G.R. Nos. 109430-43. December 28, 1994.
Republic of the Philippines, petitioner, vs. Sandiganbayan (Second Division), Imelda R. Marcos and Estate/Heirs of the Late Ferdinand E. Marcos, respondents.

FACTS

The Republic filed multiple ill-gotten wealth cases against Imelda R. Marcos and the estate of Ferdinand Marcos before the Sandiganbayan. The court declared Imelda in default on April 6, 1989, for failure to file an answer. This default order was previously upheld by the Supreme Court in a prior case (G.R. Nos. 90110-43) which resolved the validity of the service of summons. On July 8, 1992, Imelda filed a motion to lift the default order. The Sandiganbayan granted her motion on October 28, 1992, finding her failure to answer was due to fraud, accident, and excusable neglect, and that she had prima facie meritorious defenses. The Republic’s motion for reconsideration was denied on January 6, 1993. The Republic then filed this petition for certiorari, arguing the Sandiganbayan committed grave abuse of discretion in lifting the default order due to Imelda’s unreasonable delay and lack of valid grounds.

ISSUE

Whether the Sandiganbayan committed grave abuse of discretion in lifting its order of default against Imelda R. Marcos.

RULING

The Supreme Court dismissed the petition, finding no grave abuse of discretion. First, it ruled that res judicata did not apply. The prior Supreme Court case only conclusively settled the validity of the service of summons and the default order based on that specific procedural issue. The present case involves the propriety of lifting that default order based on grounds of fraud, accident, mistake, or excusable neglect, which is a separate cause of action. Second, the Court emphasized that the grant of a motion to lift an order of default is addressed to the sound discretion of the trial court. Absent a clear grave abuse, its decision is presumed correct and will not be disturbed. The Sandiganbayan reasonably considered the extraordinary circumstances Imelda faced—including exile, numerous foreign lawsuits, her husband’s illness and death, and the complexity of the cases—as constituting excusable neglect. The Court also noted that the cases were still in pre-trial, so no substantial prejudice to the State would occur. Finally, the Sandiganbayan correctly found that Imelda had shown prima facie meritorious defenses, such as claiming the assets were legally acquired, which warranted a full trial on the merits. The Republic’s claim that Imelda’s political campaign caused delay was deemed speculative.