G.R. No. 200727 ; March 4, 2013
IRENE VILLAMAR-SANDOVAL, Petitioner, vs. JOSE CAILIPAN, MARIA OFELIA M. GONZALES, LAURA J. CAYABYAB, ROGELIO COSTALES, and FERNANDO V. AUSTRIA, Respondents.

FACTS

Petitioner Irene Villamar-Sandoval filed a complaint for damages against respondents, alleging they maliciously supported a libel case against her. During proceedings, respondents’ counsel failed to attend a scheduled pre-trial conference and did not file a required pre-trial brief. The Regional Trial Court (RTC) consequently declared respondents in default in its October 20, 2010 Order, a ruling it sustained in a November 10, 2010 Order denying reconsideration. The RTC proceeded to hear the case ex parte and rendered a decision on January 11, 2011.
Respondents, prior to receiving the RTC’s January 11 decision, had filed a petition for certiorari with the Court of Appeals (CA) on January 11, 2011, challenging the default orders. After receiving the RTC decision, they also filed a notice of appeal. The CA granted the certiorari petition, setting aside the RTC’s default orders and ordering remand for respondents to present evidence, applying the principle of substantial justice and finding the default sanction too severe.

ISSUE

The core issues were: (1) whether respondents’ petition for certiorari was rendered moot and improper by the RTC’s subsequent final decision and their filing of a notice of appeal; and (2) whether the CA erred in nullifying the RTC’s orders of default.

RULING

The Supreme Court granted the petition, reversing the CA. On the first issue, the Court held that the certiorari petition was indeed rendered moot by the RTC’s final judgment. A petition for certiorari under Rule 65 is a remedy against interlocutory orders (like the default orders) issued without or in excess of jurisdiction or with grave abuse of discretion. However, once a final judgment is rendered, any error in an interlocutory order is deemed merged with the judgment. The proper remedy is to appeal the final judgment itself and assign the alleged error in the interlocutory order as part of the appeal. Here, respondents received the RTC’s final decision and filed a notice of appeal. Therefore, the CA should have dismissed the certiorari petition as moot, as the issues regarding the default could be, and were, raised in their ordinary appeal.
On the substantive issue of default, the Supreme Court, while not definitively ruling on the RTC’s discretion due to the procedural mootness, implicitly underscored the primacy of the final judgment and the appeal process. The legal logic is clear: certiorari is not a substitute for a lost appeal. By availing themselves of an appeal from the final decision, respondents abandoned their certiorari action challenging the interlocutory default orders. The CA thus erred in still granting certiorari relief after a final judgment had been rendered and appealed. The case was remanded to the CA to give due course to respondents’ ordinary appeal.