G.R. No. L-14133; April 18, 1960
INSURANCE COMPANY OF NORTH AMERICA, plaintiff-appellee, vs. PHILIPPINE PORTS TERMINAL, INC., defendant-appellant.

FACTS

1. Plaintiff Insurance Company of North America (insurer) filed a complaint on May 28, 1952, against defendant Philippine Ports Terminal, Inc. (arrastre operator) to recover the value of an insured shipment that was allegedly not delivered to the consignee.
2. The trial court initially dismissed the complaint upon defendant’s motion, citing prescription under the Carriage of Goods by Sea Act. Plaintiff appealed.
3. On July 18, 1955, the Supreme Court reversed the dismissal in G.R. No. L-6420, holding the Act inapplicable to defendant as it was not a carrier, and remanded the case to the trial court for further proceedings.
4. The trial court received the remanded case on September 14, 1955. Its clerk notified only plaintiff’s counsel of this fact on September 16, 1955. Neither the defendant nor its counsel was notified.
5. On December 12, 1955, plaintiff filed an ex-parte petition to declare defendant in default for failure to answer. The trial court granted the petition on December 17, 1955, set the case for hearing, and later rendered a decision against defendant on March 20, 1956, based on plaintiff’s evidence.
6. Defendant and its counsel received no notice of the petition for default, the order of default, the hearing, or the decision.
7. Defendant’s counsel learned of the judgment only in April 1958 during a telephone conversation with plaintiff’s counsel. Upon verification, defendant filed a petition for relief from judgment on April 18, 1958.
8. The trial court denied the petition for relief. Defendant appealed.

ISSUE

Whether the trial court, upon receipt of a case remanded by an appellate court, has a duty to notify the parties of such receipt to resume proceedings, and whether the proceedings (order of default and decision) conducted without such notice to the defendant are valid.

RULING

The Supreme Court REVERSED the trial court’s order denying the petition for relief.
1. Duty to Notify: Reason and justice dictate that the court of origin has the duty to notify the parties of its receipt of a remanded case. Without such notice, parties would not know when to resume proceedings or file necessary pleadings. Notification of the appellate court’s decision alone is insufficient, as parties cannot know the exact date of remand and receipt. Official notification marks the resumption of the trial court’s jurisdiction and the start of reglementary periods for filing pleadings.
2. Nullity of Proceedings: Since defendant was not notified of the remand, it was deprived of its day in court to answer the complaint after the dismissal was reversed. Consequently, it was also not apprised of the subsequent default proceedings. Under these circumstances, the granting of relief is a matter of right, not discretion. The proceedings from the order of default to the decision are null and void and not binding on the defendant.
DISPOSITIVE:
The appealed order of default and the decision are declared null and void. The order denying the petition for relief is reversed. The case is remanded to the trial court for further proceedings, with defendant allowed to file its answer within a reasonable time. Costs are taxed against plaintiff-appellee.