G.R. No. 196877 ; November 21, 2012
ELOISA R. NARCISO, Petitioner, vs. ESTELITA P. GARCIA, Respondent.

FACTS

Respondent Estelita P. Garcia filed a complaint for damages against petitioner Eloisa R. Narciso before the Regional Trial Court (RTC) of San Fernando, Pampanga. Instead of filing an answer, Narciso filed a motion to dismiss, challenging the court’s jurisdiction and the propriety of venue. Garcia opposed this motion and simultaneously moved to have Narciso declared in default, arguing that the time to file an answer had lapsed and citing an administrative circular discouraging motions to dismiss in lieu of answers. The RTC, after a hearing, denied Narciso’s motion to dismiss and, as a consequence, declared her in default on November 30, 2004.
Narciso filed a motion for reconsideration. Subsequently, the case underwent mediation and judicial dispute resolution, which failed. Years later, the RTC denied her motion for reconsideration, ruling that the default order had become final as she had not moved to lift it within the allowable time. Narciso then filed a motion to lift the order of default, which was also denied. Her petition for certiorari before the Court of Appeals (CA) was dismissed. The CA held that while a motion to lift default may be filed anytime before judgment, Narciso failed to allege fraud, accident, mistake, or excusable negligence and to show a meritorious defense.

ISSUE

Whether the Court of Appeals gravely abused its discretion in affirming the RTC’s order declaring petitioner Narciso in default.

RULING

Yes, the Court of Appeals committed grave abuse of discretion. The Supreme Court annulled the CA’s decision and lifted the order of default. The legal logic is anchored on the procedural rules governing motions to dismiss and the declaration of default. Under Section 1, Rule 16 of the Rules of Court, a motion to dismiss may be filed within the time for, but before filing, an answer. Crucially, the filing of such a motion suspends the running of the period to file an answer.
Applying Section 4, Rule 16, when a motion to dismiss is denied, the movant has the balance of the original period to file an answer, but in no case less than five days from receipt of the notice of denial. Therefore, when the RTC denied Narciso’s motion to dismiss on November 30, 2004, she was not yet in default; she still had at least five days to file her answer. The trial court’s simultaneous denial of the motion to dismiss and declaration of default was a serious error, as it disregarded this suspended period.
Furthermore, Narciso retained the right to file a motion for reconsideration of the order denying her motion to dismiss. Only after the denial of such a motion for reconsideration, and her subsequent failure to file an answer within the granted period, could she properly be declared in default. The CA erred in not recognizing this fundamental procedural sequence, which deprived Narciso of her right to due process and to present her defense. The Supreme Court directed the RTC to allow Narciso to file her answer and to proceed with the case.