NICOLAS LEYTE AND MARCELO LEYTE, DEFENDANTS-PETITIONERS, VS. HON. VICENTE N. CUSI, JR., JUDGE, FIRST BRANCH, COURT OF FIRST INSTANCE OF DAVAO, 16TH JUDICIAL DISTRICT, RESPONDENT…

The petitioners were sued for recovery of possession of a piece
of land and were declared in default for failure to answer the complaint.^[1]
The case was heard ex parte on February 10, 1970,
and on February 23, 1970, judgment was rendered in favor of the plaintiff, the
private respondent here.^[2]
When they learned of the decision on March 21, 1970, the petitioners filed a
motion for new trial on April 2, 1970,^[3]
but this was denied by the respondent judge, who held it was not the proper
remedy.^[4]
The petitioners then asked for time to file a motion to lift the order of
default but this request was denied, as so was their oral motion for
reconsideration of the denial of the motion and the latter request.^[5]
They then came to us on certiorari claiming, among other grounds, grave
abuse of discretion on the part of the respondent judge.^[6]
Pending consideration of the merits of the case, we issued a writ of
preliminary injunction against the enforcement of the judgment of default upon
the posting by the petitioners of a surety bond in the amount of P1,000.00.^[7]

We find for the petitioners.  The respondent judge erred in dismissing the
motion for new trial as an im­proper remedy. 
It was in fact permitted by Rule 37 of the Rules of Court on the ground,
among others, of fraud, acci­dent, mistake or excusable negligence.  A motion to set aside the order of default
under Rule 18, Section 3, of the Rules of Court was no longer available to the
petitioners because it should have been filed before the judgment by
default.  As the judgment had already
been rendered when the petitioners discovered that they had been declared in
default, but before the said judgment had become final and executory, a motion for new trial under
Section 1(a) of Rule 37 was clearly the appropriate remedy.^[8]

Examination of the motion for new trial shows that it complied
with the requisites of Rule 37.  The
motion is verified and contains allegations of the claimed grounds, viz.,
mistake and excusable negligence.  It is
supported by affidavits of merit to show that the peti­tioners have a good and
valid defense against the com­plaint. 
Moreover, the records show that it was filed on time, on April 2, 1970,
or 12 days after the peti­tioners learned of the judgment by default on March
21, 1970.  It should, therefore, not have
been summarily dismissed but instead admitted and considered by the respondent
court.

This Court has repeatedly admonished against precipi­tate orders
of default as these have the effect of denying the litigant the chance to be
heard.  While there are instances, to be
sure, when a party may be properly de­faulted, these should be the exception
rather than the rule and should be allowed only in clear cases of an obstinate
refusal or inordinate neglect to comply with the orders of the court.  Absent such a showing, the party must be given every reasonable
opportunity to present his side and to refute the evidence of the adverse party
in deference to due process of law.

“x x x.  We maintain fealty to the prin­ciple
that courts should be liberal in setting aside orders of default for default
judgment is frowned upon, and unless it clearly appears that the reopening of
the case is intended for delay, it is best that the trial courts give both
parties every chance to fight their case fairly and in the open, without resort
to technicality.”^[9]

“Time and again the Court has enjoined trial judges to act
with circumspection and not to precipitately declare parties in default, needlessly
compelling the aggrieved party to
undergo the additional expense, anxiety and delay of seeking the intervention
of the appellate courts and depriving them of the much needed time and
attention that could instead have well been devoted to the study and
disposition of more complex cases and issues.”^[10]

While it is desirable
that the Rules of Court be faith­fully and even meticulously observed, courts
should not be so strict about procedural lapses like this that do not really
impair the proper administration of justice. 
If the Rules of Court are intended to ensure the orderly conduct of
litigation, it is because of the higher objective they seek, which is the
protection of the substantive rights of the parties.

WHEREFORE, the petition is GRANTED.  The order of the respondent judge dismissing
the motion for new trial is SET ASIDE and he is DIRECTED to resolve the said
motion after proper hearing.  The
writ of preliminary injunction dated June 15, 1970, is made permanent.  No costs.

SO ORDERED.

Teehankee, C.J., Narvasa, Paras,
and Gancayco, JJ., concur.

^[1]
Rollo, pp. 9-13.

^[2]
Ibid., pp. 15-18.

^[3]
Id., pp. 19-23.

^[4]
id., p. 8.

^[5]
id., p. 4.

^[6]
id., pp. 1-7.

^[7]
id., pp. 58-59.

^[8]
id., p. 74.

^[9]
Pineda vs. Court of Appeals, 67
SCRA 229, cited in zenith Insurance Corp. vs. Purisima, 114 SCRA 62.

^[10]
Akut vs. Court of Appeals, 116
SCRA 213 citing Lope Gerian, et al. vs. Hon. Boncares, et al.