G.R. No. 152714 August 10, 2006
PANGASINAN FIVE STAR BUS CO., INC., Petitioner, vs. SPOUSES LEON & LUISA BARREDO, Respondents.

FACTS

On April 14, 1994, a bus owned by petitioner Pangasinan Five Star Bus Co., Inc. and driven by Emilio Credo bumped the owner-type jeep of Leon Barredo, Jr., causing him serious injuries and loss of employment. Respondents Spouses Barredo filed a complaint for damages. After protracted pre-trial, the Regional Trial Court (RTC) set the trial for April 22, 1997. Petitioner and its counsel failed to appear on that date. The RTC issued an order declaring petitioner “as in default” and allowed respondents to present evidence ex parte. The RTC rendered judgment awarding damages to respondents barely a week later.
Petitioner filed a Motion to Lift the Order of Default and an unverified motion for reconsideration of the judgment, arguing lack of notice for the April 22 hearing and counsel’s illness. It claimed meritorious defenses, alleging Barredo, Jr.’s negligence and the company’s exercise of due diligence in employee selection. However, petitioner failed to attach any affidavit of merit to its motion for reconsideration. The RTC denied the motions, clarifying that its order merely allowed ex parte presentation of evidence due to petitioner’s absence. The Court of Appeals affirmed the RTC decision.

ISSUE

Whether the Court of Appeals erred in affirming the RTC judgment despite petitioner’s claim of being denied due process.

RULING

The Supreme Court denied the petition. The legal logic centers on procedural rules governing motions for new trial or reconsideration. Under Section 2, Rule 37 of the Rules of Court, a motion for new trial based on fraud, accident, mistake, or excusable negligence must be verified and supported by affidavits of merit showing the facts constituting the ground and the movant’s meritorious defense. Petitioner’s motion for reconsideration was fatally defective: it was unverified and, crucially, lacked the required affidavit of merit. An affidavit of merit is indispensable as it demonstrates that reopening the case would serve a purpose because a valid defense exists. Without it, the motion is a mere scrap of paper that does not interrupt the period for appeal. Consequently, the RTC’s denial of the motion was correct. The Court found it unnecessary to delve into petitioner’s other arguments on due process and the alleged haste in rendering judgment, as the procedural defect was dispositive. The failure to comply with a mandatory rule precluded relief, and the judgment based on respondents’ ex parte evidence thus stood.