RUPERTO MERCADER AND SEVERINA MERCADER, PETITIONERS, VS. HON. AQUILINO P. BONTO, JUDGE OF THE COURT OF FIRST INSTANCE OF SORSOGON, BRANCH II, ARSENIO OLIQUINO, BENJAMIN REVILLA …

This is a petition for review on certiorari of the order
of respondent Judge Aquilino P. Bonto
issued on February 25, 1976 in Civil Case No. 1006, declaring herein
petitioners Ruperto Mercader
and Severina Mercader in
default, the order issued on May 24, 1976 denying petitioners’ motion to set
aside the order of default, the order dated July 13, 1976, denying the motion
for reconsideration of the aforesaid May 24, 1976 order, and the order dated
September 29, 1976, denying petitioners’ second motion for reconsideration of
the aforesaid order of May 24, 1976.

The record shows that herein petitioners are defendants in Civil
Case No. 1006 of the Court of First Instance of Sorsogon,
entitled “Arsenio Oliquino,
plaintiff, versus Ruperto Mercader,
Severina Mercader, Benjamin
Revilla and Joaquina Vda. de Palanca,
defendants.”

In a complaint filed on August
20, 1975 before the Court of First Instance of Sorsogon,
plaintiff Arsenio Oliquino
(private respondent herein) instituted an action for interpleader
against defendants Ruperto Mercader
and Severina Mercader
(petitioners herein), Benjamin Revilla and Joaquina Vda. de
Palanca (private respondents herein), in order to
determine the owner to whom he should make payments of the rents of the parcel
of land that he is occupying as a lessee.

The complaint alleges among others, that plaintiff Arsenio Oliquino has been renting
since 1951, a portion of a large parcel of land situated in Gabao,
Irosin, Sorsogon, belonging
to defendant Joaquina Vda. de Palanca, by virtue of a Verbal
lease contract; that he built thereon a house in the same year and has been
paying yearly rentals to defendant Joaquina Vda. de Palanca; that there are
other lessees occupying the other portions of the said parcel of land, who have
likewise been paying yearly rentals; that sometime in 1971, defendants Ruperto Mercader and Severina Mercader asserted
ownership over a parcel of land with an area of 154 square meters covered by
Tax Declaration No. 16696 in the name of Alejandro Mercader;
that this parcel of land is only a portion of the large parcel of land owned by
defendant Joaquina Vda. de Palanca and on which portion plaintiff and another lessee,
Ester Grefaldeo, had built their house; that
plaintiff is being harassed, threatened, and forced by defendants Ruperto Mercader and Severina Mercader to vacate the
lot that he is occupying; that also sometime in 1971, defendant Benjamin Revilla asserted ownership over the entire parcel of land
of defendant Joaquina Vda.
de Palanca, including the portion which plaintiff had
been occupying; that defendant Benjamin Revilla also
resorted to ways and means to oust plaintiff and the other occupants from the
property of defendant Palanca; that there are now
three parties claiming ownership over one and the same property; and that these
parties should be ordered to interplead with each other and litigate their
respective claims of ownership over the property, a portion of which is being
rented by the plaintiff (pp. 1-8, Record on Appeal).

The corresponding summonses, together with the complaint for interpleader and the order to interplead issued by the
lower court on September 2, 1975,
were served upon defendants Ruperto Mercader and Severina Mercader on September
25, 1975 and upon defendant Benjamin Revilla
on October 4, 1975.  The records, however, do not reveal when
defendant Joaquina Vda. de Palanca was served with
summons, together with the complaint and the order to interplead.

Instead of filing a responsive pleading, defendants Ruperto Mercader and Severina Mercader moved for the
dismissal of the complaint for inter-pleader on October 7, 1975 (pp. 8-11, ROA).  Defendant Benjamin Revilla
likewise moved for the dismissal of the complaint on September 15, 1975, even before he was served
with summons on October 4, 1975.  Defendant Joaquina Vda. de Palanca filed an answer to the
complaint but the records do not reveal the date of filing.  On October
24, 1975, plaintiff Arsenio Oliquino filed his comment on the motion to dismiss of
defendants Ruperto Mercader
and Severina Mercader and
defendant Benjamin Revilla (pp. 12-16, ROA).

By order dated January 6,
1976, the lower court denied the motion to dismiss filed by
defendants Ruperto Mercader
and Severina Mercader and
defendant Benjamin Revilla (p. 17, ROA).  The order of
denial was received on January 16,
1976 by Atty. Agustin Frivaldo, counsel
for defendants Ruperto Mercader
and Severina Mercader.  In the case of defendant Benjamin Revilla, the records do not show when his counsel, Atty.
Archimedes Frivaldo, actually received the order of
denial which was sent by registered mail on January 10, 1976.

On February 9, 1976, plaintiff Arsenio Oliquino, through his counsel, Atty. Jaime G. Fortes, filed
a motion to declare defendants Ruperto Mercader and Severina Mercader and Benjamin Revilla in
default, upon the ground that the reglementary period
for the filing of an answer to the complaint had already expired without any
answer having been filed within said period (pp. 17-19, ROA).

On the date set for the hearing of the motion on February 16, 1976, defendants Ruperto Mercader and Severina Mercader filed a motion
for postponement so they could file an opposition to the plaintiff’s motion,
which motion the court granted.

Then on February 20, 1976, defendants Ruperto
Mercader and Severina Mercader, through their counsel, filed an opposition
to the motion to declare them in default and attached thereto the answer to the
complaint with a petition to admit said answer (pp. 19-21, ROA).  In their
answer, which was supported by an affidavit of merits, they alleged that they
are claiming ownership over a parcel of land with an area of 154 square meters
covered by Tax Declaration No. 16696, which they inherited from their late
father, Alejandro Mercader; that their father sold to
the Palanca family two parcels of land under Tax
Declaration No. 16695 and Tax Declaration No. 12097; that in the consolidation
of the latter two parcels of land sold to them, the Palanca
family erroneously consolidated the parcel of land claimed by the defendants
under Tax Declaration No. 16696 with the parcel of land under Tax Declaration
No. 16695, instead of the parcel of land under Tax Declaration No. 12097; that
the parcel of land under Tax Declaration No. 16696 is presently occupied by
defendant Severina Mercader,
but a portion of said lot is being occupied by plaintiff Arsenio
Oliquino where he had built his house; and that
defendants have no interest in the lots covered by Tax Declarations Nos. 16695
and 12097 (pp. 21-27, ROA).

On February 25, 1976,
the respondent Judge Aquilino Bonto
issued an order declaring defendants Ruperto Mercader and Severina Mercader in default, the dis­positive
portion of which reads as follows:

“WHEREFORE, in view of the foregoing, defendants Ruperto Mercader and Severina Mercader, having failed
to answer within the reglementary period, are hereby
declared in default.  Resolution on the
motion for default with respect to defendant Benjamin Revilla
is hereby held in abeyance until after the plaintiff shall have presented a
certificate from the Postmaster at Irosin, Sorsogon, showing therein the date of the receipt by Atty.
Archimedes Frivaldo of the registered letter No. 118
mailed on January 10, 1976″ (Annex C, Petition for Certiorari, pp.
19-20, rec.).

A copy of the February
25, 1976 order was served upon defendants’ counsel on March 10, 1976.  On March
17, 1976, defendants Ruperto Mercader and Severina Mercader filed a motion to set aside the order of default,
stating the facts constituting their failure to answer on time and the good and
meritorious defenses they rely upon to controvert the complaint (Annex D,
Petition, pp. 21-24, rec.).  Subsequently,
respondent Judge issued an order dated May
24, 1976 denying defendants’ motion to set aside the order of
default, which is herein below quoted as follows:

“A careful examination of the grounds relied upon by the
defendants Ruperto Mercader
and Severina Mercader in
their motion to set aside the order of default dated February 25, 1976, shows
that the circumstances for their failure to answer do not constitute excusable
neglect.

“WHEREFORE, the motion to set aside is hereby denied for lack
of merit” Annex A, Petition, p. 16, rec.).

A motion for reconsideration of the aforequoted
order was filed by defendants Ruperto Mercader and Severina Mercader on June
16, 1976 (Annex E, Petition, pp. 25-28, rec.).  This was, however, denied by the trial court
in its order dated July 13, 1976
(Annex B, Petition, pp. 17-18, rec.).  On
July 24, 1976, defendants
filed a notice of appeal with the trial court but the same was later withdrawn
when they filed a second motion for reconsideration with a motion to dismiss on
August 3, 1976 (pp. 39-42, ROA).  Plaintiff, through
his counsel, filed on August 6, 1976
his opposition to the said motion (pp. 42-43, ROA).  By order dated September 29, 1976, the trial court denied defendants’
second motion for reconsideration (pp. 43-­44, ROA).

Thereafter, a notice of appeal and an appeal bond were filed on October 7, 1976 by defendants Ruperto Mercader and Severina Mercader which were
approved by the trial court (p. 44, ROA).  The appeal having been perfected, the trial
court, in its order dated October 27,
1976, directed the clerk of court to transmit the records of the
case to the Supreme Court (p. 46, ROA).  The records of the case were forwarded to the
Supreme Court on June 1, 1978.  On June
14, 1978, the Court resolved to require defendants Ruperto Mercader and Severina Mercader to file a
petition for review on certiorari. 
Defendants filed on July 13,
1978 a motion for extension of time of fifteen (15) days within
which to file their petition, which the Court granted.

This petition for review on certiorari was filed on July 24, 1978 (pp. 10-28, rec.).  Required to comment on the
petition, defendant Joaquina Vda.
de Palanca (private
respondent herein) filed her comment on September
12, 1978 (pp. 34-38, rec.). 
Atty. Jaime G. Fortes, counsel for plaintiff Arsenio
Oliquino (private respondent herein), and Atty.
Archimedes Frivaldo, counsel for defendant Benjamin Revilla (private respondent herein), failed to file their
respective comments on the petition. 
Thus, on November 3, 1978,
the Court required Attys. Jaime G. Fortes and Archimedes Frivaldo
to show cause why they should not be cited for
contempt for such failure, and to file their respective comments.  On December
12, 1978, Atty. Archimedes Frivaldo filed
his explanation and/or comment on the petition (pp. 40-41, rec.).  On March
2, 1979, the Court resolved to impose on Atty. Jaime G. Fortes a
fine of two hundred pesos (P200.00) or imprisonment in case of non-payment for
failure to file comment on the petition. 
On March 28, 1979,
Atty. Fortes filed a motion for reconsideration of the resolution of March 2, 1979, and the comment on the
petition (pp. 47-52, rec.).  In OUR
resolution of April 6, 1979, the Court resolved to reduce the fine imposed on
Atty. Fortes to one hundred pesos (P100.00) and resolved further to give due course
to the petition and declared the case submitted for decision.

The sole issue to be determined in the instant case is whether or
not the respondent Judge abused his discretion in declaring the defendants
(petitioners herein) in default and in refusing to set aside the order of
default.

It is OUR view that the failure of defendants’ counsel, Atty.
Agustin Frivaldo, to file an answer on time and his
being able to do so only after the expiration of the reglementary
period, considering the attendant circumstances in this case, is excusable and
do not warrant the declaration of default of defendants Ruperto
Mercader and Severina Mercader.

For one, defendants’ counsel failed to file the answer on time
because he overlooked the expiration of the reglementary
period and he attributed this oversight or negligence to the following
factors:  first, his advanced age (77
years); second, he is suffering from high blood pressure and was hospitalized
for cerebral stroke in 1972, which made him prone to forget dates or events
that happened earlier; third, pressure of work; fourth, lack of personnel; and
lastly, the length of time from the filing of the motion to dismiss the
complaint for interpleader and its resolution by the
lower court.  As previously mentioned,
the complaint in the present case, together with the summons and the order to
interplead, was served upon defendants Ruperto Mercader and Severina Mercader on September 25, 1975, then on October 7, 1975, or
three (3) days before the expiration of the reglementary
period for the filing of an answer, defendants moved to dismiss the
complaint.  Said motion was, however,
denied by the lower court on January 6,
1976, and copy of the order of denial was received on January 16, 1976 by defendants’
counsel.  Therefore, the motion to
dismiss was resolved by the lower court only after three (3) months from the
filing of said motion.  Considering this
fact, together with the other factors aforesaid, it would not have been
impossible or unusual for defendants’ counsel to have overlooked the expiration
of the reglementary period.  Thus, defendants’ counsel overlooked the fact
that he had still three (3) days left from January 16, 1976, or up to January 19, 1976, within which to file an answer to the
complaint.

Moreover, WE consider the fact that when plaintiff Arsenio Oliquino filed on
February 9, 1976 a motion to declare defendants Ruperto
Mercader and Severina Mercader in default, and before they were declared in
default, defendants’ counsel, realizing that the reglementary
period had already expired, diligently prepared and immediately filed on
February 20, 1976 an opposition to the motion and attached thereto the answer
to the complaint with a petition to admit the same, a proof of his intention to
comply with the rules of procedure.  This
circumstance excludes also the intention to unduly delay the case.  It should be added also that the late filing
of the answer did not in any way prejudice the plaintiff Oliquino
who as lessee is not claiming ownership over the land nor deprive him of any
substantial right or interest, considering that his complaint was only an
action for interpleader against several persons
asserting ownership over said land. 
Furthermore, when the defendants were declared in default on February 25, 1976 and they received a
copy of the order of default on March
10, 1976, they immediately applied for relief within a reasonable
time by filing a motion to lift the order of default on March 17, 1976.

Most importantly, the record shows that defendants Ruperto Mercader and Severina Mercader have a good and
valid defense in plaintiff’s action for interpleader.  Defendants are claiming ownership over a
parcel of land with an area of 154 square meters under Tax Declaration No.
16696 which they inherited from their late father, Alejandro Mercader.  This
parcel of land forms part of the large parcel of land owned by defendant
Joaquin Vda. de Palanca, and on which parcel plaintiff Arsenio
Oliquino had built his house.  It appears that the late Alejandro Mercader sold to the Palanca
family two (2) parcels of land under Tax Declarations Nos. 16695 and
12097.  In the consolidation of these two
lots, the Palanca family erroneously consolidated
with the parcel under Tax Declaration No. 16695 the parcel of land under Tax
Declaration No. 16696, instead of the parcel of land under Tax Declaration No.
12097.  Therefore, defendants have an
interest in the parcel of land under Tax Declaration No. 16696 and their
presence is indispensable in order that they may protect such interest.  They should be given a day in court.

This Court has always opted for a liberal interpretation of the
rules of procedure whenever procedural technicalities are involved in a
case.  Thus, in a case analogous to the
case at bar, the Court, adopting a liberal posture, considered as excusable the
failure of the public counsel to incorporate in the notice of appeal the
material dates showing the timeliness of the appeal where such omission was due
to his “mistake, inadvertence and negligence considering the given circumstances
of confusion caused by heavy pressure of work aggravated by lack of personnel
and equipment x x x” (Canturna vs. Court of Appeals, et al., 70 SCRA 563 [1976]).

In the case of Cusio vs. Court of
Appeals, et al. (57 SCRA 64 [1974]), the counsel for
the petitioner asked for a third and last extension of time to file his
appellants brief and cited in support of his motion his advanced age (67
years), his recurrent attacks of arthritis, the distance of 150 kilometers he
had to travel from his office in Guimba to Manila for
the preparation of his brief and the pressure of other professional work.  The appellate court denied petitioner’s
urgent motion as well as his motion for reconsideration and ordered the
dismissal of the appeal.  This Court set
aside the appellate court’s resolutions denying the third and last extension of
time and the motion for reconsideration, and gave due course to the appeal.

In another case, WE considered as excusable negligence the
failure of the defendant’s lawyer to file an answer within the reglementary period because his wife underwent a Caesarian
operation and subsequently got sick, and said lawyer had to attend to her
personally and it does not appear that he had partners in his law office (Eduque vs. Court of Appeals, et al., 10 SCRA
632 [1964]).

And in a 1909 case, the failure of the provincial fiscal to file
his answer within the time prescribed by law due to the many urgent demands on
his time and attention in the performance of his duties,
was like­wise considered excusable negligence (Siquenza
vs. Municipality of Hinigaran, 14 Phil. 495 [1909]).

In the instant case, the respondent Judge, in declaring the
defendants in default, applied the rules of procedure strictly, disregarding
the liberal stance that WE have always adopted and the mandate under Section 2,
Rule 1 of the Revised Rules of Court that “these rules shall be liberally
construed in order to promote their object and to assist the parties in
obtaining just, speedy and inexpensive determination of every action and
proceeding.”

WE find no cogent reason in the case at bar to depart from the
rule on the liberal interpretation of the rules of procedure and to adhere to
the technical rules of procedure strictly, for to do so would not serve the
ends of substantial justice and equity. 
As said in the recent case of Galdo vs. Rosete (84 SCRA 238 [1978]), this
Court “frowns upon such application of procedural rules with pedantic
rigor”, citing the leading case of Alonso vs. Villamor
(16 Phil. 315 [1910]) wherein WE stated:

“Technicality, when it deserts its proper office as an aid to
justice and becomes its great hindrance and chief enemy, deserves scant
consideration from courts.  There should
be no vested rights in technicalities.”

Again, in Gregorio vs. Court of Appeals (72 SCRA
120 [1976]), WE said:

“The rules of procedure ought not to be applied in a very
rigid, technical sense; rules of procedure are used only to help secure, not
override, substantial justice.  If a
technical and rigid enforcement of the rules is made, their aim would be
defeated.”

And WE stressed in the case of Lim Tanhu
vs. Ramolete (66 SCRA 425
[1975]) that:

“xxx the rules of procedure may not
be misused and abused as instruments for the denial of substantial
justice.”

Thus, respondent Judge should not have been unduly strict in
applying the rules of procedure and should have avoided such a precipitate
action declaring the defendants in default because judgments by defaults are
never looked upon with favor.

This Court has already declared “its disapproval of default
judgments and cautioned the courts to be more circumspect before declaring a
defendant in default” (Luis Peggy, et al., vs. Hon. Lauro
Tapuan, et al., L-45270, February 28, 1979; Corsino, et al. vs. Hon. Arnold Savella,
et al., L-38367, November 24, 1978).

In the earlier case of Heirs of Jose Fuentes vs. Macandog (83 SCRA 648 [1978]), WE
said:

“Default is not a mechanical gadget for the acceleration of
judicial litigations.  The laudable
intention of respondent judge to terminate the subject case promptly is no
excuse for cutting corners that the rules have fixed to insure that the
constitutional requirement of due process is observed and safeguarded.  The expeditious dispatch of court matters
does not have to be gained by causing unnecessary inconvenience to any of the
parties.  x x x Whether or not to declare a defendant in default
requires mature consideration of all attendant circumstances, a sound
discretion and a great deal of circumspection.  A court is not supposed to grab the first
opportunity, no matter how insubstantially grounded, to knock the defendant out
of court” (underscoring supplied).

And in the landmark case of Coombs vs. Santos
(24 Phil. 446 [1913]), WE stated that:

“A default judgment does not pretend to be based upon the
merits of the controversy.  Its existence
is justified on the ground that it is the one final expedient to induce the
defendant to join issues upon the allegations tendered by the plaintiff, and to
do so without unnecessary delay.  A
judgment by default may amount to a positive and considerable injustice to the
defendant; and the possibility of such serious consequences necessitates a
careful examination of the grounds upon which the defendant asks that it be set
aside” (underscoring supplied).

Likewise, respondent judge should have been more liberal in the
exercise of his discretion by setting aside the order of default especially so
because the defendants filed their answer together with their opposition to the
motion to declare them in default, and, after having been declared in default,
immediately filed a motion to set aside the order of default within a
reasonable time.

“x x x when the
motion to set aside the order of default was made without any loss of time and
before a date was set for the hearing of the case on its merits, and is
accompanied by a sworn statement of merit and copies of documents which
constitute prima facie a just and valid defense, such failure is insufficient
to deprive a defendant of his rights, as in the present case, and the refusal
to set aside the order of default constitutes an abuse of discretion, and
especially when such setting aside of the order of default will in no way
prejudice the plaintiff” (Trajano vs. Cruz, 80 SCRA 712 [1977]; Tumambing vs. Ganzon, 18 SCRA 411 [1966]; Bañares vs. Flordeliza and Gavito, 51 Phil. 786 [1928]).

And furthermore, this Court, in the case of Heirs of Jose Fuentes
vs. Macandog (supra), citing the case of
Pineda vs. Court of Appeals (67 SCRA 228 [1975]),
declared:

“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 trial courts give both parties every chance to fight
their case fairly and in the open, without resort to technicality.”

In conclusion, considering that the late filing of defendants’
answer was due to excusable negligence and that they appear to have a
meritorious defense; that defendants filed an answer before they were declared
in default; and that the late filing of the answer did not in any way prejudice
or deprive the plaintiff of any substantial right, nor was there intention to
unduly delay the case, WE hold that the respondent judge committed an abuse of
discretion in declaring the defendants in default and in refusing to set aside
the order of default.

WHEREFORE, THE PETITION IS HEREBY GRANTED AND THE ORDERS
OF RESPONDENT JUDGE DATED FEBRUARY 25,
1976, MAY 24, 1976,
JULY 13, 1976 AND SEPTEMBER 29, 1976 ARE HEREBY SET
ASIDE AS NULL AND VOID, WITH COSTS AGAINST RESPONDENT ARSENIO
OLIQUINO.

SO ORDERED.

Teehankee, (Chairman), Fernandez,
Guerrero, De Castro, and Melencio-Herrera, JJ., concur.