PEOPLE’S SURETY & INSURANCE CO., PETITIONER AND APPELLANT, VS. PAZ PUEY VDA. DE LIMCACO, HON. FERNANDO C. VILLAROSA, AS JUDGE OF MUNICIPAL COURT OF PASAY CITY, AND THE SHERIFF O…

This is an appeal from an order of the Court of First Instance of
Rizal, denying the petition for a writ of certiorari filed by the
People’s Surety & Insurance Company, Inc., hereafter referred to as
the Company, for the purpose of nullifying certain orders issued and a
decision rendered in Civil Case No. 1362 of the Municipal Court of the
City of Pasay, entitled “Paz Puey Vda. de Limcaco, plaintiff, vs. People’s Surety and Insurance Company, Inc., defendant.”

Said case No. 1362 was instituted by Mrs. Limcaco, on December 9,
1954, for the recovery of a sum of money. Although duly summoned, the
company did not answer or appear before said Municipal Court on
December 21, 1954, the date set for hearing of the case. Inasmuch as
the sheriff’s return of the service of summons had not, as yet, been
attached to the record, the hearing was postponed to December 24, 1954.
On this date, the Company again failed to appear, it having been given
no notice of said postponement. The Company was then declared in
default, on motion of Mrs. Limcaco, and the latter presented her
evidence. However, judgment was rendered, on January 8, 1955,
dismissing the complaint for lack of evidence to sustain the
avernments” thereof. On motion of Mrs. Limcaco, the court granted ex parte,
on January 21, 1955, a new trial, which was held on February 6, 1955,
without notice to the Company. Upon consideration of the evidence then
introduced by Mrs. Limcaco, the court rendered, on February 11, 1955,
another decision reversing its former decision dated January 8, 1955,
and sentencing the Company to pay the sum claimed in the complaint.
Copy of this second decision was not served upon the Company.

On August 18, 1955—or soon after the lapse of the period of six (6)
months within which relief may be sought under Rule 38 of the Rules of
Court—Mrs. Limcaco filed a motion, for the issuance of a writ of
execution, which motion was granted forthwith. Upon receipt of copy of
said writ from the Sheriff of Manila, or on August 29, 1955, the
Company moved to set aside and for a reconsideration of the decision of
February 11, 1955, upon the ground of nullity of all the proceedings
leading thereto, for lack of the requisite notice. This motion was
denied on September 28, 1955, whereupon, or on October 8, 1955, the
Company instituted the case at bar, in the Court of First Instance of
Rizal, against Mrs. Limcaco, the Municipal Judge of the City of Pasay
and the Sheriff of Manila, for the annulment, by a writ of certiorari,
of the aforementioned orders of December 24, 1954, January 21 and
August 18, 1955, and of the decision of February 11, 1955, in said case
No. 1362, The Company prayed, also, in its complaint, for a writ of
preliminary injunction. Mean- while, said Sheriff of Manila had
garnished a deposit of the Company with the People’s Bank and Trust
Company. After the filing of the answer of respondents herein, or on
October 29, 1955, the Court of First Instance of Rizal issued, on
motion of the Company, a writ of preliminary injunction, restraining
said Sheriff from proceeding with the execution of the aforementioned
decision, except with respect to the amount already garnished, as above
stated. Upon submission of the case for decision, the Court of First
Instance of Rizal issued the appealed order, dated January 19, 1957,
denying the petition for certiorari, “for lack of merits”. Hence, this
appeal.

Respondents seek to justify the above-mentioned absence of notice to
the Company, upon the ground that, having been declared in default, it
was not entitled to said notice. The Company maintains, however, that
the order of December 24, 1954, declaring the same in default is null
and void, it having been given no notice of the hearing to be held on
that date. Upon the other hand, respondents contend, in effect, that
the Company was already in default prior thereto, and was,
consequently, not entitled to any notice, it having been in default
since it failed to answer the complaint and appear in court on December
21, 1954. Section 13 of Rule 4 of the Rules of Court provides that:

“If the defendant does not appear at the time and place designated in the summons, he may be declared in default,
and the court shall thereupon proceed to hear the testimony of the
plaintiff and his witnesses, and shall render judgment for the
plaintiff in accordance with the facts alleged and proved.” (Italics
ours.)

This provision merely authorizes the court to declare the
defendant in default for failure to appear at the time and place
designated in the summons. Unlike section 6 of Rule 35 of the Rules of
Court (regulating the procedure in courts of first instance), which
provides that “if the defendant fails to answer within the time
specified in these rules, the court shall, upon motion of the
plaintiff, order judgment against the defendant by default,” it does
not make such declaration of default mandatory upon the inferior court,
which, may, therefore, refrain from making it, if, in its sound
judgment, the interest of justice will best be served thereby, in the
light of the attending circumstances.

In the case at bar, the Company had not been declared in default
prior to December 24, 1954, and, hence, was entitled to notice of the
hearing scheduled on that date. Consequently, the hearing then held and
the order then issued, declaring it in default, for non-appearance at
such hearing, were null and void, and so were the subsequent
proceedings held without such notice, predicated upon said invalid
declaration of default.

Moreover, the complaint of Mrs. Limcaco was dismissed by respondent
Judge in his decision of January 8, 1955, upon the ground of
insufficiency of the evidence presented by her on December 24, 1954.
However, a new trial was granted ex parte, on motion of, Mrs.
Limcaco, and the Company was not notified, either of the date of the
new trial, or of the decision rendered on February 11, 1955, reversing
that of January 8, 1955, and sentencing the Company to pay the amount
claimed by Mrs. Limcaco. Consequently, the Company had no knowledge of
this second decision or of the proceedings leading to its promulgation,
until sometime late in August, 1955, when it received copy of the writ
of execution, issued on August 18, 1955, upon ex parte
petition of Mrs. Limcaco, filed on the same date, shortly after the
expiration of the period of six (6) months within which the relief
provided in Rule 38 of the Rules of Court could have been availed of.
It is thus clear, that petitioner herein has been denied due process of
law, and that, accordingly, the order of December 24, 1954, declaring
him in default, as well as the decision, rendered on February 11, 1955,
and the writ of execution, issued on August 18, 1955, are null and void.

Wherefore, the writ prayed for is hereby granted, with costs against respondent, Mrs. Limcaco. It is so ordered.

Paras, C. J., Bengzon, Montemayor, Bautista Angelo, Labrador, Reyes, .J. B. L., Barrera, and Gutierrez David, JJ., concur.
Padilla and Endencia, JJ., on leave.