GELACIO E. TUMAMBING, PLAINTIFF-APPELLEE, VS. MAURO GANZON ET AL., DEFENDANTS, MAURO GANZON, DEFENDANT-APPELLANT.

This is an appeal brought to the
Court of Appeals by the defendant from the orders of the Court of First Instance
of Manila (Branch XIII) denying his motion for extension of time within which to
file his answer to the complaint; refusing to set aside the order of default and
admit the answer filed before the hearing of the case; and denying the petition
for relief and to set aside the judgment of default. Inasmuch as only a question
of law is involved, the appeal was certified to this
Court.

The facts which gave rise to this
appeal, as found by the Court of Appeals, follow: In the Civil Case No. 37784 of
the Court of First Instance of Manila, entitled “Gelacio Tumambing, plaintiff, v.
Basilio Rub, Filomeno Niza and Mauro B. Ganzon,
defendants,” summons was served on defendant Ganzon on
January 30,
1959. On
February 12, 1959, Ganzon filed an urgent ex parte motion for an extension of ten days within which to
file a responsive pleading on the ground that his counsel has just been retained
and needed a few days more to study the case and prepare such responsive
pleadings as might be necessary, It should be noted that the original period for
answering was to expire on February 14, 1959.

On February
21, 1959,
the lower court denied the urgent ex parte
motions for extension of time to file responsive pleading filed individually by
defendants Mauro Ganzon and Filomeno Niza and at the same time
declared them in default. This order of denial and declaring them in default was
received by Ganzon and Niza
on February 25,
1959 and
on the same day a verified motion to set aside the order of default was filed
together with their answers, but said motion was again denied by the trial court
on February 28,
1959.

On March 4, 1959, Ganzon filed a motion for reconsideration of the order of
February 28, 1959 and for the suspension of the trial scheduled for March 5,
1959 in order to be able to file a petition for certiorari; yet, on March 5,
1959 the trial court rendered a decision, based on the findings of a
commissioner appointed by it, imposing upon the herein appellant a total
liability of more than P47,000.00.

On March
17, 1959,
defendant Ganzon, having been notified of the
decision, filed his verified petition for reconsideration or relief, with the
corresponding affidavit of merits. A portion of the petition reads:

“That the herein movant prays for reconsideration of or relief from the
decision of March 5,
1959, on
the ground of accident, mistake or excusable negligence;

“That the undersigned counsel was
retained by the defendant Mauro B. Ganzon only on
February 12,
1959,
because he was attending to his cattle ranch in Zambales from January 27 to February
11, 1959,
inclusive. He received news by letter from his daughter about the filing of the
case on February 10, as he was in the mountains of Zambales, and came home immediately thereafter to attend to
it;

“The undersigned counsel
instructed the defendant Mauro B. Ganzon to gather
together all papers relating to the case and he came back with all papers ready
on the afternoon on February 16,
1959;

“That the movant herein and his counsel never intended to delay the
disposition of this case, otherwise they would have filed dilatory motions, such
as a motion for particulars or a motion to dismiss;

“That the extensions sought to
file an answer were dictated by the circumstances above mentioned, the need for
time for counsel to study the case and the professional engagements of the
undersigned counsel;

“That the herein movant has good and indubitable defenses, supported by
documentary evidence, as shown by the attached affidavit of merits of the movant incorporating photostatic
copies of various documents, including a promissory note of December 2, 1956, of
the plaintiff himself;

“That this Honorable Court
imposed excessive damages upon the movant, when,
taking into account the movant’s affidavit of merits,
the plaintiff should be the one to pay damages to the movant herein;

“That justice and equity, the
answer having filed already before trial was held and in view of the movant’s valid and indubitable defenses, demand that the
movant be heard in his
defense.”

On March
21, 1959,
the trial court issued an order denying Ganzon’s
motion for reconsideration or relief. Hence this
appeal.

It is contended that the trial
court erred in exercising its discretion to deprive the defendant-appellant of
his day in court and in motu proprio
ordering trial before a commissioner.

It appears that the motion to set
aside the default order was filed, without delay, on February 25,
1959,
before trial, and on the same day the said order was received. When a motion to
set aside the order of default is made without any loss of time and before a
date is set for the hearing of the case on its merits, and is accompanied by a
sworn statement of merits and copies of the documents which constitute prima facie a just and valid defense,
the refusal to set aside the order of default constitutes an abuse of
discretion.(Bañares v. Flordeliza, 51 Phil. 786)

In the leading case of Coombs v.
Santos, 24 Phil. 446, where a motion to
set aside the order of default was denied by the trial court but reversed by
this Court, it was held:

“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 issue 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.

“In Watson v. R.R. Co. (41 Cal.,
17, 20), the court said: ‘Applications of this character are addressed to the
discretion – the legal discretion – of the court in which the default has
occurred, and should be disposed of by it as substantial justice may seem to
require. Each case must be determined upon its own peculiar facts, for perhaps
no two cases will be found to present the same circumstances for consideration.
As a general rule, however, in cases where, as here, the application is made so
immediately after default entered as that no considerable delay to the plaintiff
is to be occasioned by permitting a defense on the merits, the court ought to
incline to relieve. The exercise of the mere discretion of the court ought to
tend in a reasonable degree, at least, to bring about a judgment on the very
merits of the case; and when the circumstances are such as to lead the court to
hesitate upon the motion to open the default, it is better, as a general rule,
that the doubt should be resolved in favor of the
application.’

“It might be added that if
plaintiff relies upon his judgment obtained by default and directs the attention
of the court to no real injury which would result to his interests by the
reopening of the case, his objection too such action assumes, to say the least,
the appearance of a technicality, which, in this liberal age, is not looked upon
with favor. An examination of the authorities shows
that were the application to set aside a default judgment is made immediately
following its entry, it will receive much greater consideration than were a
delay of months or even weeks has occurred.”

And in the case
of Macaraig v. Dy Sun, G. R.
No. L-12497,
March 23,
1959, in
following the ruling of the Coombs case, this Court held:

“The granting of a motion to set
aside an order of default rests in the discretion of the court, but ‘It must be
remembered that the only discretion conferred upon officers is a legal
discretion, and when anything is left to any officer to be done according to his
discretion the law intends it to be done with a sound discretion and according
to law; and if a given case falls within both the letter and spirit of Section
113, supra (Rule 38, Rules of
Court) a denial of the relief sought will amount to an abuse of such discretion*
(Coombs v. Santos, 24 Phil. 446)xx”

Further, Section 7, Rule 11 of
the Rules of Court, which gives the court the discretion to allow the filing of
an answer even after the expiration of time to do so
provides:

“Extension of time to
plead. – Upon motion and on such terms
as may be just the court may extend the time to plead provided in these
rules.

“The court may also, upon like
terms, allow an answer or other pleading to be filed after the time fixed by
these rules.”

and the discretion of the court in
allowing an extension of time should be exercised to subserve the ends of justice, and its proper exercise tends
toward giving defendant his day in court. Where a defendant’s default appears to
have resulted from no neglect or fault on his part, the court will exercise its
discretion in relieving against it. (Unson v. Abera, 14 Phil. 146; Mapua v.
Mendoza, 45 Phil. 424; Maralit v. Lardizabal, 54 Phil. 252)

Considering that the granting of
the motion in this case would in no way prejudice the plaintiff (Bañares v. Flordeliza, supra) and
deprive him of any substantial right, nor is there evidence of intent to unduly
delay the case (Castañeda v. Pestano, G.R. No. L-7623, April
29, 1955), and the amount involved being
P47,000.00, it is believed that the lower court should
have set aside its order of default and, in not doing so, it gravely abused its
discretion.

WHEREFORE, the orders appealed from are
hereby set aside and the case remanded to the court of origin to allow the
defendant to answer the complaint and present evidence in support of his
defense. Costs at this instance against the plaintiff-appelee.

Concepcion, C.J., Reyes, J. B. L., Dizon, Makalintal, Bengzon, J. P., Zaldivar, Sanchez
and Ruiz Castro, JJ.,
concur.