G.R. No. L-33720 March 10, 1975
THE PHILIPPINE BRITISH CO. INC. and THE CIBELES INSURANCE CORPORATION, petitioners, vs. THE HON. WALFRIDO DE LOS ANGELES, et al. and MULTIFIELD ENTERPRISES and MOISES M. TAPIA, respondents.

FACTS

Private respondents, insured by petitioners, filed separate collection suits after a fire loss. The cases were consolidated before respondent Judge. Petitioner British was served summons on March 29, 1971, and Cibeles on April 2, 1971. British’s counsel filed a motion for a 15-day extension to answer, citing Holy Week and workload; the court granted only five days, until April 19. The joint answer for both petitioners was mailed on April 22, 1971, and received by the court on April 28. Meanwhile, on April 24, private respondents moved to declare petitioners in default. The court granted the motion, received ex-parte evidence on April 26-27, and rendered judgment on April 28.
Copies of the decisions were sent by registered mail to petitioners’ counsel on May 17, 1971. The postman testified he delivered three registry notices to counsel’s secretary on May 19, May 30, and June 15, but the mail was returned unclaimed. Counsel claimed he discovered the default orders on May 24 when he checked the court records but saw no decisions. He filed an unverified motion to lift the default on May 26, without an affidavit of merit. The court eventually denied this motion and granted execution.

ISSUE

Whether the respondent Judge acted with grave abuse of discretion in denying the motion to lift the order of default and in ordering execution.

RULING

The Supreme Court dismissed the petition, finding no grave abuse of discretion. The legal logic centers on procedural compliance and the finality of judgment. A motion to lift an order of default under Rule 18, Section 3 must be verified and accompanied by an affidavit of merit showing a meritorious defense. Petitioners’ motion lacked both requirements, rendering it fatally defective. The Court emphasized that defaults are disfavored, but parties must strictly follow the rules to avail of relief.
Regarding the finality of judgment, service of the decisions was completed by registered mail. Service is deemed complete upon expiration of five days from the date the first notice was delivered to the addressee’s residence or office. The postman’s uncontroverted testimony proved the first notice was delivered to counsel’s office on May 19, 1971; thus, service was complete on May 24. Petitioners had until June 23 to appeal or move for reconsideration. Their motion to lift the default, filed before finality, did not toll the period. The judgment became final and executory by operation of law. The respondent Judge’s orders were therefore correct and ministerial. The Court also noted counsel’s lack of candor in his representations and required him to show cause why no administrative action should be taken.