G.R. No. L-12170; April 18, 1960
PEOPLE’S SURETY & INSURANCE CO., petitioner-appellant, vs. PAZ PUEY VDA. DE LIMCACO, HON. FERNANDO C. VILLAROSA, as Judge of Municipal Court Pasay City, and the SHERIFF OF THE CITY OF MANILA, respondents-appellees.

FACTS

1. Paz Puey Vda. de Limcaco filed Civil Case No. 1362 in the Municipal Court of Pasay City on December 9, 1954, against People’s Surety & Insurance Co., Inc. (the Company) for a sum of money.
2. The Company, although duly summoned, did not answer or appear at the hearing set for December 21, 1954. The hearing was postponed to December 24, 1954, because the sheriff’s return of service was not yet attached to the record. The Company was not notified of this postponement.
3. On December 24, 1954, the Company again failed to appear. Upon Limcaco’s motion, the Company was declared in default, and Limcaco presented her evidence.
4. On January 8, 1955, the Municipal Court rendered a decision dismissing the complaint for lack of evidence.
5. On January 21, 1955, upon Limcaco’s ex parte motion, the court granted a new trial. This new trial was held on February 6, 1955, without notice to the Company.
6. On February 11, 1955, the court rendered a second decision, reversing its first decision and sentencing the Company to pay the sum claimed. Copy of this second decision was not served upon the Company.
7. On August 18, 1955 (after the six-month period for relief under Rule 38 had lapsed), Limcaco filed an ex parte motion for a writ of execution, which was granted.
8. Upon receiving a copy of the writ from the Sheriff of Manila on August 29, 1955, the Company moved to set aside the February 11, 1955 decision, alleging nullity of the proceedings due to lack of notice. This motion was denied on September 28, 1955.
9. On October 8, 1955, the Company filed a petition for certiorari in the Court of First Instance of Rizal seeking to annul the orders of December 24, 1954, January 21, 1955, and August 18, 1955, and the decision of February 11, 1955. The CFI issued a preliminary injunction but later denied the petition for certiorari “for lack of merits” in an order dated January 19, 1957. The Company appealed.

ISSUE

Whether the orders and decision issued by the Municipal Court in Civil Case No. 1362 are null and void for having been rendered without due process, specifically due to lack of requisite notice to the Company.

RULING

The Supreme Court GRANTED the writ of certiorari, declaring the challenged orders and decision null and void.
1. On the Default Declaration of December 24, 1954: The Company was entitled to notice of the hearing on December 24, 1954. It had not been declared in default prior to that date. The Municipal Court’s declaration of default on December 24 for the Company’s non-appearance at that hearing, for which it received no notice, was null and void. Section 13 of Rule 4 (governing inferior courts) authorizes but does not mandate a declaration of default for failure to appear at the time designated in the summons, unlike the mandatory provision for courts of first instance under Rule 35.
2. On the Subsequent Proceedings: All subsequent proceedings predicated on this invalid declaration of default—including the ex parte grant of a new trial on January 21, 1955, the new trial held on February 6, 1955, the decision of February 11, 1955, and the ex parte writ of execution issued on August 18, 1955—were likewise null and void. The Company was not notified of these proceedings or of the second decision until it received the writ of execution in late August 1955.
3. On Denial of Due Process: The Company was denied due process of law. It had no knowledge of the proceedings that led to the adverse decision and execution until after the period for seeking relief under Rule 38 had expired.
Therefore, the order of the Court of First Instance of Rizal denying the petition for certiorari was reversed. The orders of December 24, 1954, January 21, 1955, and August 18, 1955, and the decision of February 11, 1955, in Municipal Court Case No. 1362 were annulled. Costs were adjudged against respondent Limcaco.