Trayectoria de Cruz Novillo “el hombre que diseñó España”

Sec. 3. Default; declaration of. If the defending party fails to answer within the time allowed therefor, the court shall, upon motion of the claiming party with notice to the defending party, and proof of such failure, declare the defending party in default. Thereupon, the court shall proceed to render judgment granting the claimant such relief as his pleading may warrant, unless the court in its discretion requires the claimant to submit evidence. Such reception of evidence may be delegated to the clerk of court. (1a, R18)

x x x x x x

A defending party is declared in DEFAULT if he fails to answer the complaint within the time allowed therefor. The rule on answer is found in Rule 11. And under Rule 11 as a rule, you have 15 days to file an answer counted from the time you are furnished a copy of the complaint together with the summons

If the period to answer lapsed and there is no answer, the plaintiff will move to declare the defendant in default on the ground of failure to file an answer to the complaint. So, the court will issue an order of default declaring you as a defaulted defendant.

And from the time a party is declared in default, he loses his standing in court, although he is still entitled to notice of subsequent proceedings. He cannot participate in the trial. He cannot object to plaintiff’s evidence. He cannot present his own evidence. In effect, the case will be decided only on the basis of plaintiff’s side without anymore hearing the defendant. And of course, the plaintiff will win. It is like a boxing bout ba where the rule is, isa lang ang mag-suntok. My golly! How can you win in that situation? That is the effect of default.

Take note that the word ‘defending’ party applies not only to the original defendant but even to the cross-defendant or defendant in a counterclaim.

Q: May a court declare a defendant in default without any motion? A: NO, because the law says, “upon motion of the claiming party.”

Now, “with NOTICE to the defending party” is a new one. You must furnish a copy to the defending party of your motion to order the defendant in default which abrogates previous rulings.

Q: Suppose the defendant filed an answer but during the trial, he failed to appear. May he be declared in default?

A: NO, because the ground for default is failure to file an answer. The correct procedure is for the trial to proceed without him. (Go Changjo vs. Roldan Sy-Changjo, 18 Phil. 405) That is what you call EX-PARTE reception of evidence. Only one side will be heard.

BAR QUESTION: If the defendant is declared in default for failure to file an answer is deemed to have admitted the allegations in the complaint to be true and correct?

A: YES, because the law NOW says, “the court shall proceed to render judgment granting such claimant such relief as his pleading may warrant.” The reception of plaintiff’s evidence is already dispensed with. Wala ng reception of evidence. That is the GENERAL RULE. That is the same as the summary rules and judgment on the pleadings and the court can grant the relief without presentation of evidence.

HOWEVER under Section 3, it is discretionary upon the court to require the claimant to submit evidence. EX-PARTE RECEPTION of evidence is OPTIONAL for the court. And such reception of evidence may be delegated to the clerk of court. This is related to Section 9, Rule 30:

Rule 30, Sec. 9. Judge to receive evidence; delegation to clerk of court. The judge of the court where the case is pending shall personally receive the evidence to be adduced by the parties. However, in default or ex parte hearings, and in any case where the parties agree in writing, the court may delegate the reception of evidence to its clerk of court who is a member of the bar. The clerk of court shall have no power to rule on objections to any question or to the admission of exhibits, which objections shall be resolved by the court upon submission of his report and the transcripts within ten (10) days from termination of the hearing. (n)

The reception of evidence maybe delegated to the clerk of court but the clerk of court must be a lawyer, that is the condition. So if he is not a member of the bar, he is not authorize to conduct or hear

an ex-parte reception of evidence.

SUMMARY: Steps when the defendant fails to file an answer within the time allowed: 4.) Motion to declare defendant in default;

5.) Order of default;

6.) Judgment based on the complaint of the plaintiff UNLESS court requires the claimant to submit evidence (ex-parte presentation of plaintiff’s evidence)

However, when should the court dispensed with the ex-parte presentation of evidence and when should it require the claimant to submit evidence being discretionary? May ibang judges who likes kapoy na, judgment kaagad! May iba naman, reception muna which will take time. In my personal view, cases which are simple, presentation of evidence ex-parte can be dispensed with like collection cases ba. Walang laban ang defendant talaga.

But in controversial cases, like recovery of a piece of land – medyo mahirap yan. The judge will not automatically decide in your favor simply because of failure to answer by the defendant. The judge may still want to hear plaintiff’s evidence. To my mind, that should be the policy regarding this rule.

Q: If a defendant files an answer but did not furnish a copy of the answer to the plaintiff, can the plaintiff move to declare the defendant in default?

A: YES, because the answer is deemed to have not been legally filed. It was not in accordance with the Rules of Court. (Gonzales vs. Francisco, 49 Phil. 47) So the defendant must furnish the plaintiff a copy of the answer because in the case of

RAMIREZ vs. COURT OF APPEALS

187 SCRA 153

HELD: “The failure to furnish a copy of the answer to the adverse party in itself is sufficient or valid basis for defendant’s default.”

Q: May a defendant be declared in default while a motion to dismiss (Rule 16) or a motion for bill of particulars (Rule 12) remains pending and undisposed of?

A: NO, because under the filing of a motion to dismiss or motion for bill of particulars interrupts the running of the period to answer. It will run again from the moment he receives the order denying his motion to dismiss or for bill of particulars. (Hernandez vs. Clapis, 87 Phil. 437)

In the case of

DEL CASTILLO vs. AGUINALDO

212 SCRA 169 [1992]

FACTS: The defendant filed a motion to dismiss under Rule 16 but his motion to dismiss did not contain notice of time and place of hearing and the motion was denied. Can he file an answer after filing the motion to dismiss?

HELD: NO. He can be ordered in default. The motion is a useless piece of paper with no legal effect.

“Any motion that does not comply with Rule 16 should not be accepted for filing and if filed, is not entitled to judicial cognizance and does not affect any reglementary period. Not

Meaning, even if you are a victim of FAME, if you have no meritorious defense, the court will not lift the order of default. You are wasting my time. Kahit na pagbigyan kita, talo ka pa rin. There is no chance for you to win anyway. But if you have a meritorious defense, there is no guarantee that you will win but at least you have a fighting chance ba that your standing will be restored.

Upon proof, the court will set aside or lift the order of default and will give the defendant an opportunity to answer, where he will plead his supposed meritorious defenses. In effect, he regains his standing in court.

Q: When can the defendant avail of this remedy?

A: He may file a motion to set aside the order of default at any time after notice thereof and before judgment.

SUMMARY: Steps the defendant should take to set aside the order of default:

XIV. File a motion to lift or set aside the order of default. The motion must be verified and under oath;

XV. He must explain why he failed to file an answer due to FAME; and XVI. He must also show that he has a meritorious defense.

PARTIAL DEFAULT

(c) Effect of partial default. - When a pleading asserting a claim states a common cause of action against several defending parties, some of whom answer and the others fail to do so, the court shall try the case against all upon the answers thus filed and render judgment upon the evidence presented. (4a, R18)

This presupposes that there are two or more defendants. Say, one or some of the defendants made an answer and the others did not. So, one or some of the defendants were declared in default, the others were not.

EXAMPLE: Gary sued Bentong and Bayani. Bentong filed an answer. Bayani did not. Bayani was declared in default but there can be no judgment against Bayani in the meantime because under paragraph [c], the case will go to trial based on the answer of Bentong. The case will be tried against both Bentong and Bayani based on the answer of Bentong.

The principle here is that, the answer filed by the answering defendant will automatically benefit the non-answering defendant. The defense of Bentong will also be Bayani’s defense. Anyway there is a common or identical cause of action. The best example would be a promissory note signed by both Bentong and Bayani and they bound themselves solidarily. Both of them were sued. Bentong answered while Bayani did not, hence he is in default. Can there be a default judgment against Bayani? NO, there will still be a trial based on the answer of Bentong. In effect, Bentong will defend not only himself but also Bayani.

Q: Suppose during the trial, Bentong proved that the obligation has been extinguished, which is also applicable to Bayani, and the complaint is dismissed, what is the effect?

A: Both Bentong and Bayani will win the case. So Bayani will be benefited by the answer of his co- defendant Bentong. Hence, there is still a possibility that a defaulted defendant can win based on our example.

On the other hand it is absurd if the answer of Bentong will not benefit the defaulting defendant. EXAMPLE: Gary filed a case against Bentong and Bayani based on a promissory note on a loan secured by both, and Bayani defaulted. Bentong answered alleging payment. Suppose, Bentong proved such defense, the effect is both Bentong and Bayani are absolved. If you say that Bayani should lose because the answer of Bentong will not benefit Bayani, there will be two conflicting decisions: “Bayani is in default and thus, should pay the loan; and there is no more loan as far as Bentong is concerned.” Do you mean a loan is paid and at the same time unpaid? That’s absurd!

But take NOTE that to apply the principle, there must be a common cause of action. If there is no cause of action, while there may be a trial, the answer of Bentong is only for him. After the trial, Bentong might be absolved from liability but the defaulting defendant Bayani will be held liable because Bentong’s answer does not cover Bayani. That is when there is no common cause of action. In the case of

CO vs. ACOSTA (134 SCRA 185 [1985])

reiterating the case of

LIM TANHU vs. RAMOLETE (66 SCRA 425)

FACTS: Bentong and Bayani were (solidary debtors) sued by Gary for a loan evidenced by a promissory note. Bentong filed an answer but Bayani defaulted. The case was tried based on Bentong’s answer. Gary move to drop Bentong from the case but retained Bayani, the defaulted defendant so that Gary can secure an immediate judgement.

ISSUE: Is the motion of Gary proper?

HELD: NO. When there is a common cause against two or more defendants, if you drop the case against one, you drop the case against all. Selection is not allowed. To drop Bentong means that the cause of action against him is weak. Why should one drop somebody if a case against such person is meritorious? If such is the fact, necessarily the cause of action against the other is also weak the fact there is actually a common cause of action.

However, the ruling in ACOSTA should not be confused with the ruling in

IMSON vs. COURT OF APPEALS [1996 BAR]

239 SCRA 58 [1994]

FACTS: Imson was driving a Toyota Corolla when he was bumped by a Hino Truck causing injury to Imson and totally wreaking his car. So he filed an action for damages against several defendants. He impleaded all of them – the driver, the bus company owner and the insurance company. The insurance company filed an answer but the owner and the driver did not. So both the owner and the driver were declared in default.

Subsequently, lmson and the insurance company entered into a compromise agreement wherein the latter paid him P70,000 which was its total liability under the insurance contract. The claim was very big so the insurance company offered to give the amount, “Bahala ka sa sobra.”

So when the case (between Imson and the insurance company) was eventually dismissed because of the compromise agreement, the bus company owner also moved to dismiss the case against him and the driver, arguing that since they are all indispensable parties under a common cause of action, the dismissal of the case against the insurance company should likewise result to the dismissal of the case against them citing the case of ACOSTA and RAMOLETE.

ISSUE #1: Is there a common cause of action among the three of them?

HELD: The owner is wrong. There is NO common cause of action. The cause of action against the driver is based on quasi-delict under Article 2178 of the Civil Code. The liability against the owner is also based on quasi-delict but on another provision of the Civil Code – Article 2180 (the liability of the employer for the delict or wrong of the employee) So, the liability of the owner and the driver is based on quasi -delict but under separate provisions of the Civil Code.

Now, the cause of action against the insurance company is not based on quasi- delict but based on contract because he seeks to recover liability from the insurance company based on the third-party liability clause of the insurance contract with the company.

So, there no common cause of action among them. Yaaann!

ISSUE #2: Is the insurance company an indispensable party? Because if it is so and he is removed from the case, the case cannot proceed without him.

HELD: NO. The insurance company is not an indispensable party.

“It is true that all of Imson’s claims in civil case is premised on the wrong committed by defendant truck driver. Concededly, the truck driver is an indispensable party to the suit. The other defendants, however, cannot be categorized as indispensable parties. They are merely necessary parties to the case. It is easy to see that if any of them had been impleaded as defendant (meaning, the insurance company or the owner were impleaded), the case would still proceed without prejudicing the party not impleaded.”

“Thus, if petitioner did not sue the insurance company, the omission would not cause the dismissal of the suit against the other defendants. Even without the insurer, the trial court would not lose its competency to act completely and validly on the damage suit. The insurer, clearly, is not an indispensable party.” It is a necessary party.

(d) Extent of relief to be awarded. - A judgment rendered against a party in default shall not exceed the amount or be different in kind from that prayed for nor award unliquidated damages. (5a, R18)

This is what we call LIMITATIONS on a default judgment:

6.) The default judgment should not exceed the amount prayed for in the complaint;

7.) The default judgment should not be different in kind from that prayed for in the complaint; 8.) The default judgment should not award unliquidated damages.

Q: In the complaint, the claim is P300,000. The defendant defaulted. The court required the plaintiff to present his evidence and during the trial, the latter proved P500,000 total claim. Can the court award P500,000 claim as proved?

A: NO. It should only be P300,000 as prayed for in the complaint.

Q: Suppose during the trial, only P200,000 was proved. What should be the amount of the default judgment?

A: Only P200,000 as proved because it did not exceed the amount prayed for in the complaint. Therefore, the rule is, the default judgement cannot exceed the amount prayed for in the complaint although it may be less than it. Yaannn!

FUNDAMENTAL REASON ON THE RULE ON DEFAULT

What is the reason behind this? You have to know the philosophy on default to understand the reason behind paragraph [d]. Default means the defendant failed to file an answer despite the fact that he was properly summoned.

Q: If a defendant failed to file an answer, what may be the reasons behind that? Why did he not file an answer?

A: In the case of LIM TOCO vs. GO FAY, (80 Phil 166), there are two (2) possible reasons:

4.) Defendant deliberately did not answer because he believed that he had no good defense, and that the claim is fair. And if he will make an answer, still he will not win and would just incur expenses;

5.) He had a meritorious defense and he wanted to answer but for one reason or another beyond his control, he failed to file his answer.

Q: In the second possibility – the defendant had a defense and wanted to file an answer but failed to file an answer, what is the remedy of such defendant?

A: It is paragraph [b] – file a motion to lift the order of default and state the reasons beyond one’s control – fraud, mistake, accident, or excusable negligence (FAME) and that there is a meritorious defense.

Now suppose he did not answer because he thinks the claim is fair and so he will just pay. Then, the contingency is paragraph [d] – rest assured that the judgment will not exceed the amount or be different in kind from that prayed for. At least, you will not be surprised.

Just imagine, if you file a case against me for P200,000 damages and then I thought its fair. So I allowed myself to be defaulted because anyway its only P200,000 because if I file my answer, the costs could increase. And then during the trial, you proved that the damages were in fact P2 million. So, when I received the judgment it was already P2 million when the complaint was only for P200,000. Now, if you knew that would be the case, then you would have fought it out. In other words, its unfair. Hence, the reason.

Q: If the defendant filed an answer but failed to appear during trial, what will happen?