[ G.R. No. L-1423. January 31, 1948 ] 80 Phil. 166
[ G.R. No. L-1423. January 31, 1948 ]
MAXIMA GARCIA LIM TOCO, PLAINTIFF AND APPELLANT, VS. GO FAY, DEFENDANT AND APPELLEE.[1] R E S O L U T I O N
FERIA, J.:
The question for us to determine is whether or not a defendant declared in default in the lower court, has the right to be heard or to file brief or memoranda in this Court on appeal.
We are of the opinion, and so hold that a defendant in default is not entitled to notice of the proceedings until the final termination of the case, and therefore he has no right to be heard or file brief or memoranda on appeal. Section 9, Rule 27, provides that “no service of papers shall be necessary on a party in default, except when he files a motion to set aside the order of default in which event he is entitled to notice of all further proceedings.” And this provision is made applicable to the proceedings in appellate court by section 1, Rule 51, which says that “pleadings, motions, filing of service of papers and proof thereof, except as otherwise provided, shall be governed by Rules 15, 26, and 27 in so far as they are not inconsistent with the provisions of these Rules.”
A defendant in default loses his standing in or is considered out of court, and consequently can not appear in court; adduce evidence; and be heard, and for that reason he is not entitled to notice. If he is not entitled to notice of the proceedings in the case and to be heard, he can not appeal from the judgment rendered by the court on the merits, because he can not file a notice of appeal, and file an appeal bond and the record on appeal, for approval by the court. The only exception provided by law is when the defendant in default files a motion to set aside the order of default on the grounds stated in Rule 38 “in which event he is entitled to notice of all further proceedings.” That a" defendant in default can not be heard in the suit, not only in the trial court but also in the final hearing, that is, on appeal which is a part of the proceedings in a suit, is the ruling laid down for guidance of courts and practitioners by this Court in the case of Velez vs. Ramos, 40 Phil., 787, in which it was held:
“The action of the trial court in absolving the defendant Roberto Quirante, although he had made no defense, was correct and is worthy of some comment as embodying a point of practice which should be called to the attention of courts and practitioners. The rule is this: * * * The defaulting defendant merely loses his standing in court, he not being entitled to the service of notices in the cause, nor to appear in the suit in any way. He cannot adduce evidence; nor can he be heard at the final hearing.
The reason why the defaulting defendant is not entitled to notice is because it would be useless or of no purpose to do so, since the defendant can not appear and be heard in the suit in any way. If the defendant in default has the right to appear and be heard on appeal, there would be no reason why he should not be given notice of the proceedings in order that he may have exercise said right as appellant or appellee. There is absolutely no reason for denying a defaulted defendant the right to be heard before, and granting him that right after, the judgment on the merits, If he is out of or has no standing in court before judgment on the merits, he can not be considered as no longer in default after said judgment. And if he can not appear and be heard in the suit he can not appeal as appellant nor appear and be heard as appellee, because an appeal is a continuation of the same case or suit commenced in the lower court. The jurisdiction of the latter is, by appeal, transferred to the appellate court. The rendition of the judgment by the trial court and the appeal therefrom by the adverse party does not confer upon any of them more right than he had before the judgment in so far as their standing in court or intervention in the proceeding is concerned. “Where a person duly called has defaulted, and does not ask the court to relieve him against the default, he is precluded from moving for a new trial, and has no right to except to the conclusions of law and join in an appeal.” (Bell v. Corbin, 36 Northeastern Reporter, p. 23).
The contention that a defaulting defendant is entitled to be notified of the judgment against him and to appeal therefrom is not born out by the decision of this Court in Diaz and Rubillos vs. Mendezona and De Poli, 43 Phil. 472, cited in its support. The ruling in said decision is in conformity with the provision of Sec. 9, Rule 27, that it is not necessary to serve on a party in default papers, such as motions, notices, orders and judgment and other papers required to be served by Secs. 2 and 7 of Rule 27, except when the defendant files a motion to set aside the order of default in which case he is entitled to notice of all further proceedings, and consequently of the judgment, and he may therefore appeal; and specially with Sec. 257 of the old Code of Civil Procedure, from which Sec. 2, Rule 70 was taken, which requires the service of the order or judgment upon the defendant in order to sell the mortgaged property if he fails to pay the judgment within the period not less than ninety days fixed in the order or judgment from the date of the service thereof. In that case this Court said:
“* * * However, after he had submitted to the jurisdiction of the court on February 10 by asking the annulment of the order of default and that he be permitted to answer and take part in the proceedings, he had the right to the notice provided by section 257 of the Code of Civil Procedure. The sheriff’s telegram of May 12 was only a notice to the defendant that the ninety-day period for the satisfaction of the judgment had expired—but it must be borne in mind that the defendant had not been notified of the judgment.” (Diaz and Rubillos vs. Mendezona and De Poli, 43 Phil. 472, 477).
The rule in the United States, as stated in 34 C.J., p. 177, is that “Unless there is a statutory provision permitting him to do so, or unless the default has been set aside, he cannot, after the entry of default, filed pleadings contesting plaintiff’s allegations, move for a new trial, or take or participate in any further proceedings in the cause affecting plaintiff’s right of action, * * *.” (34 Corpus Juris, p. 177). And the only case to the contrary found and cited by the dissenters is that of Hallock v. Jaudin, 34 Cal., 161, 172, decided in 1867, or about a century ago, in which it was held that a judgment by default is a final judgment, and therefore appealable, because there is no distinction between judgment by default and judgment after issue found and a trial. It is evident that the ratio decidendi of said decision which is also the reason advanced by dissenters based on Sec. 2 of Rule 41 which provides that all final judgments are appealable, and on Sec. 12 of Rule 48 which requires appellant to serve copies of his brief upon the appellee, would be correct, were there no special provisions of law applicable to parties in default. But there being such special provisions, the latter must be taken as intended to constitute an exception to the general provisions of said section 2 of Rule 27 and section 5 of Rule 48, since the legislative body is not presumed to have intended a conflict. The principle is expressed in the maxim “generalia specialibus no derogant.”
Besides, the very decision in said case of Hallock vs. Jaudin admits that the ruling laid down therein was contrary to the theory adopted in the cases cited or quoted in support of the respondent’s contention, but just because of the above-mentioned reasoning set forth in the decision, the latter did not have to respect them. That decision reads in part as follows:
“* * * We do not hesitate to declare that all cases which are to the contrary are unsupported by any provision of the law by which the jurisdiction and practice of this Court is regulated. To hold otherwise would be to create a distinction where the law has not, which we have no power to do. There are some cases, no doubt, which support the theory of the learned counsel for the respondents, but we have no respect for them. Some of them go upon the ground that a defaulting defendant has six months in which to seek relief from the judgment in the court below, and therefore he has no occasion to appeal.” (Hallock vs. Jaudin, 34 California Reports, pp. 167, 172.)
The reason on which the cases supporting the theory of the respondents in the above mentioned case of Hallock vs. Jaudin, to the effect that the defendant had six months in which to seek relief from the judgment in the court below, and therefore he had no occasion to appeal, is well founded. The provisions of sections 2 and 3 of Rule 38, substantially taken from section 113 of the old Code of Civil Procedure, which was in turn substantially copied from section 473 of the Civil Code of California, show or corroborate our conclusion that a party in default is not entitled to notice of the order of and judgment by default. Because otherwise, or if he is entitled to it, there would be no reason for granting him six months time, from the date he becomes aware of such order or judgment, within which to file a motion to set them aside.
The decision in Frow vs. De le Vega, 15 Wall [W] 552, cited in the dissenting opinion, in which the appellant was allowed to appeal from the decree on the merits of the lower court, is also in favor of our conclusion, because the defendant in that case filed a motion to set aside the default and be allowed to answer the complaint. The decision states that “the appellant’s answer having been delayed, as he insist, by misunderstanding, sickness and other accidents, a decree pro confesso [in default] was taken against him * * * and notwithstanding he afterwards prepared his answer and asked leave to file it (the same as the answer of the other defendants), yet the court afterwards * * * made a final decree absolute against him.
Relying on the statement found in the decision in Macondray & Co. vs. Eustaquio, 61 Phil., 446, that “such a judgment [by default] does not imply a waiver of rights, except of being heard and of presenting evidence,” some of the dissenters, argue that, by its very location in the sentence quoted “the phrase ’that of being heard’ which comes before the phrase ’that of presenting evidence’ [the right waived] can only be the right to be heard before the judgment on the merits and not after.” And they add that “if said phrase ’that of being heard’ should be construed to include the right to be heard after the default judgment, it would entirely nullify even the right to ask that said judgment be set aside upon equitable grounds under Rule 38.”
To contend that, because the phrase “that of being heard” precedes the phrase “and of presenting evidence,” the defendant has the right to be heard after the presentation of evidence, is to rely on the mere location of phrases used in an obiter dictum without any support or basis on reason and logic, because the presentation of evidence is the most important means of being heard, and for that reason it has expressly been mentioned to emphasize it. As this Court said in the case of Velez vs. Ramos, supra, the defaulting defendant “can not adduce evidence; nor can he be heard at the final hearing.” Following the reasoning of the dissenters, the above quoted ruling in the case of Velez vs. Ramos should be construed to mean that the defaulting defendant would be entitled to be heard after the presentation of evidence and not before, contrary to the ruling in Macondray vs. Eustaquio; and in order to conclude that he is not entitled to be heard at all the stages of the case, it would have been necessary for the court in said case of Macondray vs. Eustaquio to awkwardly say that the defendant waives his right “to be heard and present evidence and to be heard.”
The argument that if “said phrase that of being heard, as used in Macondray vs. Eustaquio, supra, should be construed to include the right to be heard after the default judgment, it would entirely nullify even the right to ask that said judgment be set aside upon the equitable grounds under Rule 38,” is without any foundation. Because this right is expressly granted by section 2 of Rule 38 where the order of or judgment by default was rendered under any of the circumstances therein provided. And section 9, Rule 27, expressly prescribes that a defendant is entitled to notice of and hence be heard in all further proceedings when he files a motion to set aside the order of default” under said section 2 of Rule 38. Had the filing of such motion not been expressly granted as an exception or taken out of the effect of default provided in the enactment clause of said section 9, Rule 27, the defendant in default could not present a motion to set aside the order of default which carries with it, if granted, the nullity of the judgment on the merits.
The philosophy or fundamental reason underlying the law on the effects of default is that the failure to answer on the part of a defendant who receives a summons and knows that he is being sued, may be due to one of these two causes: (1) either to his resolution not to oppose to the plaintiff’s allegations and relief demanded in the complaint, and willingness to abide by the judgment granting said relief after the presentation of evidence by the plaintiff, or (2) to fraud, accident, mistake or excusable negligence without which he should have filed his answer in time for he has a good defense. Were his failure due to fraud, etc., he may resort to the relief provided for in Rule 38, that is, he may file “a motion to set aside the order of default, in which event he is entitled to notice of all further proceedings” according to section 9, Rule 27, and therefore to be heard on appeal; and if he does not do so, knowing as he ought to know that a case was filed against him for he was served with a summons, it is because, it may be presumed, he has no defense to the plaintiff’s demand. Inexcusable negligence amounts to voluntary failure to answer, and it has the same effect; for defendant can not successfully invoke the equitable remedy provided in said section 2, Rule 38. The rule in the United States is that “a judgment rendered on default is tantamount to an admission that the plaintiff is entitled to a judgment as prayed for.” (31 Am. Jur., p. 137.)
There is, therefore, no reason in law or equity for permitting a defaulting defendant, after judgment on the merits, to appear and be heard either in the trial court or on appeal. If the defendant is presumed, as above stated, to have decided not to oppose to the plaintiff’s claim and be willing to abide by the judgment granting the relief prayed for in the complaint after plaintiff has been heard, what would be the purpose of hearing him as appellant or as appellee? There would be no injustice done to him if the trial or the appellate court grants the plaintiff the relief demanded without hearing the defendant in the lower or in the court of appeal, because he is presumed to be agreeable to it. If the trial court errs in not granting the relief applied for in the complaint, there would be no reason to allow a defaulting defendant to defend, on appeal, the error of the lower court of which he himself is conscious and convinced. And if the lower court has not erred in deciding the case in defendant’s favor and the plaintiff appeals, it is to be expected that the appellate court will affirm it without necessity of the defaulting defendant’s intervention as appellee.
It is true that the trial court may render a decision in violation of section 9 of Rule 35. This provides that a judgment entered after defendant has been declared in default shall not exceed the amount or be different in kind from that alleged and prayed for in the demand for judgment; and the reason underlying this provision is that it may be presumed that were the relief demanded by plaintiff greater or different in kind from that claimed in the complaint, defendant would not have let himself, declared in default and should have filed his answer on time opposing the plaintiff’s demand. But in such case the defendant in default may have the judgment set aside, not by appeal because he can not appeal, but through certiorari proceeding, on the ground that the court exceeded its jurisdiction in so doing. For it is well known principle in procedure that courts of justice have no jurisdiction or power to decide a question not in issue, and the issue in case of default is limited to the plaintiff’s claim such as it is demanded in the complaint, for although the defendant in default has not filed an answer the plaintiff has to present evidence to prove his allegations. (1 Freeman on Judgments, 5th ed., pp. 738, 739.)
Moran, C.J., Pablo, Bengzon, Briones, Padilla, and Tuason, JJ., concur.