JUAN A. GOCHANGCO, vs. THE COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL, G.R. No. L-49396 January 15, 1988 (Digested)

JUAN A. GOCHANGCO,
vs.
THE COURT OF FIRST INSTANCE OF NEGROS OCCIDENTAL,

G.R. No. L-49396 January 15, 1988

NARVASA, J.:

 Civil Procedure: Rule 9 Effect of Failure to Plead

Facts:

          Hodges sought the ejectment from certain parcels of land in Bacolod City titled in his name, of several persons, namely: Basilicio Macanan, Gertrude Nolan, Alejandro Santiago, Jr., Sy Ho, and Milagros Minoria. 

          Macanan, Nolan and Santiago were duly served with summons. Macanan died afterwards, and since his heirs could not be located, and hence could not be substituted in his place, the case against him was eventually dismissed without prejudice.  Santiago and Nolan voluntarily vacated the premises; so, the case was also dismissed as against them. 

Summons was also duly served on Minoria. Although she refused to acknowledge such service, she subsequently filed an answer to the complaint, thru counsel.

           Sy Ho also appears to have been served with summons, service being evidenced, it is claimed, by the return to this effect of the Provincial Sheriff. But, as, will shortly be recounted, Sy Ho would later deny such service.

           Plaintiff Hodges died during the pendency of the ejectment suit; and on August 20,1964, the court-appointed Administrator of his estate, the Philippine Commercial and Industrial Bank (PCIB), was substituted as party plaintiff.  PCIB thereafter filed a motion to declare Sy Ho in default for failure to answer the complaint. This was granted.

Issue:

Whether or not the petitioners must be considered default for his failure to submit evidence on the clerk of court not by the judge.

Held:

           The underlying philosophy of the doctrine of default is that the defendant's failure to answer the complaint despite receiving copy thereof together with summons, is attributable to one of two causes: either (a) to his realization that he has no defenses to the plaintiffs cause and hence resolves not to oppose the complaint, or, (b) having good defenses to the suit, to fraud, accident, mistake or excusable negligence which prevented him from seasonably filing an answer setting forth those defenses,.  It does make sense for a defendant without defenses, and who accepts the correctness of the specific relief prayed for in the complaint, to forego the filing of the answer or any sort of intervention in the action at all. For even if he did intervene, the result would be the same: since he would be unable to establish any good defense, having none in fact, judgment would inevitably go against him. And this would be an acceptable result, if not being in his power to alter or prevent it, provided that the judgment did not go beyond or differ from the specific relief stated in the complaint. It would moreover spare him from the embarrassment of openly appearing to defend the indefensible. On the other hand, if he did have good defenses, it would be unnatural for him not to set them up properly and timely, and if he did not in fact set them up, it must be presumed that some insuperable cause prevented him from doing so: fraud, accident, mistake, excusable negligence. In this event, the law will grant him relief, and the law is in truth quite liberal in the reliefs made available to him: a motion to set aside the order of default prior to judgment;  a motion for new trial to set aside the default judgment;  an appeal from the judgment by default even if no motion to set aside the order of default or motion for new trial had been previously presented;  a special civil action for certiorari impugning the court's jurisdiction. 

         A defendant in default is not and should not be placed in a situation more favorable than a defendant who has answered but who fails to appear for trial despite notice. In the latter case, as in the former, the trial may proceed ex parte, but is not invalidated by the fact merely that reception of evidence had been undertaken by the clerk of court on the Court's instructions; this, despite the fact that the judgment that may be rendered on the basis of such an ex parte trial may award reliefs exceeding the amount or different from that, prayed for in the complaint, unlike a judgment by default which cannot differ from or go beyond what is set down in the prayer of the complaint.

        It was therefore error for the Court a quo to have declared the judgment by default to be fatally flawed by the fact that the plaintiffs evidence had been received not by the Judge himself but by the clerk of court.

One last word. The City Court and City Sheriff were impleaded as parties petitioners in the petition at bar. This is incorrect. They are not proper parties. They do not have — and should not have — any interest in the subject of the instant proceedings, either in obtaining any relief in respect thereto of any nature whatsoever, or in the success of the petitioner. Only Gochangco is the proper party petitioner.