G.R. No. L-31439 August 31, 1973
LUZON RUBBER & MANUFACTURING CO., petitioner-appellant, vs. SIXTO ESTARIS and THE HON. COURT OF APPEALS, respondents-appellees.

FACTS

Respondent Sixto Estaris filed a complaint for sum of money against petitioner Luzon Rubber & Manufacturing Co. in the City Court of Manila. Summons required the petitioner to file an answer within two to five days and set the hearing for January 18, 1966. On January 15, 1966, a Saturday, petitioner’s counsel filed a motion for extension of time to file an answer and for postponement of the hearing via registered mail. This motion did not reach the City Court until January 24, 1966. Consequently, on January 18, the City Court declared petitioner in default and rendered a judgment against it. Petitioner received a copy of this default judgment on January 26, 1966.
Petitioner filed a motion for reconsideration with the City Court on February 3, 1966, which was denied. Petitioner then appealed to the Court of First Instance (CFI). Respondent moved to dismiss the appeal, arguing the CFI lacked jurisdiction because a judgment by default from an inferior court cannot be appealed directly; the proper remedy was a petition for relief from judgment under Rule 38 of the Rules of Court. The CFI granted the motion to dismiss, a decision affirmed by the Court of Appeals.

ISSUE

Whether the Court of First Instance correctly dismissed petitioner’s appeal from the City Court’s default judgment, holding that the proper remedy was a petition for relief under Rule 38, not a direct appeal.

RULING

Yes, the dismissal was correct. The Supreme Court affirmed that a party declared in default by an inferior court, such as a city or municipal court, cannot directly appeal the judgment on the merits. The exclusive remedy to set aside the default order and seek a trial on the merits is a verified petition for relief from judgment under Rule 38, filed in the Court of First Instance within the reglementary period. The Court explained that a default order is an interlocutory order that is not appealable. An appeal from the subsequent judgment on the merits does not bring up for review the propriety of the default order itself. Since petitioner’ failure to file an answer was due to the delayed receipt of its mailed motion—a circumstance constituting excusable negligence—its recourse was precisely the special remedy under Rule 38. Petitioner’s attempt to bypass this procedure by filing a direct appeal was improper. The Court emphasized that the rules provide a specific, orderly process for vacating defaults from inferior courts, and this process must be followed to prevent delay and ensure finality of judgments. The CFI, therefore, correctly dismissed the appeal for lack of jurisdiction.