G.R. No. L-21914 February 28, 1978
T.J. WOLFF & CO., INC., plaintiff-appellee, vs. DEMETRIO MORALDE, doing business under the name and style, CEBU PEOPLE’S GENERAL SUPPLY, defendant-appellant.

FACTS

Plaintiff T.J. Wolff & Co., Inc. filed a collection suit against defendant Demetrio Moralde for unpaid radio sets. The defendant filed a motion to dismiss, which the trial court denied in an order dated December 1, 1962. A copy of this order was sent by registered mail to defendant’s counsel, Atty. Gregorio Homedia, at his address of record. The registry return card showed it was received on December 12, 1962, by one Rodriguez on behalf of Atty. Homedia. The defendant failed to file an answer, leading the court to declare him in default, receive ex parte evidence, and render a judgment against him. A writ of execution was subsequently issued.
The defendant then filed a petition for relief from judgment, claiming he never received the order denying his motion to dismiss and that his failure to answer was due to excusable negligence. He also asserted a meritorious defense, alleging he was not the owner of the business entity sued. Vacation Judge Tito V. Tizon initially granted the petition, set aside the default judgment, and allowed the defendant to file his answer. However, upon plaintiff’s motion for reconsideration, the regular presiding judge, Judge Francisco Arca, set aside Judge Tizon’s order and reinstated the default judgment. The defendant appealed.

ISSUE

Whether the trial court erred in setting aside the order granting the petition for relief from judgment and in rendering a default judgment based on ex parte evidence.

RULING

The Supreme Court affirmed the trial court’s order and the default judgment. On procedural authority, the Court held that Judge Arca, as the regular judge assigned to the case, had full authority to reconsider and set aside the interlocutory order issued by the vacation judge, Judge Tizon. On substantive grounds for relief from judgment, the Court emphasized that a defendant must prove both excusable negligence and a meritorious defense. The defendant failed on both counts.
The alleged excusable negligence—counsel’s claim of being too busy and losing case records—was insufficient to justify relief. The denial order was properly sent to counsel’s address of record and received by a representative, constituting valid service. Counsel’s workload does not equate to excusable negligence. Furthermore, the defendant failed to substantiate his claimed meritorious defense. His denial of ownership was contradicted by his own letter to the plaintiff and a deed of assignment he executed, which were presented as evidence. Finally, the Court declined to review the factual finding on the evidence presented during the ex parte hearing, as the appealed amount was within the exclusive appellate jurisdiction of the Court of Appeals on questions of fact, and the defendant, by appealing directly to the Supreme Court, was deemed to have waived the right to challenge such findings.