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INDIANAAEROSPACE UNIVERSITY vs. (CHED) G.R. No. 139371. April 4, 2001 (Digested)

G.R. No. 139371. April 4, 2001
 Civil Procedure: Effect of failure to plead

When the delayed filing of an answer causes no prejudice to the plaintiff, default orders should be avoided. Inasmuch as herein respondent was improvidently declared in default, its Petition for Certiorari to annul its default may be given due course. The act of the Commission on Higher Education enjoining petitioner from using the word university in it corporate name and ordering it to revert to its authorized name does not violate its proprietary rights or constitute irreparable damage to the school. Indeed, petitioner has no vested right to misrepresent itself to the public. An injunction is a remedy in equity and should not be used to perpetuate a falsehood.


Dr. Vera, Chairman, Technical Panel for Engineering, Architecture, and Maritime Education (TPRAM) of [CHED], received a letter from Douglas R. Macias, Chairman, Board of Aeronautical Engineering, (PRC) and Chairman, Technical Committee for Aeronautical Engineering (TPRAME) inquiring whether petitioner had already acquired university status in view of the latter’s advertisement in the Manila Bulletin.
Dr. Vera formally referred the aforesaid letter to Chairman Alcala with a request that the concerned Regional Office of CHED be directed to conduct appropriate investigation on the alleged misrepresentation. Legal Affairs Service was requested to take legal action against petitioner. Subsequently, respondent directed petitioner to desist from using the term University, including the use of the same in any of its alleged branches. 
In the course of it investigation, respondent was able to verify from the (SEC) that petitioner had filed a proposal to amend its corporate name from Indiana School of Aeronautics to Indiana Aerospace University, which was supposedly favorably recommended by the (DECS) per its Indorsement.
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Petitioner filed a Complaint for Damages with prayer for Writ of preliminary and Mandatory Injunction and Temporary Restraining Order against respondent. On their contentions they averred that respondent should be declared default. RTC declared respondent default. Nevertheless, The CA ruled that Respondent should not have been declared in default, because its answer had been filed long before the RTC ruled upon petitioners Motion to declare respondent in default. Thus, respondent had not obstinately refused to file an Answer; on the contrary, its failure to do so on time was due to excusable negligence. Declaring it in default did not serve the ends of justice, but only prevented it from pursuing the merits of its case.

Whether or not the default order is valid.

No, We agree with respondent. Lina v. Court of Appeal discussed the remedies available to a defendant declared in default, as follows: (1) a motion to set aside the order of default under Section 3(b), Rule 9 of the Rules of Court, if the default was discovered before judgment could be rendered; (2) a motion for new trial under Section 1(a) of Rule 37, if the default was discovered after judgment but while appeal is still available; (3) a petition for relief under Rule 38, if judgment has become final and executory; and (4) an appeal from the judgment under Section 1, Rule 41, even if no petition to set aside the order of default has been resorted to.
These remedies, however, are available only to a defendant who has been validly declared in default. Such defendant irreparably loses the right to participate in the trial. On the other hand, a defendant improvidently declared in default may retain and exercise such right after the order of default and the subsequent judgment by default are annulled, and the case remanded to the court of origin. The former is limited to the remedy set forth in section 2, paragraph 3 of Rule 41 of the pre 1997 Rules of Court, and can therefore contest only the judgment by default on the designated ground that it is contrary to evidence or law. The latter, however, has the following options: to resort to this same remedy; to interpose a petition for certiorari seeking the nullification of the order of default, even before the promulgation of a judgment by default; or in the event that judgment has been rendered, to have such order and judgment declared void.
In prohibiting appeals from interlocutory orders, the law does not intend to accord executory force to such writs, particularly when the effect would be to cause irreparable damage. If in the course of trial, a judge proceeds without or in excess of jurisdiction, this rule prohibiting an appeal does not leave the aggrieved party without any remedy. In a case like this, a special civil action of certiorari is the plain, speedy and adequate remedy.
Herein respondent controverts the judgment by default, not on the ground that it is unsubstantiated by evidence or that it is contrary to law, but on the ground that it is intrinsically void for having been rendered pursuant to a patently invalid order of default.

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