ALFONSO AFRICA, PETITIONER, VS. HONORABLE INTERMEDIATE APPELLATE COURT, HONORABLE RAFAEL T. MENDOZA, PRESIDING JUDGE, REGIONAL TRIAL COURT, NATIONAL CAPITAL REGION, BRANCH 134, …

In petitioner’s
own words: “This case started as a
simple case of collection for a sum of money but took a bizarre turn in its
procedural aspect.” Well said indeed.

On August 9, 1979, petitioner Alfonso Africa entered into
a “Grower’s Agreement” with private respondent San Miguel Corporation
(SMC). Under said agreement, SMC
obligated itself to deliver to petitioner day-old broiler chicks while
petitioner bound himself, for a consideration, to raise and care
for the chicks for a period of eight (8) weeks after which the birds
would be hauled back by SMC for processing at its plant in Ca­buyao, Laguna.^[1]

That contract became the center of controversy between the
parties. On February 20, 1984, SMC
filed an action for a sum of money against petitioner, alleging that upon the
maturity dates stipulated in the contract when the broilers should have been
delivered back to SMC, petitioner instead diverted the flock and sold the same
to third persons, to the prejudice of SMC which was deprived of
P317,000.00 as of July 31, 1980, inclusive of unrealized profits plus legal
interest counted from May 26, 1980.^[2]

Petitioner did not deny having sold the grown chicks to third
parties. However, he claimed that it
was SMC which reneged on the terms of the contract by failing to haul the
chicks on the specified maturity dates, thus compelling him to seek other
buyers to avert great financial losses.

The case was set for pre-trial conference on June 18, 1984 at
8:30 a.m. Counsel for petitioner
arrived late. Upon motion of counsel
for SMC, petitioner was declared as in default and SMC was allowed to present
its evidence ex parte in support of the corporation’s
allegations.^[3]
On the same day, June 18, 1984, petitioner’s counsel promptly moved for the reconsideration of the
order of default, and requested the clerk of court to set his motion for
hearing on June 22, 1984.^[4]

In his motion to lift the default order, counsel for petitioner
recounted the following events to explain his late arrival at the pre-trial:

“1.      That the instant case is set for
pre-trial conference, today, June 18, 1984, at 8:30 a.m.;

“2.      That the undersigned x x x arrived at the sala of this
Honorable Court at exactly 8:45 a.m., and was informed that the case was called
at 8:35 a.m., and that an Order was issued in Open Court declaring
herein Defendant as in Default, authorizing the Plaintiff to present its evidence, ex-parte.

“3.      That the failure of the undersigned
to appear at exactly 8:30 a.m., was due to
excusable negli­gence and/or accident, amounting to fortuitous event in that:

“a)      From experience, it takes this
Representation forty (40) minutes to reach the sala of this Hon­orable Court,
coming from his residence at 1398-G Mayha­ligue St., Tondo, Manila;

“b)      That undersigned gave himself an allowance
of One (1) hour to enable him to reach the sala of this Honorable Court and
left his residence at exactly 7:10 a.m., thus expecting to be in Court
at 8:10 a.m., (at the latest) thus having enough time to locate and be in Court room, on time for the
hearing of this case;

“c)      That undersigned encountered an unusually
inundate streets on his way to this Court aggravated by the unexpected
detour from his usual route to this Court thus compounding his
predicament;

“d)      Thus- the undersigned arrived at exactly
8:45 a.m., and while the other cases in the calendar of the Court are still
being read, undersigned invited the attention of the Clerk of Court regarding
his presence, he was informed that the case was called at 8:35 a.m., and
accordingly, Defendant was declared as in default;

“
4.   That as can be seen from all the
foregoing, the Defendant’s failure to be at the sala of this Hon­orable Court
was due to excusable negligence and/or accident, amounting to fortuitous event;
x x x .”^[5]

Two days later, or on June 20, 1984, respondent Judge Mendoza
issued the questioned decision, the dispositive part of which states:

“WHEREFORE, judgment is hereby rendered in favor of plaintiff (SMC)
and against defendant (Africa) order­ing the latter:

“1. To pay plaintiff
the sum of P317,000.00 plus 12% interest from June 13, 1980, the date of the
letter of demand to defendant, until the same is fully paid;

“2. To pay plaintiff
the sum of P32,000.00 for liquidated damages in accordance with the Grower’s
Contract (Exhibit ‘A-7’);

“3. To pay P5,000.00
as and by way of attorney’s fees; and

“4. To pay the
costs.”^[6]

It was five days after the judgment of default was rendered when
respondent Judge Mendoza acted on the June 18, 1984 motion by counsel for
petitioner to set aside the order of default. In his order dated June 25, 1984, respondent judge denied the aforesaid motion.^[7]

Petitioner then appealed to
the then Intermediate Appellate Court raising as errors the order
of default and the monetary award granted in favor of SMC.

The Appellate Court did not rule on the question regarding the
order of default. It simply affirmed
with modifications the decision of the trial court, thus:

“WHEREFORE, premises considered, the dispositive portion of the
decision appealed from is modified to read as follows:

‘Wherefore, judgment is hereby rendered in favor of plaintiff and
against defendant, ordering the latter:

‘1. To pay plaintiff
the sum of P271,260.00 plus 12%
interest from June 13, 1980, the date of the letter of demand to the defendant,
until the same is fully paid;

‘2. To pay
P5,000.00 as and by way of attorney’s fees; and

‘3. To pay the
costs.’”^[8]

Hence, this petition which seeks to annul and set aside the
default judgment rendered by the trial court and the decision of the Appellate
Court sustaining the same with modifications, on the ground that they were both
rendered with grave abuse of discretion.

We rule for petitioner.

This Court has repeatedly warned against the injudicious and
often impetuous issuance of default orders. In the case of Continental Leaf Tobacco (Phil.) Inc. vs. Intermediate
Appellate Court,^[9]
the Court explained why they should be discouraged:

“Since a judgment of default presupposes proceed­ings where the
defendant is absent and cannot possibly present any evidence in his behalf, a
court should use it with thoughtful hesitation only as a last expedient to
induce the defendant to join issue upon the allega­tion tendered by the
plaintiff. As early as 1913, the
Supreme Court made this clear in Coombs
vs. Santos^[10]
because such a judgment cannot pretend to be based on the merits of the case.

“The records must be free from even the slightest suspicion that
the trial court seized upon an opportunity either to free itself from the usual
burdens of presiding over a fullblown court battle or worse, to give undue
advantage or favors to one of the litigants. As pointed out in Heirs of Fuentes vs. Macandog^[11]
default is not a mechanical gadget for the acceleration of the judicial
litigation. An intent to terminate a
case promptly is no excuse to cut corners and avoid the rules established to
safeguard due process rights of litigants.”^[12]

In the instant case, petitioner was declared as in default on
June 18, 1984 for his lawyer’s ten-minute delay at the pre­-trial. That very day, the adverse party SMC was
allowed to present its evidence ex parte even as counsel for petitioner
was hurriedly preparing his motion to lift the order of default which motion he
actually filed on June 18, 1984. After
two days, a decision was rendered in favor of SMC and yet it was only five days
later that respondent trial judge denied petitioner’s motion for
reconsideration.

It is quite obvious that petitioner was denied his basic right to
be heard, even after his counsel had promptly explained the reason for his
tardiness at the pre-trial. As in the
cited Continental case, which, interestingly enough, involved the very same respondent judge, it would seem
that the proverbial wheels of justice literally “oversped”. For an innocuous delay of ten minutes,
petitioner was ultimately denied due
process of law which could have,
had respondent judge been in a less hurry to clear his docket, enabled him to present his defenses against SMC’s claim that he had
breached their agreement.

While it is desirable
that the Rules of Court be faithfully observed, courts should not be obsessively
strict over the occasional lapses of litigants. Given a good reason, the trial court should set aside its order
of default, constantly bearing in mind that it is the exception and not the
rule of the day. A default order must
be resorted to only in clear cases of obstinate refusal or inordinate neglect
to comply with the orders of the court.^[13]

WHEREFORE, the petition for review is
granted. The decision of the Appellate Court in CA-G.R. No.
CV-04600 and the judgment by default of the trial court in Civil Case No. 6477 are hereby annulled and set aside. The case is remanded to the Regional Trial
Court of Rizal, Branch 134 (Makati), for further hearing and reception of petitioner’s evidence.

So ordered.

Gutierrez, Jr., Feliciano, Bidin, and
Cortes, JJ., concur.

^[1]
Annex A, Records, p. 4.

^[2]
Civil Case No. 6477.

^[3]
Records, pp. 43-44.

^[4]
Ibid, pp. 45-46.

^[5]
Ibid.

^[6]
Records, p. 51; Rollo, p. 43.

^[7]
Records, p. 57.

^[8]
Rollo, p. 40.

^[9]
G.R. No. 69243, November 22, 1985, 140 SCRA 269, 274.

^[10]
24 Phil. 446.

^[11]
83 SCRA 648

^[12]
Underscoring supplied.

^[13]
See Leyte Spouses vs. Cusi, Jr., No. L-31974, July 31, 1987, 152 SCRA
496; National Investment and Development Corpora­tion vs. Court of
Appeals, et al., G.R. No. 81788, December 15, 1989.