G.R. No. L-46394. October 26, 1977
FABAR, INCORPORATED, PLAINTIFF-APPELLEE, VS. RUPERTO RODELAS, DEFENDANT-APPELLANT.
GUERRERO, J.:
This case was certified to Us by the Court of Appeals[1],
pursuant to Sec. 17, in relation to Sec. 31 of the Judiciary Act on purely
questions of law arising from the decision rendered by the Court of First
Instance of Manila, Branch XV on July 6, 1971, granting the plaintiff-appellee
a favorable judgment for the collection of a sum of money.
The facts are as follows:
On March 21, 1966,
Fabar, Incorporated filed a complaint against Ruperto Rodelas and Apolonio
Elevado for collection of a sum of money, docketed as Civil Case No. 64789 in
Branch XV, Court of First Instance of Manila.
The complaint avers that Ruperto Rodelas and Apolonio Elevado purchased
from Fabar, Incorporated three (3) brand new motor vehicles (Austin
1100 De Luxe Saloons) for the total price of P34,945.95. Defendants made a down payment of P6,000.00
and executed a promissory note in favor of Fabar, Inc. undertaking to pay
jointly and severally the balance of P28,945.95 payable in weekly installments
of P360.45. After the 17th installment,
defendants stopped paying and defaulted in the payment of all installments
falling due thereafter. After repeated
and unsuccessful demands, plaintiff Fabar, Inc. filed the complaint,
particularly invoking the acceleration clause in the terms of the promissory
note, for collection of the entire unpaid balance, plus interest, liquidated
damages, and attorney’s fees.
Defendants filed their answer on June 14, 1966 alleging that the true buyer of the motor
vehicles was one Robert Yap; that they merely signed the promissory note as
accommodation parties for Yap; and that subsequently, Yap
was substituted as the principal debtor to the plaintiff with the consent of
the latter. On June 19, 1966, the court issued a pre-trial order
pursuant to Section 1, Rule 20 of the Rules of Court, setting a pre-trial
conference on September 2, 1966
to be followed by trial on the merits if the parties fail to settle
amicably. Copy of the order was received
by defendants on July 21, 1966.
On August 29, 1966,
plaintiff, pursuant to the aforesaid order, filed its pre-trial brief while on August 30, 1966, defendants filed a
manifestation and motion praying that they be excused from compliance with the
order on the ground that the documentary evidence they expect to submit
consists of receipts which are in the possession of plaintiff. This manifestation and motion was denied on August 31, 1966.
Thereafter, the pre-trial conference was re-set on October 12, 1966. However, on that day, the pre-trial
conference was suspended in an order dated October 12, 1966 in view of the manifestation by counsel
for defendants that he will file a third-party complaint. With leave of court, the third-party
complaint was filed on October 24,
1966 and admitted by the court on November 3, 1966.
In the third-party complaint filed by Rodelas on October 24, 1966, Robert Yap was sued as
third-party defendant and Rodelas prayed that the latter be declared liable to
plaintiff for any judgment that might be rendered in its favor, or in the event
that defendants be held jointly liable with third-party defendant, the latter
be ordered to indemnify the former. The
court issued instruction that a copy thereof and summons be served on the
third-party defendant.
In a motion dated January
5, 1968, which was granted on January 16, 1968, counsel for defendants withdrew his
appearance for Apolonio Elevado because the latter’s interest conflicted with
that of Ruperto Rodelas whom counsel principally represents. Apolonio Elevado was ordered to engage
immediately the services of a new counsel.
With leave of court, counsel for defendants filed an amended answer
which reiterated substantially the previous answer but now serving only the
benefits of defendant Rodelas, which amended answer was admitted by the court
in the order of July 25, 1969.
On July 29, 1969,
another pre-trial order was issued setting the pre-trial conference on September 22, 1969. Defendant Rodelas failed to file his
pre-trial brief nor did he and his counsel appear at the scheduled pre-trial
conference on September 22, 1969,
for which reason, defendant was, on the same day, declared in default. On May
24, 1971, the court also declared Apolonio Elevado in default and
plaintiff was then authorized in the same order to present its evidence ex-parte
before the branch clerk of court commissioned to receive the same.
For failure of defendant to file pre-trial brief and to appear
together with his attorney at the pre-trial conference, and on the basis of the
pleadings and ex-parte evidence presented by plaintiff, the lower court
rendered judgment on July 6, 1971,
the dispositive portion of which reads:
“WHEREFORE, judgment
is hereby rendered in favor of plaintiff and against defendants, ordering the
latter to pay the former, jointly and severally:
1. the sum of P51,913.11 covering the outstanding
principal balance, the agreed interest at 12% per annum from. May
29, 1965 to May 28, 1971
and the liquidated damages equivalent to 33-1/3% of the total amount due;
2. the agreed interest on the outstanding
principal balance at the rate of 12% per annum from May 29, 1971 until the
obligation is finally paid; and
3. the costs.
SO ORDERED.”
On August 14, 1971,
defendant Rodelas moved to set aside the decision, alleging as ground thereof
the absence of notice to him of the pre-trial set for September 22, 1969 and the fact that his
co-defendant Elevado had not yet secured the services of counsel. This motion is hereunder quoted as follows:
“MOTION TO SET ASIDE DECISION
COMES NOW defendant Ruperto M. Rodelas and to this Honorable Court,
respectfully moves to set aside the decision in the above-entitled case dated July 6, 1971, copy of which was
received on July 16, 1971. In support of the motion, herein
defendant-movant alleges:
1. That upon verification of
the record of this case, movant has discovered that:
a. On February
21, 1968, the Court has issued an Order (pls. see p. 80, Record)
postponing the pre-trial of this case until further assignment;
b. On July
29, 1969, an Order was issued admitting the amended Answer filed by
the movant (p. 81, Rec.);
c. That on July 29, 1969, a notice of pre-trial for September 18, 1960 and directing the
parties to submit their pre-trial brief;
d. On September
18, 1969, the plaintiff filed their pre-trial brief;
e. On September 22, 1969, the Court issued an
Order declaring defendant-movant in default for his failure to appear or his
counsel and forthwith,it authorized the plaintiff to present evidence
ex-parte; and
f. Finally, on July 6, 1971 the Court rendered the decision subject of
this motion, copy of which was received by movant through counsel on July 16, 1971.
2. That not any one of the aforementioned Orders
of the Court, except the decision, was received by defendant-movant personally
or through his undersigned counsel;
3. That defendant-movant has not also received a
copy of the pre-trial brief filed by the plaintiff on September 18, 1969;
4. That in any case, defendant-movant had always
been under the honest impression that no further proceedings as yet could be
taken in this case because defendant Apolonio Elevado had not yet secured the
services of a separate counsel in conformity with the Order of this Court dated
January 16, 1968;
5. That too, defendant-movant had personal
knowledge that the Hon. Judge Felix Domingo had been taken ill for a
considerable time so that he had always been under the honest belief that no
new proceedings had transpired in the meantime, or at least a new judge had
been assigned in the absence of Judge Domingo;
6. That defendant-movant has valid and
meritorious defenses in the complaint and principal’of which defenses is that
movant had been substituted by another person by the name of Robert Yap as
debtor in the promissory note (Annex “A”, Complaint) with the consent
of the plaintiff and the consent being manifested in its acceptance of payments
on the note by said Robert Yap.
Moreover, there is jurisprudence to the effect that a co-maker in the
promissory note who had not actually benefited from the proceeds thereof could
not be held liable therefor, the result of which is as in this case, the
plaintiff would not have any cause and/or right of action against the
defendant-movant;
7. That lastly, since it is held that Notice to
both the party and his attorney at the pre-trial is mandatory, the Order: of default on September 22, 1969 is null and
void. (cf. International Harvester vs.
Ban Ling, 25 SCRA, 612-616; American Ins. Co. vs. MPS 22 SCRA, 482-484 and Home
Ins. Co. vs. U.S. Lines, 21 SCRA, 863-866
P
R A Y E R
WHEREFORE, it is respectfully prayed that the Decision of this
Court dated July 6; 1971 in the above-entitled case be set aside; that the case
be reopened and that the defendant-movant be allowed, at least, to
cross-examine the witnesses for the plaintiff and to adduce evidence in support
of his defenses.
Manila, Philippines, August 14, 1971.
RECON, SANTAROMANA
& ASSOCIATES
Suite 201 Del Mundo
Building
2121 Taft Avenue,
Manila D-406
By:
DENNIS B. RECON
Counsel for Ruperto
Rodelas
REPUBLIC OF THE PHILIPPINES)
CITY OF MANILA ) S.S.
RUPERTO M. RODELAS, after being duly sworn deposes and states:
1. That he is the
defendant-movant in the above-entitled case;
2. That he has read the
foregoing motion to set aside decision; and
3. That the allegations
therein are true and correct of his own personal knowledge.
RUPERTO M. RODELAS
Defendant-Affiant
SUBSCRIBED AND SWORN to before me this 14th day of August, 1971, in
the City of Manila, Philippines, affiant exhibited to me his Res. Cert. No.
A-4830731, issued on Jan. 8, 1971 at Lipa City.
DENNIS B. RECON
Notary Public
Until Dec. 31,
1972; PTR No. 3390029
Issued on Jan. 8,
1971 at Manila
Doc. No. 41
Page No. 10
Book No. II
Series of 1971″
Opposition was filed by plaintiff
contending that defendant Rodelas was duly notified through counsel. The motion to set aside the decision was
denied in the order dated October 30, 1971 stating that copy of the order of
July 29, 1969 was received by defendant’s counsel as shown by the registry
return receipt.
Only defendant Rodelas appealed the foregoing decision to the
Court of Appeals. After the recital of
facts, the Tenth Division of the Court of Appeals, in its resolution of May 23,
1977, certified this case to Us, pursuant to Section 17 of the Judiciary Act,
as amended, since the matters involve purely questions of law.
The sufficiency of appellant Rodelas’ motion to set aside the
decision is the principal question of law raised for Our resolution. This in turn depends on whether the
requirements of Rule 38, Sections 2 and 3 of the New Rules of Court have been
complied with or not. This Rule
provides:
“Sec. 2. Petition to
Court of First Instance for relief from judgment or other proceeding thereof.-
When a judgment or order is entered, or any other proceeding is taken against a
party in a Court of First Instance through fraud, accident, mistake, or
excusable negligence, he may file a petition in such court and in the same
cause praying that the judgment, order or proceeding be set aside.
Sec. 3. Time for filing
petition; contents and verification.- A petition provided for in either of the
preceding sections of this rule must be verified, filed within sixty (60) days
after the petitioner learns of the judgment, order, or other proceedings to be
set aside, and not more than six (6)
months after such judgment or order was entered, or such proceeding was taken;
and must be 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.”
We have carefully and closely, examined the motion to set aside
the decision and We find that, indeed, it is verified by the movant and no
separate affidavit of merits is attached thereto. Although the Rule cited above requires,
besides the motion to be verified, an accompanying affidavit of merits 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, it has been held by the Supreme Court that a petition for
relief without a separate affidavit of merits is sufficient where facts
constituting petitioner’s substantial cause of action or defense as the case
may be, are alleged for the oath elevates the petition to the same category as
a separate affidavit. (Consul vs.
Consul, G. R. No. L-22713, July
26, 1966). We may grant the mistake of
the movant in his honest impression that no further proceedings as yet could be
taken in this case because defendant Apolonio Elevado had not secured the
services of a separate counsel and that movant had personal knowledge that the
presiding judge had been taken ill for a considerable time so that he had the
honest belief that no new proceedings had transpired in the meantime. Nonetheless, Our main inquiry must be
directed into the petitioner’s alleged good and substantial defense which is
“that movant had been substituted by another person by the name of Robert
Yap as debtor in the promissory note with the consent of the plaintiff and the
consent being manifested in its acceptance of payment on the note by said
Robert Yap.”
We hold these
allegations as mere conclusions, opinions, or beliefs of the movant
himself. The motion does not state facts
or circumstances, not a document, writing or note whatsoever showing such
substitution, much less the acceptance of it by the plaintiff. By the movant’s palpable failure to state
said facts or circumstances whether documentary or otherwise, the motion
becomes utterly inadequate and insufficient to constitute by itself or to be
considered in lieu of an affidavit of merits.
It cannot be elevated to the
category as a separate affidavit. We,
therefore, find that movant has not complied with the requirements of Rule 38, Sec. 3 and consequently, the motion must fall. It would serve no useful and beneficial
purpose to set aside the decision when .the purported defense is after all not
meritorious, good and substantial.
This Court, in Correos vs. Valenzuela, G. R. No. L-24099, July
20, 1968, 24 SCRA 80, pp. 82-83, said: “We have held consistently in this
connection that it is not enough to allege in a motion of that kind that the
movant has a good and meritorious defense, because that is a mere conclusion
and an expression of his own opinion as to the merit of his case. The rules require such motion to be supported
by affidavits not only proving the ground relied upon but likewise the merits
of movant’s case, which means that it is the latter’s duty to submit to the
court for consideration, in the form of depositions or sworn statements, his
testimony and that of his witnesses, so that the court may be in a position to
decide whether the re-opening of the case would be for a useful purpose or
would be a mer empty and useless gesture.”
Moreover, appellant’s claim of a valid and good defense of
novation in that he had been substituted by another person by the name of
Robert Yap as debtor in the promissory note with the consent of the appellee
does not appear to be true and meritorious in the light of the apparent neglect
and omission of the appellant in prosecuting the third party complaint
purposely filed by him to prove and enforce said defense.
The record shows that appellant filed the third party complaint
on Oct. 24, 1966, and the court, on Nov. 3, 1966 directed that copy thereof and
summons be served on Robert Yap. But
there is no proof of compliance with this order of the court. Neither is there any showing that appellant
himself caused service of the summons by paying the necessary fees, or moved
to have Robert Yap declared in default if the latter was in fact summoned but
failed to answer, and if an answer was filed, then to prosecute the case in
earnest and with dispatch. After filing
the third party complaint, appellant made no move whatsoever, filed no pleading
or motion of any kind. Hence, the truth,
merit and validity of appellant’s claim of novation is open to serious doubt
and suspicion that the filing of the third party complaint was a mere strategem
to delay justice. The right of the
appellee to the payment of the
vehicles purchased by the appellant may not be thwarted or denied by the mere
filing of the third party complaint that appellant had completely abandoned and
conveniently forgotten.
The appellant contends that the absence of notice of pre-trial to
him deprived the lower court of the right to conduct the pre-trial, much less
declare him in default and that the failure of his counsel to attend said
pre-trial although notified thereof did not render nugatory his right to the
notice of the pre-trial. The record
shows, however, that the pre-trial called by the court in its order of July 29,
1969 setting the hearing on Sept. 22, 1969, which appellant strongly assails,
was the third pre-trial setting of the case.
The first was called for Sept. 2, 1966, of which appellant was duly
notified on July 21, 1966. The parties
were required to submit their respective pre trial briefs and while the
plaintiff (appellee herein) submitted its brief, defendant (appellant herein)
failed to do so. Then, on Oct. 12, 1966,
appellant avoided the pretrial hearing by-announcing his intention to file a
third party complaint and although he did file the complaint, he conveniently
abandoned and neglected to prosecute it.
After four years and 10 months that
appellant failed to prosecute the third party complaint he filed to avoid the
pre-trial hearings of the case, and after one year and 10 months since the
order of default was entered against him, appellant may not now be heard to
raise objection s to said order.
IN VIEW OF THE FOREGOING, We hereby affirm the decision
appealed from, without costs.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Muñoz Palma, Martin, and Fernandez, JJ., concur.
[1]
Tenth Division, penned by Justice Ameurf Melencio Herrera, and concurred by
Justice Ericta and Gopengco.