G.R. No. L-18957; April 23, 1963
VILLA-REY TRANSIT, INC., petitioner, vs. HON. ELOY B. BELLO, FLORENTINA ASUNCION, in her own behalf and as guardian ad-litem of her minor children, CARMENCITA, DANILO, EVANGELINE, RAUL, ADAN and LUIS, all surnamed TEJADA, and THE PROVINCIAL SHERIFF OF PANGASINAN, respondents.

FACTS

Respondents filed a complaint for damages with preliminary attachment against Villa-Rey Transit, Inc. and its incorporators arising from a fatal vehicular accident. Petitioner received summons on August 18, 1961, and was granted a ten-day extension to file a responsive pleading, expiring on September 12, 1961. On that date, counsel for all defendants filed a “Motion to Dismiss,” but its substantive arguments sought the dismissal of the complaint only as against the individual incorporator-defendants, contending they were not liable to third parties for unpaid subscriptions. The motion did not seek dismissal for the corporate defendant, Villa-Rey Transit.
Respondents then filed an ex-parte motion to declare Villa-Rey Transit in default for failure to file an answer. Subsequently, they also moved to drop the incorporators as defendants. The trial court, in an order dated September 18, 1961, granted both motions: it declared Villa-Rey Transit in default and dropped the incorporators from the complaint. A default judgment was promptly rendered against Villa-Rey Transit, which was immediately executed. Petitioner filed motions to lift the default and for a new trial in the lower court but, before these could be resolved, filed the instant petition for certiorari and injunction with the Supreme Court.

ISSUE

Whether the respondent court acted without or in excess of jurisdiction, or with grave abuse of discretion, in declaring petitioner in default and rendering a default judgment.

RULING

The Supreme Court denied the petition. The ruling is anchored on the distinction between jurisdictional error and error of judgment within jurisdiction. The Court held that the respondent court undeniably had jurisdiction over the subject matter and the person of the petitioner. Consequently, its orders declaring the default and rendering judgment, even if potentially erroneous, were issued in the exercise of that jurisdiction. The proper remedy for such alleged legal errors is an appeal, not a special civil action for certiorari.
The legal logic proceeds as follows: For certiorari to lie, the abuse of discretion must be grave, patent, and arbitrary. The trial court’s finding that the “Motion to Dismiss” was not a responsive pleading for Villa-Rey Transit—as it solely advocated for the dismissal of the incorporators—was a conclusion based on its assessment of the motion’s substance. Even assuming this conclusion was mistaken, it constituted, at most, an error of judgment correctable on appeal. The Court emphasized that not every erroneous conclusion of law or fact amounts to an abuse of discretion. Furthermore, the petition was deemed premature because petitioner sought certiorari without first allowing the trial court a reasonable opportunity to rule on its pending motions to lift the default and for a new trial. Thus, finding no grave abuse of discretion, the Supreme Court dissolved the preliminary injunction and upheld the challenged orders.