GR 217138; (August, 2020) (Digest)
G.R. No. 217138 , August 27, 2020
VITARICH CORPORATION, PETITIONER, VS. FEMINA R. DAGMIL, RESPONDENT.
FACTS
Petitioner Vitarich Corporation filed an action for sum of money against respondent Femina Dagmil before the Regional Trial Court (RTC) of Malolos City. Upon receipt of summons, Dagmil’s counsel moved to dismiss on grounds of improper venue. The RTC denied the motion and directed Dagmil to answer the complaint. Dagmil’s counsel received the order but she did not file any responsive pleading. Vitarich moved to declare Dagmil in default. Meanwhile, Dagmil’s new counsel entered his appearance and filed a motion to admit answer. The RTC declared Dagmil in default, allowed Vitarich to present evidence ex-parte, denied the new counsel’s entry of appearance and the motion to admit answer, and subsequently rendered a default judgment against Dagmil. Dagmil filed a petition for relief from judgment and a motion for new trial, citing her former counsel’s excusable negligence (e.g., the order was placed in a wrong case folder and the counsel had health issues). The RTC denied these motions, ruling that a client is bound by the actions of counsel. Dagmil filed a petition for certiorari before the Court of Appeals (CA). The CA reversed the RTC’s judgment of default and remanded the case, ordering the admission of Dagmil’s answer. The CA found that Dagmil had manifested a strong desire to file an answer and avail of her day in court, and that her answer was filed before the declaration of default. Vitarich filed the present petition.
ISSUE
Whether the Court of Appeals erred in setting aside the RTC’s order of default and judgment by default.
RULING
The Supreme Court denied the petition and affirmed the CA Decision. The Court held that the CA correctly reversed the judgment of default. The answer was filed by registered mail before the declaration of default, and the date of mailing is considered the date of filing. The Court reiterated the principle that it is within the sound discretion of the trial court to permit the filing of an answer even after the reglementary period, provided there is no intent to delay and no prejudice to the plaintiff. Default judgments are frowned upon, and courts should be liberal in setting aside orders of default to give parties every opportunity to present their case on the merits. The Court found that Dagmil’s several motions manifested her desire to be heard, and her answer indicated a prima facie meritorious defense. The negligence of her former counsel, under the circumstances, was excusable. The RTC’s refusal to admit the answer and its declaration of default constituted grave abuse of discretion.