G.R. No. L-43815, December 17, 1976
ERLINDO FLORES, petitioner, vs. HON. FELIPE V. BUENCAMINO and JOSE S. CANCIO, JR., respondents.

FACTS

Petitioner Erlindo Flores was a defendant in a collection suit before the Court of First Instance of Pampanga. After filing his answer, his original counsel was appointed as an Assistant City Fiscal. Petitioner retained a new attorney, but due to what he termed “excusable negligence and honest mistake,” neither he nor his new counsel appeared at the scheduled pre-trial conference on June 6, 1975. Consequently, the respondent judge granted private respondent Jose S. Cancio, Jr.’s motion and declared petitioner in default. The court immediately allowed the ex parte presentation of evidence before the clerk of court.
Petitioner’s counsel prepared a motion to lift the order of default with supporting affidavits. However, before this motion could be filed, the respondent judge had already rendered an adverse judgment against petitioner based solely on the ex parte evidence. The court subsequently denied the motion to lift the default. Petitioner filed this certiorari action, asserting he had a meritorious defense: he had not only fully paid the alleged debt of P11,470.00 but had overpaid by P6,694.62. Private respondent, in his comment, did not squarely deny this claim of payment, merely arguing that petitioner had forfeited his opportunity by failing to attend the pre-trial.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in declaring petitioner in default and rendering judgment based on ex parte evidence, thereby denying him procedural due process.

RULING

Yes. The Supreme Court granted the petition, nullifying the order of default and the subsequent decision. The Court emphasized that while courts rightly enforce rules to manage their dockets, procedural rules must not be misused to deny substantial justice. The petitioner’s failure to appear at the pre-trial, under the circumstances of a recent change of counsel, called for a more liberal and careful application of the rules to avoid a positive injustice.
The Court found a clear denial of procedural due process. Petitioner was condemned without a hearing; the ex parte reception of evidence before the clerk of court and the immediate rendition of judgment deprived him of his fundamental right to be heard. Citing Lim Tanhu v. Ramolete, the Court reiterated that default judgments carry serious consequences and necessitate a liberal examination of grounds for setting them aside. The preference is to allow a reasonable opportunity to lift a default order before proceeding with ex parte evidence and judgment.
Moreover, the petitioner’s vigorous assertion of a complete and overpayment, which the private respondent did not forthrightly deny, indicated a potentially meritorious defense that deserved a hearing. The demands of justice required that petitioner be afforded his day in court to present his evidence. The case was remanded to the lower court for trial on the merits.