GR 88586; (April, 1990) (Digest)
G.R. No. 88586. April 27, 1990.
CONTINENTAL CEMENT CORPORATION, petitioner, vs. COURT OF APPEALS and MUNICIPALITY OF NORZAGARAY, respondents.
FACTS
The Municipality of Norzagaray filed a complaint for tax recovery against Continental Cement Corporation. The petitioner, within the granted extensions to file a responsive pleading, filed a Motion to Dismiss on May 25, 1985, three days before the expiration of the second extension period. The trial court denied this motion on July 16, 1985. Subsequently, the municipality moved to declare the petitioner in default for not filing an answer, arguing that a motion to dismiss was not a responsive pleading. The trial court issued a default order on August 2, 1985, received evidence ex parte, and rendered a judgment against the petitioner on February 4, 1986. The Court of Appeals affirmed this decision, prompting the petitioner to elevate the case to the Supreme Court.
ISSUE
Whether the trial court correctly declared the petitioner in default for filing a motion to dismiss within the extended period to file a responsive pleading.
RULING
No. The Supreme Court reversed the lower courts and set aside the default order and subsequent judgment. The Court clarified that a motion to dismiss, filed within the time for pleading, is expressly allowed under Section 1, Rule 16 of the Rules of Court. Citing Barraza v. Campos, the Court held that such a motion, even if filed during an extension period, interrupts the running of the time to file an answer. Following the denial of a motion to dismiss, the defendant has a fresh 15-day period from notice of the denial to file an answer, as provided under Section 4, Rule 16. In this case, notice of the denial was received on July 29, 1985, giving the petitioner until August 13, 1985, to answer. The default order issued on August 2, 1985, was therefore premature and void, as it was issued while the petitioner still had eleven days remaining within the reglementary period. Consequently, the ex parte proceedings and the resulting judgment were nullified. The case was remanded to the trial court for a full trial on the substantive tax issue to afford both parties due process.