NATIONAL POWER CORPORATION AND NATIONAL POWER BOARD, PETITIONERS, V. HON. RALPH LEE, IN HIS CAPACITY AS PRESIDING JUDGE OF BRANCH 83, REGIONAL TRIAL COURT, NATIONAL CAPITAL JUDI…

National Power Corporation versus Lee

The Case

This is a special civil action in which the National Power Corporation and the National Power Board ask the Supreme Court to annul the orders and the default judgment of a Regional Trial Court in a case for retirement gratuity benefits brought by hundreds of retired employees. The retirees, led by Emma Baysic and Narcisa Santiago, moved to strike out the petition on the ground that certiorari was the wrong remedy. The case matters because it is a clean teaching vehicle on the hierarchy of remedies: when a defending party is declared in default and judgment is rendered against it, the proper remedy is an ordinary appeal, not a petition for certiorari under Rule 65.

Procedural History

In the Regional Trial Court, Branch 83, the retirees sued the National Power Corporation and its Board for retirement gratuity benefits. The trial court, through Presiding Judge Ralph Lee, issued an order granting the retirees' motion to strike out the petitioners' answer, then denied reconsideration, then declared the petitioners in default, and then denied their omnibus motion to lift the order of default and admit their answer.

The petitioners first filed an original petition for certiorari and prohibition before the Supreme Court to question those four orders. While that petition was pending, the trial court rendered a decision dated the sixteenth of August, 2010, a default judgment based solely on the evidence presented by the retirees. The petitioners then filed an amended petition to include that decision among the assailed issuances. The amended petition superseded the original petition, which was deemed withdrawn from the records.

The retirees filed a motion to strike out the amended petition, arguing that the petitioners failed to allege the absence of appeal or any plain, speedy, and adequate remedy in the ordinary course of law, and that they did not file a motion for reconsideration of the decision. The Supreme Court resolved that motion in this decision.

Facts

The retirees, four hundred eighty-eight of them, claimed retirement gratuity benefits under Commonwealth Act Number 186, as amended, over and above the separation pay granted by the National Power Corporation under National Power Board Resolution Number 98-130. The petitioners resisted, contending that the gratuity had already been validly deducted from the separation pay, and that paying both would amount to double compensation prohibited by Section 8, Article IX-B of the 1987 Constitution.

In the trial court, the petitioners' answer was struck out upon the retirees' motion. The trial court denied reconsideration, declared the petitioners in default, and later denied their omnibus motion to lift the default and admit their answer.

Because of the default, the trial court rendered judgment based solely on the retirees' evidence. The petitioners then amended their pending certiorari petition to include that default judgment, insisting that the judgment was null and void for violating the Constitution, the law, and existing jurisprudence, and that the award was excessive.

Issues

• Whether or not a petition for certiorari under Rule 65 is the proper remedy to assail a judgment by default rendered by the trial court.
• Whether or not the petitioners were required to file a motion for reconsideration of the default judgment before resorting to certiorari.

Applicable Provisions

Rule 65 of the Revised Rules of Civil Procedure, as invoked by the retirees, requires that there be no appeal or any plain, speedy, and adequate remedy in the ordinary course of law:

Section 1. Petition for certiorari. When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

This provision bears on the case because the availability of an ordinary appeal forecloses certiorari.

Rule 41 of the Rules of Court governs appeals from judgments and final orders of the Regional Trial Court, and it is the remedy the Court holds the petitioners should have used:

Section 1. Subject of appeal. An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.

This provision bears on the case because the default judgment was a final order disposing of the case, and therefore appealable.

Ruling

On the first issue, the Court held that certiorari was not the proper remedy. A defending party declared in default retains the right to appeal from the judgment by default, although the grounds are restricted to the failure of the plaintiff to prove the material allegations of the complaint, the decision being contrary to law, and the amount of judgment being excessive or different in kind from that prayed for. The Court quoted its own ruling:

Indeed, a defending party declared in default retains the right to appeal from the judgment by default. However, the grounds that may be raised in such an appeal are restricted to any of the following: first, the failure of the plaintiff to prove the material allegations of the complaint; second, the decision is contrary to law; and third, the amount of judgment is excessive or different in kind from that prayed for.

Since the petitioners themselves argued that the judgment was contrary to law and that the award was excessive, those very grounds were available on appeal. The Court also stressed that certiorari lies only in the absence of appeal:

A petition for certiorari under Rule 65 of the Rules of Court is a special civil action that may be resorted to only in the absence of appeal or any plain, speedy and adequate remedy in the ordinary course of law.

On the second issue, the Court held that the amended petition was premature because the petitioners did not file a motion for reconsideration of the decision dated the sixteenth of August, 2010, before filing it.

Doctrine

A defending party declared in default does not lose the right to appeal the judgment by default. The grounds on appeal, however, are limited to three: the plaintiff failed to prove the material allegations of the complaint; the decision is contrary to law; and the amount of judgment is excessive or different in kind from that prayed for. Certiorari under Rule 65 is a special civil action available only when there is no appeal, nor any plain, speedy, and adequate remedy in the ordinary course of law. The existence and availability of the right of appeal prohibits resort to certiorari, even where the error ascribed is lack of jurisdiction or grave abuse of discretion.

Disposition

The Court granted the retirees' motion to strike out the petition and dismissed the amended petition for certiorari and prohibition.

Remember This

Memorize this line: a party declared in default may still appeal, but only on the three restricted grounds, and certiorari is barred while appeal is available. Examiners use this case to test the hierarchy of remedies and the requisites of Rule 65.