Rule 9 (Outline, Case Digest & Fulltext)

8/9/2019 Rule 9 (Outline, Case Digest & Fulltext)

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Outline: Rule 9Effect of Failure to Plead CIVIL PROCEDURE

mmeikimouse

Lesson for August 30, 2014

Effect of Failure to Plead

1. Effect of failure to plead - Rule 9

a) Failure to plead defenses and objections - Sec. 1, Rule 9

- Garcia v. Mathis, G.R. No. L-48577, September 30, 1980

b) Failure to plead a compulsory counterclaim and cross-claim - Sec. 2, Rule 9

- Meliton v. CA, G.R. No. 101883, December 11, 1992

2. Default - Sec. 3, Rule 9

a) When a declaration of default is proper

- Rosario v. Alonzo, G.R. No. L-17330, June 29, 1963

b) Effect of an order of default - Sec. 3(a), Rule 9

- Co v. Acosta, G.R. No. 64591, January 17, 1985

- Boticano v. Chu, G.R. No. L-58036, March 16, 1987

c) Relief from an order of default - Sec. 3(b), Rule 9

- Denso (Phil.), Inc. v. IAC, G.R. No. 75000, February 27, 1987

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

d) Effect of a partial default - Sec. 3(c), Rule 9

- Lim Tanhu v. Ramolete, G.R. No. L-40098, August 29, 1975

e) Extent of relief - Sec. 3(d), Rule 9

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

f) Actions where default is not allowed - Sec. 3(e), Rule 9

- Dela Cruz v. Hon. Ejercito, G.R. No. L-40895, November 6, 1975


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Case Digest: Rule 9 Effect of Failure to Plead CIVIL PROCEDURE

mmeikimouse

Failure to plead defenses and objections - Sec. 1, Rule 9

GARCIA vs MATHIS

G.R. No. L-48577, September 30, 1980

Facts:

In Civil Case No. D-4097 of the CFI of Pangasinan,

presided by the respondent judge, Sulpicio Garcia, the

petitioner herein, sued Colonel Paul C. Mathis in his

capacity as Base Commander, CAFB, acting for and in

behalf of the United States of America.

The complaint alleged that Garcia was a civilian

employee at Clark Air Force Base from May 26, 1949, to

August 23, 1956, when he was dismissed for alleged

bribery and collusion. He prayed inter alia that he be

reinstated to his former position, and paid back wages,

moral damages, attorney's fees and costs of the suit.

Defendant Mathis entered a special

appearance and filed a motion for the dismissal of thecomplaint upon the ground that the trial court had no

jurisdiction over his person because he was being sued as

the representative of a foreign sovereign "which has not

consented and does not now consent to the maintenance

of the present suit."

On June 7, 1978, the respondent judge issued an

Order, that the cause of action has already prescribed,

because paragraphs 3 and 5 of the complaint alleged that

the services of the plaintiff has been terminated on August

23, 1956.

Issue:

Whether or not respondent judge committed a

grave abuse of discretion amounting to lack of jurisdiction

when he dismissed the complaint on the ground of

prescription which Mathis did not raise in any of his

pleadings.

Held:

GR: Action will not be held to have prescribed if

prescription is not expressly invoked.XPN: When the plaintiff's own allegations in his complaint

show clearly that the action has prescribed.

The plaintiff's action had prescribed for he alleged

that he was removed on August 23, 1956 but the case was

filed only on November 18, 1977, after a lapse of more

than 21 years. Prescinding, therefore, the defense of

jurisdiction which is apparently meritorious, the complaint

was properly dismissed.

It is not incorrect to state that because of the

special appearance which Mathis had entered, he was

constrained to confine himself to showing that the trial

court did not have jurisdiction over his person and had to

exclude all other non-jurisdictional grounds in his motion

to dismiss otherwise he could be deemed to have

abandoned his special appearance and voluntarily

submitted himself to the jurisdiction of the court.

Petition, dismissed.

Failure to plead a compulsory counterclaim and cross-

claim - Sec. 2, Rule 9

MELITON vs CA

G.R. No. 101883, December 11, 1992

Facts:

Nelia Ziga, in her own behalf and as attorney-in-

fact of Alex A. Ziga and Emma A. Ziga-Siy, filed a complaint

(Civil Case No. RTC 88-1480 of the RTC of Naga City)against petitioner Lydia Meliton for rescission of a contract

of lease over a parcel of land.

Petitioner, as lessee, failed to deposit the one

month rental and to pay the monthly rentals due; that her

construction of a concrete wall and roof on the site of a

demolished house on the leased premises without the

lessor's written consent; and here unauthorized sublease

of the leased property to a third party.

Lydia Meliton filed an answer to the complaint

denying the material averments and setting up three

counterclaims for recovery of the value of her kitchenette

constructed on the leased parcel of land and which was

demolished by Ziga.

The RTC, on motion of Ziga contending that her

cause of action had already become moot and academic

by the expiration of the lease contract, dismissed the

complaint. The counterclaims of Meliton were also

dismissed for non-payment of the docket fees, ergo the

trial court's holding that thereby it had not acquired

jurisdiction over the same.

Spouses Meliton filed a complaint against Ziga forrecovery of the same amounts involved and alleged in

their counterclaims.

Ziga filed a motion to dismiss the complaint on

the ground that the cause of action was barred by prior

judgment. This was denied on the ground that the

dismissal of the petitioner's counterclaim is not an

adjudication on the merits as the court did not acquire

jurisdiction over the counterclaims for failure of Meliton to

pay the docket fees, hence the said dismissal does not

constitute a bar to the filing of the later complaint. Zigas

MR was denied.

Ziga filed a petition for certiorari with the SC. The

case was referred to the CA.


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CA granted the petition, and reversed the RTC

Decision. The respondents' counterclaim against the

petitioner is a compulsory counterclaim, it having arisen

out of or being necessarily connected with the transaction

or occurrence subject matter of the petitioner's complaint.

The failure of the respondents to seek a reconsideration of

the dismissal of their counterclaim or to take an appeal

therefrom rendered the dismissal final. Such dismissal

barred the prosecution of their counterclaim by another

action.

Hence, this petition.

Issues:

(1) Whether or not the counterclaims of petitioners are

compulsory in nature.YES

(2) Whether or not petitioners, having failed to seek

reconsideration of or to take an appeal from the order of

dismissal of their counterclaims, are already barred fromasserting the same in another action.NO

Held:

1. Whether or not the counterclaims of petitioners are

compulsory in nature.YES

Section 4 of Rule 9 of the Rules of Court, a

counterclaim is compulsory if (a) it arises out of, or is

necessarily connected with, the transaction or occurrence

which is the subject matter of the opposing party's claim;

(b) it does not require for its adjudication the presence of

third parties of whom the court cannot acquire

jurisdiction; and (c) the court has jurisdiction to entertain

the claim.

To determine whether the counterclaim is

compulsory or permissive, the "one compelling test of

compulsoriness" is the logical relationship between the

claim alleged in the complaint and that in the

counterclaim, that is, where conducting separate trials of

the respective claims of the parties would entail asubstantial duplication of effort and time, as where they

involve many of the same factual and/or legal issues.

In the Civil Case No. 88-1480, all the requisites of

a compulsory counterclaim are present. Zigas complaint

was for rescission of the contract of lease due to Lydia

Meliton's breach of her obligations under the said

contract. On the other hand, Melitons counterclaims were

for damages for unlawful demolition of the improvements

she introduced pursuant to her leasehold occupancy of the

premises, as well as for the filing of that civil suit which is

contended to be clearly unfounded. Both the claims arose

from the same contract of lease. The two actions are but

the consequences of the reciprocal obligations imposed by

law upon and assumed by the parties under their lease

contract.

In actions for ejectment or for recovery of

possession of real property, it is well settled that the

defendant's claims for the value of the improvements on

the property or necessary expenses for its preservation are

required to be interposed in the same action as

compulsory couterclaims.

CA correctly held that the counterclaims of

petitioners are compulsory in nature.

2. Whether or not petitioners, having failed to seek

reconsideration of or to take an appeal from the order of

dismissal of their counterclaims, are already barred from

asserting the same in another action.NO

In order that a prior judgment will constitute a

bar to a subsequent case, the following requisites mustconcur: (1) The judgment must be final; (2) The judgment

must have been rendered by a court having jurisdiction

over the subject matter and the parties; (3) The judgment

must be on the merits; and (4) There must be between the

first and second actions, identity of parties, of subject

matter, and of causes of action.

Civil Case No. RTC 88-1480 was dismissed upon

motion of Ziga under Section 2 of Rule 17. Dismissal is

without prejudice, except when otherwise stated in the

motion to dismiss or when stated to be with prejudice in

the order of the court. The order of dismissal of the first

case was unqualified, hence without prejudice and,

therefore, does not have the effect of an adjudication on

the merits. On a parity of rationale, the same rule should

apply to a counterclaim duly interposed and which is

likewise dismissed but not on the merits.

In the same order of dismissal of the complaint,

the counterclaims of petitioners were dismissed by reason

of the fact the court a quo had not acquired jurisdiction

over the same for non-payment of the docket fees. On

that score, the said dismissal was also without prejudice,since a dismissal on the ground of lack of jurisdiction does

not constitute res judicata, there having been no

consideration and adjudication of the case on the merits.

The dismissal of the case without prejudice

indicates the absence of a decision on the merits and

leaves the parties free to litigate the matter in a

subsequent action as though the dismissal action had not

been commenced. The discontinuance of a case not on the

merits does not bar another action on the same subject

matter. Evidently, the prior dismissal of herein petitioners'

counterclaims is not res judicata and will not bar the filing

of another action based on the same causes of action.

CA decision, reversed and set aside.


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When a declaration of default is proper

ROSARIO vs ALONZO

G.R. No. L-17330, June 29, 1963

Facts:

This is an action for partition of two parcels of

lands (in Ilocos Sur).

Plaintiffs: alleged that the said parcels of land belonged to

the conjugal partnership of their late father, Hilario

Rosario and Juana Alonzo, his second wife.

Defendants:alleged that out of the proceeds of the sale of

cattle they had inherited from their deceased father, Eleno

Manzano, they purchased the first parcel of land and had

been in possession thereof as owners for more than 20

years and paying the realty tax thereon; while the second

parcel of land was acquired through occupation andhomestead by Juana Alonzo and Roberto Hilario who had

in possession thereof as owners for more than 20 years

and also paying the realty tax thereon; that Hilario, the

second husband of Juana, was blind for 30 years and could

not have earned money to purchase any parcel of land;

thus, the action of the plaintiffs was reckless, groundless

and barred by statute of limitations; further prayed for the

dismissal of the complaint and payment of P300 as for

damages.

The parties submitted a partial agreed statement

of facts and reserved the right to present evidence. The

hearing was set, however, the defendants and their

counsel failed to appear. The plaintiffs rested its case after

presentation of their exhibits. The trial court rendered

judgment in favor of the plaintiffs. A motion for

reconsideration was filed by the defendants but it was

denied for no affidavit of merit was attached to the

motion. Another motion was filed for the setting aside of

the judgment and leave to present evidence. It was again

denied based on the first ground. The defendants

appealed to CA, which dismissed the aforesaid appeal.Thus, a petition for certiorari was filed to SC, but in its

Resolution, set aside the CA resolution, and remanded the

case to CA for judgment on the merits. The CA certified the

case to SC based on the grounds that the petitioners raised

legal questions only. Hence, this petition.

Issue:

Whether or not the declaration of default is

properNO

Held:

Having answered the complaint filed by the

appellees, the appellants were not and could not be in

default. The appellants complaint that in refusing to

relieve their counsel from the effects and consequences of

his failure to appear and defend their case, the lower court

committed, a grave injustice to their prejudice, for they

contend that such failure was due to his forgetfulness and

oversight.

Although the two motions for reconsideration

were sworn to by the attorney, for the appellants, still

such motions were not "accompanied with affidavits

showing the fraud, accident, mistake, or excusable

negligence relied upon, and the facts constituting the

petitioner's good and substantial cause of action or

defense, as the case may be, which he may prove if his

petition be granted," provided for and required in section

3 of Rule 38, as Rules of Court.

The order appealed from is affirmed, with costs

against the appellants.

Effect of an order of default - Sec. 3(a), Rule 9

CO vs ACOSTA

G.R. No. 64591, January 17, 1985

Facts:

Pepsi Cola Bottling Company of the Philippines,

Inc. (PEPSI), through Mr. C.M. Aboitiz issued three

purchase orders addressed to CTC Appliance Center for

12,000 units of refrigerators valued at P35,322,900.00.

Petitioner Rufino Co is the proprietor of the Center.

In a formal deed of assignment, petitioner Co

assigned his rights and interests to the three purchase

orders and to the money value of the deliveries made or to

be made thereunder to respondent Refrigerations

Industries, Inc. (RII).

PEPSI wrote a letter to the private respondents

informing them that it took notice of the assignments ofthe purchase orders by the petitioner and stated that it

was not recognizing the same.

In the course of time, 10,000 units of refrigerators

were delivered and paid. No problem arose from these

10,000 units.

PEPSI wrote a letter to the petitioner requesting

the delivery of 1,000 units of refrigerators and stating that

PEPSI will be talking directly to respondent RII through Mr.

Dominador Gana on the matter of storage fees.

From March 23, 1981 to May 21, 1981 PEPSI

received 1,000 units of refrigerators directly from

respondent RII. The total invoice price of these units was

P2,907,535.00.


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Private respondent RII sent a letter of demand to

PEPSI. PEPSI wrote private respondent RII acknowledging

receipt of the demand letter but stating that it does not

recognize and does not feel bound by the petitioners

assignment of the purchase orders. Private respondent RII

sent another letter of demand to PEPSI demanding

payment of the P2,907,535.00 within five days. PEPSI

informed respondent RII that there is no legal basis for the

demand and no reason for PEPSI to pay the 1,000 units. It

added further that respondent RIIs recourse is against the

petitioner.

Failing to collect from PEPSI, private respondent

RII sent a letter of demand to the petitioner demanding

payment, but the latter refused and failed to pay. Private

respondent RII and Delta Motors Corporation filed a civil

case for a sum of money with attachment before the Court

of First Instance of Rizal, against Pepsi Cola Bottling

Company of the Philippines, Inc. and petitioner Rufino Co.Private respondents filed a formal ex-parte

motion to dismiss the complaint against PEPSI. Attached to

the motion is an instrument entitled "Joint Release,

Waiver and/or Quitclaim" which covenants that Delta

Motors, RII, and PEPSI mutually agreed to release and

forever discharge each other from any and all liabilities or

causes of action arising out of the transaction involving the

1,000 units of refrigerators in order to maintain

harmonious business relations among the parties.

The respondent court issued an order, on

plaintiffs motion, dismissing the complaint against the

defendant PEPSI.

The private respondents filed an ex-parte motion

to declare the petitioner Rufino Co in default for having

failed to file his answer.

The respondent court issued an order declaring

Rufino Co in default and RII is allowed to present its

evidence ex-parte. The respondent court rendered its

decision in favor of the plaintiffs and against the defendant

Rufino Co, ordering the latter to pay the former the sum of

P2,907,535.00 plus the legal rate of interest therein fromdate of demand; the sum of P200,000.00 as and by way of

attorneys fees; plus the costs of suit.

Petitioner Co filed a "Petition for Relief from

Judgment".

Pending resolution of the petitioners petition for

relief from judgment, the respondent court issued a writ of

execution and, as a consequence, virtually all of the

petitioners real properties werelevied upon on execution

and advertised for sale at public auction.

The petitioner filed a motion for a restraining

order to restrain the writ of execution and thereafter, filed

an urgent motion for resolution of his petition for the

issuance of a restraining order.

The petitioner again filed an urgent

supplementary motion for a restraining order pending the

resolution of his petition for relief or a motion to dismiss

the case.

The petitioner filed still another urgent motion for

resolution of his petition for the issuance of a restraining

order pointing out that the respondent court had not

resolved his motion even as the date of sale in the sheriffs

notice for the sale on execution of his properties was only

a few days away.

The respondent court issued the following order

denying, for lack of merit, the "Petition for Relief from

Judgment" and the "Petition for the Issuance of a

Restraining Order filed by Rufino Co.

Supreme Court (SC) issued a temporary

restraining order enjoining the respondent Regional Trial

Court from taking further action in this civil case, more

particularly from taking any further proceedings relative tothe writ of execution in this civil case, until further orders.

Issue:

Considering that under the allegations of the

complaint, both the defendants PEPSI and Co are

indispensable parties, sued under a common cause of

action, may the plaintiff move to dismiss the case against

the PEPSI without notice to defendant Co? Yes

Held:

The petitioner contends that he and PEPSI are

indispensable parties sued under a common cause of

action and that if the complaint is dismissed insofar as

PEPSI is concerned, the court should have ordered also the

dismissal of the case insofar as it affects the petitioner.

According to him, it does not matter that the dismissal is

upon the evidence presented by the plaintiff or upon the

latters mere desistance, for in both instances, a lack of

sufficient legal basis must be the cause.

The private respondents state that the petitioner

is confusing the decision of the court a quo becauseinstead of questioning the order denying the petition for

relief from judgment, the petitioner assails the decision of

the court which has already become final and executory

with the writ of execution issued already being

implemented by the deputy sheriff.

Supreme Court agreed with the petitioner. The

private respondents complaint for a sum of money with

attachment against PEPSI and Co clearly shows that PEPSI

and the petitioner are indispensable parties to the case. In

fact the private respondents sued both PEPSI and the

petitioner under a common cause of action.

Likewise, the affidavit attached in support of the

complaint is framed in such a way that there can be no

doubt as to the intention of the private respondents in


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suing PEPSI and the petitioner herein as indispensable

parties.

SCs ruling in Lim Tanhu v. Hon. Ramolete is

applicable to the instant petition. The fact that in the case

of Lim Tanhu several defendants were declared in default

and the defenses set up by those who answered the

complaint were available to those who were in default,

while in the case at bar both PEPSI and the petitioner did

not answer the complaint, is of no moment because Lim

Tanhu cases ruling was based on the fact that all the

defendants therein were indispensable parties and the

plaintiff moved for the dropping of two defendants from

the complaint. The situation is similar to this case where

both PEPSI and Rufino Co were sued as indispensable

parties under a common cause of action, and on motion of

the private respondent PEPSI was dropped as a party

defendant.

Applying Tanhu ruling, SC found that therespondent court erred in (1) declaring petitioner Co in

default; (2) in hearing the plaintiffs evidence ex -parte on

December 3, 1982; (3) in rendering the decision dated

March 9, 1983; (4) in issuing the writ of execution and in

having the petitioners properties levied upon in

execution; (5) in having them advertised for sale, and

consequently, (6) in ordering them sold to answer for the

private respondents claim. After the lower court dropped

PEPSI as a party defendant in Civil Case No. 42815, the

respondent court lost authority to act further in the case

insofar as the petitioner is concerned.

Effect of an order of default - Sec. 3(a), Rule 9

BOTICANO vs CHU

G.R. No. L-58036, March 16, 1987

Facts:Petitioner Eliseo Boticano is the registered owner

of a Bedford truck with plate No. QC-870 which he was

using in hauling logs for a certain fee. One evening, while

loaded with logs, it was properly parked by its driver

Maximo Dalangin at the shoulder of the national highway

in Barrio Labi, Bongabon, Nueva Ecija when it was hit and

bumped at the rear portion by a Bedford truck bearing

plate No. QK-516 owned by private respondent Manuel

Chu, Jr. and driven by Jaime Sigua, the formers co-

defendant in this case. Manuel Chu, Jr. acknowledged

ownership thereof and agreed with petitioner to shoulder

the expenses of the repair of the damaged truck of the

latter.

When Manuel Chu, Jr. failed to comply with

aforesaid agreement as well as to pay damages

representing lost income despite petitioners demands,

the latter (plaintiff in the lower court), filed a complaint at

the Court of First Instance against private respondent

Manuel Chu, Jr. and Jaime Sigua, both as defendants in a

civil case.

Summons was issued but was returned unserved

for defendant Jaime Sigua because he was no longer

connected with San Pedro Saw Mill, Guagua, Pampanga,

while another copy of the summons for Manuel Chu, Jr.

was returned duly served on him thru his wife Veronica

Chu at his dwelling house.

Petitioner moved to dismiss the case against

Jaime Sigua and to declare Manuel Chu, Jr. in default for

failure to file responsive pleadings within the reglementary

period. The motion was granted by the lower court in an

order allowing petitioner to adduce his evidence ex parte.From the evidence adduced by the plaintiff

(petitioner), the trial court found that private respondent

Manuel Chu, Jr. is responsible for the fault and negligence

of his driver Sigua under Article 2180 of the Civil Code,

whose negligence and lack of due care was the immediate

and proximate cause of the damage to petitioners truck

and ruled in favor of plaintiff-petitioner.

On March 19, 1979 private respondent Manuel

Chu, Jr. filed with the trial court a "Notice of Appeal" and

an Urgent Motion for Extension of Time to File Record on

Appeal which was granted by the trial court on the same

date.

Atty. Hermenegildo D. Ocampo, counsel of record

of private respondent, filed a "Motion to Withdraw as

Counsel" while the new counsel Atty. Wilfredo G.

Laxamana entered his appearance and filed his record on

appeal.

Petitioner filed with the trial court a Motion to

Dismiss Appeal and for execution wherein private

respondents counsel personally appeared and opposed

petitioners motion. Petitioner filed his reply to opposition.The trial court issued an order denying aforesaid motion.

The trial court issued another order approving private

respondents Record on Appeal.

Court of Appeals issued its decision setting aside

the appealed judgment for being null and void and its

order denying petitioners motion for reconsideration.

Hence, this petition.

Issue:

If the defendant in the Regional Trial Court has

been declared in default, may he appeal the default

judgment that may subsequently be rendered even if he

has not asked the RTC to set aside the declaration of

default? Yes!


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Held:

The answer is in the affirmative. However a

distinction must be made as to the effects of such appeal.

(a) If an appeal is made without first asking the

RTC to set aside the declaration of default, and the

appellate court sets aside on said declaration, all he can

get is a review of the RTCs default judgment without the

opportunity of having the higher court consider defense

evidence (for the simple reason that no evidence was even

adduced by him in the RTC) (Rule 41, sec. 2, par. 3, Rules of

Court).

(b) If upon the other hand, the defendant first

asks the RTC to set aside the declaration of default (Rule

18, secs. 2 and 3, Rules of Court), and he is able to prevail,

the declaration will be set aside, and he will now have the

opportunity to present his evidence in the RTC. Thus, even

if he finally loses in the RTCs subsequent decision, his

defense can be considered, when appeal is made to theappellate tribunal. Of course, even if the default

declaration is not set aside despite his motion for the

setting aside, he will be entitled to all notices in the court

proceedings, and can file any pleading he may wish to file,

including the notice of appeal. (Rule 13, sec. 9, Rules of

Court).

Incidentally, the afore-mentioned rules apply to

default declarations in the Metropolitan Trial Courts, the

Municipal Trial Courts, and the Municipal Circuit Trial

Courts, for under Batas Pambansa Bilang 129, the said

inferior courts will follow the rules in the RTC. Note

however that in summary proceedings, there can be no

default declarations.

In the case at bar, there is no question that

summons was timely issued and received by private

respondent. In fact, he never denied actual receipt of such

summons but confined himself to the argument that the

sheriff should prove that personal service was first made

before resorting to substituted service.

This brings to the fore the question of procedural

due process. In Montalban v. Maximo, the Court ruled that"The constitutional requirement of due process exacts that

the service be such as may be reasonably expected to give

the notice desired. Once the service provided by the rules

reasonably accomplishes that end, the requirement of

justice is answered; the traditional notions of fair play are

satisfied; due process is served."

Indeed, such construction is but fair, and in

accord with substantial justice. The burden on a plaintiff is

not to be enlarged with a restrictive construction desired

by the defendant.

Finally in a last ditch effort, private respondent

insists that there was no valid service of summons because

private respondent is a partner and general manager in

San Pedro Sawmill. Consequently the wife of private

respondent to whom summons and complaint were

allegedly served not being partnership, cannot receive the

same under Section 13 of Rule 14 of the Rules of Court.

It has however been settled that actions must be

brought by the real parties in interest and against the

persons who are bound by the judgment obtained therein.

The title of the case both in the trial court, in the

Court of Appeals and in the Supreme Court shows that the

partnership is not a party. On the contrary, as previously

stated private respondent himself assumed the

responsibility of the accident and is now estopped to

disclaim the liabilities pertaining thereto.

From what has been discussed the following

conclusions are hereby made: jurisdiction was properly

acquired by the trial court over the person of respondent

thru both service of summons and voluntary appearance in

court; he was therefore properly declared in default for

not having filed any answer; despite respondents failureto file a motion to set aside the declaration of default, he

has the right to appeal the default judgment but in the

appeal only the evidence of the petitioner may be

considered, respondent not having adduced any defense

evidence; the Supreme Court agreed with the findings of

fact by the trial court, the same being unrebutted.

WHEREFORE, the assailed decision and resolution

of the Court of Appeals are REVERSED and SET ASIDE, and

the decision of the then Court of First Instance (now

Regional Trial Court) of Nueva Ecija, Cabanatuan City in

Civil Case No. 6754 "Eliseo Boticano v. Manuel Chu, Jr. and

Jaime Sigua" is hereby REINSTATED.

Relief from an order of default - Sec. 3(b), Rule 9

DENSO (PHIL.), INC. vs IAC

G.R. No. 75000, February 27, 1987

Facts:A fire broke out at the Nippondenso Building

which was owned by the Kayamanan Development

Corporation (KAYAMANAN), and was then under lease to

Denso (Phils), Inc. (DENSO). The fire caused extensive

damage. DENSO and its correspondent firm in Japan,

NIPPONDENSO, reportedly suffered losses amounting to

P6,131,976.65 and P682,212.58. On the other hand,

KAYAMANAN's loss was placed at P1,750,000.00.

KAYAMANAN instituted an action against DENSO

before the RTC for recovery of (a) unpaid rentals; (b) the

cost of repairing the damage caused by the fire to the

leased building, it being alleged that DENSO was bound to

bear said cost under their lease agreement; and (c)

unrealized monthly rents and attorney's fees.


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Summons was served on DENSO but summons

(together with the accompanying copy of the complaint)

was not referred by DENSO to its counsel until June 22,

1985. This prompted the latter to file on June 25, 1985 a

"MOTION FOR EXTENSION OF TIME TO FILE ANSWER,"

pleading the late referral, the need to attend to other legal

work of equal importance, as well as the time requirement

for study of the factual and legal points involved in the

action, and praying, in consequence, for an additional

period of 15 days from June 25 within which to present the

requisite responsive pleading. The motion closed with a

"Notice of Hearing" addressed to the Clerk of Court, asking

that the motion be submitted to the court for

consideration and approval immediately upon its receipt;

and a notation that a copy of the motion had been

furnished plaintiff KAYAMANAN's counsel.The copy of the

motion was actually received by KAYAMANAN's counsel

the following day, June 26, 1985 .Motion for extension was denied. KAYAMANAN

presented an "Ex parte Motion to Declare Defendant in

Default" asserting that the reglementary period of 15 days

for DENSO to file answer had expired on June 25, 1985

without any answer having been filed, but making no

reference to DENSO's motion for extension which, as

above stated, had been received by it on June 26, 1985.

Judge Guadiz promulgated an Order deeming the motion

for default to be "well-taken," and accordingly declaring

DENSO in default and setting the reception of

KAYAMANAN's evidence ex-parte.

DENSO learned of the order of default and the

judgment by default. It then filed a verified motion for

reconsideration of said order and judgment. Acting

thereon, the Trial Court promulgated an Order setting

aside, "in the interest of substantial justice," the order of

default as well as the decision; but hearing was

rescheduled only for the presentation of defendant

DENSO's evidence, the Court explicitly stating that the

evidence already presented (by KAYAMANAN) would

remain on record "without the right of cross examinationon the part of the defendant." The hearing was set on

October 2, 1985 but at DENSO's instance, was re-

scheduled on October 24, 1985.

DENSO submitted its formal motion for

reconsideration praying for the right to cross-examine

KAYAMANAN's witnesses. The record does not show that

any opposition to the motion was ever filed. DENSO

received notice of the Order of the Court dated October

24, 1985 (the date of the hearing), denying its (DENSO's)

motion to be allowed to cross-examine KAYAMANAN's

witnesses, and scheduling the initial hearing for the

presentation of the defense witnesses.

DENSO then asked for deferment of the hearing

so that it might elevate this adverse ruling to a higher

court. This was denied, and when DENSO declared itself as

not ready to proceed with the presentation of evidence,

the Court dictated an Order stating that "this being the

third time that defendant failed to present its evidence

notwithstanding the chance given to it, the 'Decision'

dated July 1, 1985 is revived."

Without awaiting service of the Order, DENSO

filed a petition for certiorari with the Intermediate

Appellate Court, praying for the annulment of the series of

orders of Judge Guadiz already referred to, starting with

the order of default of June 26, 1985 and culminating in

the order of January 9, 1986 reviving the judgment by

default.

The Intermediate Appellate Court (Fourth Special

Cases Division) considered the crucial issue to be "the

propriety or impropriety" of the order which, while setting

aside the previous order of default and the judgment by

default, prescribed that the evidence already presentedwould remain in the record and denied petitioner the right

to cross-examine the respondent's witnesses who had

testified at the ex-parte hearing. It declared unnecessary

further consideration of the order of default and judgment

by default thus set aside, and limited its review of the

proceedings to the question of whether or not the

petitioner was properly denied the right of cross-

examination.

Appellate Court ruled that the right of cross-

examination, while a part of due process so that denial

thereof amounts to depriving a party of his day in court, is

nonetheless waivable; that since petitioner received copy

of the order setting the judgment by default aside and

scheduling the case for hearing only for reception of

defendant's evidence without right to cross-examine

plaintiff's witnesses but did not move for its

reconsideration after a lapse of 38 days, such inaction

amounted to a waiver of the claimed right to cross-

examine; and, moreover, said motion for reconsideration

came too late because the order sought to be

reconsidered was by then already final, the applicableperiod of appeal being only fifteen (15) days from notice of

said order, and that (in any event) DENSO was guilty of

laches.

Issue:

Whether or not IAC is correct.

Held:

No. The Decision of the Intermediate Appellate

Court under review is reversed and set aside.

The error in these pronouncements is

immediately apparent. They assume that the order in

question is a final-and appealable order, when it is in


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mmeikimouse

fact interlocutory. The distinction between final and

interlocutory orders is a well-settled one.

The concept of "final" judgment, as distinguished

from one which has "become final" (or "executory" as of

right [final and executory]), is definite and settled. A "final"

judgment or order is one that finally disposes of a case,

leaving nothing more to be done by the Court in respect

thereto, e.g., an adjudication on the merits which, on the

basis of the evidence presented at the trial, declares

categorically what the rights and obligations of the parties

are and which party is in the right; or a judgment or order

that dismisses an action on the ground, for instance, of res

judicata or prescription. Once rendered, the task of the

Court is ended, as far as deciding the controversy or

determining the rights and liabilities of the litigants is

concerned. Nothing more remains to be done by the Court

except to await the parties' next move (which among

others, may consist of the filing of a motion for new trial orreconsideration, or the taking of an appeal) and ultimately,

of course, to cause the execution of the judgment once it

becomes 'final' or, to use the established and more

distinctive term, "final and executory." ...

xxx xxx xxx

Conversely, an order that does not finally dispose

of the case, and does not end the Court's task of

adjudicating the parties' contentions and determining their

rights and liabilities as regards each other, but obviously

indicates that other things remain to be done by the Court,

is "interlocutory," e.g., an order denying a motion to

dismiss under Rule 16 of the Rules, or granting a motion

for extension of time to file a pleading, or authorizing

amendment thereof, or granting or denying applications

for postponement, or production or inspection of

documents or things, etc. Unlike a "final" judgment or

order, which is appealable, as above pointed out, an

"interlocutory" order may not be questioned on appeal

except only as part of an appeal that may eventually be

taken from the final judgment rendered in the case.

That the order of September 3, 1985 wasinterlocutory in character is beyond cavil. In setting aside

the order of default and the succeeding judgment by

default, it left the case open for further proceedings

before the Trial Court, not the least of which was the

reception of evidence for the petitioner. Therefore, it

could not become final in the sense that final judgments

become "final and executory." No appeal therefrom would

lie except in the context and as part of an appeal from a

subsequent final judgment on the merits, and a motion for

reconsideration thereof was not subject to the limiting

fifteen-day period of appeal prescribed for final judgments

or orders.

Neither will the Court consider laches as having

set in by reason of petitioner's allowing thirty-eight (38)

days to pass before seeking a reconsideration of the order,

having in mind not only that such a relatively brief period

cannot by any reckoning be deemed an unreasonable

length of time, but also the fact that while laches is a

defense which operates independently of the statute of

limitations and is subject to no fixed periods, it is also

founded on equity and may be invoked only if the delay in

asserting a claim has worked a change in the conditions

such as would render unjust or inequitable the grant of the

relief sought.

Upon similar premises, this Court has consistently

held, since as early as in 1946, that motions for extension

of time to file record on appeal may be filed and passed

upon ex-parte, and the rulings on that point are applicable,

without differentiation, to motions for extension of time

to file answer.

While the order of default was in fact set aside by

the Trial Judge on motion of the petitioner, he failed toafford petitioner the complete relief that the arbitrary and

improper issuance of said order and of the earlier order

denying the motion for extension clearly called for. Ideally,

the slate should have been wiped clean by setting aside

also the hearing at which the respondent presented its

evidence ex-parte, so that the parties would stand on even

terms with neither having the advantage of the other.

Instead, the Judge prescribed that the evidence presented

by the KAYAMANAN would remain in the record without

right on the part of DENSO to cross-examine the witnesses

who had already testified, and by necessary implication,

also denied DENSO the right to object to the documentary

evidence submitted by respondent. This, too, was abuse of

discretion. If a defendant is improperly declared in default

his time to answer not having expired because of a

timely ex-parte motion for extension he should be

entitled to relief which should consist not only in the

admission of his responsive pleading, but of the right to

cross-examine the witnesses presented and to object to

the exhibits offered in his absence, if not indeed to have

trial commence all over again. He should not, under thesecircumstances, be penalized by loss of the right to cross-

examine. This would be grossly unwarranted and unfair; it

would amount to a denial of due process.

The Appellate Court's observation that "*** it

cannot be denied that the petitioner had other remedies

at hand after the court a quo had set aside the questioned

Order of default and Default Judgment ***" It is

somewhat perplexing. Given the character of said orders,

particularly of the order of default, this Court is hard put to

conceive how DENSO could have acted to protect its rights

otherwise than as it did here, namely by exhausting all

recourse toward a reconsideration before the Trial Court

and then applying for corrective relief in the Intermediate

Appellate Court. The petition is granted.


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mmeikimouse

Relief from an order of default - Sec. 3(b), Rule 9

LINA vs CA

G.R. No. L-63397, April 9, 1985

Facts:

Private respondent Northern Motors, Inc. filed

with the CFI Rizal (Pasig) a case for sum of money with

damages. Petitioner Alex Lina was served with summons

together with a copy of the complaint.

Then, when no answer or motion to dismiss was

filed by petitioner, Northern Motors, Inc. filed a motion to

declare him in default. The motion was set for hearing on

May 21, 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 responsive pleading

within the reglementary period.

Respondent judge (Hon. Pineda) issued an orderdeclaring Petitioner herein in default and allowing herein

private respondent to adduce its evidence ex parte.

Petitioner filed his answer to the complaint.

On July 28, 1982, respondent court rendered its

decision in favor of private respondent. Thereafter

petitioner filed a motion to set aside the said decision.

Respondent judge issued an order denying petitioner's

motion to set aside decision.

Petitioner filed with the CA a petition for

certiorari/prohibition.

CAdenied the petition on the ground that: it is

conclusively assumed that the respondent court, in

resolving the motion to declare defendant in default, had

taken into consideration the motion for extension,

especially because the ground of petitioner's opposition to

the motion to declare 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 defendant in 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 for extension 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's opposition 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 or denied by the court.

Hence this petition.

Issue/s:

Whether or not certiorari is proper in a case

where judgment by default was rendered without an order

of default being furnished petitioner and where

meritorious defenses exist.

Held:

We agree with the CA. The granting of additional

time within which to file an answer to a complaint is a

matter largely addressed to the sound discretion of the

trial court. In the case at bar, it was on May 5, 1982 or 2

days before the expiration of the 15-dayreglementary

period given to defendant to file his responsive pleading

when petitioner moved for an extension of 20 days 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 CFI 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

the ground 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 a

motion 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 has been 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, respondent

appellate 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 a remedy in the ordinarycourse 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 can also assail the

judgment and the merits upon the ground that it is

supported by the evidence, or it is contrary to law. Thus,

the petition is DISMISSED.


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mmeikimouse

Effect of a partial default - Sec. 3(c), Rule 9

LIM TANHU vs RAMOLETE

G.R. No. L-40098, August 29, 1975

Facts:

A complaint filed on February 9, 1971 by

respondent Tan Put only against the spouses-petitioners

Antonio Lim Tanhu and DyOchay. Subsequently, in an

amended complaint dated September 26, 1972, their son

Lim TeckChuan and the other spouses-petitioners Alfonso

Leonardo Ng Sua and Co Oyo and their son Eng Chong

Leonardo were included as defendants.

In the amended complaint, respondent Tan alleged

that she "is the widow of Tee Hoon Lim Po Chuan, who

was a partner in the commercial partnership, Glory

Commercial Company ... with Antonio Lim Tanhu and

Alfonso Ng Sua that "defendant Antonio Lim Tanhu,

Alfonso Leonardo Ng Sua, Lim TeckChuan, and Eng ChongLeonardo, through fraud and machination, took actual and

active management of the partnership and although Tee

Hoon Lim Po Chuan was the manager of Glory Commercial

Company, defendants managed to use the funds of the

partnership to purchase lands and building's.

The admission of said amended complaint was

opposed by defendants upon the ground that there were

material modifications of the causes of action previously

alleged, but respondent judge nevertheless allowed the

amendment.

All of the included defendants filed single answer

with counterclaim, over the signature of their common

counsel, defendants denied specifically not only the

allegation that respondent Tan is the widow of Tee Hoon

because, according to them, his legitimate wife was

AngSiok Tin still living and with whom he had four (4)

legitimate children, a twin born in 1942, and two others

born in 1949 and 1965, all presently residing in Hongkong,

but also all the allegations of fraud and conversion quoted

above, the truth being, according to them, that proper

liquidation had been regularly made of the business of thepartnership and Tee Hoon used to receive his just share

until his death, as a result of which the partnership was

dissolved and what corresponded to him were all given to

his wife and children.

During the date set for the pre-trial, both of the two

defendants-spouses the Lim Tanhus and Ng Suas, did not

appear, for which reason, upon motion of plaintiff dated

February 16, 1973, in an order of March 12, 1973, they

were all "declared in DEFAULT as of February 3, 1973 when

they failed to appear at the pre-trial." They sought to hive

this order lifted thru a motion for reconsideration, but the

effort failed when the court denied it.

Thereafter, the trial started, but at the stage

thereof where the first witness of the plaintiff by the name

of Antonio Nuez who testified that he is her adopted son,

was up for re-cross-examination, said plaintiff

unexpectedly filed a motion to drop Lim Teck and Eng

Chong (two amongst the several defendants in the case).

The motion to drop was granted.

Subsequently, another order was issued:

Considering that defendants Antonio Lim Tanhu and his

spouse DyOchay as well as defendants Alfonso Ng Sua and

his spouse Co Oyo have been declared in default for failure

to appear during the pre-trial and as to the other

defendants the complaint had already been ordered

dismissed as against them.

A hearing of plaintiffs evidence ex-parte was

scheduled. Upon learning of these orders on October 23,

1973, the defendant Lim Teck Cheng, thru counsel, Atty.

Sitoy, filed a motion for reconsideration thereof, and on

November 1, 1974, defendant Eng Chong Leonardo, thru

counsel Atty. Alcudia, filed also his own motion forreconsideration and clarification of the same orders. These

motions were denied.

Respondent court rendered the impugned decision

but it does not appear when the parties were served

copies of this decision.

Subsequently, all the defendantsfiled a motion to

quash the order on the receipt of evidence ex parte.

Without waiting however for the resolution thereof, Lim

TeckChuan and Eng Chong Leonardo went to the Court of

Appeals with a petition for certiorari seeking the

annulment of the above-mentioned orders. The CA

dismissed the petition on the ground that it was

prematurely filed.

The petitioners now argue before the court that to

begin with, there was compulsory counterclaim in the

common answer of the defendants the nature of which is

such that it cannot be decided in an independent action

and as to which the attention of respondent court was

duly called in the motions for reconsideration. Besides,

and more importantly, under Section 4 of Rule 18,

respondent court had no authority to divide the casebefore it by dismissing the same as against the non-

defaulted defendants and thereafter proceeding to hear it

ex-parte and subsequently rendering judgment against the

defaulted defendants, considering that in their view, under

the said provision of the rules, when a common cause of

action is alleged against several defendants, the default of

any of them is a mere formality by which those defaulted

are not allowed to take part in the proceedings, but

otherwise, all the defendants, defaulted and not

defaulted, are supposed to have but a common fate, win

or lose. In other words, petitioners posit that in such a

situation, there can only be one common judgment for or

against all the defendant, the non-defaulted and the

defaulted.


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mmeikimouse

Thus, petitioners contend that the order of

dismissal of October 21, 1974 should be considered also as

the final judgment insofar as they are concerned, or, in the

alternative, it should be set aside together with all the

proceedings and decision held and rendered subsequent

thereto, and that the trial be resumed as of said date, with

the defendants Lim TeckChuan and Eng Chong Leonardo

being allowed to defend the case for all the defendants.

On the other hand, private respondent argues that

inasmuch as petitioners had been properly declared in

default, they have no personality nor interest to question

the dismissal of the case as against their non-defaulted co-

defendants and should suffer the consequences of their

own default.

Held:

Being declared in default does not constitute a

waiver of rights except that of being heard and ofpresenting evidence in the trial court. According to Section

2, "except as provided in Section 9 of Rule 13, a party

declared in default shall not be entitled to notice of

subsequent proceedings, nor to take part in the trial." That

provision referred to reads: "No service of papers other

than substantially amended pleadings and final orders or

judgments shall be necessary on a party in default unless

he files a motion to set aside the order of default, in which

event he shall be entitled to notice of all further

proceedings regardless of whether the order of default is

set aside or not." And pursuant to Section 2 of Rule 41, "a

party who has been declared in default may likewise

appeal from the judgment rendered against him as

contrary to the evidence or to the law, even if no petition

for relief to set aside the order of default has been

presented by him in accordance with Rule 38.

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 plaintiff's cause is, ofcourse, presented in his absence, but the 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, only legal

evidence should be considered against him. If the evidence

presented should not be sufficient to justify a judgment for

the plaintiff, the complaint must be dismissed. 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.

Where a complaint states a common cause of

action against several defendants and some appear to

defend the case on the merits while others make default,

the defense interposed by those who appear to litigate the

case inures to the benefit of those who fail to appear, and

if the court finds that a good defense has been made, all of

the defendants must be absolved. In other words, the

answer filed by one or some of the defendants inures to

the benefit of all the others, even those who have not

seasonably filed their answer. The proper mode of

proceeding where a complaint states a common cause of

action against several defendants, and one of them makes

default, is simply to enter a formal default order against

him, and proceed with the cause upon the answers of the

others. The defaulting defendant merely loses his standing

in court, he not being entitled to the service of notice in

the cause, nor to appear in the suit in any way. He cannot

adduce evidence; nor can he be heard at the final hearing,

although he may appeal the judgment rendered against

him on the merits. (Rule 41, sec. 2.) If the case is finally

decided in the plaintiff's favor, a final decree is then

entered against all the defendants; but if the suit shouldbe decided against the plaintiff, the action will be

dismissed as to all the defendants alike.

It provides that when a complaint states a

common cause of action against several defendants, some

of whom answer, and the others make default, 'the court

shall try the case against all upon the answer thus filed and

render judgment upon the evidence presented by the

parties in court'. It is obvious that under this provision the

case is tried jointly not only against the defendants

answering but also against those defaulting, and the trial is

held upon the answer filed by the former; and the

judgment, if adverse, will prejudice the defaulting

defendants no less than those who answer. In other

words, the defaulting defendants are held bound by the

answer filed by their co-defendants and by the judgment

which the court may render against all of them. By the

same token, and by all rules of equity and fair play, if the

judgment should happen to be favorable, totally or

partially, to the answering defendants, it must

correspondingly benefit the defaulting ones, for it would

not be just to let the judgment produce effects as to thedefaulting defendants only when adverse to them and not

when favorable.


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mmeikimouse

Extent of relief - Sec. 3(d), Rule 9

PASCUA vs HON. FLORENDO

G.R. No. L-39047, April 30, 1985

Facts:

Petitioners, as plaintiffs, filed a complaint for

reconveyance with damages against the private

respondents, spouses Clemente and Juliana Castro. The

latter, as defendants, 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

subsequently declared the respondents in default for their

having failed to file an answer within the reglementary

period. Thus, the petitioners proceeded to present theirevidence ex-parte.

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 errors of the respondent court:

The petitioners contend that the trial court acted

with grave abuse of discretion when, after hearing their

evidence presented ex-parte, the respondents having been

declared in default, it dismissed the case on the ground

that the action had already prescribed. When the same

ground was earlier raised, the court denied the motion to

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 same

ground.

Petitioners further contend that the court's

conclusion that they had knowledge of the sale executed

by their deceased brother, Martin Pascua about twenty

years ago 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 deceasedbrother in 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 the knowledge of the petitioners of the deed of sale

and not from the date it was executed.

Issue:

Whether or not the trial court erred in not

granting relief to plaintiffs although the defendants were

declared in default.

Held:

No. Petitioners' contention are without merit. 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 of the

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

and the 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 in this

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

prayed for, 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

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 it

sanctioned by the due process clause.

Actions where default is not allowed - Sec. 3(e), Rule 9

DELA CRUZ vs HON. EJERCITOG.R. No. L-40895, November 6, 1975

Facts:

Milagros de la Cruz was charged with bigamy in

the Court of First Instance of Pampanga, Angeles City

Branch IV for having married Sergeant Dominick L. Gaccino

on September 15, 1973 while her prior marriage to

Teodoro G. David was undissolved.

Milagros de la Cruz filed in the same court at its

San Fernando Branch III a complaint for the annulment of

her marriage to Sergeant Gaccino on the ground of duress.

Judge Castaeda rendered a decision annulling the

marriage of Milagros de la Cruz to Gaccino. No appeal was

taken from that decision. It became final. In view of the


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mmeikimouse

annulment of her second marriage, Milagros de la Cruz

filed a motion to dismiss the bigamy charge. The private

prosecutor and the prosecuting fiscal opposed the motion.

Judge BienvenidoEjercito denied it on the ground

that the decision in the annulment case is not controlling

in the criminal case because the parties and the issues in

the two cases are not the same.

That refusal of Judge Ejercito to dismiss the

bigamy case, not withstanding the judicial pronouncement

that her second marriage was a nullity, prompted Milagros

de la Cruz to file the instant special civil action

of certiorariand prohibition.

Issue:

Whether or not the bigamy case became moot or

untenable after the second marriage, on which the

prosecution for bigamy is based, was annulled.

Held:

In the annulment case that the second marriage

contracted by Milagros de la Cruz with Sergeant Gaccino

was a nullity is determinative of her innocence and

precludes the rendition of a verdict that she committed

bigamy. To try the criminal case in the face of such a

finding would be unwarranted.

And even supposing arguendothat the decree

annulling the second marriage was questionable or

erroneous because it was issued in a judgment by default,

still that would not prevent the decree from having legal

effect. "An erroneous judgment is not a void judgment"


15/55

Full Text: Rule 9Effect of Failure to Plead CIVIL PROCEDURE

mmeikimouse

G.R. No. L-48577 September 30, 1980

SULPICIO A. GARCIA, petitioner,

vs.

COLONEL PAUL C. MATHIS, in his capacity as Base Commander,

Clark Air Force Base (CAFB) or his SUCCESSOR, and the

HONORABLE COURT OF FIRST INSTANCE OF PANGASINAN,

Branch IV, Dagupan City, respondents.

ABAD SANTOS,J.:

Petition for certiorari to set aside the Order of the respondent

judge, dated June 4, 1978, dismissing petitioner's Complaint

against the private respondent and another Order, dated July 7,

1978, denying a motion to reconsider the aforesaid order.

The factual background can be briefly stated as follows.

In Civil Case No. D-4097 of the Court of First Instance ofPangasinan presided by the respondent judge, Sulpicio Garcia,

the petitioner herein, sued Colonel Paul C. Mathis in his capacity

as Base Commander, CAFB, acting for and in behalf of the United

States of America. The complaint, which was filed on November

8, 1977, alleged that Garcia was a civilian employee at Clark Air

Force Base from May 26, 1949, to August 23, 1956, when he was

dismissed for alleged bribery and collusion. He prayed inter

alia that he be reinstated to his former position, and paid back

wages, moral damages, attorney's fees and costs of the suit.

The defendant Mathis entered a special appearance and filed a

motion for the dismissal of the complaint upon the ground that

the trial court had no jurisdiction over his person because he wasbeing sued as the representative of a foreign sovereign "which

has not consented and does not now consent to the maintenance

of the present suit."

On June 7, 1978, the respondent judge issued an Order as

aforesaid the text of which reads as follows:

Without considering the issue of jurisdiction

raised by the defendant in his motion to

dismiss the above-entitled case, the Court

finds that the cause of action has already

prescribed, because paragraphs 3 and 5 of

the complaint alleged that the services of theplaintiff has been terminated on August 23,

1956.

WHEREFORE, the above-entitled case is

hereby dismissed.

The only issue in this case is whether or not the respondent judge

committed a grave abuse of discretion amounting to lack of

jurisdiction when he dismissed the complaint on the ground of

prescription which the defendant did not raise in any of his

pleadings.

It is true that an action will not be held to have prescribed ifprescription is not expressly invoked. However there are

exceptions to this rule and one of them is when the plaintiff's

own allegations in his complaint show clearly that the action has

prescribed. (Philippine National Bank vs. Pacific Commission

House, G.R. No. L-22675, March 28, 1969, 27 SCRA 766). In this

case the complaint shows clearly that the plaintiff's action had

prescribed for he alleged that he was removed on August 23,

1956 (par. 5) but the case was filed only on November 18, 1977,

after a lapse of more than 21 years. Prescinding, therefore, the

defense of jurisdiction which is apparently meritorious, the

complaint was properly dismissed.

It is not amiss to state here that because of the specialappearance which the defendant had entered, he was

constrained to confine himself to showing that the trial court did

not have jurisdiction over his person and had to exclude all other

non-jurisdictional grounds in his motion to dismiss otherwise he

could be deemed to have abandoned his special appearance and

voluntarily submitted himself to the jurisdiction of the court.

(Republic vs. Ker z Co., Ltd; G.R. No. L-21609, Sept. 29,1966, 18

SCRA 207).

WHEREFORE, finding the petition to be without merit, the same

is hereby dismissal without any special pronouncement as to

costs.

SO ORDERED.


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G.R. No. 101883 December 11, 1992

SPOUSES LYDIA and VIRGILIO MELITON,* petitioners,

vs.

COURT OF APPEALS and NELIA A. ZIGA, represented by her

Attorney-in-Fact RAMON A. AREJOLA,**respondents.

REGALADO,J.:

In its judgment in CA-G.R. No. 250911

promulgated on August 9,

1991, respondent Court of Appeals annulled and set aside the

orders dated February 22, 1991 and March 18, 1991 of the

Regional Trial Court of Naga City, Branch 27, in Civil Case No. RTC

89-1942 thereof and ordered the dismissal of petitioner's

complaint filed herein, hence this appeal bycertiorari.

On June 22, 1988, private respondent Nelia Ziga, in her own

behalf and as attorney-in-fact of Alex A. Ziga and Emma A. Ziga-

Siy, filed a complaint, docketed as Civil Case No. RTC 88-1480 ofthe Regional Trial Court, Branch 27, Naga City,2

against herein

petitioner Lydia Meliton for rescission of a contract of lease over

a parcel of land situated at Elias Angeles Street, Naga City.

Alleged as grounds therefor were said petitioner's failure, as

lessee, to deposit the one month rental and to pay the monthly

rentals due; her construction of a concrete wall and roof on the

site of a demolished house on the leased premises without the

lessor's written consent; and here unauthorized sublease of the

leased property to a third party.

On July 29, 1988, petitioner Lydia Meliton filed an answer to the

complaint denying the material averments thereof and setting up

three counterclaims for recovery of the value of her kitchenette

constructed on the leased parcel of land and which was

demolished by private respondent, in the amount of P34,000.00;

the value of the improvements introduced in the kitchenette to

beautify it, in the amount of P10,000.00, plus the value of the

furniture and fixtures purchased for use in the kitchenette in the

amount of P23,000.00; and moral damages in the amount of

P20,000.00 aside from attorney's fees of P5,000.00 and P250.00

per court appearance, with litigation expenses in the amount of

P1,000.00.3

On May 29, 1989, the trial court, on motion of private

respondent contending that her cause of action had already

become moot and academic by the expiration of the lease

contract on February 7, 1989, dismissed the complaint. Thecounterclaims of petitioner Lydia Meliton were also dismissed for

non-payment of the docket fees, ergo the trial court's holding

that thereby it had not acquired jurisdiction over the same.4

On December 6, 1989, petitioners Lydia Meliton and Virgilio

Meliton filed a complaint against private respondent for recovery

of the same amounts involved and alleged in their counterclaims

in Civil Case No. RTC 88-1480, which complaint was docketed as

Civil Case No. RTC 89-19425and likewise assigned to Branch 27

of the same trial court.

On February 15, 1991, private respondent filed a motion to

dismiss the complaint on the ground that the cause of actiontherein was barred by prior judgment in Civil Case No. RTC 88-

1480, the order of dismissal wherein was rendered on May 29,

1989.6

On February 22, 1991, the court below denied private

respondent's motion to dismiss the complaint in Civil Case No.

RTC 89-1942 on the ground that the dismissal of the petitioner's

counterclaims in Civil Case No. RTC 88-1480 is not an

adjudication on the merits as the court did not acquire

jurisdiction over the counterclaims for failure of petitioner Lydia

Meliton to pay the docket fees, hence the said dismissal does not

constitute a bar to the filing of the later complaint.7

Private respondent's motion for reconsideration of the foregoing

order was denied by the lower court for lack of merit in its order

of March 18, 1991. 8 Dissatisfied therewith, private respondent

filed a petition for certiorariwith this Court. In our resolution

dated April 29, 1991, we referred this case to the Court of

Appeals for proper determination and disposition pursuant to

Section 9, paragraph 1, of B.P. Blg. 129,9

where it was docketed

as CA-G.R. SP No. 25093.

In a decision promulgated on August 9, 1991, the Court of

Appeals granted the petition, the pertinent part of which reads:

xxx xxx xxx

The respondents' counterclaim against the

petitioner in Civil Case No. RTC 88-1480

(Annex E, petition) is a compulsory

counterclaim, it having (arisen) out of or

being necessarily connected with the

transaction or occurrence subject matter of

the petitioner's complaint. The failure of the

respondents to seek a reconsideration of the

dismissal of their counterclaim or to take an

appeal therefrom rendered the dismissal

final. Such dismissal barred the prosecution

of their counterclaim by another action(Section 4, Rule 9, Revised Rules of Court;

Javier vs. IAC, 171 SCRA 605).

The respondent Court, therefore, in issuing

the orders complained of (Annexes G and I,

petition), gravely abused its discretion

amounting to lack of jurisdiction.

WHEREFORE, the petition for certiorari is

GRANTED. Accordingly, the orders

complained of (Annexes G and I, petition) are

annulled and set aside and the respondents'

complaint in Civil Case No. RTC 89-1942before the respondent Court, DISMISSED.

Costs against the respondents, except the

respondent Court.10

Petitioners are now before use, assailing the said judgment of the

Court of Appeals and praying for the annulment thereof.

The present petition requires the resolution of two principal

issues, to wit: (1) whether or not the counterclaims of petitioners

are compulsory in nature; and (2) whether or not petitioners,

having failed to seek reconsideration of or to take an appeal from

the order of dismissal of their counterclaims, are already barred

from asserting the same in another action.

1. Considering Section 4 of Rule 9 of the Rules of Court, a

counterclaim is compulsory if (a) it arises out of, or is necessarily

connected with, the transaction or occurrence which is the


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subject matter of the opposing party's claim; (b) it does not

require for its adjudication the presence of third parties of whom

the court cannot acquire jurisdiction; and (c) the court has

jurisdiction to entertain the claim.

It has been postulated that while a number of criteria have been

advanced for the determination of whether the counterclaim is

compulsory or permissive, the "one compelling test of

compulsoriness" is the logical relationship between the claimalleged in the complaint and that in the counterclaim, that is,

where conducting separate trials of the respective claims of the

parties would entail a substantial duplication of effort and time,

as where they involve many of the same factual and/or legal

issues.

The phrase "logical relationship" is given meaning by the purpose

of the rule which it was designed to implement. Thus, a

counterclaim is logically related to the opposing party's claim

where, as already stated, separate trials of each of their

respective claims would involve a substantial duplication of effort

and time by the parties and the courts. Where multiple claims

involve many of the same factual issues, or where they areoffshoots of the same basic controversy between the parties,

fairness and considerations of convenience and of economy

require that the counterclaimant be permitted to maintain his

cause of action.11

In the aforesaid Civil Case No. 88-1480, all the requisites of a

compulsory counterclaim are present. The counterclaims, as this

term is now broadly defined, are logically related to the

complaint. Private respondent's complaint was for rescission of

the contract of lease due to petitioner Lydia Meliton's breach of

her obligations under the said contract. On the other hand,

petitioner's counterclaims were for damages for unlawful

demolition of the improvements she introduced pursuant to her

leasehold occupancy of the premises, as well as for the filing of

that civil suit which is contended to be clearly unfounded.

Both the claims therein of petitioners and private respondent

arose from the same contract of lease. The rights and obligations

of the parties, as well as their potential liability for damages,

emanated from the same contractual relation. Petitioners' right

to claim damages for the unlawful demolition of the

improvements they introduced on the land was based on their

right of possession under the contract of lease which is precisely

the very same contract sought to be rescinded by private

respondent in her complaint. The two actions are but the

consequences of the reciprocal obligations imposed by law upon

and assumed by the parties under their aforesaid lease contract.

That contract of lease pleaded by private respondent constitutes

the foundation and basis relied on by both parties for recovery of

their respective claims.

The relationship between petitioners' counterclaims and private

respondent's complaint is substantially the same as that which

exists between a complaint for recovery of land by the owner

and the claim for improvements introduced therein by the

possessor. As we have ruled, in actions for ejectment or for

recovery of possession of real property, it is well settled that the

defendant's claims for the value of the improvements on the

property or necessary expenses for its preservation are required

to be interposed in the same action as compulsory couterclaims.In such cases, it is the refusal of the defendant to vacate or

surrender possession of the premises that serves as the vital link

in the chain of facts and events, and which constitutes the

transaction upon which the plaintiff bases his cause of action. It is

likewise an "important part of the transaction constituting the

subject matter of the counterclaim" of defendant for the value of

the improvements or the necessary expenses incurred for the

preservation of the property. They are offshoots of the same

basic controversy between the parties, that is, the right of either

to the possession of the property.12

On the foregoing considerations, respondent Court of Appeals

correctly held that the counterclaims of petitioners arecompulsory in nature.

2. Petitioners having alleged compulsory counterclaims, the next

point of inquiry is whether or not petitioners are already barred

from asserting said claims in a separate suit, the same having

been dismissed in the preceding one. The answer is in the

negative.

It is indeed the rule, embodied in Section 4, Rule 9 of the Rules of

Court, that a counterclaim not set up shall be barred if it arises

out of or is necessarily connected with the transaction or

occurrence that is the subject matter of the opposing party's

claim and does not require for its adjudication the presence ofthird parties of whom the court cannot acquire jurisdiction.

However, said rule is not applicable to the case at bar.

Contrary to the claim of private respondent, it cannot be said

that therein petitioners failed to duly interpose their causes of

action as counterclaims in the previous action. Petitioners' claims

were duly set up as counterclaims in the prior case but the same

were dismissed by reason of non-payment of docket fees. The

ruling of respondent Court of Appeals to the effect that the

failure of petitioners to appeal or to move for reconsideration of

the said order of dismissal bars them from asserting their claims

in another action cannot be upheld.

Firstly, where a compulsory counterclaim is made the subject of a

separate suit, it may be abated upon a plea ofauter action

pendantor litis pendentiaand/or dismissed on the ground of res

judicata,13

depending on the stage or status of the other suit.

Both defenses are unavailing to private respondent. The present

action cannot be dismissed either on the ground of litis

pendentia since there is no other pending action between the

same parties and for the same cause, nor on the ground of res

judicata.

In order that a prior judgment will constitute a bar to a

subsequent case, the following requisites must concur: (1) thejudgment must be final; (2) the judgment must have been

rendered by a court having jurisdiction over the subject matter

and the parties; (3) the judgment must be on the merits; and (4)

there must be between the first and second actions, identity of

parties, of subject matter, and of causes of action.14

The first case, Civil Case No. RTC 88-1480, was dismissed upon

motion of private respondent, plaintiff therein, under Section 2

of Rule 17. Dismissal thereunder is without prejudice, except

when otherwise stated in the motion to dismiss or when stated

to be with prejudice in the order of the court.15

The order of

dismissal of the first case was unqualified, hence without

prejudice and, therefore, does not have the effect of anadjudication on the merits. On a parity of rationale, the same rule

should apply to a counterclaim duly interposed therein and which

is likewise dismissed but not on the me

Documents

Rule 9 (Outline, Case Digest & Fulltext)