G.R. No. 71171 July 23, 1985
MARCIANA VDA. DE HOYO-A, ET AL., petitioners, vs. DOMINADOR VIRATA and INTERMEDIATE APPELLATE COURT, respondents.

FACTS

The petitioners, Marciana Hoyo-a and her eight children, filed two injunction cases in 1978 against private respondent Dominador Virata with the Court of First Instance of Negros Occidental. The suits sought to restrain Virata from occupying portions of two homestead applications covering Lot No. 2527 in Escalante, Negros Occidental. The trial court initially dismissed the cases as premature in April 1978 but later reconsidered and reinstated them in December 1981.
Subsequently, on February 20, 1984, the trial court, upon the petitioners’ ex parte motion, declared Virata in default. Virata filed a motion to set aside this order of default, which was denied by the trial court on June 19, 1984. His motion for reconsideration was likewise denied. The trial judge refused to give due course to Virata’s appeal from the denial order and proceeded with the reception of the petitioners’ evidence. Meanwhile, Virata secured a resolution from the Intermediate Appellate Court (now the Court of Appeals) dated April 10, 1985, requiring the elevation of the case records, prompting the petitioners to file the instant prohibition case before the Supreme Court.

ISSUE

Whether an order denying a motion to set aside an order of default is appealable.

RULING

The Supreme Court ruled that such an order is not appealable. The Court drew a clear distinction between an order denying a motion to set aside an order of default and an order denying a motion to set aside a judgment by default. The former is interlocutory because it does not terminate the proceedings or finally dispose of the parties’ rights; the trial court has yet to render a judgment on the merits based on the evidence presented by the plaintiff. As an interlocutory order, it is not subject to appeal but may be reviewed through a special civil action of certiorari if issued with grave abuse of discretion. Citing Abesames vs. Garcia and Section 2, Rule 41 of the Rules of Court, the Court emphasized that only final orders or judgments are appealable.
To expedite the resolution of the long-pending 1978 cases, the Supreme Court granted the petition and remanded the records to the trial court. It directed Virata to file his answer within a non-extendible period of ten days from notice of the finality of this judgment. Should he fail to do so, the order of default would stand, and the petitioners could continue presenting their evidence. If an answer is filed, the case should proceed to pre-trial and trial, during which Virata’s counsel would be allowed to cross-examine the petitioner Marciana Hoyo-a.