Civpro - Default

8/12/2019 Civpro - Default

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G.R. No. L-39047 April 30, 1985 / Pascua v. Florendo

This is a petition for review on certiorari, seeking to annul the decision of the Court of First Instance of Cagayan which dismissed the petitioners' action forreconveyance with damages on the ground that the period within which to file the same had already prescribed.

Petitioners, as plaintiffs, filed a complaint for reconveyance with damages against the private respondents, spouses Clemente and Juliana Castro. The latter, asdefendants, in lieu of filing an answer, filed a motion to dismiss the complaint on the grounds that the complaint states no cause of action and that the same is already

barred by the statute of limitations.

The trial court denied the respondents' motion after finding that the grounds relied upon by them did not appear on the face of the complaint. The court subsequentlydeclared the respondents in default for their having failed to file an answer within the reglementary period. Thus, the petitioners proceeded to present their evidence ex-

parte

After receiving the petitioners' evidence, the trial court made the following findings:

From the evidence adduced during the presentation of evidence by plaintiffs, it was shown that Alberto Pascua is one of the plaintiffs in this case; that he knows his co-plaintiffs Crispina, Sotera, surnamed Pascua, and Eduardo Molina, the first two being his sisters while the last is his nephew being the son of his sister Alejandra;that his father is Jordan Pascua while his mother is Magdalena Dumadag;that both his parents are already dead (Exhibits A, B, and C); that Alejandra Pascua is also dead;that during the lifetime of Jordan and Magdalena Dumadag, they begot five children, namely Alberto, Alejandra, Crispina, Martin and Sotera; that Jordan Pascua andMagdalena Dumadag acquired a parcel of land located at Dacalafugo, Camalaniugan, Cagayan, consisting of 1.02.20 hectares and described in paragraph 3 of thecomplaint; that lately they came to know that their brother Martin Pascua sold the property to Clemente Castro, a resident of Camalaniugan, Cagayan;that when they went to complain to the Agrarian office in Tuguegarao Clemente Castro showed them the deed of sale which they xerox copied (Exhibit D);that the signature Alberto Pascua appearing in Exhibit D is not his signature; that the genuine signature of Alberto Pascua appears in Exhibit E; that he and this co-

plaintiffs did not give consent to the sale of the land subject matter of this case;that the signature Sotera Pascua, appearing in Exhibit D is not also the signature of Sotera Pascua;that he and his co-plaintiffs did not appear before the Notary Public;that the land subject matter of this case was never given to Martin Pascua by their deceased father;that Martin Pascua is already dead; that the land is now titled in the name of the defendant Juliana O. Castro (Exhibits F and F-1) while the deed of sale was executed infavor of Clemente Castro (Exhibit D);that the land is declared for taxation purposes under Tax Declaration No. 157 (Exhibit G) in the name of Juliana Castro; that plaintiffs and the defendants have beenneighbors since before the war and defendants know that the land sold to them and subject matter of this suit was inherited by the plaintiffs from their deceased father;that they (plaintiffs) have been deprived of the fruits of the land for more than 20 years;that the land yields from thirty to forty sacks of palay valued at P 30.00 each; and that plaintiffs agreed to pay their counsel the amount of P 1,200.00 out of which theyhave already paid P 200.00.

From Exhibit D of the plaintiffs, it appears that the deed of sale was executed in favor the defendant Clemente Castro married to Juliana Orteza by Martin Pascua on

May 8, 1951. Alberto Pascua and Sotera Pascua testified that lately they came to know that this land was conveyed by Martin Pascua to the defendants and that saiddefendants have been in possession of the land in question for more than 20 years. They testified further, however, that they have been deprived of the fruits of the landfor more than twenty years. If such is the case, it is clear that the defendants have entered and occupied the property for more than twenty years and it is inconceivablethat the plaintiffs did not come to know that the defendants bought the property from their brother Martin Pascua when they admitted that they have suffered damages

by virtue of the dispossession for more than twenty years. The conclusion is obvious that the plaintiffs had knowledge of the transaction made by their brother abouttwenty years ago.

From the evidence of the plaintiffs, the Court finds that there was really fraud committed by Martin Pascua in selling the entire property which said Martin Pascua andplaintiffs inherited from their parents thus excluding the shares of the plaintiffs. Certainly, Martin Pascua could only sell one-fifth of the property and that the four-fifthswere fraudulently conveyed by him. It is clear that there was fraud on the part of Martin Pascua in selling the shares of his brother and sisters. The action for relief onthe ground of fraud, however, may be brought only within four years from the discovery of the fraud. (Article 1391, New Civil Code; Section 43 (c) Act 190).

xxx xxx xxx

In view of the fact that the deed of sale was executed on May 8, 1951, or over twenty years before the filing of the complaint on May 31, 1973, it is hard to believe thatplaintiffs did not come to know of this deed of sale executed by their brother. The Court, therefore, comes to the inevitable conclusion that this action, having been filed22 years after the execution of the deed of sale, has long prescribed.

Not satisfied with the trial court's decision, petitioners elevated the case to this Court through this petition. The petitioners ask us to examine the following alleged errorof the respondent court:

1. THE TRIAL COURT ERRED IN DISMISSING THE CASE ON GROUND OF PRESCRIPTION ALTHOUGH IT HAS PREVIOUSLY DENIED AMOTION TO DISMISS BASED ON THE SAME GROUND.

2. THE TRIAL COURT ERRED IN NOT GRANTING RELIEF TO PLAINTIFFS ALTHOUGH THE DEFENDANTS WERE DECLARED IN DEFAULT.

The petitioners contend that the trial court acted with grave abuse of discretion when, after hearing their evidence presented ex-parte, the respondents having beendeclared in default, it dismissed the case on the ground that the action had already prescribed. When the same ground was ear lier raised, the court denied the motion to


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dismiss filed by the respondents. The petitioners argue that because of its denying the motion to dismiss, the trial court is estopped from dismissing the case on the sameground. Petitioners further contend that the court's conclusion that they had knowledge of the sale executed by their deceased brother, Martin Pascua about twenty yearsago is based merely on surmises and conjectures because, in reality, it was only in 1973 when they came to learn of the deed of sale executed by their deceased brotherin 1951. In 1973, the deed was shown to them by respondent Clemente Castro at the Agrarian office. Therefore, the period of prescription should be counted from theknowledge of the petitioners of the deed of sale and not from the date it was executed.

Petitioners' contention are without merit.

The trial court denied the motion to dismiss because the grounds relied upon by the respondents for their motion did not appear on the face of the complaint. There wasno finding that the allegation of prescription had no merit. It cannot be said, therefore, that the trial court was already estopped from passing upon the issue of

prescription. The issue was not adjudicated on its merits and the doctrine of res judicata had not set in yet.

We likewise find the petitioners' contention, that they came to know of the deed of sale by Mart in Pascua in favor of the respondents only in 1973, highly improbable.As the trial court correctly observed, it is inconceivable that the petitioners did not come to know about the purchase by the respondents of property from MartinPascua. They admitted that they have been neighbors of the respondents since before the war or period of about 30 years and that the latter had deprived them of thefruits of the land in question for more than 20 years. Alberto Pascua, one of the petitioners testified that his parents from whom they inherited the property died morethan 25 years ago yet the children never exerted any effort to have the property partitioned. This fact indicates that petitioners had knowledge of the sale, which explainswhy they had no interest at all in any project of partition. More important is the fact that after the respondents purchased the land they worked to secu re an OriginalCertificate of Title on the basis of a free patent application. This was way back in 1958, 15 years before the petitioners decided to file the action below. Clearly, the

petitioners' action is now barred by the statute of limitations.

In the case of Iglesia ni Cristo v. Hon. Judge, Court of First instance of Nueva Ecija, Br. I (123 SCRA 523), quoting the case of Labora v. Dayang-hirang (37 SCRA346), we ruled:

The rule in this jurisdiction, regarding public patents and the character of the certificate of title that may be issued by virtue thereof, is that where land is granted by thegovernment to a private individual, the corresponding patent therefore, is recorded, and the certificate of title is issued to the grantee; thereafter, the land isautomatically brought within the operation of the Land Registration Act, the title issued to the grantee becoming entitled to all the safeguards provided in Section 38 ofsaid Act. In other words, upon the expiration of one year from its issuance, the certificate of title becomes irrevocable and indefeasible like a certificate issued in aregistration proceeding.

It is quite obvious, therefore, that the respondents' title has already become indefeasible and irrevocable, the one-year period provided by law having expired in 1959.

Moreover, even if we add the lower court's finding that there was fraud on the part of Martin Pascua when he effected the sale of the disputed lot in favor of therespondents, the petitioners are still barred from recovering the lot because their action should have been filed within four (4) years from their discovery of the fraud,which in turn, is deemed at the latest to have taken place in 1958, when the respondents were issued an original certificate of title. This was our ruling in the case ofBalbin v. Medalla (108 SCRA 666) where we stated:

An action for reconveyance of real property resulting from fraud may be barred by the statute of limitations, which requires that the action shall be filed within four (4)years from the discovery of the fraud. Such discovery is deemed to have taken place when the petitioners herein were issued original certificates of title through eitherhomestead or free patent grants, for the registration of said patents constitutes constructive notice to the whole world. (Gerona v. de Guzman, 11 SCRA 153, and citedcases thereof ).

In the case at bar, the latest patent was issued on October 14, 1959. There is, therefore, merit in petitioners' contention that if any action for reconveyance should becommenced, the same should be filed on or before October 14, 1963. But private respondents' complaint for reconveyance and annulment of titles with damages wasfiled only on August 30, 1973 or more than 14 years had already elapsed from the date of the issuance of the respective titles of the defendants. Consequently, the actionfor reconveyance of land titled in the names of defendants (petitioners herein) had already prescribed.

The petitioners raise as a second issue that the respondent court had no alternative but to grant the relief prayed for in their complaint as this was evident in the tenor ofthe summons issued by said court which in part stated:

... if you fail to appear within the time aforesaid, the plaintiff will take judgment against you by default and demand from this Court the relief applied for in said

complaint. ...

Petitioners also anchor their contention on Rule 18, Section 1 of the Rules of Court which provides:

Judgment by default.If the defendant fails to answer within the time specified in these rules, the court shall, upon motion of the plaintiff and proof of such failure,declare the defendant in default. Thereupon the court shall proceed to receive the plaintiff's evidence and render judgment granting him such relief as the complaint andthe facts proven may warrant. This provision applies where no answer is made to a counter-claim, cross-claim or third-party complaint within the period provided inthis Rule.

Nowhere in the aforequoted provision nor in the summons issued by the respondent court is it stated that the petitioners are automatically entitled to the relief prayedfor, once the respondents are declared in default.

Favorable relief can be granted only after the court has ascertained that the evidence offered and the facts proven by the presenting party, petitioners in this case,warrant the grant of the same. Otherwise, it would be meaningless to require presentation of evidence if everytime the other party is declared in default, a decision


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would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his prayer. This is not contemplated by the Rules nor is itsanctioned by the due process clause.

In the case of Lim Tanhu v. Ramolete (66 SCRA 452-453), we had occasion to elaborate on this point. We ruled:

The Rules of Court contain a separate rule on the subject of default, Rule 18. But said rule is concerned solely with default resulting from failure of the defendant ordefendants to answer within the reglementary period. Referring to the simplest form of default, that is, where there is only one defendant in the action and he fails toanswer on time, Section I of the rule provides that upon 'proof of such failure, (the court shall) declare the defendant in default. Thereupon the court shall proceed to

receive the plaintiff's evidence and render judgment granting him such relief as the complaint and the facts proven may warrant.' This last clause is clarified by Section5 which says that 'a judgment entered against a party in default shall not exceed the amount or be different in kind from that prayed for'.

Unequivocal, in the literal sense, as these provisions are, they do not readily convey the full import of what they contemplate. To begin with, contrary to the immediatenotion that can be drawn from their language, these provisions are not to be understood as meaning that default or the failure of the defendant to answer should be'interpreted as an admission by the said defendant that the plaintiff's cause of action find support in the law or that plaintiff is entitled to the relief prayed for.' (Moran,supra, p. 535 citing Macondray & Co. v. Eustaquio, 64 Phil. 466, citing with approval Chaffin v. McFadden, 41 Ark 42; Johnson v. Pierce, 12 Ark. 599; Mayden v.Johnson, 59 Ga. 105; People v. Rust, 292 Ill. 328; Ken v. Leopold, 21 Ill. A. 163; Chicago, etc. Electric R. Co. v. Krempel, 116 Ill. A. 253.)

xxx xxx xxx

In other words, a defaulted defendant is not actually thrown out of court. While in a sense it may be said that by defaulting he leaves himself at the mercy of the court,the rules see to it that any judgment against him must be in ac cordance with law. The evidence to support the plaintiff's cause is, of course, presented in his absence, butthe court is not supposed to admit that which is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that onlylegal evidence should be considered against him. If the evidence presented should not be sufficient to justify a judgment for the plaintiff, the complaint must bedismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint.

In the instant case, from the evidence presented ex-parte by the petitioners and from their very own allegations, the only judgment that is warranted is the dismissal ofthe complaint. It is barred by the statute of limitations.

WHEREFORE, the petition is hereby DISMISSED for lack of merit. No costs.

G.R. No. 151098 March 21, 2006 / Gajudo v. Traders Royal Bank

The mere fact that a defendant is declared in default does not automatically result in the grant of the prayers of the plaintiff. To win, the latter must still present the samequantum of evidence that would be required if the defendant were still present. A party that defaults is not deprived of its rights, except the right to be heard and to

present evidence to the trial court. If the evidence presented does not support a judgment for the plaintiff, the complaint should be dismissed, even if the defendant maynot have been heard or allowed to present any countervailing evidence.

The Case

Before us is a Petition for Review2 under Rule 45 of the Rules of Court, assailing the June 29, 2001 Decision3 and December 6, 2001 Resolution4 of the Court ofAppeals (CA) in CA-GR CV No. 43889. The CA disposed as follows:

"UPON THE VIEW WE TAKE OF THIS CASE, THUS, the partial judgment appealed from, must be, as it hereby is, VACATED and SET ASIDE, and another oneentered DISMISSING the complaint at bench. Without costs."5

The assailed Resolution denied petitioners Motion for Reconsideration6 for lack of merit.

The Facts

The CA narrated the facts as follows:

"[Petitioners] filed a complaint before the Regional Trial Court of Quezon City, Branch 90, against [respondent] Traders Royal Bank, the City Sheriff of Quezon Cityand the Register of Deeds of Quezon City. Docketed thereat as Civil Case No. Q-41203, the complaint sought the annulment of the extra-judicial foreclosure andauction sale made by [the] city sheriff of Quezon City of a parcel of land covered by TCT No. 16711 of the Register of Deeds of Quezon City, the conventionalredemption thereof, and prayed for damages and the issuance of a writ of preliminary injunction.

"The complaint alleged that in mid 1977[, Petitioner] Danilo Chua obtained a loan f rom [respondent] bank in the amount of P75,000.00 secured by a real estatemortgage over a parcel of land covered by TCT No. 16711, and owned in common by the [petitioners]; that when the loan was not paid, [respondent] bank commencedextra-judicial foreclosure proceedings on the property; that the auction sale of the property was set on 10 June 1981, but was reset to 31 August 1981, on [PetitionerChuas] request, which, however, was made without the knowledge and conformity of the other [petitioners]; tha t on the re-scheduled auction sale, [the] Sheriff ofQuezon City sold the property to the [respondent] bank, the highest bidder therein, for the sum of P24,911.30; that the auction sale was tainted with irregularity becauseamongst others, the bid price was shockingly or unconscionably, low; that the other [petitioners] failed to redeem the property due to their lack of knowledge of theirright of redemption, and want of sufficient education; that, although the period of redemption had long expired, [Petitioner] Chua offered to buy back, and [respondent]

bank also agreed to sell back, the foreclosed property, on the understanding that Chua would pay [respondent] bank the amount of P40,135.53, representing the sum thathe bank paid at the auction sale, plus interest; that [Petitioner] Chua made an initial payment thereon in the amount of P4,000.00, covered by Interbank Check No.


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09173938, dated 16 February 1984, duly receipted by [respondent] bank; that, in a sudden change of position, [respondent] bank wrote Chua, on 20 February 1984,asking that he could repurchase the property, but based on the current market value thereof; and that sometime later, or on 22 March 1984, [respondent] bank wroteChua anew, requiring him to tender a new offer to counter the offer made thereon by another buyer.

"Traversing [petitioners] complaint, [respondent] bank, upon 05 July 1984, filed its answer with counterclaim, thereunder asserting that the foreclosure sale of themortgaged property was done in accordance with law; and that the bid price was neither unconscionable, nor shockingly low; that [petitioners] slept on their rights whenthey failed to redeem the property within the one year statutory period; and that [respondent] bank, in offering to sell the property to [Petitioner] Chua on the basis of itscurrent market price, was acting conformably with law, and with legitimate banking practice and regulations.

"Pre-trial having been concluded, the parties entered upon trial, which dragged/lengthened to several months due to postponements. Upon 11 June 1988, however, a bigconflagration hit the City Hall of Quezon City, which destroyed, amongst other things, the records of the case. After the rec ords were reconstituted, [petitioners]discovered that the foreclosed property was sold by [respondent] bank to the Ceroferr Realty Corporation, and that the notice of lis pendens annotated on the certificateof title of the foreclosed property, had already been cancelled. Accordingly, [petitioners], with leave of court, amended their complaint, but the Trial Court dismissedthe case without prejudice due to [petitioners] failure to pay additional filing fees.

"So, upon 11 June 1990, [petitioners] re-filed the complaint with the same Court, whereat it was docketed as Civil Case No. 90-5749, and assigned to Branch 98: theamended complaint substantially reproduced the allegations of the original complaint. But [petitioners] this time impleaded as additional defendants the Ceroferr RealtyCorporation and/or Cesar Roque, and Lorna Roque, and included an additional cause of action, to wit: that said new defendants conspired with [respondent] bank in[canceling] the notice of lis pendens by falsifying a letter sent to and filed with the office of the Register of Deeds of Quezon City, purportedly for the cancellation ofsaid notice.

"Summons was served on [respondent] bank on 26 September 1990, per Sheriffs Return dated 08 October 1990. Supposing that allthe defendants had filed theiranswer, [petitioners] filed, on 23 October 1991, a motion to set case for pre-trial, which motion was, however, denied by the Trial Court in its Order of 25 October1991, on the ground that [respondent] bank has not yet filed its answer. On 13 November 1991[, petitioners] filed a motion fo r reconsideration, thereunder alleging thatthey received by registered mail, on 19 October 1990, a copy of [respondent] banks answer with counterclaim, dated 04 October 1990, which copy was attached to themotion. In its Order of 14 November 1991, the trial Court denied for lack of merit, the motion for reconsideration, therein holding that the answer with counterclaimfiled by [respondent] bank referred to another civil case pending before Branch 90 of the same Court.

"For this reason, [petitioners] filed on 02 December 1991 a motion to declare [respondent] bank in default, thereunder alleging that no answer has been filed despite theservice of summons on it on 26 September 1990.

"On 13 December 1991, the Trial Court declared the motion submitted for resolution upon submission by [petitioners] of proof of service of the motion on [respondent]bank.

"Thus, on 16 January 1992, upon proof that [petitioners] had indeed served [respondent] bank with a copy of said motion, the Trial Court issued an Order of defaultagainst [respondent] bank.

"Upon 01 December 1992, on [petitioners] motion, they were by the Court allowed to present evidence ex parte on 07 January 1993, insofar as [respondent] bank wasconcerned.

"Thereafter, or on 08 February 1993, the Trial Court rendered the new questioned partial decision.7

"Aggrieved, [respondent] bank filed a motion to set aside [the] partial decision by default against Traders Royal Bank and admit [respondent] Traders Royal Banks x xx Answer with counterclaim: thereunder it averred, amongst others, that the erroneous filing of said answer was due to an honest mistake of the typist and inadvertenceof its counsel.

"The [trial court] thumbed down the motion in its Order of 26 July 1993."8

Respondent bank appealed the Partial Decision9 to the CA. During the pendency of that appeal, Ceroferr Realty Corporation and/or Cesar and/or Lorna Roque filed aManifestation with Motion10 asking the CA to discharge them as parties, because the case against them had already been dismissed on the basis of their CompromiseAgreement11 with petitioners. On May 14, 1996, the CA issued a Resolution12 granting Ceroferr et al.s Manifestation with Motion to discharge movants as parties to

the appeal. The Court, though, deferred resolution of the matters raised in the Comment13 of respondent bank. The latter contended that the Partial Decision had beennovated by the Compromise Agreement, whose effect of res judicata had rendered that Decision functus officio.

Ruling of the Court of Appeals

The CA ruled in favor of respondent bank. Deemed, however, to have rested on shaky ground was the latters "Motion to Set Aside Partial Decision by Default AgainstTraders Royal Bank and Admit Defendant Traders Royal Banks Answer."14 The reasons offered by the bank forfailing to file an answer were considered by theappellate court to be "at once specious, shallow and sophistical and can hardly be dignified as a mistake or excusable negligence, which ordinary prudence could not

have guarded against."15

In particular, the CA ruled that the erroneous docket number placed on the Answer filed before the trial court was not an excusable negligence by the banks counsel.The latter had a bounden duty to be scrupulously careful in reviewing pleadings. Also, there were several opportunities to discover and rectify the mistake, but thesewere not taken. Moreover, the banks Motion to Set Aside the Partial Decision and to Admit [the] Answer was not accompanied by an affidavit of merit. These mistakeand the inexcusable negligence committed by respondents lawyer were binding on the bank.


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On the issue of whether petitioners had convincingly established their right to relief, the appellate court held that there was no ground to invalidate the foreclosure saleof the mortgaged property. First, under Section 3 of Act No. 3135, an extrajudicial foreclosure sale did not require personal notice to the mortgagor. Second, there wasno allegation or proof of noncompliance with the publication requirement and the public posting of the notice of sale, provided under Act No. 3135, as amended. Third,there was no showing of inadequacy of price as no competent evidence was presented to show the real market value of the land sold or the readiness of another buyer tooffer a price higher than that at which the property had been sold.

Moreover, petitioners failed to prove that the bank had agreed to sell the property back to them. After pointing out that the redemption period had long expired,

respondents written communications to Petitioner Chua only showed, at most, that the former had made a proposal for the latter to buy back the property at the currentmarket price; and that Petitioner Chua was requested to make an offer to repurchase the property, because another buyer had a lready made an offer to buy it. On theother hand, respondent noted that the Interbank check for P4,000 was for "deposit only." Thus, there was no showing that the check had been issued to cover part of therepurchase price.

The appellate court also held that the Compromise Agreement had not resulted in the novation of the Partial Decision, because the two were not incompatible. In fact,the bank was not even a party to the Agreement. Petitioners recognition of Ceroferrs title to the mortgaged property was intended to preclude future litigation againstit.

Hence this Petition.16

Issues

In their Memorandum, petitioners raise the following issues:

"1. Whether or not the Respondent Court of Appeals erred in failing to apply the provisions of Section 3, Rule 9 of the 1997 Rules of Civil Procedure [and in applyinginstead] the rule on preponderance of evidence under Section 1, Rule 133 of the Rules of Court.

"2. Whether or not the respondent appellate court failed to apply the conventional redemption rule provided for under Article 1601 of the New Civil Code.

"3. Whether or not this Honorable Court can exercise its judicial prerogative to evaluate the findings of facts."17

The first issue is one of law and may be taken up by the Court without hindrance, pursuant to Section 1 of Rule 45 of the Rules of Court.18 The second and the thirdissues, however, would entail an evaluation of the factual findings of the appellate court, a function ordinarily not assumed by this Court, unless in some excepted casesThe Court will thus rule on the first issue before addressing the second and the third issues jointly.

The Courts Ruling

The Petition has no merit.

First Issue:Quantum of Proof

Petitioners challenge the CA Decision for applying Section 3 of Rule 9 of the Rules of Court, rather than Section 1 of Rule 133 of the same Rules. In essence,petitioners argue that the quantum of evidence for judgments flowing from a default order under Section 3 of Rule 9 is not the same as that provided for in Section 1 ofRule 133.

For ease of discussion, these two rules will be reproduced below, starting with Section 3 of Rule 9 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 noticeto the defending party, and proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the claimantsuch 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 theclerk of court.

"(a) 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.

"(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 oath to set aside the order odefault 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.

"(c) Effect of partial default.When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and theothers fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented.

"(d) Extent of relief to be awarded.A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor a wardunliquidated damages.


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"(e) Where no defaults allowed.If the defending party in an action for annulment or declaration of nullity of marriage or for legal separation fails to answer, the courtshall order the prosecuting attorney to investigate whether or nor a collusion between the parties exists, and if there is no collusion, to intervene for the State in order tosee to it that the evidence submitted is not fabricated."

We now quote Section 1 of Rule 133:

"SECTION 1. Preponderance of evidence, how determined.In civil cases, the party having the burden of proof must establish his case by a preponderance ofevidence. In determining where the preponderance or superior weight of evidence on the issues involved lies, the court may consider all the facts and circumstances of

the case, the witnesses manner of testifying, their intelligence, their means and opportunity of knowing the facts to which they are testifying, the nature of the facts towhich they testify, the probability or improbability of their testimony, their interest or want of interest, and also their personal credibility so far as the same maylegitimately appear upon the trial. The court may also consider the number of witnesses, though the preponderance is not nece ssarily with the greater number."

Between the two rules, there is no incompatibility that would preclude the application of either one of them. To begin with, Section 3 of Rule 9 governs the procedurewhich the trial court is directed to take when a defendant fails to file an answer. According to this provision, the court "shall proceed to render judgment granting theclaimant such relief as his pleading may warrant," subject to the courts discretion on whether to require the presentation o f evidence ex parte. The same provision alsosets down guidelines on the nature and extent of the relief that may be granted. In particular, the courts judgment "shall not exceed the amount or be different in kindfrom that prayed for nor award unliquidated damages."

As in other civil cases, basic is the rule that the party making allegations has the burden of proving them by a preponderance of evidence.19 Moreover, parties must relyon the strength of their own evidence, not upon the weakness of the defense offered by their opponent.20 This principle holds true, especially when the latter has had noopportunity to present evidence because of a default order. Needless to say, the extent of the relief that may be granted can only be as much as has been alleged and

proved21 with preponderant evidence required under Section 1 of Rule 133.

Regarding judgments by default, it was explained in Pascua v. Florendo22 that complainants are not automatically entitled to the relief prayed for, once the defendantsare declared in default. Favorable relief can be granted only after the court has ascertained that the relief is warranted by the evidence offered and the facts proven bythe presenting party. In Pascua, this Court ruled that "x x x it would be meaningless to require presentation of evidence if every time the other party is declared indefault, a decision would automatically be rendered in favor of the non-defaulting party and exactly according to the tenor of his prayer. This is not contemplated by theRules nor is it sanctioned by the due process clause."23

The import of a judgment by default was further clarified in Lim Tanhu v. Ramolete.24 The following disquisition is most instructive:

"Unequivocal, in the literal sense, as these provisions [referring to the subject of default then under Rule 18 of the old Rules of Civil Procedure] are, they do not readilyconvey the full import of what they contemplate. To begin with, contrary to the immediate notion that can be drawn from their language, these provisions are not to beunderstood as meaning that default or the failure of the defendant to answer should be interpreted as an admission by the said defendant that the plaintiffs cause of

action find support in the law or that plaintiff is entitled to the relief prayed for. x x x.

x x x x x x x x x

"Being declared in default does not constitute a waiver of rights except that of being heard and of presenting evidence in the trial court. x x x.

"In other words, a defaulted defendant is not actually thrown out of court. While in a sense it may be said that by defaulting he leaves himself at the mercy of the court,the rules see to it that any judgment against him must be in accordance with law. The evidence to support the plaintiffs cause i s, of course, presented in his absence, butthe court is not supposed to admit that which is basically incompetent. Although the defendant would not be in a position to object, elementary justice requires that onlylegal evidence should be considered against him. If the evidence presented should not be sufficient to justify a judgment for the plaintiff, the complaint must bedismissed. And if an unfavorable judgment should be justifiable, it cannot exceed in amount or be different in kind from what is prayed for in the complaint."25

In sum, while petitioners were allowed to present evidence ex parte under Section 3 of Rule 9, they were not excused from establishing their claims for damages by therequired quantum of proof under Section 1 of Rule 133. Stated differently, any advantage they may have gained from the ex parte presentation of evidence does notlower the degree of proof required. Clearly then, there is no incompatibility between the two rules.

Second and Third Issues:

Review of the Evidence

Petitioners urge this Court to depart from the general rule that the lower courts findings of fact are not reviewable in a petition for review.26 In support of their plea,they cite the conflicting findings of the trial and the appellate courts, as well as the alleged conjectures and surmises made by the CA in arriving at its Decision.

Indeed, the differences between the findings of the two courts a quo, leading to entirely disparate dispositions, is reason enough for this Court to review the evidence inthis case.27 Whether the CA indulged in surmises and conjectures when it issued the assailed Decision will thus be determined.

At the outset, it behooves this Court to clarify the CAs impression that no evidence was presented in the case which might have contributed to petitioners challenge toits Decision. The appellate courts observation was based on the notation by the lower courts clerk of court that there were no separate folders for exhibits and

transcripts, because "there was no actual hearing conducted in this case."28

True, there was no hearing conducted between petitioners and respondent, precisely because the latter had been declared in default, and petitioners had therefore beenordered to present their evidence ex parte. But the absence of a hearing did not mean that no evidence was presented. The Par tial Decision dated February 8, 1993, in


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fact clearly enumerated the pieces of evidence adduced by petitioners during the ex parte presentation on January 7, 1993. The documentary evidence they presentedconsisted of the following:

1. A copy of respondent banks Petition for the extrajudicial foreclosure and auction sale o f the mortgaged parcel of land29

2. The Certificate of Sale that was a consequence of the foreclosure sale30

3. A Statement of Account dated February 15, 1984, showing Petitioner Chuas outstanding debt in the amount of P40,135.5331

4. A copy of the Interbank check dated February 16, 1984, in the amount of P4,00032

5. The Official Receipt issued by the bank acknowledging the check33

6. The banks letter dated February 20, 1984, advising Petitioner Chua of the sale of the property at an extrajudicial public auction; the lapse of the period ofredemption; and an invitation to purchase the property at its current market price34

7. Another letter from the bank dated March 22, 1984, inviting Petitioner Chua to submit, within five days, an offer to buy the same property, which another buyer hadoffered to buy35

8. A copy of the Notice of Lis Pendens, the filing of which was done after that of the Amended Complaint36

9. A copy of the title showing the inscription of the Notice of Lis Pendens37

10. A copy of the Absolute Deed of Sale to Cerrofer38

11. A copy of a letter dated August 29, 1986, made and signed by peti tioners counsel, requesting the cancellation of the Notice of Lis Pendens39

12. A copy of a page of the Memorandum of Encumbrance from TCT No. (314341) 7778/T-3940

Having clarified this matter, we proceed to review the facts.

Petitioners do not deny that the one-year period for legal redemption had already lapsed when respondent bank supposedly offered to sell the property in question. Therecords clearly show that the Certificate of Sale following the extrajudicial public auction of the property was registered on June 21, 1982, the date from which the legalredemption period was to be reckoned.41 Petitioners insist, though, that they had the right to repurchase the property through conventional redemption, as providedunder Article 1601 of the Civil Code, worded as follows:

"ART. 1601. Conventional redemption shall take place when the vendor reserves the right to repurchase the thing sold, with the obligation to comply with the

provisions of Article 1616 and other stipulations which may have been agreed upon."

It is true that the one-year period of redemption provided in Act No. 3135, as amended -- the law under which the property here was sold in a foreclosure sale -- is onlydirectory and, as such can be extended by agreement of the parties.42 However, it has also been held that for legal redemption to be converted into conventionalredemption, two requisites must be established: 1) voluntary agreement of the parties to extend the redemption period; and 2) the debtors commitment to pay theredemption price on a fixed date.43 Thus, assuming that an offer was made to Petitioner Chua to buy back the property after the lapse of the period of legal redemption,

petitioners needed to show that the parties had agreed to extend the period, and that Petitioner Chua had committed to pay the redemption price on a fixed date.

The letters sent by the bank to Petitioner Chua on February 20 and March 22, 1984, do not convincingly show that the parties arrived at a firm agreement for therepurchase of the property. What can be gleaned from the February 20 letter is that Petitioner Chua proposed to pay the redemption price for the property, but that the

bank refused to accede to his request, because the one-year redemption period had already lapsed.44 The bank, though, had offered to sell back the property to him atthe current market value. Indeed, an examination of his earlier letter of February 17, 1984, readily reveals that he expressed willingness to settle his account with the

bank, but that his "present financial situation precludes [him] from effecting an immediate settlement x x x."45

On the other hand, the letter dated March 22, 1984, clearly states that "x x x the Bank rejected [his] request to redeem said property due to [the] lapse of [the] one (1)year legal redemption period."46 Nonetheless, he was "[invited] to submit an offer to buy the same property in five (5) days from receipt [of the letter]."47 PetitionerChua was also informed that the bank had received an offer to purchase the foreclosed property. As to the P4,000 check enclosed in his proposal dated February 17,1984, as a token of his good faith, he was advised that the amount was still outstanding in the books of the bank and could be claimed by him if he thought the invitationwas not feasible.

More important, there was no showing that petitioners had committed to pay the redemption price on a fixed date. True, Petitioner Chua had attempted to establish aprevious agreement to repurchase the property for less than its fair market value. He had submitted in evidence a Statement of Account48 dated February 15, 1984,showing a balance of P40,135.53; the Interbank check dated February 16, 1984 , for P4,000, which was deposited to the account of respondent bank;49 and the OfficialReceipt for the check.50

Granting that these documents evinced an agreement, petitioners were still unable to establish a firm commitment on their part to pay the redemption price on a fixeddate. On the contrary, the February 17 letter of Petitioner Chua to the bank clearly manifested that he was not capable of paying the account immediately. For this


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reason, he proposed to pay in "three or four installments" without a specification of dates for the payments, but with a plea for a reduction of the interest charges. Thatproposal was rejected.

Indeed, other than the Interbank check marked "for deposit" by respondent bank, no other evidence was presented to establish that petitioners had offered to pay thealleged redemption price of P40,135.53 on a fixed date. For that matter, petitioners have not shown that they tendered payment of the balance and/or consigned the

payment to the court, in order to fulfill their part of the purported agreement. These remedies are available to an aggrieved debtor under Article 1256 of the CivilCode,51 when the creditor unjustly refuses to accept the payment of an obligation.

The next question that presents itself for resolution is thepropriety of the CAs ruling vacating the Partial Decision of the regional trial court (RTC) and dismissing thecase. To recall, the RTC had resolved to withhold a ruling on petitioners right to redeem conventionally and/or order the reconveyance of the property in question,

pending a determination of the validity of the sale to Cerrofer Realty Corporation and Spouses Cesar and Lorna Roque. The trial court, however, granted the prayer fordamages against respondent bank. The RTC ruled as follows:

"The evidence presented by [petitioners] in so far as the cause of action against [respondent] Traders Royal Bank is concerned are preponderant to support the claims ofthe [petitioners]. However, in view of the fact that the property subject matter of this case has already been conveyed to defendant Cerrofer Realty Corporation thus theissue as to whether or not the said conveyance or sale is valid is sill pending between the [petitioners] and [respondents] Cerrofer Realty Corporation and Cesar Roqueand Lorna Roque. Hence, this Court resolves to grant the prayer for damages against Traders Royal Bank.

"The claims of the [petitioners] as against [respondent] Traders Royal Bank having been established and proved by evidence, j udgment is hereby rendered ordering[respondent] Traders Royal Bank to pay [petitioners] actual damage or the market value of the land in question in the sum of P500,000.00; the sum of P70,000.00 ascompensatory damages; the sum of P200,000.00 to the heirs of [petitioner] Danilo Chua; and attorneys fees in the sum of P30,000.00."52

In the light of the pending issue as to the validity of the sale of the property to the third parties (Cerrofer Realty Corporation and Spouses Roque), the trial courtproperly withheld judgment on the matter and thus left the prayer for damages as the sole issue for resolution.

To adjudge damages, paragraph (d) of Section 3 of Rule 9 of the Rules of Court provides that a judgment against a party in default "shall not exceed the amount or bedifferent in kind from that prayed for nor award unliquidated damages." The proscription against the award of unliquidated damages is significant, because it means thatthe damages to be awarded must be proved convincingly, in accordance with the quantum of evidence required in civil cases.

Unfortunately for petitioners, the grant of damages was not sufficiently supported by the evidence for the following reasons.

First, petitioners were not deprived of their property without cause. As correctly pointed out by the CA, Act No. 3135, as amended, does not require personal notice tothe mortgagor.53 In the present case, there has been no allegation -- much less, proof -- of noncompliance with the requirement of publication and public posting of thenotice of sale, as required by ct No. 3135. Neither has there been competent evidence to show that the price paid at the foreclosure sale was inadequate.54 To be sure,there was no ground to invalidate the sale.

Second, as previously stated, petitioners have not convincingly established their right to damages on the basis of the purported agreement to repurchase. Without

reiterating our prior discussion on this point, we stress that entitlement to actual and compensatory damages must be proved even under Section 3 of Rule 9 of the Rulesof Court. The same is true with regard to awards for moral damages and attorneys fees, which were also granted by the trial court.

In sum, petitioners have failed to convince this Court of the cogency of their position, notwithstanding the advantage they enjoyed in presenting their evidence ex parte.Not in every case of default by the defendant is the complainant entitled to win automatically.

WHEREFORE, this Petition is hereby DENIED and the assailed Decision and Resolution AFFIRMED. Costs against petitioners.

G.R. No. L-63397 April 9, 1985 / Lina v. CA

Appeal by certiorari from the decision of the then Court of Appeals in CA-G.R. No. 14943-SP, dated November 29, 1982, affirming (a) the order of default issued byrespondent judge in a collection suit instituted by private respondent Northern Motors, Inc. against petitioner; and, (b) the judgment of default in the same case.

On March 31, 1982, private respondent Northern Motors, Inc. filed with the then Court of First Instance of Rizal (Pasig) a case for sum of money with damages;

docketed as Civil Case No. 4520.

On April 22, 1982, petitioner Alex Lina was served with summons together with a copy of the complaint.

On May 8, 1982, when no answer or motion to dismiss was filed by petitioner, private respondent Northern Motors, Inc. filed a motion to declare him in default. Themotion was set for hearing on May 21, 1982.

On May 19, 1982, petitioner filed his opposition to the aforesaid motion inviting attention to the fact that he had filed a motion for extension of time to file responsivepleading within the reglementary period. On May 26, 1982, respondent judge issued an order declaring defendant (herein petitioner) in default and allowing plaintiff(herein private respondent) to adduce its evidence ex parte.

On May 27, 1982, defendant (petitioner) filed his answer to the complaint.

On July 28, 1982, respondent court rendered its decision in favor of plaintiff (herein private respondent).


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On August 11, 1982, petitioner filed a motion to set aside decision dated July 28, 1982.

On August 25, 1982, respondent judge issued an order denying petitioner's motion to set aside decision.

On October 6, 1982, petitioner filed with the then Court of Appeals a petition for certiorari/prohibition, which was denied in its decision dated November 29, 1982 onthe ground that

... when the private respondent filed on May 8, 1982, its motion to declare defendant in default because the last day for him to file an answer under the summons wasMay 7, 1982, the petitioner has not filed an answer. So, there was actually a valid ground for the motion, and the respondent court could have validly declared thedefendant in default, especially because, at that time it was still unaware of the fact that on May 5, 1982, the herein petitioner had sent to it, by registered mail, a motionfor extension of twenty days from May 7, 1982, within which to file an answer, and which motion was received by the respondent court only on May 19, 1982.

But, then the respondent court did not immediately act on the motion to declare defendant in default, so that by May 19, 1982, the herein petitioner was still able to filean opposition to the motion asking him to be declared in default. The principal ground of the opposition of the petitioner was the fact that he had sent, by registeredmail, a motion for extension of time to file responsive pleading, and he even attached to his opposition a copy of the motion for extension.

On May 26, 1982, the respondent court resolved the motion to declare defendant in default by granting the motion. Now since on May 26, 1982, the motion forextension of time to file responsive pleading was already before the court, as it received the same on May 19, 1982, and aside from this, a copy thereof was attached tothe petitioner's opposition to the private respondent's motion to declare defendant in default, it is conclusively assumed that the respondent court, in resolving themotion to declare defendant in default, had taken into consideration the motion for extension, especially because the ground of petitioner's opposition to the motion todeclare defendant in default is the fact that he had asked for extension of time to file responsive pleading. Now, then, when the respondent court declared the defendantin default, it is a clear and inevitable implication, without the need of an express statement to that effect, although it would have been more desirable, that the motion forextension of nine to file responsive pleading was denied. In other words, the Order of May 26, 1982 had the necessary and logical implication that the petitioner'sopposition to the motion to declare defendant in default, based upon the ground that he had asked for extension of time to file responsive pleading, was disapproved ordenied by the court.(pp. 22-23, Rollo)

Coming to this Court on a petition for certiorari/prohibition, petitioner raised the following issues, to wit:

1. Whether or not the order of default was issued in grave abuse of discretion amounting to lack of jurisdiction.

2. Whether or not certiorari is proper in a case where judgment by default was rendered without an order of default being furnished petitioner and wheremeritorious defenses exist, which are for the trial court to evaluate and which evaluation was not done in this case.

We are in agreement with respondent appellate court's affirmance of the questioned order of the trial court. The granting of additional time within which to file ananswer to a complaint is a matter largely addressed to the sound discretion of the trial court. "While trial courts are persuaded, as a matter of policy, to adopt a basicallyflexible attitude in favor of the defendant in this area of our adjective law, the defense should never be lulled into the belief that whenever trial courts refuse a second

request for extension to file an answer, the appellate courts will grant relief (Naga Development Corporation vs. Court of Appeals, 41 SCRA 105)."

In the case at bar, it was on May 5, 1982 or two (2) days before the expiration of the fifteen-day reglementary period given to defendant to file his responsive pleadingwhen petitioner moved for an extension of twenty (20) days from May 7 within which to file his answer. Upon motion of private respondent and over the objection of

petitioner, respondent judge issued an order declaring petitioner in default.

Under the Rules of Court, the remedies available to a defendant in the Court of First Instance (now Regional Trial Court) are:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on theground that his failure to answer was due to fraud, accident, mistake or excusable neglect, and that he has a meritorious defense; (Sec. 3, Rule 18)

b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file amotion for new trial under Section 1 (a) of Rule 37;

c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default hasbeen presented by him. (Sec. 2, Rule 41)

Petitioner in this case did not avail himself of any of the above remedies. Instead, he went to the appellate court on certiorari/prohibition. On this point, respondentappellate court aptly said:

... where the judgment rendered by the respondent court is the one sought to be annulled, a petition for relief, under Rule 38 of the Revised Rules of Court, which is aremedy in the ordinary course of law, could have been just as plain, adequate and speedy as certiorari. Such a remedy could have been granted by the respondent court.And if the respondent court still denies the petition, then petitioner can take an appeal on the order denying the petition, and in the course of such appeal petitioner canalso assail the judgment an the merits upon the ground that it is supported by the evidence, or it is contrary to law. (p. 25 , Rollo)

ACCORDINGLY, the petition is DISMISSED. Without costs.


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Arquero v. CA, G.R. No. 168053, September 21, 2011

This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by petitioner Rebecca T. Arquero against public respondents Edilberto C. De Jesus(De Jesus), in his capacity as Secretary of Education, Dr. Paraluman Giron (Dr. Giron), Department of Education (DepEd) Direc tor, Regional Office IV-MIMAROPA,Dr. Eduardo Lopez (Lopez), Schools Division Superintendent, Puerto Princesa City, and private respondent Norma Brillantes. Petitioner assails the Court of Appeals(CA) Decision[1] dated December 15, 2004 and Resolution[2] dated May 3, 2005 in CA-G.R. SP No. 85899. The assailed decision reversed and set aside the Judgment

by Default[3] of the Regional Trial Court (RTC), Branch 95, Puerto Princesa City, while the assailed resolution denied petitioners motion for reconsideration.

The facts of the case are as follows:

On October 13, 1989, Congress approved Republic Act (RA) No. 6765, or An Act Integrating Certain High Schools in the City of Puerto Princesa and in theProvince of Palawan with the Palawan National School and Appropriating Funds Therefor. Under the law, the following schoolswere converted into national schoolsand integrated with the Palawan National School (PNS) in the City of Puerto Princesa, Province of Palawan, as branches thereof: (1) Puerto Princesa School ofPhilippine Craftsmen; (2) San Jose Barangay High School; (3) Inagawan Barangay High School; (4) Puerto Princesa Rural High School; all in the City of PuertoPrincesa and (5) Plaridel Barangay High School in the Municipality of Aborlan; (6) Narra Barangay High School in the Municipality of Narra; (7) Quezon MunicipalHigh School in the Municipality of Quezon; (8) Pulot Barangay High School in the Municipality of Brookes Point; (9) Bataraza Barangay High School in theMunicipality Bataraza; and (10) Balabac Barangay High School in the Municipality of Balabac; all in the Province of Palawan.[4]

Section 2 of the law provides that the PNS shall, in addition to general secondary education program, offer post -secondary technical-vocational and other relevantcourses to carry out its objectives. The PNS shall thus be considered the mother unit and the integrated schools should benefit from a centralized curriculum planningto eliminate duplication of functions and efforts relative to human resource development for the province.[5] The law also provides that the Palawan Integrated

National Schools (PINS) shall be headed by a Vocational School Superintendent (VSS) who shall be chosen and appointed by the Secretary of the Department ofEducation, Culture, and Sports (now the DepEd).[6] Except for Puerto Princesa School of Philippine Craftsmen, which shall be headed by the Home IndustriesTraining Supervisor, the PNS and each of its units or branches shall be headed either by a Principal or Secondary School Head Teacher to be chosen in accordance withthe DepEd Rules and Regulations.[7]

However, no VSS was appointed. Instead, then DECS Region IV Office designated then PNS Principal Eugenio J. dela Cuesta in a concurrent capacity asOfficer-in-Charge (OIC) of the PINS. After the retirement of Dela Cuesta, petitioner took over as Secondary School Principal of the PNS.[8] On March 18, 1993, thenDECS-Region IV Director IV Desideria Rex (Director Rex) designated petitioner as OIC of the PINS.[9]

On December 1, 1994, Director Rexs successor, Pedro B. Trinidad placed all satellite schools of the PINS under the direct supervision of the Schools DivisionSuperintendent for Palawan effective January 1, 1995.[10] This directive was later approved by the DepEd in September 1996. Petitioner was instructed to turn over theadministration and supervision of the PINS branches or units.[11] In another memorandum, Schools Division Superintendent Portia Gesilva was designated as OIC ofthe PINS. These events prompted different parties to institute various actions restraining the enforcement of the DepEd orders.

Pursuant to RA 8204, separate City Schools Division Offices were established for the City of Puerto Princesa and the Province of Palawan. [12]

On March 14, 2000, Regional Director Belen H. Magsino issued an Order addressed to the Schools Division Superintendent of Palawan and Puerto Princesa Cityand petitioner stating that the PINS satellite schools shall be under the supervision of the division schools superintendents concerned, while petitioner shouldconcentrate on the supervision and administration of the PNS.[13] Again, this prompted the filing of various court actions.

On May 14, 2002, then DECS Undersecretary Jaime D. Jacob issued an Order[14] addressed to Dr. Giron, OIC, DepEd Regional Office No. 4, stating that therebeing no more legal impediment to the integration, he ordered that the secondary schools integrated with the PNS be under the direct administrative management andsupervision of the schools division superintendents of the divisions of Palawan and Puerto Princesa City, as the case may be, according to their geographical and

political boundaries. Consequently, Dr. Giron instructed the secondary schools principals concerned of the assumption of jurisdiction by the superintendent of theschools division offices of the city and province, and that their fiscal and financial transaction as turned over will be effected in July 1, 2002. However, then DepEdUndersecretary Ramon C. Bacani (Bacani) ordered that the status quo be maintained and that no turn over of schools be made.[15] In the meantime, petitionerremained as the OIC of the PINS.

On September 19, 2002, Dr. Giron withdrew the designation of petitioner as OIC of the PINS, enjoining her from submitting to the Regional Office allappointments and personnel movement involving the PNS and the satellite schools. On November 7, 2002, petitioner appealed to the Civil Service Commission

assailing the withdrawal of her designation as OIC of the PINS.[16]

On March 28, 2003, then DepEd Secretary Edilberto C. De Jesus designated Assistant Schools Division Superintendent Norma B. B rillantes (hereafter referred toas private respondent) in concurrent capacity as OIC of the PINS entitled to representation and transportation allowance, except the salary of the position.[17]Petitioner filed a Motion for Reconsideration and/or Clarification[18] before the Office of the DepEd Secretary as to the designation of private respondent.

On September 18, 2003, Dr. Giron filed a formal charge[19] against petitioner who continued to defy the orders issued by the Regional Office relative to theexercise of her functions as OIC of the PINS despite the designation of private respondent as such. The administrative complaint charged petitioner with gravemisconduct, gross insubordination and conduct prejudicial to the best interest of the service. Petitioner was also preventively suspended for ninety (90) days.[20]

On October 2, 2003, petitioner filed the Petition for Quo Warranto with Prayer for Issuance of Temporary Restraining Order and/or Injunctive Writ[21] before theRTC of Palawan[22] against public and private respondents. The case was docketed as Civil Case No. 3854. Petitioner argued that the designation of privaterespondent deprived her of her right to exercise her function and perform her duties in violation of her right to security of tenure. Considering that petitioner was


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appointed in a permanent capacity, she insisted that private respondents designation as OIC of the PNS is null and void there being no vacancy to the position.Petitioner thus prayed that the RTC issue an order granting the writ of quo warranto enjoining private respondent from assuming the position of OIC of the PNS,declaring the questioned designation null and void and without operative effect, and declaring petitioner to be entitled to the office of the principal of the PNS.[23]

On October 6, 2003, the Executive Judge issued a 72-Hour TRO[24] enjoining and restraining private respondent from assuming the position of OIC andperforming the functions of the Office of the Principal of the PNS; and restraining public respondents from giving due course or recognizing the assailed designation ofprivate respondent. The RTC later issued the writ of preliminary injunction.[25]

Respondents failed to file their Answer. Hence, on motion[26] of petitioner, the Court declared respondents in default in an Order[27] dated December 15, 2003.In the same order, petitioner was allowed to present her evidence ex parte.

On June 14, 2004, the RTC rendered a Judgment by Default,[28] the dispositive portion of which reads:

WHEREFORE, premises considered and by preponderance of evidence, judgment is hereby rendered:

1. Declaring petitioner Rebecca T. Arquero as the lawful Principal and Head of the Palawan Integrated National High School who is lawfully entitled to manage theoperation and finances of the school subject to existing laws;

2. Declaring the formal charge against petitioner, the preventive suspension, the investigating committee, the proceedings therein and any orders, rulings, judgmentsand decisions that would arise therefrom as null, void and of no effect;

3. Ordering respondent Norma Brillantes, or any person acting in her behalf, to cease and desist from assuming and exercising the functions of the Office of thePrincipal of Palawan Integrated National High School, and respondents Edilberto C. De Jesus, Paraluman R. Giron and Eduardo V. Lopez, or any person acting in their

behalf, from giving due course or recognizing the same; and

4. Making the writ of preliminary injunction issued in this case permanent.

IT IS SO ORDERED.[29]

The RTC held that considering that the integrated school failed to offer post-secondary technical-vocational courses, the VSS position became functus officio.The PNS, therefore, remains to be a general secondary school under the jurisdiction of the DepEd.[30] Consequently, supervision of the integrated school wasautomatically vested with the principal of the PNS without the necessity of appointment or designation. As to the administrative case filed against petitioner, the RTCopined that the formal charge and preventive suspension are illegal for lack of due process.[31]

On appeal, the CA reversed and set aside the RTC decision, the dispositive portion of which reads:

WHEREFORE, premises considered, the present appeal is hereby GRANTED. The appealed decision of the court a quo in Civil Case No. 3854 is herebyREVERSED and SET ASIDE. A new judgment is hereby entered DISMISSING the petition for quo warranto filed by appellee Rebecca T. Arquero.

No pronouncement as to costs.

SO ORDERED.[32]

Applying the rules on statutory construction, the appellate court emphasized the need to harmonize the laws. The CA held that the PINS and its satellite schools remainunder the complete administrative jurisdiction of the DepEd and not transferred to the Technical Education and Skills Development Authority (TESDA). It alsoexplained that by providing for a distinct position of VSS with a higher qualification, specifically chosen and appointed by the DepEd Secretary that is separate from theschool head of the PNS offering general secondary education program, RA 6765 intended that the functions of a VSS and School Principal of PNS be discharged bytwo separate persons.[33] The CA added that if we follow the RTC conclusion, petitioner would assume the responsibilities and exercise the functions of a divisionschools superintendent without appointment and compliance with the qualifications required by law.[34] The appellate court likewise held that petitioner failed to

establish her clear legal right to the position of OIC of the PINS as she was not appointed but merely designated to the position in addition to her functions as incumbenschool principal of the PNS.[35] Clearly, there was no violation of her right to due process and security of tenure when private respondent replaced her. As to thevalidity of filing the administrative charge against her and the subsequent imposition of preventive suspension, the CA refused to rule on the matter due to the pendencyof the administrative case which is within the jurisdiction of the DepEd.

Hence, this petition raising the following issues:

A. THE COURT OF APPEALS DECISION DATED THE 15TH DECEMBER 2004, AND THE RESOLUTION OF 3RD MAY 2005, HAVE DECIDED A

QUESTION OF SUBSTANCE, NOT THERETOFORE DETERMINED BY THE SUPREME COURT, OR THE APPELLATE COURT HAS DECIDED IT IN AWAY PROBABLY NOT IN ACCORD WITH LAW OR WITH THE APPLICABLE DECISIONS OF THE HIGHEST COURT; OR THE RESPONDENT COURTOF APPEALS HAS SO FAR DEPARTED FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR AN EXERCISEOF THE POWER OF SUPERVISION.


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B. THE CHALLENGED DECISION WAS RENDERED ON THE BASIS OF MERE UNSUBSTANTIATED ARGUMENTATIONS OF THE INDIVIDUAL

RESPONDENTS.

NO IOTA OF EVIDENCE, TESTIMONIAL OR DOCUMENTARY, WERE PRESENTED AND OFFERED FOR A SPECIFIC PURPOSE BY THERESPONDENTS (WHO WERE DECLARED IN DEFAULT).

THEREFORE, THE CONCLUSION OF THE IMPUGNED DECISION IS NOT SUPPORTED BY RECORDED EVIDENCE.[36]

The petition is without merit.

Petitioner insists that respondents could not have appealed the RTC decision having been declared in default. She explains that the only issue that could havebeen raised is a purely legal question, therefore, the appeal should have been filed with the Court and not with the CA.

In Martinez v. Republic,[37] the Court has clearly discussed the remedies of a party declared in default in light of the 1964 and 1997 Rules of Court and a numbeof jurisprudence applying and interpreting said rules. Citing Lina v. Court of Appeals,[38] the Court enumerated the above-mentioned remedies, to wit:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion, under oath, to set aside the order of default on the groundthat his failure to answer was due to fraud, accident, mistake or excusable neglect, and that he has meritorious defenses; (Sec. 3, Rule 18)

b) If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motionfor new trial under Section 1 (a) of Rule 37;c) If the defendant discovered the default after the judgment has become final and executory, he may file a petition for relief under Section 2 of Rule 38; and

d) He may also appeal from the judgment rendered against him as contrary to the evidence or to the law, even if no petition to set aside the order of default has beenpresented by him. (Sec. 2, Rule 41)[39]

The Court explained in Martinez that the fourth remedy, that of appeal, is anchored on Section 2, Rule 41 of the 1964 Rules. Even after the deletion of that provisionunder the 1997 Rules, the Court did not hesitate to expressly rely on the Lina doctrine, including the pronouncement that a defaulted defendant may appeal from the

judgment rendered against him. Moreover, in Rural Bank of Sta. Catalina v. Land Bank of the Philippines,[40] the Court provided a comprehensive restatement of theremedies of the defending party declared in default:

It bears stressing that a defending party declared in default loses his standing in court and his right to adduce evidence and to present his defense. He, however, has theright to appeal from the judgment by default and assail said judgment on the ground, inter alia, that the amount of the judgment is excessive or is different in kind fromthat prayed for, or that the plaintiff failed to prove the material allegations of his complaint, or that the decision is contrary to law. Such party declared in default is

proscribed from seeking a modification or reversal of the assailed decision on the basis of the evidence submitted by him in the Court of Appeals, for if it were

otherwise, he would thereby be allowed to regain his right to adduce evidence, a right which he lost in the trial court when he was declared in default, and which hefailed to have vacated. In this case, the petitioner sought the modification of the decision of the trial court based on the evidence submitted by it only in the Court ofAppeals.[41]

Undoubtedly, a defendant declared in default retains the right to appeal from the judgment by default on the ground that the plaintiff failed to prove the materialallegations of the complaint, or that the decision is contrary to law, even without need of the prior filing of a motion to set aside the order of default except that he doesnot regain his right to adduce evidence.[42] The appellate court, in turn, can review the assailed decision and is not precluded from reversing the same based solely onthe evidence submitted by the plaintiff.

The next question to be resolved is whether petitioner has the right to the contested public office and to oust private respondent from its enjoyment. We answer inthe negative.

A quo warranto proceeding is the proper legal remedy to determine the right or title to the contested public office and to oust the holder from its enjoyment.[43]

It is brought against the person who is alleged to have usurped, intruded into, or unlawfully held or exercised the public office.[44] It may be brought by the Republicof the Philippines or by the person claiming to be entitled to such office.[45]

In quo warranto, the petitioner who files the action in his name must prove that he is entitled to the subject public office. In other words, the private person suing mustshow a clear right to the contested position.[46] Otherwise, the person who holds the same has a right to undisturbed possession and the action for quo warranto may bedismissed.[47] It is not even necessary to pass upon the right of the defendant who, by virtue of his appointment, continues in the undisturbed possession of hisoffice.[48]

On the basis of the evidence presented solely by petitioner and without considering the arguments and attachments made by respondents to rebut petitionersclaims, we find that petitioner failed to prove that she is entitled to the contested position.

It is undisputed that petitioner was appointed as the principal of the PNS. In addition, she was designated as the OIC of the PINS. Said designation was, howeverwithdrawn. Private respondent was, thereafter, designated as the new OIC. This prompted petitioner to file the quo warranto petition before the court a quo.

The contested position was created by RA 6765. Section 3 of the law provides:


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Section 3. The school shall be headed by a Vocational School Superintendent. He shall be chosen and appointed by the Secretary of Education, Culture and Sports [nowSecretary of Education].

Moreover, Section 4 thereof states:

Section 4. The Home Industries Training Supervisor of the Puerto Princesa School of Philippine Craftsmen shall continue to serve as such. The main school and each of

its units or branches shall be headed either by a Principal or Secondary School Head Teacher to be chosen in accordance with the rules and regulations of theDepartment of Education, Culture and Sports [now the Department of Education].

As aptly observed by the CA, the law created two positionsthe VSS and the principal or secondary school head teacher of each of the units or branches of theintegrated school. The legislators clearly intended that the integrated schools shall be headed by a superintendent. Admittedly, petitioner did not possess thequalifications to hold the position and she was merely designated by the DepEd as the OIC of the PINS. At that time, she held in a concurrent capacity, the permanent

position of principal of the PNS. Having been appointed as OIC without the necessary qualifications, petitioner held the position only in a temporary capacity. Thepurpose of an acting or temporary appointment is to prevent a hiatus in the discharge of official functions by authorizing a person to discharge those functions pendingthe selection of a permanent or another appointee. An acting appointee accepts the position on the condition that he shall surrender the office once he is called to do so

by the appointing authority. Therefore, his term of office is not fixed, but endures at the pleasure of the appointing authority.[49] The essence of an acting appointmentis its temporariness and its consequent revocability at any time by the appointing authority.[50]

Thus, under RA 6765, petitioner can only insist on her security of tenure as principal of the PNS but not as OIC of the integrated school. Upon the withdrawal of herdesignation, her right to the contested position ceased to exist.

Petitioner also bases her right to the contested position on the enactment of RA 7796, or An Act Creating the Technical Education and Skills Development Authority,Providing for its Powers, Structure and for Other Purposes, and RA 9155, or An Act Instituting a Framework of Governance for Basic Education, EstablishingAuthority and Accountability, Renaming the Department of Education Culture and Sports as the Department of Education, and for Other Purposes. She contends thatunder RA 7796, the position of VSS could no longer be filled up by the DepEd having been absorbed by TESDA. As such, the right to manage the operation andfinances of the integrated schools is automatically vested with petitioner being the principal of the PNS without further appointment or designation.

Again, we do not agree.

As found by the RTC and affirmed by the CA, the PINS failed to implement its technical-vocational education program. Consequently, the PNS and the other satelliteschools never came under the jurisdiction of the Bureau of Technical and Vocational Education of the DepEd nor the technical-vocational education in DepEdsregional offices. Thus, except for the Puerto Princesa School of Philippine Craftsmen, which is now within the jurisdiction of the TESDA, the PNS and the other unitsremained under the complete administrative jurisdiction of the DepEd. Although the technical-vocational education program was not implemented, it does not alter thelaws intent that the main school, which is the PNS and the other units integrated with it, shall be headed either by a principal or secondary school head teacher; while

the PINS or the integrated school shall be headed by another. We cannot subscribe to petitioners insistence that the principal automatically heads the PINS withoutappointment or designation. As clearly explained by the CA, by providing for a distinct position with a higher qualification (that of a superintendent), specificallychosen and appointed by the DepEd Secretary, separate from the school head of the PNS offering general secondary education program, the law clearly intended thefunctions of a VSS and school principal of the PNS to be discharged and performed by two different individuals.[51]

Neither can petitioner rely on the enactment of RA 9155. The law, in fact, weakens petitioners claim. RA 9155 provides the framework for the governance of basiceducation. It also emphasizes the principle of shared governance which recognizes that every unit (which includes the national, regional, division, school district, andschool levels) in the education bureaucracy has a particular role, task and responsibility. The school shall be headed by a [principal] or school head; a school district bya schools district supervisor; a division by a schools division superintendent; a region by a director; and the national level by the Secretary of Education. It must berecalled that the integration under RA 6765 involved certain high schools in different municipalities of the Province of Palawan and the City of Puerto Princesa. Wealso note that RA 6765 intended that the integrated school shall be headed by a superintendent. Nowhere in the above laws can we find justification for petitionersinsistence that she, and not private respondent, has a better right to hold the contested position.

Clearly, petitioner failed to establish her right to the contested position. Therefore, the dismissal of her quo warranto petition is in order. It must be emphasized,

however, that this declaration only involves the position of petitioner as OIC of the PINS. It does not in any way affect her position as principal of the PNS which sheholds in a permanent capacity.

WHEREFORE, premises considered, the petition is DENIED for lack of merit. The Court of Appeals Decision dated December 15, 2004 and Resolution dated May 3,2005 in CA-G.R. SP No. 85899, are AFFIRMED.

G.R. No. 194122 October 11, 2012 / Hernandez v. Agoncillo

Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court are the April 29, 2010 Decision1 and October 12, 2010 Resolution2 of theCourt of Appeals (CA) in CA-G.R. SP No. 108801.

The instant petition arose from a Complaint for Damages filed with the Metropolitan Trial Court (MeTC) of Parafiaque City against herein petitioner and one FreddieApawan Verwin by herein respondent, alleging as follows:


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x x x x

2. x x x Defendant Hector Hernandez is x x x the owner of the delivery van which is the subject matter of the above-entitled case. He is doing business under the nameof Cargo Solution Innovation and is the employer of Defendant Fredie Apawan Verwin;

3. That on October 5, 2006 at around 12:15 in the afternoon, Defendant Fredie Apawan Verwin was driving a delivery van belonging to a certain Hector Hernandez,bearing plate number RBB-510, along Buendia Avenue Flyover, South Super-Highway (Osmea Avenue), and negligently backed against a Honda City model withplate number XMF-496, owned and driven by the Plaintiff at the time of the incident;

4. That at the time of the incident, the traffic condition at the Buendia Avenue Flyover was bumper-to-bumper and that Plaintiff's and Defendant's vehicles were in anascending position;

5. That Defendant driver alighted from his van and so did the Plaintiff to assess the damage done. Plaintiff observed that the pedestal of the van totally engaged andhooked the front bumper of her Honda car;

6. That after a brief discussion of the incident, Defendant driver went back to his van and stepped on the gas which caused the van to move abruptly forward andresulted to the disengagement of the bumper of Plaintiff's car and damage to the car radiator, and as a consequence, the Plaintiff's car was towed. Plaintiff paid P1,700as towing fee. x x x

7. Right after the incident, Plaintiff made various demands from Defendants, thru the secretary of the Cargo Solution Innovation or C.S.I., the company which the driverof the van was working for, to pay the actual damages sustained, but to Plaintiff's dismay her demands were unheeded;

8. That defendant Hector Hernandez never talked nor appeared to the Plaintiff despite several requests made by the latter. Instead, he made a person appear having thename of Mr. De Ocampo before the Plaintiff in her clinic at Medical Center Manila, sometime on October 11, 2006 and acted in representation of Hector Hernandezand made a number of inquiries regarding the accident that transpired;

9. That sometime after, Plaintiff contacted Mr. De Ocampo for feedback regarding Defendant's position about the incident, and Mr. De Ocampo spoke that theDefendants are still waiting for the police report and ever since that conversation, no communication transpired between the parties regarding any agreement orsettlement about the accident;

10. That as a direct consequence of the foregoing, Plaintiff's vehicle sustained heavy damage and the repair of which amounted to P130,602.53. A copy of the officialreceipt given by Honda Makati is hereby attached as Annex "D";

11. Plaintiff was unable to use her vehicle in going to work for five (5) weeks and led her to commute by means of a taxi every time her duty called her in MedicalCenter Manila in United Nations Avenue, Manila costing her P500-1000/day;

12. Considering the character of Defendant driver's negligence, together with the malicious refusal to pay actual damages of both Defendants and Plaintiff's experience

of sleepless nights and anxiety because of the incident, Defendants should be held liable for moral damages in an amount of not less than P50,000.00;

13. Forced to litigate, Plaintiff engaged the services of a lawyer and have agreed to pay attorney's fees in the amount of P30,000.00 plus P2,500.00 per appearance.3

On May 31, 2007, the MeTC issued a Summons Under Summary Procedure4 which was served upon and received by petitioner on June 18, 2007. However, thesummons was not served on the other defendant. The case then proceeded only against petitioner.

On July 6, 2007, petitioner filed an Ex Parte Motion for Extension of Time to File His Answer claiming that he just engaged the services of his counsel. He prayed thathe be granted an additional period of fifteen (15) days or until July 21, 2007 within which to file his responsive pleading.5

On July 18, 2007, the MeTC issued an Order6 denying petitioner's Ex Parte Motion for Extension of Time holding that the said Motion was filed beyond thereglementary period provided for by the Revised Rules on Summary Procedure and that it is likewise a prohibited pleading under the said Rule.

Petitioner filed a Motion for Reconsideration7 on August 17, 2007. Meanwhile, petitioner, nonetheless, filed his Answer with Affirmative and Negative Defenses and

Compulsory Counterclaims8 on July 26, 2007.

Respondent opposed petitioner's Motion for Reconsideration.9 In the meantime, she filed a Motion to Render Judgment10 on August 24, 2007, on the ground thatpetitioner failed to file his answer within the time prescribed by the Revised Rules on Summary Procedure.

On September 7, 2007, the MeTC issued an Order11 ruling that in view of the fact that the amount being claimed by respondent exceeds P200,000.00, the case shall begoverned by the "Rules on Regular Procedure." In the same Order, the MeTC denied petitioner's Motion for Reconsideration and directed him to file hisComment/Opposition to respondent's Motion to Render Judgment.

Petitioner filed his Opposition12 on September 14, 2007.

On October 23, 2007, the MeTC issued an Order13 denying respondent's Motion to Render Judgment reiterating its ruling that the case does not fall under the RevisedRules on Summary Procedure.


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On November 14, 2007, respondent filed a Motion to Declare Defendant (herein petitioner) Hector Hernandez in Default and to Render Judgment.14

Petitioner opposed contending that he has already filed his Answer prior to respondent's Motion to declare him in default and that he had actively participated in thecase by filing various pleadings.15

On December 4, 2007, the MeTC issued an Order16 declaring petitioner in default and directing respondent to present evidence ex parte.

Petitioner filed a Motion to Set Aside Order of Default,17 but the MeTC denied it in its Order18 dated February 8, 2008.

After respondent's evidence ex parte was presented, the MeTC rendered its Decision19 dated August 6, 2008, the dispositive portion of which reads as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff Susan San Pedro Agoncillo and against the defendant Hector Hernandez, ordering him,

a) To pay the plaintiff the amount of One Hundred Thirty-Two Thousand Three Hundred Two Pesos and 53/100 (Php 132,302.53) for the actual damages for the repair

Documents

Civpro - Default