Banco de Oro vs.

Tansipek
Topic: Motion to Life Order of Default; Not Motion Reconsideration
Facts:
1. J. O. Construction, Inc. (JOCI) entered into a contract with Duty Free Philippines, Inc. for the
construction of a Duty Free Shop in Mandaue City.
a. Payments were received by JOCI directly or through herein respondent John
Tansipek, its authorized collector.
2. However, payment through PNB Check No. 0000302572 for P4,050,136.51 was not turned
over to JOCI. Instead, respondent Tansipek endorsed said check and deposited the same to his
account in PCIB.
a.
PCIB allowed the said deposit, despite the fact that the check was crossed for the
deposit to payees account only, and despite the alleged lack of authority of
respondent Tansipek to endorse said check.
3. JOCI filed a complaint against PCIB for collection of sum of money.
4. PCIB filed its answer and likewise moved for leave for the court to admit the formers third-party
complaint against respondent Tansipek.
5. In the third-party complaint, PCIB prayed for subrogation.
6. Tansipek was granted time to file his Answer to the Third-Party Complaint.
a. He was, however, declared in default for failure to do so.
b. The Motion to Reconsider the Default Order was denied
c. CA: Petition for Certiorari was dismissed for failure to attach the assailed Orders.
7. The main case ensued.
8. RTC: ordered the payment of the sum prayed for and that respondent shall pay whatever
amount PCIB shall be paying JOCI.
9. CA: Reversed.
a. RTC was in error to have acted on PCIBs motion to declare respondent Tansipek in
default.
b. Case was remanded to the RTC for further proceedings.
10.Banco de Oro as successor-in-interest to PCIB, filed the instant Petition for Review on
Certiorari, assailing the above Decision.
Issue: Whether respondent Tansipek was in Default
HELD: YES.
Respondent Tansipeks remedy against the Order of Default was erroneous from the very beginning.
Respondent Tansipek should have filed a Motion to Lift Order of Default, and not a Motion for
Reconsideration, pursuant to Section 3(b), Rule 9 of the Rules of Court:
(b) Relief from order of default.A party declared in default may at any time after notice thereof and
before judgment file a motion under oath to set aside the order of default upon proper showing that his
failure to answer was due to fraud, accident, mistake or excusable negligence and that he has a
meritorious defense. In such case, the order of default may be set aside on such terms and conditions as
the judge may impose in the interest of justice.
A Motion to Lift Order of Default is different from an ordinary motion in that the Motion should be verified;
and must show fraud, accident, mistake or excusable neglect, and meritorious defenses. 7 The allegations
of (1) fraud, accident, mistake or excusable neglect, and (2) of meritorious defenses must concur.8
Assuming for the sake of argument, however, that respondent Tansipeks Motion for Reconsideration may
be treated as a Motion to Lift Order of Default, his Petition for Certiorari on the denial thereof has already
been dismissed with finality by the Court of Appeals. Respondent Tansipek did not appeal said ruling of
the Court of Appeals to this Court. The dismissal of the Petition for Certiorari assailing the denial of

respondent Tansipeks Motion constitutes a bar to the retrial of the same issue of default under the
doctrine of the law of the case.
The issue of the propriety of the Order of Default had already been adjudicated in Tansipeks Petition for
Certiorari with the Court of Appeals. As such, this issue cannot be readjudicated in Tansipeks appeal of
the Decision of the RTC on the main case. Once a decision attains finality, it becomes the law of the case,
whether or not said decision is erroneous. 10 Having been rendered by a court of competent jurisdiction
acting within its authority, the judgment may no longer be altered even at the risk of legal infirmities and
errors it may contain.