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 (insurance company) filed a complaint on May 28, 1952, against defendant Philippine Ports Terminal, Inc. (Ports Terminal) to recover the value of an insured shipment that was allegedly not delivered to the consignee after being discharged into the defendant’s custody as the arrastre operator.
2. The trial court initially dismissed the complaint upon the defendant’s motion, citing prescription under the Carriage of Goods by Sea Act. The plaintiff appealed this dismissal to the Supreme Court (G.R. No. L-6420).
3. On July 18, 1955, the Supreme Court reversed the dismissal order, holding the Carriage of Goods by Sea Act inapplicable to the defendant as it was not a carrier, and remanded the case to the trial court for further proceedings. The defendant received a copy of this decision on July 21, 1955.
4. The trial court received the remanded case on September 14, 1955, and its clerk notified only the plaintiff’s counsel of this fact on September 16, 1955. Neither the defendant nor its counsel was notified by the clerk of court that the case had been remanded and received.
5. On December 12, 1955, the plaintiff filed an ex-parte petition to declare the 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 the defendant on March 20, 1956, based on ex-parte evidence.
6. The defendant and its counsel were not notified of the petition for default, the order of default, the hearing, or the decision. The defendant’s counsel discovered the judgment only in the second week of April 1958 during a conversation with the plaintiff’s counsel.
7. Consequently, the defendant filed a petition for relief from judgment on April 18, 1958. The trial court denied this petition, prompting the present appeal.

ISSUE

Whether the trial court, upon receipt of a case remanded by an appellate court, has the duty to notify the parties of such receipt to resume proceedings, and whether the failure to provide such notice to the defendant, leading to a default judgment, warrants the grant of relief from said judgment.

RULING

The Supreme Court REVERSED the trial court’s order denying the petition for relief.
1. Duty to Notify: The Rules of Court, while silent on the matter, require by reason and justice that the court of origin notify the parties upon receipt of a remanded case. Notification of the appellate court’s decision alone is insufficient, as parties cannot know precisely when the case is physically returned and jurisdiction is reacquired by the trial court. Official notification by the clerk of court is necessary to inform the parties that proceedings have resumed and that reglementary periods for filing pleadings (e.g., an answer) begin or continue to run from that date.
2. Right to Relief: Under the circumstances, where the defendant was not notified of the remand and was consequently deprived of its day in court to file an answer after the dismissal it sought was reversed, the granting of relief is a matter of right, not discretion. The proceedings from the order of default to the rendition of the decision are null, void, and not binding on the defendant.
3. Disposition: 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 the defendant allowed to file its answer within a reasonable time. Costs are taxed against the plaintiff-appellee.