G.R. No. 130330 , September 26, 2003
Fernando Go, Petitioner, vs. Michael Tan and Lolita Tan, Respondents.

FACTS

Petitioner Fernando Go and respondent Michael Tan entered into a five-year lease contract over a parcel of land. The contract prohibited subleasing. Upon learning that Tan had subleased the property to the Siy brothers, Go initiated an action for illegal detainer. Anticipating this, the Tans filed a complaint for specific performance and damages against Go and the Siy brothers in the Regional Trial Court (RTC), securing a temporary restraining order (TRO). During a hearing on the Tans’ application for injunction, the RTC judge asked Go’s counsel if an answer had been filed. Upon hearing a negative reply, the judge stated the court would “wait for you to file your answer.” Relying on this, Go filed a motion for extension the following day, which was the last day to file his answer. The Tans immediately moved to declare Go in default.
The trial court denied Go’s motion for postponement of the hearing on the incidents, declared him in default for failure to file a timely answer, and proceeded with an ex parte hearing. Go’s motions for reconsideration were denied. The RTC later rendered a judgment by default, which was affirmed with modification by the Court of Appeals (CA). The CA upheld the default order but noted the main issue of possession had been rendered moot by a final ejectment ruling in Go’s favor.

ISSUE

Whether the Court of Appeals erred in upholding the trial court’s order declaring petitioner in default.

RULING

The Supreme Court reversed the CA’s ruling on the default order. The Court emphasized that procedural rules are tools to promote, not thwart, substantial justice. A default order is proper only when the failure to answer is clearly attributable to gross negligence, bad faith, or a deliberate attempt to delay. Here, Go’s failure to file his answer on the exact due date was not due to flouting court processes but to his reliance on the trial judge’s statement during the hearing that the court would “wait for you to file your answer.” This constituted a justifiable reason for the brief delay.
The Court held that a liberal interpretation was warranted to allow a full trial on the merits, particularly since the case still involved unresolved claims for damages. Denying Go the opportunity to present his evidence on these claims would result in a judgment based solely on ex parte evidence, risking a miscarriage of justice. The primary objective of litigation is the search for truth, which is best achieved by affording both parties ample opportunity to adduce proof. Consequently, the Supreme Court set aside the order of default and the judgment by default, and remanded the case to the trial court to allow Go to file his answer and for a full trial on the remaining issue of damages.