GR L 25778; (September, 1982) (Digest)
G.R. No. L-25778 September 30, 1982
Joesteel Container Corporation, plaintiff, vs. Commonwealth Financing Corporation, defendant.
FACTS
Commonwealth Financing Corporation filed a collection case against Joesteel Container Corporation before the City Court of Manila for a deficiency claim from a foreclosed mortgage. Summons and a copy of the complaint were served upon Joesteel through its General Manager on July 13, 1965. The summons specifically ordered the defendant to answer and to appear for trial on August 12, 1965. On that scheduled trial date, counsel for Joesteel appeared in court and moved for an extension of time to file an answer.
The plaintiff, however, moved to have the defendant declared in default, arguing that the reglementary period to answer—20 days from July 13—had already expired on August 2, 1965. The City Court denied Joesteel’s motion for extension, granted the plaintiff’s motion, and declared Joesteel in default. A commissioner was appointed to receive the plaintiff’s evidence. Despite Joesteel’s subsequent motion to lift the order of default and an appeal to the Court of First Instance, the default order and the subsequent judgment remained in effect.
ISSUE
Whether the City Court of Manila committed a grave abuse of discretion in declaring the defendant in default.
RULING
Yes, the City Court gravely abused its discretion. The Supreme Court set aside the default order and the consequent judgment, remanding the case for further proceedings. The legal logic hinges on the proper computation of the period to answer when the summons itself sets a specific date for trial. The Court applied the precedent set in Zenith Films, Inc. vs. Herrera, which established that when a summons orders the defendant to answer by a specified trial date, the defendant has until that very date to file its responsive pleading.
Here, the summons commanded Joesteel to answer and appear for trial on August 12, 1965. Consequently, the deadline for filing an answer was August 12, not August 2 as computed from the general 20-day rule. When Joesteel’s counsel appeared on August 12 and asked for an extension, the defendant was not yet in default, as the court-fixed period had not lapsed. The City Court’s denial of the motion and its immediate declaration of default, therefore, constituted a capricious and whimsical exercise of power, depriving Joesteel of its day in court without legal basis. The default was improperly declared.