G.R. No. L-45445 June 16, 1978
THE HEIRS OF JOSE FUENTES, et al., petitioners, vs. HON. ANTONIA C. MACANDOG, Presiding Judge, Court of First Instance of Negros Occidental, Branch X, et al., respondents.

FACTS

Private respondents filed an action for reconveyance over three parcels of land against petitioners, alleging ownership through inheritance and that petitioners obtained titles through fraud and falsification. Petitioners filed an answer asserting ownership and raising affirmative defenses, including prescription. The court issued an order requiring simultaneous memoranda on the affirmative defense of prescription, which both parties submitted. Subsequently, the court scheduled a pre-trial and trial. Petitioners’ counsel failed to appear at the scheduled hearing. The court, in a single decision, declared petitioners in default for non-appearance, denied their affirmative defense of prescription on the merits, and rendered judgment against them based on ex-parte evidence. A writ of execution was issued.
Petitioners filed a motion for reconsideration, which the court denied as pro forma. They then filed this petition for certiorari and mandamus, arguing denial of due process. They contended they received no proper notice of the pre-trial, the case was not ripe for pre-trial as the pending affirmative defense of prescription had not been resolved, and their motion for reconsideration was not pro forma.

ISSUE

Whether the respondent judge acted with grave abuse of discretion in declaring petitioners in default, proceeding to an ex-parte hearing, and rendering a decision without first resolving the pending affirmative defense of prescription set for preliminary hearing.

RULING

Yes. The Supreme Court granted the petition, annulling the default judgment and subsequent proceedings. The legal logic centers on the violation of procedural due process and the proper sequence of proceedings under the Rules of Court. First, the court’s procedure was irregular. An order of default should be a separate, distinct order, not merely incorporated into a decision on the merits. The rules prefer that pre-trial calendars be set separately from trial dates. Here, the court conflated the declaration of default, the resolution of a pending preliminary matter (prescription), and the trial on the merits into one proceeding, leading to a denial of petitioners’ right to be heard.
Second, and crucially, the court gravely abused its discretion by not resolving the affirmative defense of prescription as a preliminary matter before proceeding to pre-trial or trial. The court had specifically ordered the issue submitted for resolution via memoranda. Under Section 5 of Rule 16, an affirmative defense may be set for a preliminary hearing like a motion to dismiss. Until such a potentially case-dispositive issue is resolved, the case is not ready for pre-trial. By declaring petitioners in default for non-appearance at a hearing that should not have proceeded, and by deciding the prescription issue within a judgment on the merits instead of in a preliminary order, the court deprived petitioners of their day in court. The Supreme Court set aside the decision and writ of execution and ordered the respondent court to conduct appropriate proceedings, directing it to first re-examine the issue of prescription in light of pertinent jurisprudence.