Title
Azul vs. Castro
Case
G.R. No. 52241
Decision Date
Nov 19, 1984
Azul, declared in default without proper notice, denied due process; Supreme Court nullified excessive damages, remanded for trial, and ordered investigation into irregularities.
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Case Digest (G.R. No. 52241)

Facts:

1. Filing of the Complaint:

  • On March 14, 1979, respondent Rosalinda Tecson filed a complaint for collection of P250,092.55 against petitioner Pedro M. Azul. The complaint included claims for actual, moral, and exemplary damages, attorney's fees, and litigation expenses.
  • Tecson alleged that she loaned Azul a total of P391,822.78 to finance his deliveries to the Armed Forces of the Philippines (AFP). She claimed she was authorized to collect checks from the AFP Finance Center but only managed to collect P141,730.23, leaving a balance of P250,092.55.

2. Receipt of Complaint and Motion for Extension:

  • Azul received the complaint on March 27, 1979. On April 10, 1979, he filed an urgent ex-parte motion for a 15-day extension to file a responsive pleading.
  • Judge Ulpiano Sarmiento, who initially presided over the case, retired. Judge Lino Anover, temporarily taking over, granted only a 5-day extension, which Azul received on April 23, 1979, after the deadline had already passed.

3. Declaration of Default:

  • On April 17, 1979, Tecson filed a motion to declare Azul in default, which was granted by Judge Jose Castro on April 18, 1979, his first day in office.
  • Evidence was presented ex-parte on April 19, 1979, and a decision was rendered on April 27, 1979, ordering Azul to pay P1,187,615.69, including principal, damages, and attorney's fees.

4. Post-Decision Motions:

  • On May 2, 1979, Azul filed a motion to lift the order of default and submitted his answer. On May 7, 1979, he received the adverse decision.
  • Azul filed a motion for reconsideration or new trial on June 6, 1979, which was denied on July 24, 1979, on the grounds that it was "pro forma."

5. Appeal and Dismissal:

  • Azul filed a notice of appeal and a motion for extension to file the record on appeal on August 1, 1979. The court initially denied the motion but later granted a 10-day extension.
  • The court eventually dismissed the appeal on September 11, 1979, after Tecson opposed the approval of the record on appeal.

Issue:

  1. Whether the respondent court gravely abused its discretion in:

    • Denying Azul's motion to lift the order of default.
    • Denying Azul's motion for reconsideration or new trial as "pro forma."
    • Rendering a decision awarding excessive damages unsupported by the facts.
    • Issuing orders denying an extension to file the record on appeal and dismissing the appeal.
    • Issuing a writ of preliminary attachment without sufficient basis.
  2. Whether Azul was denied due process in the proceedings.

Ruling:

The Supreme Court granted the petition for certiorari, finding that Azul was denied due process. The Court set aside the following orders and decisions of the lower court as null and void:

  • The order issuing a writ of preliminary attachment.
  • The order declaring Azul in default.
  • The decision awarding P1,187,615.69.
  • The orders denying the motion to lift the order of default and the motion for reconsideration or new trial.
  • The order dismissing the appeal.
  • The order issuing a writ of execution.

The Court ordered the appropriate branch of the Regional Trial Court at Quezon City to admit Azul's answer and conduct a trial on the merits. The Acting Court Administrator was also ordered to investigate the alleged irregularities in the proceedings.

Ratio:

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