G.R. No. L-12497; March 23, 1959
Primitivo A. Macaraig, petitioner, vs. Vicente Dy Sun, Sr., et al., respondents.

FACTS

On June 9, 1953, spouses Vicente Dy Sun, Sr. and Gloria R. Dy Sun filed a damage suit against Primitivo A. Macaraig (the driver) and Francisco A. Quisumbing (the taxicab owner) arising from a vehicular collision on June 4, 1953. Summons could not be personally served on Macaraig as he had transferred to Pangasinan. The court ordered summons by publication, requiring him to answer by September 15, 1953. Macaraig failed to appear and was declared in default. The trial proceeded, and on February 25, 1954, the last day of the hearing, Macaraig appeared with counsel and filed a verified motion to set aside the order of default, explaining his failure to appear and asserting a good defense. Copies were served on counsel for both parties present in court. The trial court refused to act on the motion, stating it should first be set for hearing. The court later rendered judgment against Macaraig. Macaraig perfected his appeal. The Court of Appeals, while granting co-defendant Quisumbing’s motion for a new trial (to present evidence including Macaraig’s acquittal in a related criminal case), affirmed the judgment against Macaraig, holding his failure to appear was a deliberate attempt to evade the law and not due to accident, mistake, or excusable negligence.

ISSUE

Whether the Court of Appeals erred in denying Macaraig’s petition to set aside the order of default to enable him to present his defense.

RULING

Yes. The Supreme Court set aside the Court of Appeals’ decision with respect to Macaraig. The Court ruled that while the granting of a motion to set aside a default order is discretionary, denying relief under the circumstances amounted to an abuse of discretion. Macaraig appeared in court as soon as he learned of the default order, filed a verified motion stating a good defense (his subsequent acquittal in the criminal case arising from the same accident), and did so while the trial was still ongoing and before plaintiffs had completed their evidence. His failure to give a three-day notice for the motion was insubstantial, as there was no objection from opposing counsel and the merits were argued. No prejudice would be caused to the plaintiffs, as the case was being remanded for a new trial for co-defendant Quisumbing anyway. Equity demanded that Macaraig be given an opportunity to present his defense. The case was remanded to the court of origin to allow Macaraig to answer and present evidence.