ZENITH INSURANCE vs.

PURISIMA
1982 May 24; G.R. No. L-5755
MELENCIO-HERRERA, J.:
A Petition for Review on Certiorari of a default judgment rendered by the
Court of First Instance of Manila, Branch III, in an action for damages arising
from a vehicular accident entitled !Perla Cia" de #eguros, Inc" vs" Manalang,
$arcia and %enith Insurance Cor&"!, doc'eted therein as Civil Case (o"
)*+,*+" In that -ecision, said defendants were ordered to &ay res&ondent
Perla Cia" de #eguros, jointly and severally, the sum of P./,+++"++ with )*0
interest &er annum from 1anuary )2, ),2,, &lus the additional sum of
P*,+++"++ as attorney3s fees"
4he records show that &etitioner, as defendant below, 5led its Answer with
counterclaim" But, for its failure to a&&ear at the scheduled &re6trial on
1anuary )7, ),8), &etitioner cor&oration 9then the defendant: was declared
as in default and Perla Cia" de #eguros, as &lainti;, was authori<ed to adduce
evidence e=6&arte" Petitioner alleges that it did not receive any co&y of said
>rder of default"
4he lower Court >rder setting the case for &re6trial on 1anuary )7, ),8)
indicated that !the &arties and their counsel 9were: noti5ed in o&en Court"!
?)@
Aowever, in its !Motion for Reconsideration and to #et aside >rder of
-efault! 5led by &etitioner on May )B, ),8), or after its recei&t of the
judgment by default, as well as in its &resent Petition, &etitioner insists that it
received no notice of the &re6trial set for 1anuary )7, ),8) as !borne by the
records of this case,! ?*@ and that &etitioner3s counsel was sic' with inCuen<a
from 1anuary )/ to 1anuary )8, ),8) and advised to rest for a wee', as
shown by a veri5ed medical certi5cate" ?.@
4hus, &etitioner3s submission is that res&ondent 1udge acted without or in
e=cess of jurisdiction or with grave abuse of discretion in declaring &etitioner
as in default for non6a&&earance at the 1anuary )7, ),8) &re6trial and in
rendering the default judgment"
An e=amination of the e=&ediente below fails to reveal any noti5cation to
&arties or counsel of the &re6trial set for 1anuary )7, ),8) ?B@ unli'e the trial
Court3s other >rders, such as, the noti5cation for the &re6trial on (ovember
)2, ),8+ ?/@ , for -ecember )8, ),8+ ?7@ , and for the &resentation of
evidence on February B, ),8+" ?2@
!-ue notice! not having been clearly established, we are constrained to hold
that the trial Court committed grave abuse of discretion in considering
&etitioner as in default and in denying its !Motion for Reconsideration and to
#et Aside >rder of -efault! 5led on May )8, ),8)" ConseDuently, the validity
of the >rder of default and all the &roceedings that trans&ired subseDuent
thereto cannot be sustained" ?8@
Additionally, default judgments are frowned u&on"
!" " " Ee maintain fealty to the &rinci&le that courts should be liberal in
setting aside orders of default for default judgment is frowned u&on, and
unless it clearly a&&ears that the reo&ening of the case is intended for delay,
it is best that the trial Courts give both &arties every chance to 5ght their
case fairly and in the o&en, with out resort to technicality"! ?,@
4he defenses that &etitioner wanted to inter&ose if the default judgment had
been lifted are listed in the AFdavit of Merit of its #enior ice President as
followsG
!a: 4hat there was no documentary evidence &ur&orting to show that the
vehicle of defendant Roman $arcia was insured with defendant %enith
Insurance Cor&orationH
!b: 4hat assuming without admitting that the said vehicle of defendant
Roman $arcia was insured with defendant %enith Insurance Cor&oration, the
action against it had already &rescribed, it a&&earing that it was 5led more
than one year after the occurrence of the vehicular accident &ursuant to the
&rovisions of the (ew Insurance CodeG
!c: 4hat assuming again, without admitting, that the said vehicle of
defendant Roman $arcia was insured with %enith Insurance Cor&oration, its
liability is subject to the terms and conditions of the insurance &olicyH
!d: 4hat there is no record on 5le that this &articular vehicular accident was
re&orted to our com&any"! ?)+@
4o a;ord &etitioner its day in Court, it should be allowed to &resent evidence
to substantiate those defenses"
And although a&&eal was technically available to &etitioner, Certiorari lies
when such a&&eal does not &rove to be a s&eedy and adeDuate remedy" ?))@
Certiorari is a more s&eedy and eFcacious remedy to have the judgment by
default set aside as a nullity where a &arty has been illegally declared in
default" ?)*@
(ote should also be ta'en of the fact that the trial Court had already ordered
the issuance of a Erit of I=ecution in its >rder of #e&tember )2, ),8), ?).@
e=ce&t that res&ondent 1udge, in his >rder of (ovember )*, ),8), held in
abeyance resolution of &etitioner3s Motion to Juash said Erit &ending the
resolution by this Court of this Petition" ?)B@ Clearly, even if a&&eal were
available to &etitioner, it is no longer s&eedy and adeDuate" ?)/@
EAIRIF>RI, granting Certiorari, the default >rder and default 1udgment
rendered by res&ondent 1udge in Civil Case (o" )*+,*+ are hereby set aside
and he is hereby directed to reset the case for &re6trial and trial and to
render judgment accordingly"
(o costs"
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