supposedly owned.7 The case was docketed as Civil Case No. 09-CV-2582.8

On January 19, 2010, Ong filed an "amended complaint."9 On February 3, 2010, summons was
issued directed to the Spouses Manuel.10

On April 23, 2010, Ong filed with the Regional Trial Court a motion to declare the Spouses Manuel in
default.11 Per the sheriff’s return on summons, on February 12, 2010, Sheriff Joselito Sales, along
with Ong’s counsel, Atty. Christopher Donaal, and a certain Federico Laureano, attempted to
personally serve summons on the Spouses Manuel at their address in Lower Bacong, Loacan,
Itogon, Benguet.12 The Spouses Manuel, however, requested that service be made at another time
considering that petitioner Sandra Manuel's mother was then critically ill.13 The sheriff’s return further
indicates that on March 16, 2010, another attempt at personal service was made. After Sheriff
Joselito Sales had personally explained to petitioner Sandra Manuel the content of the summons
and the complaint, the latter refused to sign and receive the summons and the complaint. Sheriff
Joselito Sales was thus prompted to merely tender the summons and complaint to petitioner Sandra
Manuel and to advise her to file their answer within fifteen (15) days.14 As the Spouses Manuel failed
to file their answer within this period, Ong asked that they be declared in default.15

On June 28, 2010, the Regional Trial Court issued an order granting Ong's motion to declare the
Spouses Manuel in default. Following this, Ong moved for the ex parte presentation ofevidence,
which the Regional Trial Court granted.16

On September 13, 2010, the Spouses Manuel filed a motion to lift the order of default. They alleged
thatit is the siblings of petitioner Sandra Manuel who resided in Lower Bacong, Itogon, Benguet,
while they resided in Ambiong, La Trinidad, Benguet. Thus, summons could not have been properly
served on them in the former address. They surmised that Ong and his companions mistook
petitioner Sandra Manuel’s siblings as the defendants in Civil Case No. 09-CV-2582.They further
claimed that they only subsequently received via registered mail copies of (1) a compliance and
manifestation filed by Ong and (2) the Regional Trial Court’s order scheduling the ex parte
presentation of evidence. Attachedto the Spouses Manuel’s motion to lift order of default was their
answer.17

In its order dated November 30, 2010,the Regional Trial Court denied the Spouses Manuel’s motion
to lift order of default. It noted that, first, their motion was not sworn to, as required by the 1997
Rules of Civil Procedure, and, second, they did not showthat their failure to timely file an answer
"was due to fraud, accident, mistake or excusable negligence."18 In its order dated February16, 2011,
the Regional Trial Court denied the Spouses Manuel’s motion for reconsideration.19

Aggrieved, the Spouses Manuel filed a petition for certiorari before the Court of Appeals.20

As mentioned, the assailed June 28, 2012 decision of the Court of Appeals dismissed the Spouses
Manuel’s Rule 65 petition for lack of merit. The assailed December 19, 2012 resolution of the Court
of Appeals denied their motion for reconsideration.

Hence, this petition.

For resolution is the sole issue ofwhether the Spouses Manuel may be granted relief from the
Regional Trial Court’s June 28, 2010 order of default.

Jurisdiction over the persons of the Spouses Manuel acquired

As a preliminary matter, we ruleon whether jurisdiction over the persons of the Spouses Manuel, as
defendants in Civil Case No. 09-CV-2582, was validly acquired. This preliminary matter is
determinative of whether the fifteen-day period within which they must file their answer started to
run, thereby facilitating the context in which they could have validly been declared to be in default.

We hold that jurisdiction over the persons of both defendants in Civil Case No. 09-CV-2582 — the
Spouses Benedict and Sandra Manuel — was validly acquired. This is so because personal service
of summons, via tender to petitioner Sandra Manuel, was made by Sheriff Joselito Sales on March
16, 2010.

Rule 14, Section 6 of the 1997 Rules of Civil Procedure provides:

SEC. 6. Service in person on defendant. — Whenever practicable, the summons shall be served by
handing a copy thereof to the defendant in person, or, if he refuses to receive and sign for it, by
tendering it to him.

Tendering summons is itself a means of personal service as it is contained in Rule 14, Section 6.
Personal service, as provided by Rule 14, Section 6, is distinguished from its alternative —
substituted service — as provided by Rule 14, Section 7:

SEC. 7. Substituted service. — If, for justifiable causes, the defendant cannot be served within a
reasonable time as provided in the preceding section, service may be effected (a) by leaving copies
of the summons at the defendant's residence with some person of suitable age and discretion then
residing therein, or (b) by leaving the copies at defendant's office or regular place of business with
some competent person in charge thereof. (Emphasis supplied)

In this case, the sheriff’s returnon summons indicated that Sheriff Joselito Sales endeavored to
personallyhand the summons and a copy of the complaint to the Spouses Manuel on two (2)
separate occasions. He relented from doing so on the first occasion in deference to the medical
condition of petitioner Sandra Manuel’s mother. On the second occasion, he was constrained to
tender the summons and copy of the complaint as petitioner Sandra Manuel refused to accept them.

The Spouses Manuel did not deny the occurrence of the events narrated in the sheriff’s return but
claimed that no valid service of summons was made. They claimed that they did not reside in Lower
Bacong, Loacan, Itogon, Benguet, where the service of summons was made. From this, they
surmised that the "Sandra Manuel" who was specifically identified in the sheriff’s return was
someone other than petitioner Sandra Manuel.

The Spouses Manuel cannot capitalize on the supposed variance of address. Personal service of
summons has nothing to do with the location where summons is served. A defendant’saddress is
inconsequential. Rule 14, Section 6 of the 1997 Rules of Civil Procedure is clear in what it requires:
personally handing the summons to the defendant (albeit tender is sufficient should the defendant
refuseto receive and sign). What is determinative of the validity of personal service is, therefore, the
person of the defendant, not the locus of service.

In any case, the Court of Appeals iscorrect in pointing out that the Spouses Manuel’s self-serving
assertion must crumble in the face of the clear declarations in the sheriff’s return.21 Pursuant to Rule
131, Section 3(m) of the Revised Rules on Evidence,22 the acts of Sheriff Joselito Sales and the
events relating to the attempt to personally hand the summons and a copy of the complaint to the
Spouses Manuel, as detailed in the sheriff’s return, enjoy the presumption of regularity.23 Moreover,
Sheriff Joselito Sales must be presumed to have taken ordinary care and diligence in carrying out
his duty to make service upon the proper person(s) and not upon an impostor.24

A sheriff’s return, if complete on its face, must be accorded the presumption of regularity and, hence,
taken to be an accurate and exhaustive recital of the circumstances relating to the steps undertaken
by a sheriff. In this case, the Spouses Manuel have harped on their (self-serving) claim of
maintaining residence elsewhere but failed to even allege that there was anything irregular about the
sheriff’sreturn or that it was otherwise incomplete.

Having alleged irregularities in the service of summons, it was incumbent upon the Spouses Manuel
to adduce proof of their claims. All they mustered was their self-serving allegation of an alternative
address. If at all, this claim of maintaining residence elsewhere should not even be lent an iota of
credibility considering that, as respondent Ramon Ong pointed out, the barangay clearances, which
the Spouses Manuel themselves attached to one of their pleadings (as proof of their identities),
actually indicated that they were residents of Bacong Loacan, Itogon, Benguet.25 Their lie is, thus,
revealed by their own pleading.

As the Spouses Manuel not only failed in discharging the burden of proving their allegation but even
succeeded in contradicting themselves, Sheriff Joselito Sales’ recollection of events must be taken
tobe true. Thus, valid personal service of summons, via tender to petitioner Sandra Manuel, was
made. From this, it follows that jurisdiction over the persons of petitioners Benedict and Sandra
Manuel was acquired by the Regional Trial Court, La Trinidad, Benguet, in Civil Case No. 09-CV-
2582.

The Spouses Manuel are not entitled to relief from the order of default

As valid service of summons was made on them, it was incumbent upon the Spouses Manuel,
pursuant to Rule 11, Section 1 of the 1997 Rules of Civil Procedure,26 to file their answer withinfifteen
(15) days from March 16, 2011. Having failed to do so, they wererightly declared to be in default.
Rule 9, Section 3 of the 1997 Rules of Civil Procedure provides for when a party to an action may be
declared in default. Further, Rule 9, Section 3(b) governs the grant of relief from orders of default:

SEC. 3. Default; declaration of.— If the defending party fails to answer within the time allowed
therefor, the court shall, upon motion of the claiming party with notice to the defending party, and
proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to
render judgment granting the claimant such relief as his pleading may warrant, unless the court in its
discretion requires the claimant to submit evidence. Such reception of evidence may be delegated to
the clerk of court.

(a) Effect of order of default. — A party in default shall be entitled to notice of subsequent
proceedingsbut not to take part in the trial. (b)

Relief from order of default.— A party declared in default may at any time after notice thereof and
before judgment file a motion under oathto set aside the order of default upon proper showing that
his failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a
meritorious defense. In such case, the order of default may be set aside on such terms and
conditions as the judge may impose in the interest of justice. (Emphasis supplied)

Pursuant to Rule 9, Section 3, a court may proceed to render judgment as the pleading may warrant
should a defendant fail to timely file his or her answer. However, a court may decline from
immediately rendering judgment and instead require the plaintiff to present evidence. Per Rule 9,
Section 3(a), a party declared to be indefault shall nevertheless be "entitled to notice of subsequent
proceedings," although he or she may no longer take part in the trial.

As explained in Spouses Delos Santos v. Carpio,27 "there are three requirements which must be
complied with by the claiming party before the court may declare the defending party in default:

(1) the claiming party must filea motion asking the court to declare the defending party in
default;

(2) the defending party must be notified of the motion to declare him in default;

(3) the claiming party must provethat the defending party has failed to answer within the
period provided by the Rule."28

All these requisites were complied with by respondent Ramon Ong.

It is not disputed that Ong filed a motion to declare the Spouses Manuel in default. It is also not
disputed that the latter filed their answer after the fifteen-day period, counted from March 16, 2010,
had lapsed. The Spouses Manuel only filed their answer along with their motion to lift order of default
on September 13, 2010.

It is similarly settled that the Spouses Manuel were notified that a motion to declare them in default
had been filed. They acknowledged in the present petition for certiorari that on June 23, 2010, Ong
filed a compliance to the Regional Trial Court’s April 30, 2010 order that required the submission of
the registry return card evidencing the mailing to the Spouses Manuel of a copy of the motion to
have them declared in default.

Not only were the requisites for declaring a party in default satisfied, the Spouses Manuel’s motion to
lift order of default was also shown to be procedurally infirm.
Consistent with Rule 9, Section 3(b) of the 1997 Rules of Civil Procedure, "the remedy against an
order of default is a motion to set it aside on the ground of fraud, accident, mistake, or excusable
negligence."29 However, it is not only the motion to lift order of default which a defendant must file. As
this court emphasized in Agravante v. Patriarca,30to the motion to lift order of default must "be
appended an affidavit showing the invoked ground, and another, denominated affidavit of merit,
setting forth facts constituting the party's meritorious defense or defenses."31

The need for an affidavit of merit isconsistent with Rule 8, Section 5 of the 1997 Rules of Civil
Procedure,32 which requires that "[i]n all averments of fraud or mistake, the circumstances
constituting fraud or mistake must be statedwith particularity."

In Montinola, Jr. v. Republic Planters Bank,33 this court noted that the three (3) requisites that must
be satisfied by a motion in order "to warrant the setting aside of an order of default for failure to file
answer, are:

(1) it must be made by motion under oath by one that has knowledge of the facts;

(2) it must be shown that the failure to file answer was due to fraud, accident, mistake or
excusable negligence; and

(3) there must be a proper showing of the existence of a meritorious defense."34 (Citations
omitted)

Consistent with Agravante, it is through an affidavit of merit that a defendant seeking relief from an
order of default shows that "the failure to file answer was due to fraud, accident, mistake or
excusable negligence."35

In this case, the Court of Appeals noted that the Spouses Manuel’s motion to lift order of default was
not made under oath. We add that this motion was not accompanied by an affidavit of merit
specifying the facts which would show that their non-filing of an answer within fifteen (15) days from
March 16, 2010 was due to fraud, accident, mistake, or excusable negligence.

Failing both in making their motion under oath and in attaching an affidavit of merits, the Spouses
Manuel’s motion to lift order of default must be deemed pro-forma. It is not even worthy of
consideration.

Certainly, there is jurisprudence to the effect that an affidavit of merit is not necessary "where a
motion to lift an order of default is grounded on the very root of the proceedings [such as] where the
court has not acquired jurisdiction over the defendants."36 Similarly, there is jurisprudence stating that
"when a motion to lift an order ofdefault contains the reasons for the failure to answer as well as the
facts constituting the prospective defense of the defendant and it is sworn to by said defendant,
neither a formal verification nor a separate affidavit of merit is necessary."37

However, in this case, the Spouses Manuel failed not only in attaching an affidavit of merit but alsoin
making their motion under oath. They are, therefore, left without any alternative on which to rest.
Their motion is utterly ineffectual.

Apart from their failure to make their motion to lift order of default under oath and to attach to it an
affidavit of merit, the Court of Appeals also noted that the Spouses Manuel set their motion to lift
order of default for hearing on the same date that they filed it(i.e., September 13, 2010). Thus, they
also violated Rule 15, Section 4 of the 1997 Rules of Civil Procedure,38 which requires that service of
a motion upon an adverse party must be made in such a manner that ensures receipt by the latter
"at least three (3) days before the date of hearing. . . ."

We do not lose sight of the admonitions that have been made in jurisprudence that, as a rule, courts
should be liberal in setting aside orders of default and that default judgments are frowned
upon.39 Indeed, apart from a motion to lift order of default,other remedies are available to a defaulted
defendant evenafter judgment has been rendered. Thus, if judgment had already been rendered but
has not yet become final and executory, an appeal asserting that the judgment was contrary to the
law or to the evidence,40 or a motion for new trial under Rule 37, may be filed.41 In the case of the
latter, the same affidavits as are required in a motion to lift order of default must be attached.42 If
judgment has become final and executory, a defaulted defendant may file a petition for relief from
judgment under Rule 38.43 Still, should the defaulted defendant fail tofile a petition for relief, a petition
for annulment ofjudgment on the ground of lack of jurisdiction or extrinsic fraud remains available.44

However, jurisprudence, too, has qualified the intent that animates this liberality. As this court stated
1âw phi1

in Acance v. Court of Appeals:45

The issuance of the orders of default should be the exception rather than the rule, to be allowed only
in clear cases of obstinate refusal by the defendant to comply with the orders of the trial
court.46 (Emphasis supplied)

Moreover, this liberality must be tempered with a recognition that, in the first place, it is a defendant
who is at fault in failing to timely file an answer.

Rule 9, Section 3(b) gives an exclusive list of only four (4) grounds that allow for relief from orders of
default. Moreover, these grounds — extrinsic fraud, accident, mistake, and excusable negligence —
relate to factors that are extraneous to a defendant, that is, grounds that show that a defendant was
prevented, by reasons beyond his or her influence, from timely filing an answer.

The recognition that it is the defendant who is at fault and must suffer the consequences of his or her
own failure is analogous to the dismissal of an action due to the fault of a plaintiff, as provided by
Rule 17, Section 3 of the 1997 Rules of Civil Procedure. Rule 17, Section 3 reads:

SEC. 3. Dismissal due to fault of plaintiff.— If for no justifiable cause, the plaintiff fails to appear on
the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for
an unreasonable length of time, or to comply with these Rules or any order of the court, the
complaint may be dismissed upon motion of the defendant or upon the court's own motion, without
prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate
action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court.

Rule 17, Section 3 is qualified by the phrase "for no justifiable cause." Thus, in cases covered by
Rule 17, Section 3, should the failure to comply with court processes be the result of the plaintiff’s
own fault, it is but logical that a plaintiff must suffer the consequences of his own heedlessness. Rule
9, Section 3 — on default — applies the same logic to a culpable defendant. In this case, the
Spouses Manuel only have themselves to blame in not properly receiving the summons and copyof
the complaint served on them. It has been shown that their claim that service of summons was made
on persons other than them deserves no credence. Quite the contrary, it is quite apparent that
Sheriff Joselito Sales notonly explained the contents of the summons and the complaint but actually
told them that they must file their answer in fifteen (15) days. It was petitioner Sandra Manuel who
refused to sign and receive the summons and the complaint. This is evidently an act of obstinate
refusal to submit to and to comply with court processes. Thus, the Spouses Manuel are not
deserving of any leniency.

WHEREFORE, the petition for review on certiorari is DENIED. The June 28, 2012 decision and the
December 19, 2012 resolution of the Court of Appeals in CA-G.R. SP No. 119270 are AFFIRMED.

SO ORDERED
FIRST DIVISION

GUILLERMA S. SABLAS, G.R. No. 144568

joined by her husband,
PASCUAL LUMANAS,
Petitioners, Present:

PUNO, C.J., Chairperson,

SANDOVAL-GUTIERREZ,*
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.

ESTERLITA S. SABLAS and

RODULFO S. SABLAS,
Respondents. Promulgated:
July 3, 2007

x-------------------------------------------x

DECISION
CORONA, J.:

This case traces its roots to a complaint for judicial partition,

inventory and accounting filed by respondents Esterlita S. Sablas
and Rodulfo S. Sablas against petitioner spouses Pascual Lumanas
and Guillerma S. Sablas in the Regional Trial Court of Baybay,
Leyte, Branch 14[1] on October 1, 1999.[2]

Petitioner spouses were served with summons and a copy of the

complaint on October 6, 1999. On October 21, 1999, they filed a
motion for extension of time requesting an additional period of 15
days, or until November 5, 1999, to file their answer. However, they
were able to file it only on November 8, 1999. While the trial court
observed that the answer was filed out of time, it admitted the
pleading because no motion to declare petitioner spouses in default
was filed.[3]

The following day, November 9, 1999, respondents filed a

motion to declare petitioner spouses in default.[4] It was denied by
the trial court in an order dated December 6, 1999.[5] Respondents
moved for reconsideration but it was also denied.[6] Thereafter, they
challenged the December 6, 1999 order in the Court of Appeals in a
petition for certiorari[7] alleging that the admission of the answer by
the trial court was contrary to the rules of procedure and
constituted grave abuse of discretion amounting to lack of
jurisdiction.
In a decision dated July 17, 2000,[8] the appellate court ruled
that the trial court committed grave abuse of discretion because,
pursuant to Section 3, Rule 9 of the Rules of Court, the trial court
had no recourse but to declare petitioner spouses in default when
they failed to file their answer on or before November 5, 1999. Thus,
the Court of Appeals granted the petition, vacated the December 6,
1999 order and remanded the case to the trial court for reception of
plaintiffs evidence.

Aggrieved, petitioner spouses (defendants in the trial court)

now assail the July 17, 2000 decision of the Court of Appeals in
this petition for review on certiorari.[9]
Petitioner spouses contend that the Court of Appeals decision was
not in accord with the rules of procedure as it misconstrued Section
3, Rule 9 of the Rules of Court and was in contravention of
jurisprudence.

We agree.

WHERE THERE IS NO MOTION, THERE

CAN BE NO DECLARATION OF DEFAULT

The elements of a valid declaration of default are:

1. the court has validly acquired jurisdiction over the
person of the defending party either by service of
summons or voluntary appearance;[10]
2. the defending party failed to file the answer within the
time allowed therefor and
3. a motion to declare the defending party in default has
been filed by the claiming party with notice to the
defending party.

An order of default can be made only upon motion of the

claiming party.[11] It can be properly issued against the defending
party who failed to file the answer within the prescribed period only
if the claiming party files a motion to that effect with notice to the
defending party.
 In this connection, Section 3, Rule 9 of the Rules of Court
provides:
SEC. 3. Default: Declaration of. If the defending party fails
to answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party,
and proof of such failure, declare the defending party in default. x
x x. (emphasis supplied)

Three requirements must be complied with before the court

can declare the defending party in default: (1) the claiming party
must file a motion asking the court to declare the defending party in
default; (2) the defending party must be notified of the motion to
declare him in default and (3) the claiming party must prove that
the defending party has failed to answer within the period provided
by the Rules of Court.[12]

The rule on default requires the filing of a motion and notice of

such motion to the defending party. It is not enough that the
defendant fails to answer the complaint within the reglementary
period.[13] The trial court cannot motu proprio declare a defendant in
default[14] as the rules leave it up to the claiming party to protect his
or its interests. The trial court should not under any circumstances
act as counsel of the claiming party.

WHERE THERE IS NO
DECLARATION OF DEFAULT,
ANSWER MAY BE ADMITTED EVEN
IF FILED OUT OF TIME
 It is within the sound discretion of the trial court to permit the
defendant to file his answer and to be heard on the merits even
after the reglementary period for filing the answer expires.[15] The
Rules of Court provides for discretion on the part of the trial court
not only to extend the time for filing an answer but also to allow an
answer to be filed after the reglementary period.[16]

Thus, the appellate court erred when it ruled that the trial
court had no recourse but to declare petitioner spouses in default
when they failed to file their answer on or before November 5, 1999.

The rule is that the defendants answer should be admitted

where it is filed before a declaration of default and no prejudice is
caused to the plaintiff.[17] Where the answer is filed beyond the
reglementary period but before the defendant is declared in default
and there is no showing that defendant intends to delay the case,
the answer should be admitted.[18]

Therefore, the trial court correctly admitted the answer of

petitioner spouses even if it was filed out of time because, at the
time of its filing, they were not yet declared in default nor was a
motion to declare them in default ever filed. Neither was there a
showing that petitioner spouses intended to delay the case.

WHERE ANSWER HAS BEEN FILED,

THERE CAN BE NO DECLARATION
OF DEFAULT ANYMORE
 Since the trial court already admitted the answer, it was
correct in denying the subsequent motion of respondents to declare
petitioner spouses in default.

In Cathay Pacific Airways, Ltd. v. Hon. Romillo, Jr.,[19] the Court

ruled that it was error to declare the defending party in default after
the answer was filed. The Court was in fact even more emphatic
in Indiana Aerospace University v. Commission on Higher
Education:[20] it was grave abuse of discretion to declare a defending
party in default despite the latters filing of an answer.

The policy of the law is to have every litigants case tried on the
merits as much as possible. Hence, judgments by default are
frowned upon.[21] A case is best decided when all contending parties
are able to ventilate their respective claims, present their arguments
and adduce evidence in support thereof. The parties are thus given
the chance to be heard fully and the demands of due process are
subserved. Moreover, it is only amidst such an atmosphere that
accurate factual findings and correct legal conclusions can be
reached by the courts.

Accordingly, the petition is hereby GRANTED. The July 17,

2000 decision of the Court of Appeals in CA-G.R. SP No. 57397
is REVERSEDand SET ASIDE and the December 6, 1999 order of
the Regional Trial Court of Baybay, Leyte, Branch 14
is REINSTATED. The case is REMANDED to the trial court for
further proceedings.
PEDRO T. SANTOS, JR., G.R. No. 170943
Petitioner,
Present:

PUNO, C.J., Chairperson,

CARPIO,
- v e r s u s - CORONA,
AZCUNA and
LEONARDO-DE CASTRO, JJ.

PNOC EXPLORATION
CORPORATION,
Respondent. Promulgated:
September 23, 2008

x---------------------------------------------------x

DECISION
CORONA, J.:

This is a petition for review[1] of the September 22, 2005 decision[2] and
December 29, 2005 resolution[3] of the Court of Appeals in CA-G.R. SP No.
82482.

On December 23, 2002, respondent PNOC Exploration Corporation filed a

complaint for a sum of money against petitioner Pedro T. Santos, Jr. in the
Regional Trial Court of Pasig City, Branch 167. The complaint, docketed as Civil
Case No. 69262, sought to collect the amount of P698,502.10 representing
petitioners unpaid balance of the car loan[4] advanced to him by respondent when
he was still a member of its board of directors.
Personal service of summons to petitioner failed because he could not be located in
his last known address despite earnest efforts to do so. Subsequently, on
respondents motion, the trial court allowed service of summons by publication.

Respondent caused the publication of the summons in Remate, a newspaper of

general circulation in the Philippines, on May 20, 2003. Thereafter, respondent
submitted the affidavit of publication of the advertising manager of Remate [5] and
an affidavit of service of respondents employee[6] to the effect that he sent a copy
of the summons by registered mail to petitioners last known address.

When petitioner failed to file his answer within the prescribed period, respondent
moved that the case be set for the reception of its evidence ex parte. The trial court
granted the motion in an order dated September 11, 2003.

Respondent proceeded with the ex parte presentation and formal offer of its
evidence. Thereafter, the case was deemed submitted for decision on October 15,
2003.

On October 28, 2003, petitioner filed an Omnibus Motion for Reconsideration and
to Admit Attached Answer. He sought reconsideration of the September 11, 2003
order, alleging that the affidavit of service submitted by respondent failed to
comply with Section 19, Rule 14 of the Rules of Court as it was not executed by
the clerk of court. He also claimed that he was denied due process as he was not
notified of the September 11, 2003 order. He prayed that respondents evidence ex
parte be stricken off the records and that his answer be admitted.

Respondent naturally opposed the motion. It insisted that it complied with the rules
on service by publication. Moreover, pursuant to the September 11, 2003 order,
petitioner was already deemed in default for failure to file an answer within the
prescribed period.

In an order dated February 6, 2004, the trial court denied petitioners motion for
reconsideration of the September 11, 2003 order. It held that the rules did not
require the affidavit of complementary service by registered mail to be executed by
the clerk of court. It also ruled that due process was observed as a copy of the
September 11, 2003 order was actually mailed to petitioner at his last known
address. It also denied the motion to admit petitioners answer because the same
was filed way beyond the reglementary period.

Aggrieved, petitioner assailed the September 11, 2003 and February 6, 2004 orders
of the trial court in the Court of Appeals via a petition for certiorari. He contended
that the orders were issued with grave abuse of discretion. He imputed the
following errors to the trial court: taking cognizance of the case despite lack of
jurisdiction due to improper service of summons; failing to furnish him with copies
of its orders and processes, particularly the September 11, 2003 order, and
upholding technicality over equity and justice.

During the pendency of the petition in the Court of Appeals, the trial court
rendered its decision in Civil Case No. 69262. It ordered petitioner to
pay P698,502.10 plus legal interest and costs of suit.[7]

Meanwhile, on September 22, 2005, the Court of Appeals rendered its

decision[8] sustaining the September 11, 2003 and February 6, 2004 orders of the
trial court and dismissing the petition. It denied reconsideration.[9] Thus, this
petition.
Petitioner essentially reiterates the grounds he raised in the Court of Appeals,
namely, lack of jurisdiction over his person due to improper service of summons,
failure of the trial court to furnish him with copies of its orders and processes
including the September 11, 2003 order and preference for technicality rather than
justice and equity. In particular, he claims that the rule on service by publication
under Section 14, Rule 14 of the Rules of Court applies only to actions in rem, not
actions in personam like a complaint for a sum of money. He also contends that the
affidavit of service of a copy of the summons should have been prepared by the
clerk of court, not respondents messenger.

The petition lacks merit.

PROPRIETYOF
SERVICE BY PUBLICATION

Section 14, Rule 14 (on Summons) of the Rules of Court provides:

SEC. 14. Service upon defendant whose identity or whereabouts

are unknown. In any action where the defendant is designated as an
unknown owner, or the like, or whenever his whereabouts are
unknown and cannot be ascertained by diligent inquiry, service
may, by leave of court, be effected upon him by publication in a
newspaper of general circulationand in such places and for such times
as the court may order. (emphasis supplied)

Since petitioner could not be personally served with summons despite

diligent efforts to locate his whereabouts, respondent sought and was granted leave
of court to effect service of summons upon him by publication in a newspaper of
general circulation. Thus, petitioner was properly served with summons by
publication.
Petitioner invokes the distinction between an action in rem and an action in
personam and claims that substituted service may be availed of only in an action in
rem. Petitioner is wrong. The in rem/in personam distinction was significant under
the old rule because it was silent as to the kind of action to which the rule was
applicable.[10] Because of this silence, the Court limited the application of the old
rule to in rem actions only.[11]

This has been changed. The present rule expressly states that it applies [i]n any
action where the defendant is designated as an unknown owner, or the like, or
whenever his whereabouts are unknown and cannot be ascertained by diligent
inquiry. Thus, it now applies to any action, whether in personam, in rem or quasi
in rem.[12]

Regarding the matter of the affidavit of service, the relevant portion of

Section 19,[13] Rule 14 of the Rules of Court simply speaks of the following:
an affidavit showing the deposit of a copy of the summons and order for
publication in the post office, postage prepaid, directed to the defendant
by registered mail to his last known address.

Service of summons by publication is proved by the affidavit of the printer,

his foreman or principal clerk, or of the editor, business or advertising manager of
the newspaper which published the summons. The service of summons
by publication is complemented by service of summons by registered mail to the
defendants last known address. This complementary service is evidenced by an
affidavit showing the deposit of a copy of the summons and order for publication
in the post office, postage prepaid, directed to the defendant by registered mail to
his last known address.
 The rules, however, do not require that the affidavit of complementary
service be executed by the clerk of court. While the trial court ordinarily does the
mailing of copies of its orders and processes, the duty to make the complementary
service by registered mail is imposed on the party who resorts to service by
publication.

Moreover, even assuming that the service of summons was defective, the
trial court acquired jurisdiction over the person of petitioner by his own
voluntary appearance in the action against him. In this connection, Section 20,
Rule 14 of the Rules of Court states:

SEC. 20. Voluntary appearance. The defendants voluntary

appearance in the action shall be equivalent to service of summons.
The inclusion in a motion to dismiss of other grounds aside from lack of
jurisdiction over the person of the defendant shall not be deemed a
voluntary appearance. (emphasis supplied)

Petitioner voluntarily appeared in the action when he filed the Omnibus Motion for
Reconsideration and to Admit Attached Answer.[14] This was equivalent to service
of summons and vested the trial court with jurisdiction over the person of
petitioner.

ENTITLEMENTTO
NOTICE OF PROCEEDINGS

The trial court allowed respondent to present its evidence ex parte on

account of petitioners failure to file his answer within the prescribed period.
Petitioner assails this action on the part of the trial court as well as the said courts
failure to furnish him with copies of orders and processes issued in the course of
the proceedings.

The effects of a defendants failure to file an answer within the time allowed
therefor are governed by Sections 3 and 4, Rule 9 (on Effect of Failure to Plead) of
the Rules of Court:

SEC. 3. Default; declaration of. If the defending party fails to

answer within the time allowed therefor, the court shall, upon
motion of the claiming party with notice to the defending party, and
proof of such failure, declare the defending party in default.
Thereupon, the court shall proceed to render judgment granting the
claimant such relief as his pleading may warrant, unless the court in its
discretion requires the claimant to submit evidence. Such reception of
evidence may be delegated to the clerk of court.

SEC. 4. Effect of order of default. A party in default shall be

entitled to notice of subsequent proceedings but not to take part in the
trial. (emphasis supplied)

If the defendant fails to file his answer on time, he may be declared in default upon
motion of the plaintiff with notice to the said defendant. In case he is declared in
default, the court shall proceed to render judgment granting the plaintiff such relief
as his pleading may warrant, unless the court in its discretion requires the plaintiff
to submit evidence. The defaulting defendant may not take part in the trial but shall
be entitled to notice of subsequent proceedings.

In this case, even petitioner himself does not dispute that he failed to file his
answer on time. That was in fact why he had to file an Omnibus Motion for
Reconsideration and to Admit Attached Answer. But respondent moved only for
the ex parte presentation of evidence, not for the declaration of petitioner in
default. In its February 6, 2004 order, the trial court stated:

The disputed Order of September 11, 2003 allowing the

presentation of evidence ex-parte precisely ordered that despite and
notwithstanding service of summons by publication, no answer has been
filed with the Court within the required period and/or
forthcoming.[] Effectively[,] that was a finding that the defendant
[that is, herein petitioner] was in default for failure to file an answer
or any responsive pleading within the period fixed in the publication
as precisely the defendant [could not] be found and for which reason,
service of summons by publication was ordered. It is simply illogical to
notify the defendant of the Order of September 11, 2003 simply on
account of the reality that he was no longer residing and/or found on his
last known address and his whereabouts unknown thus the publication of
the summons. In other words, it was reasonable to expect that the
defendant will not receive any notice or order in his last known address.
Hence, [it was] impractical to send any notice or order to
him. Nonetheless, the record[s] will bear out that a copy of the order
of September 11, 2003 was mailed to the defendant at his last known
address but it was not claimed. (emphasis supplied)

As is readily apparent, the September 11, 2003 order did not limit itself to
permitting respondent to present its evidence ex parte but in effect issued an order
of default. But the trial court could not validly do that as an order of default can be
made only upon motion of the claiming party.[15] Since no motion to declare
petitioner in default was filed, no default order should have been issued.

To pursue the matter to its logical conclusion, if a party declared in default is

entitled to notice of subsequent proceedings, all the more should a party who has
not been declared in default be entitled to such notice. But what happens if the
residence or whereabouts of the defending party is not known or he cannot be
located? In such a case, there is obviously no way notice can be sent to him and the
notice requirement cannot apply to him. The law does not require that the
impossible be done.[16] Nemo tenetur ad impossibile. The law obliges no one to
perform an impossibility.[17] Laws and rules must be interpreted in a way that they
are in accordance with logic, common sense, reason and practicality.[18]

Hence, even if petitioner was not validly declared in default, he could not
reasonably demand that copies of orders and processes be furnished him. Be that as
it may, a copy of the September 11, 2003 order was nonetheless still mailed to
petitioner at his last known address but it was unclaimed.

CORRECTNESSOF
NON-ADMISSION OF ANSWER

Petitioner failed to file his answer within the required period. Indeed, he
would not have moved for the admission of his answer had he filed it on time.
Considering that the answer was belatedly filed, the trial court did not abuse its
discretion in denying its admission.

Petitioners plea for equity must fail in the face of the clear and express
language of the rules of procedure and of the September 11, 2003 order regarding
the period for filing the answer. Equity is available only in the absence of law, not
as its replacement.[19] Equity may be applied only in the absence of rules of
procedure, never in contravention thereof.
WHEREFORE, the petition is hereby DENIED.
SPOUSES HUMBERTO DELOS G.R. No. 153696
SANTOS and CARMENCITA
DELOS SANTOS, Present:
Petitioners,
PANGANIBAN, CJ., Chairperson,
- versus - YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
HON. EMMANUEL C. CALLEJO, SR. and
CARPIO, Presiding Judge of CHICO-NAZARIO, JJ.
RTC, Branch 16, Davao City
and METROPOLITAN BANK Promulgated:
and TRUST COMPANY,
Respondents. September 11, 2006

x------------------------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of

Court filed by
spouses Humberto delos Santos and Carmencita delos Santos (petitioners) assailing
the Decision[1] dated April 30, 2002 of the Court of Appeals (CA) in CA-G.R. SP
No. 64961.[2]

The antecedent facts of the case as summarized by the CA are as follows:

On January 3, 2001, Metropolitan Bank and Trust Company

(or Metrobank) filed a complaint[3] for sum of money against
spouses Humberto and Carmencita delos Santos (or petitioners) before
the Regional Trial Court of Davao City (Branch 16).
On January 22, 2001, petitioners were served with the summons,
together with a copy of the complaint. As petitioners failed to file an
answer within the reglementary period, Metrobank, on February 8,
2001,[4] filed a motion to declare them in default. The motion was set for
hearing on February 16, 2001.

Acting on the motion, the lower court, presided over by Hon. Emmanuel
C. Carpio (or respondent judge), issued an order dated February 12,
2001 declaring petitioners in default and setting the ex-parte presentation
of Metrobanks evidence on March 7, 2001.

On February 15, 2001, petitioners filed an opposition

to Metrobanks motion to declare them in default, claiming that upon
receipt of the summons, they immediately sought the services of Atty.
Philip Pantojan (or Atty. Pantojan) of the Into Pantojan Gonzales
and Marasigan Law Offices but it was only on February 12, 2001 that
they were able to meet with Atty. Pantojan. Petitioners alleged that not
being learned in law, they were unaware of the consequences of delay in
the filing of their answer.

On the same date, February 15, 2001, petitioners filed a motion to admit
answer, as well as the answer. In an order dated February 16, 2001,
respondent judge disregarded petitioners opposition
to Metrobanks motion for default and stood pat on his previous default
order.

On February 19, 2001, Metrobank filed an opposition to petitioners

motion to admit answer, arguing that said motion was rendered moot and
academic by the February 12, 2001 order.Metrobank also chided
petitioners for violating the three-day notice rule under Sec. 4, Rule 15
of the 1997 Rules of Civil Procedure. In an order dated February 20,
2001, the motion to admit answer was denied.

On February 27, 2001, petitioners filed a motion to lift the order of

default; Metrobank opposed the motion. In their motion, petitioners
reiterated that, being laymen, they were unaware of the fifteen-day
period within which to file the answer and that their failure to do so was
due to the unavailability of Atty. Pantojan who was then always out of
town. They attached to their motion an Affidavit of Merits which
restated the contents of the motion. Petitioners further claimed that if
 given our day in Court, we have a meritorious defense to set up against
the allegations of the plaintiffs complaint.

On March 2, 2001, respondent judge issued an order holding in abeyance

the ex-parte reception of evidence pending resolution of petitioners
motion to lift the order of default.

On March 5, 2001, respondent judge issued an order denying petitioners

motion to lift the order of default and setting the reception
of Metrobanks evidence on March 7, 2001, as previously scheduled. On
that date (March 7, 2001), Metrobank presented its evidence and the case
was submitted for decision. Petitioners moved for reconsideration of
the March 5, 2001 order but their motion was denied on March 21,
2001.[5]

Aggrieved, petitioners filed a Petition for Certiorari with the CA ascribing grave
abuse of discretion committed by the trial court amounting to lack of jurisdiction in
issuing the Orders dated February 12 and 16, 2001, declaring them in default and
denying their Opposition to Metropolitan Bank and Trust Companys (Metrobank)
Motion to Declare them in Default, respectively; and the Orders dated March 5 and
21, 2001 denying their Motion to Lift the Order of Default and their Motion for
Reconsideration, respectively.

In a Decision dated April 30, 2002, the CA denied the petition for lack of merit and
accordingly dismissed the same. The CA did not find the excuse proffered by
petitioners, i.e., the ignorance of procedural rules and their lawyers unavailability,
as constitutive of excusable negligence. It also ruled that for an order of default to
be set aside, petitioners must have a meritorious defense or that something could
be gained by having the order of default set aside; that petitioners affidavit of merit
did not show a meritorious defense since it merely stated that they have a
meritorious defense to set up against the allegation of petitioners complaint but
there was no discussion of such defense and the facts which they intend to prove in
support thereof.

The CA further found unmeritorious the contention of petitioners that they

were declared in default without giving them ample time to file an opposition
to MetrobanksMotion to Declare them in Default; that under Section 3, Rule 9 of
the Rules of Court, it is provided that the court shall, upon motion of the claiming
party with notice to the defending party in default, and proof of such failure,
declare the defending party in default; and that since it is clear from the records
that the reglementary period for filing an answer had expired with no responsive
pleading filed by petitioners, the trial court had properly declared them in
default. The CA further declared that even assuming that the trial court committed
a procedural lapse in declaring petitioners in default before the scheduled hearing
of Metrobanks motion, such error is not so serious as to constitute grave abuse of
discretion.

Hence, the instant petition filed by petitioners raising the following issues, to
wit:

1. Whether or not the procedural lapse committed by Honorable

Public Respondent in issuing an Order declaring petitioners [sic] in
default on 12 February 2001 or four (4) days before the scheduled
hearing of Metrobanks Motion to declare petitioners [sic] in default on
16 February 2001 is so serious as to constitute grave abuse of discretion.
2. Whether or not LITIS PENDENTIA raised by petitioners [sic]
as an affirmative defense is a meritorious defense.

3. Whether or not it is beyond the authority of the Honorable

Trial Court to rule on the issue of LITIS PENDENTIA simply and
chiefly because the defendants failed to seasonably raise it.

4. What constitutes Affidavit of Merit? [6]

Petitioners claim that the trial court committed grave abuse of discretion in
declaring them in default in its Order dated February 12, 2001, which was four
days before the hearing set on Metrobanks Motion to Declare them in Default; that
their failure to file their Answer within the reglementary period was due to the fact
that the services of their counsel of choice could not be secured within the period;
that they had filed their Motion to Admit Answer and their Answer as well as their
Opposition to respondents motion to declare them in default on February 15, 2001,
a day prior to the scheduled date of hearing.
Petitioners aver that under Section 1, Rule 9 of the Rules of Court, defenses
like the court has no jurisdiction, litis pendentia, res judicata and prescription can
be taken cognizance of by the court despite the fact that they are not in a motion to
dismiss or Answer; that the trial court should have looked into their affirmative
defense of litispendentia raised in their Answer since it is a meritorious defense as
it is a ground for a dismissal of a complaint. They further contend that although the
affirmative defense of litispendentia had reached the trial courts attention, it still
refused to pass judgment on said legal concern; that the defense
of litis pendentia raised in their Answer is sufficient to show that the affidavit of
merit showed a meritorious defense; that the procedural lapse committed by the
trial court would cause the unlawful deprivation of their property rights through
undue haste.

In its Comment, Metrobank contends that petitioners failed to file a motion

for reconsideration before filing the instant petition which would vest authority for
this Court to assume jurisdiction; that the rule on declaration of default did not
expressly mandate the trial court to conduct a hearing of the motion as it merely
requires that the notice of the motion was made to the defending party; that the trial
court declared petitioners in default since they failed to file their Answer within
the reglementary period; that assuming arguendo that the trial court committed
procedural lapse in declaring petitioners in default before the scheduled hearing,
there is still no grave abuse of discretion committed by the trial court since even if
the hearing was held, it would not make any difference as petitioners failed to file
their Answer within the reglementary period.

Metrobank further argues that petitioners negligence is not excusable

because if they have consulted the associates of Atty. Pantojan, they would
definitely be advised to ask for an extension of time to file their answer; that
petitioners failed to present a meritorious defense since aside from merely stating
in general terms their claim of litispendentia as a defense, the same is misplaced
because Civil Case No. 28,362-2001 pending in RTC of Davao City, Branch 16,
and Civil Case No. 27,875-2000 filed by petitioners in RTC of Davao City, Branch
10, have separate and distinct causes of action; that the trial court is correct in not
ruling on the issue of litis pendentia as petitioners Answer was not admitted as part
of the records of the case.

Petitioners filed their Reply contending that appeal by certiorari under Rule
45 does not require prior filing of a motion for reconsideration; that the procedural
lapse committed by the trial court in declaring petitioners in default before the
scheduled hearing should not be tolerated since petitioners land and building are at
stake; and that they should not be faulted for not consulting the associates of
Atty. Pantojan as they reposed their trust and confidence in him.

Petitioners and Metrobank filed their respective

memoranda. Metrobanks Memorandum no longer questioned petitioners non-filing
of a motion for reconsideration of the CA decision.

Prefatorily, we agree with petitioners that in appeal by certiorari, the prior

filing of a motion for reconsideration is not required.[7]

The principal issue before us is whether or not the CA erred in upholding the
Orders of the trial court declaring petitioners in default and denying their Motion to
Lift Order of Default.

We rule in the affirmative.

Section 3, Rule 9 of the Rules of Court provides:

Sec. 3. Default; declaration of If the defending party fails to

answer within the time allowed therefor, the court shall, upon motion of
the claiming party with notice to the defending party, and proof of such
failure, declare the defending party in default. Thereupon, the court shall
proceed to render judgment granting the claimant such relief as his
pleading may warrant, unless the court in its discretion requires the
claimant to submit evidence. Such reception of evidence may be
delegated to the clerk of court.

Clearly, there are three requirements which must be complied with by the
claiming party before the court may declare the defending party in default, to wit:
(1) the claiming party must file a motion asking the court to declare the defending
party in default; (2) the defending party must be notified of the motion to declare
him in default; (3) the claiming party must prove that the defending party has
failed to answer within the period provided by the Rule.
 In filing motions, Section 4, Rule 15 of the Rules of Court, specifically
provides:

Sec. 4. Hearing of motion. Except for motions which the court

may act upon without prejudicing the rights of the adverse party, every
written motion shall be set for hearing by the applicant. (Emphasis
supplied)

xxxx

Prior to the present rule on default introduced by the 1997 Rules of Civil
Procedure, as amended, Section 1 of the former Rule 18 on default is silent on
whether or not there is need for a notice of a motion to declare defendant in
default.[8] The Court then ruled that there is no need.[9] However, the present rule
expressly requires that the motion of the claiming party should be with notice to
the defending party.[10] The purpose of a notice of a motion is to avoid surprises on
the opposite party and to give him time to study and meet the arguments. [11] The
notice of a motion is required when the party has the right to resist the relief sought
by the motion and principles of natural justice demand that his right be not affected
without an opportunity to be heard.[12]

Therefore, as the present rule on default requires the filing of a motion and
notice of such motion to the defending party, it is not enough that the defendant
failed to answer the complaint within the reglementary period to be a sufficient
ground for declaration in default. The motion must also be heard.

In this case, it is not disputed that petitioners were served summons

on January 22, 2001.[13] Under Section 1, Rule 11 of the Rules of Court, the
defendant shall file his answer to the complaint within 15 days after service of
summons, unless a different period is fixed by the court. Petitioners answer was
due on February 6, 2001, but no answer was filed by
[14]
petitioners. Thus, Metrobank filed a Motion to declare petitioners in default
on February 9, 2001, setting the hearing thereof on February 16, 2001. However,
four days before the scheduled hearing, the trial court issued the Order
dated February 12, 2001, declaring petitioners in default.
 We could not see any justifiable reason why the trial court chose not to hear
the petitioners on the date and time fixed in Metrobanks motion, and instead,
hastily granted the motion before it could be heard on the ground that it had found
the motion to be impressed with merit. Indeed, in totally disregarding the purpose
for which the filing of a motion and notice to defending party are required by the
Rules, the trial court had acted in a despotic manner that is correctly assailed
through a petition for certiorari which petitioners have seasonably filed with the
CA.

Again, respondent Judge acted capriciously when he totally ignored

petitioners Opposition to Metrobanks Motion to Declare them in Default and
denied their Motion to Admit Answer, both filed on February 15, 2001, a day
before the scheduled hearing, which showed their desire to be heard before the
motion to declare them in default is resolved by the trial court.

A mere perusal of the Answer attached to the Motion to Admit Answer

would readily reveal that petitioners raised a special and affirmative defense the
other action pending between the same parties for the same cause. Petitioners
alleged that they entered into several loan agreements with Metrobank involving an
aggregate amount of P12,500,000.00 which was the basis of petitioners causes of
action in a civil case they earlier filed against Metrobank with the RTC
of Davao City, Branch 10, docketed as Civil Case No. 27,875-2000, for damages,
fixing of interest rates, application of excess interest payments; that the principal
obligation of P12,500,000.00 includes all other loans which petitioners have
with Metrobank; that the P500,000.00 obligation covered by the promissory note
subject of the instant Civil Case No. 28,362-2001 is part of the P12,500,000.00
loan of petitioners, subject of Civil Case No. 27,875-2000 that was earlier filed;
and that a written copy of the P500,000.00 loan was not attached to the complaint.

Thus, the trial court is deemed to have been apprised of the affirmative
defense of litis pendentia. Instead of unceremoniously discarding petitioners
Opposition and Motion to Admit Answer[15] which were filed before the scheduled
date of hearing of the motion to declare petitioners in default, it behooved upon the
trial court to delve into the merits of the Opposition and the Answer.
 The trial court then should have been guided by Section 11, Rule 11 of the
Rules of Court, to wit:
Sec. 11. Extension of time to plead. - Upon motion and on such terms as
may be just, the court may extend the time to plead provided in these Rules.

The court may also, upon like terms, allow an answer or other pleading to
be filed after the time fixed by these Rules.

and Section 1, Rule 9 of the 1997 Rules of Procedure which provides:

Sec. 1. Defenses and objections not pleaded. - Defenses and

objections not pleaded either in a motion to dismiss or in the answer are
deemed waived. However, when it appears from the pleadings or the
evidence on record that the court has no jurisdiction over the subject
matter, that there is another action pending between the same parties for
the same cause, or that the action is barred by a prior judgment or by
statute of limitations, the court shall dismiss the claim.

Under Rule 11, it is within the discretion of the trial court to permit the filing
of defendants answer even beyond the reglementary period, provided there is
justification for the belated action, and there was no showing that the defendant
intended to delay the case. Petitioners may be considered to have committed
excusable negligence when they waited for the counsel of their choice who was out
of town which caused the delay in filing their Answer; and the Motion to Admit
Answer was filed before the scheduled date of hearing on the Motion to Declare
Petitioners in Default, showing that petitioners had no intention to delay the case.

Under Rule 9, the trial court may motu proprio dismiss the claim when it
appears from the pleadings or evidence on the record that there is another cause of
action pending between the same parties for the same cause. With the alleged
affirmative defense of litis pendentia, the trial court had justifiable compelling
reason to recall its premature Order declaring petitioners in default.

In a case,[16] we found the trial court to have gravely abused its discretion
when it declared defendants in default; that the answer should be admitted because
it had been filed before it was declared in default and no prejudice was caused to
plaintiff; and that the hornbook rule is that default judgments are generally
disfavored.[17]

In this case, since the Order dated February 12, 2001 declaring petitioners in
default is null and void, the filing of the Answer may be considered as having been
filed before petitioners were declared in default and therefore no prejudice was
caused to Metrobank and there was no undue delay on the part of petitioners.

Basic elementary sense of fairness, liberality and substantial justice so

dictate that the premature Order be considered as null and void. It is the avowed
policy of the law to accord both parties every opportunity to pursue and defend
their cases in the open and relegate technicality to the background in the interest of
substantial justice.[18]

Since the Order dated February 12, 2001 was null and void, the trial court
likewise committed grave abuse of discretion in issuing the Orders dated March 5,
2001 and March 21, 2001 denying petitioners Motion to Lift Order of Default and
Motion for Reconsideration, respectively.

We reiterate the ruling in Akut v. Court of Appeals,[19] where we found that

the trial court committed grave abuse of discretion in declaring therein petitioners
in default and in denying their motion to set aside the order of default, thus:

The controlling principle ignored by respondent court is that it is

within sound judicial discretion to set aside an order of default and to
permit a defendant to file his answer and to be heard on the merits even
after the reglementary period for the filing of the answer has
expired. This discretion should lean towards giving party-litigants every
opportunity to properly present their conflicting claims on the merits of
the controversy without resorting to technicalities. Courts should be
liberal in setting aside orders of default, for default judgments are
frowned upon, and unless it clearly appears that reopening of the case is
intended for delay, it is best that the trial courts give both parties every
chance to fight their case fairly and in the open, without resort to
technicality. x x x

x x x Moreover, petitioners' answer shows that they have

a prima facie meritorious defense. They should, therefore, be given their
 day in court to avoid the danger of committing a grave injustice if they
were denied an opportunity to introduce evidence in their behalf.

Our ruling in Mercader v. Bonto[20] and the copious precedents

therein cited that "considering that the late filing of defendants'
answer was due to excusable negligence and that they appear to
have a meritorious defense; that defendants filed an answer before
they were declared in default; and that the late filing of the answer
did not in any way prejudice or deprive the plaintiff of any
substantial right, nor was there intention to unduly delay the case,
WE hold that the respondent judge committed an abuse of
discretion in declaring the defendants in default and in refusing to
set aside the order of default" is fully applicable to the case at bar.

Time and again the Court has enjoined trial judges to act with
circumspection and not to precipitately declare parties in default,
needlessly compelling the aggrieved party to undergo the additional
expense, anxiety and delay of seeking the intervention of the appellate
courts and depriving them of the much needed time and attention that
could instead have well been devoted to the study and disposition of
more complex and complicated cases and issues.[21] (Emphasis supplied)

In sum, we find that the RTC Order declaring petitioners in default and its
subsequent Order denying petitioners Motion to Lift Order of Default are null and
void; and the CA erroneously upheld the assailed Orders of the trial court.

WHEREFORE, the petition for review is GRANTED. The Decision of the

Court of Appeals dated April 30, 2002 in CA-G.R. SP No. 64961
is REVERSED and SETASIDE. The Order of Default of the Regional Trial Court
is SET ASIDE and the Answer filed by petitioners is deemed ADMITTED. The
trial court is DIRECTED to continue with deliberate speed with the proceedings
in the case below.