G.R. No. L-19556. October 30, 1964.
J.M. TUASON and CO., INC., plaintiff-appellee, vs. ESPERANZA FERNANDEZ, defendant-appellant.

FACTS

J.M. Tuason & Co., Inc. filed a complaint for recovery of a portion of land against Esperanza Fernandez. The sheriff’s return stated that summons was served on March 16, 1959, at Fernandez’s given address via substituted service on Jovita C. Arenas, described as a person of suitable age and discretion residing therein. Arenas, however, only delivered the summons to Fernandez on April 4, 1959. On that same date, Fernandez filed a verified motion for a 10-day extension to file an answer, to be counted from April 4. Before the court acted on this motion, the plaintiff moved to declare Fernandez in default. Fernandez filed her answer and a third-party complaint on April 8, 1959. Nevertheless, the trial court issued an order of default on April 11, 1959.
Fernandez moved to set aside the order of default, attaching affidavits of merit. These affidavits revealed that the address where substituted service was effected was a house she owned but had leased to Arenas, and that Fernandez herself resided at a different, distinct address in Quezon City at the time. The trial court denied her motion, ruling the service was valid and that she had no meritorious defense. Fernandez appealed.

ISSUE

Whether the trial court erred in denying the motion to set aside the order of default.

RULING

Yes. The Supreme Court set aside the order of default and remanded the case. The legal logic centers on the invalidity of the substituted service and the abuse of discretion in denying relief from default. Substituted service under the Rules of Court requires leaving copies at the defendant’s dwelling house or usual place of abode with a person of suitable age and discretion residing therein. The affidavits of merit, whose contents were uncontroverted, established that the served address was not Fernandez’s dwelling or usual abode; it was a property she leased to Arenas. Fernandez resided elsewhere. Therefore, the prerequisite for valid substituted service was absent, rendering the service and the subsequent default order voidable.
Furthermore, the Court found an abuse of discretion in denying the motion to lift the default. Fernandez acted with alacrity, filing for an extension immediately upon actual receipt of the summons and submitting her answer shortly thereafter. More critically, her answer and motion demonstrated a meritorious defense. She claimed acquisition of the land in good faith and for value from Florencio Deudor, whose rights were recognized in a prior compromise agreement with the plaintiff itself. This assertion, if proven, would negate the allegation of usurpation. Given the defective service and the existence of a substantial defense, the interests of justice demanded that Fernandez be afforded her day in court.