G.R. No. 172455 ; February 1, 2012
ANTONIO CHUA, Petitioner, vs. TOTAL OFFICE PRODUCTS AND SERVICES (TOPROS), INC., Respondent.

FACTS

Respondent TOPROS filed a complaint for annulment of contract against petitioner Antonio Chua. After summons was served, petitioner filed a motion to dismiss, which the trial court denied. Petitioner then filed a motion for reconsideration and subsequently a petition for certiorari with the Court of Appeals, but no restraining order was issued. Consequently, petitioner failed to file an answer. The trial court declared him in default, received respondent’s evidence ex-parte, and rendered a judgment annulling the loan and mortgage contracts and ordering the cancellation of annotations on the titles. Petitioner’s motion for reconsideration was denied.
Petitioner appealed to the Court of Appeals, arguing he was deprived of due process due to his former counsel’s gross negligence in failing to file an answer. The CA dismissed the appeal, upholding the validity of the default order under the Rules of Court. It found no compelling reason to set aside the default, noting petitioner failed to demonstrate a meritorious defense. Petitioner’s motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in dismissing the appeal and affirming the default judgment, despite petitioner’s claim of being deprived of due process due to his counsel’s gross negligence.

RULING

The Supreme Court denied the petition. The general rule is that a client is bound by the mistakes of his counsel. An exception exists only when counsel’s negligence is so gross, reckless, and inexcusable that it deprives the client of his day in court, provided the client has a good and meritorious cause or defense. For this exception to apply, the court must be convinced that the client possessed a substantial defense that was lost solely due to counsel’s incompetence.
In this case, petitioner failed to satisfy this requirement. The Court agreed with the CA’s finding that there was no showing petitioner had a good cause or a meritorious defense to present. Even during the proceedings, petitioner did not persuasively demonstrate to the trial court that justice demanded lifting the default order. The CA meticulously reviewed the records and found the evidence sufficient to support the trial court’s judgment for respondent. Petitioner’s arguments focused solely on procedural leniency without substantiating a valid defense on the merits. Therefore, the circumstances did not warrant an exception to the general rule binding clients to their counsel’s actions. The dismissal of the appeal was proper.