POLICARPO MENDEZ, PLAINTIFF AND APPELLEE, VS. SENG KIAM AND SE NGA, DEFENDANTS AND APPELLANTS.

On 1 March 1951 the plaintiff brought an ejectment suit in the Court
of First Instance of Lanao to recover from the defendants the
possession of a parcel of land containing an area of 11 hectares,
situated in Dalipuga, Iligan City, described in the complaint; P10,000,
the value of the coconuts that the plaintiff failed to harvest in the
parcel of land from 1940 to the filing of the complaint; P960, the
value of the coconuts the plaintiff would fail to harvest in the parcel
of land every quarter from the date of the filing of the suit until
possession thereof is restored to him; and P500 for attorney’s fees. He
further prays for costs and other just and equitable relief. On the
same date, 1 March, the plaintiff filed a motion praying for
extraterritorial service of summons by registered mail pursuant to
sections 17 and 18, Rule 7, upon the defendant Seng Kiam, whose known
address was Quemoy, China. On 24 March 1951, the defendant Se Nga filed
a motion praying for the dismissal of the complaint on the ground that
the plaintiff’s cause of action is barred by the statute of limitations
and that the complaint states no cause of action. On 4 April 1951 the
plaintiff filed a motion praying that the defendant Se Nga be adjudged
in default. On 24 April 1951 the Court entered an order summoning the
defendant Seng Kiam to appear before it on 4 September 1951 at 8:30
o’clock in the morning, and to answer the complaint filed against him
by the plaintiff, with a warning that should he fail to do so, the
plaintiff would take judgment against him by default and demand the
relief prayed for in the complaint, and directing that a copy of the
order be published in the Manila Times, a newspaper edited in the City
of Manila, with general circulation in the province of Lanao, once a
week for three consecutive weeks at the expense of the plaintiff, and
that a copy of the order and of the complaint be sent by the Clerk of
Court by ordinary mail addressed to the defendant Seng Kiam at Quemoy,
Republic of China. On 1 September 1951 attorney Francisco A. Obach
filed an answer in behalf of the absent defendant denying the claim of
the plaintiff, averring that on 3 March 1932, for and in consideration
of P1,000, the plaintiff conveyed and sold to the defendant Seng Kiam
the parcel of land described in the complaint, as evidenced by an
instrument acknowledged before Notary Public Francisco A. Obach,
Notarial Document No. 27, page 88, book No. 2, series of 1932, and
whatever right or interest the plaintiff had in the parcel of land was
already barred by the statute of limitations, and praying that the
complaint be dismissed with costs against the plaintiff. On 4 September
1951 the plaintiff filed a motion praying that the absent defendant be
declared in default. The Court set the hearing of the pending motions
of 4 April and 4 September 1951 for 25 September 1951 at 8:30 o’clock
in the morning with notice to the attorneys of the parties. On 25
September 1951 the Court denied the plaintiff’s motions to declare the
two defendants in default, deferred resolution of the defendant Se
Nga’s motion to dismiss and directed the latter to file his answer.

On 1 November 1951 the plaintiff filed a motion praying that
attorney Francisco A. Obach be prohibited from appearing as counsel for
the absent defendant for lack of authority to do so and reiterating
that the two defendants be declared in default. On 6 November 1951
counsel filed an answer to the plaintiff’s motion averring that there
is no reasonable ground to believe that he has no authority to appear
for the absent defendant; that the reasons given by the plaintiff are
mere conjectures and suppositions not supported by affidavits; and that
an attorney appearing for a client is presumed to be authorized to do
so. On the same day, 6 November, the Court entered an order declaring
the defendant Se Nga in default, authorizing the plaintiff to present
his evidence in support of his claim, granting the plaintiff until the
next day to file his motion for reconsideration of the order dated 25
September 1951, and setting the hearing of the said motion for
reconsideration for 9 November 1951 at 8:30 o’clock in the morning. On
7 November 1951 the plaintiff filed his motion for reconsideration of
the order of 25 September 1951 on the ground that Seng Kiam’s answer
was not served upon him or his counsel pursuant to the Rules. On 8
November 1951 the defendant Se Nga filed a motion praying that the
order declaring him in default be set aside on the ground of mistake or
excusable neglect, for neither he nor his attorney had been notified of
any order of the Court on his motion to dismiss filed on 24 March 1951
and neither he nor his attorney had been served with notice to answer
the complaint; and averring that he is just a trustee of his
co-defendant who is the real owner of the parcel of land, his ownership
dating back to 1932 and his possession from that year having been
actual, open, public, peaceful and continuous, and that neither had
judgment been rendered in the case against the defendant Se Nga, nor
had the plaintiff introduced evidence in support of his claim, and for
that reason, no real injury to the plaintiff’s right would result from
the setting aside of the order of default. On 9 November 1951 the
plaintiff filed an opposition thereto. On the same date, 9 November,
the defendants filed an opposition to the plaintiff’s motion for
reconsideration of the order of 25 September 1951, more than 40 days
since then having already elapsed. On 12 December 1951 the Court denied
the plaintiff’s motion for reconsideration of the order of 25 September
1951 which had denied the plaintiff’s motion to declare the defendant
Seng Kiam in default, but directed attorney Francisco A. Obach to
furnish counsel for the plaintiff with a copy of the answer he had
filed in behalf of the defendant Seng Kiam, within five days from
receipt of a copy of the order; denied the plaintiff’s motion to
prohibit attorney Obach from appearing for the defendant Seng Kiam; and
set aside the order adjudging Se Nga in default but ordered the latter
to answer the complaint within five days from receipt of notice
thereof. On 28 December 1951 the defendant Se Nga filed his answer and
a counterclaim of P800 for actual damages and P5,000 for injury to his
business standing and commercial credit.

On 15 January 1952 the plaintiff filed a motion for reconsideration
of the order of 12 December 1951. On 21 October 1952 the defendants
filed an opposition thereto. On 21 January 1953 the Court denied the
plaintiff’s motion for reconsideration.

On 26 March 1953 the plaintiff again filed a motion praying that the
defendant Seng Kiam be declared in default for failure of his counsel
to comply with the order of the Court dated 12 December 1951, directing
him to furnish the plaintiff with a copy of the answer filed by his
counsel. On 27 March 1953 the Court entered an order granting attorney
Obach up to 30 March 1953 to file his written pleading with reference
to the plaintiff’s motion of 26 March 1953 and setting the hearing
thereof for 30 March 1953 at 8:30 o’clock in the morning. On 30 March
1953 the Court entered an order declaring Seng Kiam in default. On 7
August 1953 the plaintiff filed a motion praying that he be allowed to
present his evidence. On 31 August 1953 the plaintiff presented his
evidence.

On 1 September 1953 the Court rendered judgment for the plaintiff
ordering the defendant Seng Kiam to deliver possession of the parcel of
land described in the complaint, to pay the plaintiff the sum of P2,400
annually from the date of the filing of the complaint until possession
of the parcel of land be restored to the plaintiff, and P500 as
attorney’s fees; and the plaintiff to refund to the defendant Seng Kiam
the sum of P600 with legal interest from the date of the filing of the
complaint, which may be deducted from the sums to be paid by the
defendant Seng Kiam, without pronouncement as to costs.

On 3 November 1953 the defendant Seng Kiam filed a motion praying
that the order of 30 March 1953 declaring him in default, and the
judgment rendered on 1 September 1953 be set aside. On 19 November 1953
the plaintiff filed an opposition thereto. On 22 January 1954 the
plaintiff filed a motion praying for execution of the judgment. On 17
February 1954 the defendants filed a motion objecting to the last
mentioned motion, which they sent by registered mail and which the
Court received on 19 February 1954. On 22 February 1954 the plaintiff
filed an answer to the defendants’ objection to his motion for
execution of the judgment. On 14 June 1954 the Court granted the
plaintiff’s motion for execution. On 2 July 1954 the defendants filed a
motion praying for reconsideration of the order granting the
plaintiff’s motion for execution. On 10 July 1954 the plaintiff filed
an opposition to the defendants’ motion for reconsideration. On 12 July
1954 the plaintiff filed a motion praying for the dismissal of the case
against Se Nga on the ground that in his answer filed on 28 December
1951 he admitted that he already had ceased to be the overseer
(encargado) of Seng Kiam since the middle of the year 1951. On 22 July
1954 the defendant Se Nga filed an opposition to the motion to dismiss
the complaint against him. On 17 November 1954 the Court denied the
defendant Seng Kiam’s motion to set aside the judgment of 1 September
1953 and motion for reconsideration of the order granting the
plaintiff’s motion for execution, dismissed the case against Se Nga,
and set the case for hearing of Se Nga’s counterclaim. On 19 November
1954 the defendants filed their notice of appeal to the Supreme Court.

The appellants claim that the trial court committed the following errors:

1. The Court a quo erred in declaring Seng Kiam in default.
2. The Court a quo erred in authorizing plaintiff-appellee to present his evidence and rendering judgment against Seng Kiam.
3. The Court a quo erred in denying the motion for relief from judgment filed by the defendant-appellant.
4. The Court a quo erred in ordering the execution of judgment.
5. The Court a quo erred in dismissing the case against Se Nga.

It appears that on 1 September 1951, attorney Francisco A. Obach
filed an answer in behalf of the appellant Seng Kiam. At the foot of
the last page thereof, he wrote, as follows: “I hereby certify that a
copy of the foregoing answer had been sent to Atty. L. Ll. Badelles, at
Iligan City today Sept. 1, 1951.” On 25 September 1951, resolving the
appellee’s motion’s filed on 4 September 1951 to adjudge the appellant
Seng Kiam in default, the Court denied the motion, ruling that attorney
Francisco A. Obach already had filed on time his answer. Again, on 12
December 1951, acting on the appellee’s motion filed on November 1951
for the reconsideration of the order of 25 September 1951, on the
ground that the appellant Seng Kiam’s answer was not duly served upon
him, the Court held that as in the answer filed by attorney Obach on 1
September 1951 the attorney certified that a copy hereof had been sent
to counsel for the appellee, the answer may be considered as duly
filed. It also directed attorney Obach to furnish counsel for the
appellee with a copy of the answer within five days from receipt of a
copy of the order. On 4 November 1952 counsel for the appellee sent
counsel for the appellant Seng Kiam a letter acknowledging receipt of
the latter’s letter dated 25 October 1952, where a copy of the answer
filed by him on 1 September 1951 was enclosed. The Clerk of Court was
furnished with a copy of this letter, and it now forms part of the
record of the case. When on 21 January 1953 the Court entered an order
denying the appellee’s motion for reconsideration of the order dated 12
December 1951 it made mention of the propriety and fairness of the
admission and allowance of the appellant Seng Kiam’s answer.

The foregoing are sufficient to excuse the appellant Seng Kiam’s
tardiness in complying with the order of the Court to furnish counsel
for the appellee with a copy of his answer. More, the appellant Seng
Kiam filed his answer within the period set by the Court in its
summons, and the appellee already had actual knowledge of the appellant
Seng Kiam’s answer.

In his petition for relief from judgment, accompanied by an
affidavit of merit, filed on 3 November 1953 the appellant Seng Kiam
has set up a valid and meritorious defense, to wit: that the parcel of
land in question has been sold to him by the appellee as evidenced by a
public instrument. The Court should be liberal in setting aside an
order declaring a party in default if it appears by affidavits that he
has a valid and meritorious defense.^[1]

Upon motion of the appellee, on 17 November 1954 the Court
dismissed the complaint against the appellant Se Nga, on the ground
alleged by the appellee that in his answer, he admitted that he already
had ceased to be the overseer (encargado) of his co-appellant. In
paragraph 5 of the complaint the appellee alleges that the appellant Se
Nga “is the one actually in possession of the land,” and in the prayer
he asks that judgment be rendered in his favor and against the
appellants in the manner stated therein. The judgment rendered by the
Court was merely partial and nothing therein was adjudged in favor of
the appellee as against the appellant Se Nga. The dispositive part of
the judgment provides:

WHEREFORE, judgment is hereby rendered in favor of
the plaintiff and against defendant Seng Kiam, ordering the latter to
restitute immediately possession of the land in question to the
plaintiff; to pay the plaintiff the sum of Two Thousand Four Hundred
(P2,400.00) Pesos annually until the land is restituted to him; and to
pay furthermore the plaintiff the sum of Five Hundred (P500.00) Pesos
as attorney’s fees. Plaintiff, however, is hereby ordered to refund to
defendant Seng Kiam the original loan of Six Hundred (P600.00) Pesos
with legal interest from the date of the filing of the complaint until
fully paid, which amount, together with the interest thereon, may be
deducted from the sum to be paid by defendant Seng Kiam to plaintiff
Policarpo Mendez as herein ordered.

Without pronouncement as to costs.

The Court did not dismiss his counterclaim but set it for hearing on 17 November 1954. His appeal, therefore, has no basis.

The order dated 30 March 1953 adjudging the appellant Seng Kiam in
default, the judgment dated 1 September 1953 rendered against him, the
order dated 14 June 1954 granting the appellee’s motion for execution
of the judgment against him, and the order dated 17 November 1954
denying his motion for reconsideration, appealed from, are set aside
and the case remanded to the Court of origin for further proceedings.
The order of 17 November 1954 dismissing the complaint against the
appellant Se Nga, appealed from, is affirmed, with costs against the
appellee.

Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Concepcion, Barrera, and Gutierrez David, JJ., concur.

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^[1] Bañares vs. Flordeliza, 51 Phil., 786.