G.R. No. L-62896 - David vs. Ferdez

On March 7, 1980, a gravel and sand truck driven by petitioner Jesus B. Pasion and owned by co-petitioners Spouses Carlos David and Teresita David struck Paulino Mananghaya in front of the Mantrade Building on Epifanio de los Santos Avenue, Makati, resulting in Paulino Mananghaya’s death.
Subsequently, on May 25, 1980, Francisca Lagman-Mananghaya—acting in her own behalf and as the natural guardian of her minor children Noel, Nolly, and Joy—filed an action for damages (Civil Case No. 1136-B) before the Court of First Instance of Bulacan against the petitioners.
Petitioners failed to file an answer despite service of summons, and as a result, they were declared in default. Evidence was presented ex parte, and on April 10, 1981, the court rendered a decision ordering petitioners to pay moral, exemplary, actual, and compensatory damages, in addition to attorney’s fees and costs.
Petitioners received the decision on April 24, 1981 and later filed a motion for a new trial, which was denied on June 5, 1981 for being filed one day late. In the same order, the court also granted the issuance of a writ of execution.

A Writ of Execution was issued on June 10, 1981, directing the Provincial Sheriff of San Fernando, Pampanga to levy upon and sell petitioners’ personal properties to effectuate the payment of the awarded sums.
The levy led to the sale of some of petitioners’ properties at a public auction, with the proceeds amounting to P12,000.00 subsequently delivered to the private respondents.
Petitioners, after receiving the June 5, 1981 order only on September 1, 1981, filed a motion for reconsideration of the new trial denial and the issuance of the writ of execution, arguing that the 31st day of the reglementary period for appeal, although falling on a Monday (after a Sunday), was still within the allowed period.
On February 8, 1982, the lower court reconsidered its earlier order, granted petitioners’ motion for new trial, and recalled the writ of execution. This allowed petitioners to file their Answer with a Counterclaim for damages against the private respondents. The respondents moved to dismiss the counterclaim, which the court denied.

On June 5, 1982, petitioners filed a Motion for Restitution seeking the return of the levied properties. The lower court granted the motion through an order dated June 8, 1982, which provided that the petitioners’ properties, already levied upon, be returned pending the new trial. In the event restitution was not possible, petitioners were allowed, in the event of a favorable final judgment, to claim against a bond posted by the respondents.
Petitioners submitted a motion for reconsideration of the second paragraph of the June 8, 1982 order, requesting that the proceeds of P12,000.00 obtained from the public auction be returned, on the ground that respondents had not posted any bond.
The reconsideration was denied by the lower court in its order dated December 1, 1982.
Petitioners contended that with the granting of a new trial (which nullified the original judgment and all effects stemming from it), they were entitled to recover their property or the auction sale proceeds, as there was no valid plaintiff’s bond against which to claim.

The respondent court’s action in ordering restitution or allowing a claim against a bond was void because the writ of execution and the levy were based on a default judgment that was later nullified by the granting of a new trial.
There was no bond posted by the private respondents, and the alternative remedy provided was unjustified.

The lower court had exercised its sound judicial discretion in denying petitioners’ motion for reconsideration, also citing petitioners’ laches (undue delay) in contesting the levy and subsequent sale of their properties.
Their actions were necessary to protect their interests, particularly given the dire circumstances following the death of the alleged sole breadwinner.

Whether the respondent court acted without or in excess of its jurisdiction (or with grave abuse of discretion) when it:

Issued the June 8, 1982 order directing restitution or an alternative claim against a bond.
Denied petitioners’ motion for reconsideration in its December 1, 1982 order.

Whether the granting of a new trial, which nullified the original default judgment, automatically voided the subsequent writ of execution and levy on petitioners’ properties.
Whether petitioners were consequently entitled to recover the P12,000.00 proceeds from the public auction sale.

Whether petitioners’ delay in opposing the levy (filed only almost a year after the public auction) should bar their claim.
Whether the principles of due process justify the return of the proceeds given that no adjudication of rights had been rendered yet in Civil Case No. 1136-B.