OTERO V TAN

15 August 2012
Petition for review on certiorari under Rule 45 seeking to annul and set aside CA Decision affirming RTC
Judgment
FACTS:
- Complaint- Tan filed for collection of sum of money and damages with MTCC Cagayan de Oro against
Otero alleging that Otero purchased on credit petroleum products from his Petron outlet for P270k;
despite demands, Otero defaulted
- Despite receipt of summons through wife Otero, he failed to file answer with MTCC
- Tan then filed a Motion to declare Otero in default; Otero denied receiving summons
- Hearings were conducted until MTCC issued an order declaring Otero in default, to which a copy was
sent to Otero, and thereby allowing Tan to present his evidence ex parte: his employees, showing
various statements of account
MTCC
- In favor of Tan, noting that Oteros failure to file an answer despite notice is a tacit admission of Tans
claim
- Otero appealed to RTC asserting that MTCCs decision is factually baseless and that he was deprived
of due process
RTC
- Affirmed MTCC, noting that the statements of account presented were overwhelming enough to prove
Oteros indebtedness, and that he was served due notice contrary to Oteros claim of deprivation of
due process
- Otero filed for MR but was denied; then filed for review with CA
- Explaining that evidence presented were presented by Betache who was not a witness by Tan
- That the genuineness and due execution of said statements of account, being private, must
first be established lest the said documents be rendered inadmissible in evidence
CA
- Assailed RTC and MTCC decision, noting that any defense which Otero may have against Tan is
already deemed waived due to Oteros failure to file his answer
ISSUE:
- WON Otero, declared in default by MTCC, in the appellate proceedings, may still raise the failure of
Tan to authenticate the statements of account which he adduced in evidence
HELD:
- YES
- A defendant who fails to file an answer may, upon motion, be declared by the court in default
- A party in default loses his right to present his defense, control the proceedings, and examine
or cross-examine witnesses
- However, the fact that a defendant has lost his standing in court for having been declared in default
does not mean that he is left without recourse
- Remedies available to party in default (Lina v CA, et al):
- May, at any time after discovery thereof and after judgment, file a motion, under
oath, to set aside the order of default on the ground that his failure to answer was due to fraud,
accident, mistake, or excusable neglect, and that he has meritorious defenses
- If judgment has been rendered when defendant discovered default, but before the
same has become final and executor, he may file a motion for new trial
- If defendant discovered the default after the judgment has become final and
executor, he may file a petition for relief
- He may also appeal from the judgment rendered against him as contrary to the
evidence or to the law, even if no petition to set aside the order of default has been presented by him
- Grounds that may be raised in such an appeal:
- Failure of plaintiff to prove material allegations of the complaint
- Decision is contrary to law
- Amount of judgment is excessive or different in kind from that prayed for
- In this case, Otero asserts that Tan failed to prove the material allegations of his complaint since the
statements of account which he presented are inadmissible in evidence

- Contrary then to CA, it is not accurate to state that having been declared in default by the MTCC,
Otero is already deemed to have waived any and all defenses which he may have against Tans claim