G.R. No. L-12170; April 18, 1960
PEOPLE’S SURETY & INSURANCE CO., petitioner-appellant, vs. PAZ PUEY VDA. DE LIMCACO, HON. FERNANDO C. VILLAROSA, as Judge of Municipal Court Pasay City, and the SHERIFF OF THE CITY OF MANILA, respondents-appellees.

FACTS

1. Paz Puey Vda. de Limcaco filed Civil Case No. 1362 in the Municipal Court of Pasay City on December 9, 1954, against People’s Surety & Insurance Co., Inc. (the Company) for a sum of money.
2. The Company, though duly summoned, did not answer or appear at the hearing set for December 21, 1954. The hearing was postponed to December 24, 1954, because the sheriff’s return of service was not yet attached to the record. The Company was not notified of this postponement.
3. On December 24, 1954, the Company again failed to appear. Upon Limcaco’s motion, the Company was declared in default, and Limcaco presented her evidence. On January 8, 1955, the court rendered a decision dismissing the complaint for lack of evidence.
4. On January 21, 1955, upon Limcaco’s ex parte motion, the court granted a new trial. This new trial was held on February 6, 1955, without notice to the Company. On February 11, 1955, the court rendered a second decision, reversing the first and sentencing the Company to pay the claimed amount. Copy of this decision was not served on the Company.
5. On August 18, 1955 (after the six-month period for relief under Rule 38 had lapsed), Limcaco filed an ex parte motion for a writ of execution, which was granted. The Company received a copy of the writ from the Sheriff of Manila on August 29, 1955.
6. On August 29, 1955, the Company moved to set aside the February 11, 1955 decision, alleging nullity of the proceedings due to lack of notice. This motion was denied on September 28, 1955.
7. On October 8, 1955, the Company filed a petition for certiorari in the Court of First Instance of Rizal to annul the orders of December 24, 1954, January 21, 1955, and August 18, 1955, and the decision of February 11, 1955. The CFI issued a preliminary injunction but later denied the petition for certiorari “for lack of merits” on January 19, 1957. The Company appealed.

ISSUE

Whether the Municipal Court’s orders and decision, particularly the declaration of default on December 24, 1954, the grant of a new trial, the subsequent decision of February 11, 1955, and the writ of execution, are null and void for having been issued without the requisite notice to the Company, thereby denying it due process.

RULING

The Supreme Court GRANTED the writ of certiorari, declaring the challenged orders and decision null and void.
1. On the Validity of the Declaration of Default (December 24, 1954): The Company was entitled to notice of the hearing on December 24, 1954. It had not been declared in default prior to that date. The provision in Section 13 of Rule 4 (for inferior courts) authorizes but does not mandate a declaration of default for non-appearance at the time designated in the summons. Since the Company was not notified of the postponement to December 24, the hearing held on that date and the order declaring it in default were null and void.
2. On the Subsequent Proceedings: All proceedings predicated on the invalid declaration of default, including the ex parte grant of a new trial on January 21, 1955, the new trial held on February 6, 1955, the decision of February 11, 1955, and the writ of execution issued on August 18, 1955, were likewise null and void. The Company was not notified of these proceedings or of the second decision until it received the writ of execution in late August 1955.
3. Conclusion: The Company was denied due process. The orders of December 24, 1954, January 21, 1955, and August 18, 1955, and the decision of February 11, 1955, were annulled. Costs were imposed on respondent Limcaco.