G.R. No. 252790 - Malayan Bank Savings and Mortgage Bank vs. Holcim Philippines, Inc.

Holcim Philippines, Inc. (Holcim) initiated the litigation by filing a Complaint on May 16, 2011, seeking:

The Complaint was docketed as Civil Case No. 11-445 and raffled to Branch 61 of the RTC in Makati City, then presided over by Judge J. Cedrick O. Ruiz.
Malayan Bank Savings and Mortgage Bank (Malayan) responded not by filing an answer but by submitting a Motion to Dismiss, raising issues that:

The Complaint’s verification and certification were signed by an unauthorized person;
The Complaint failed to state a cause of action; and
The RTC lacked jurisdiction over the subject matter.

Judge Ruiz denied the Motion to Dismiss on November 14, 2011.
Holcim subsequently filed a motion to declare Malayan in default for failure to file a responsive pleading.
Without opposition from Malayan, the RTC issued an Order of Default on February 17, 2012.
Upon receipt of the default order, Malayan attempted to remedy the situation by:

Filing a Motion to Admit its Answer;
Asserting that its counsel mistakenly believed that the Answer had been filed on time and later discovered the default when the Order was received;
Admitting that the intended filing date (January 16, 2012) was already belated because its counsel received the earlier denial of its Motion to Dismiss on December 14, 2011;
Explaining that the delay was due to the counsel’s personal circumstance—caring for his ailing mother suffering from a degenerative disease.

The RTC, in a Resolution dated March 19, 2012, refused to treat the Motion to Admit as a proper motion to set aside the default order under the Rules of Court, Rule 9, Section 3(b), holding that:

The motion was not made under oath;
There was no proper showing that the failure to answer was due to fraud, accident, mistake, or excusable negligence; and
Malayan did not assert a meritorious defense.

Malayan filed a motion to reconsider, which was also denied by the RTC.
Malayan eventually elevated the issue to the Court of Appeals (CA) through a Petition for Certiorari, arguing grave abuse of discretion by the RTC. The CA dismissed the petition in a Decision dated September 17, 2014, thus upholding the RTC’s default order.
A certiorari petition before the Supreme Court was filed by Malayan in 2015 but was denied due to:

Lateness of filing;
Failure to submit a valid verification and certification against forum shopping;
Lack of proof that the affiant was authorized to prepare and sign the document; and
Inability to show reversible error in the CA’s Decision.

This resolution became final on October 22, 2015.

On May 2, 2013, the RTC rendered a Decision in favor of Holcim, ordering Malayan to pay the claimed damages and attorney’s fees.
A Writ of Execution was issued on January 7, 2014, executed by Judge Maria Amifaith S. Fider-Reyes after Judge Ruiz’s suspension following his conviction for violating provisions of the Anti-Graft and Corrupt Practices Act.

The Office of the Court Administrator (OCA) issued Memoranda on May 8, 2014, and June 30, 2014, instructing Judge Fider-Reyes to review, maintain the status quo, and refrain from acting on pending issues related to decisions by Judge Ruiz.
An administrative case was initiated against Judge Ruiz, resulting in the October 13, 2014, resolution that recalled all decisions, writs, and processes issued under his rulings, including the May 2, 2013 Decision.

Acting on the administrative resolution, the RTC, through an Order Ad Cautelam dated February 17, 2015, recalled the May 2, 2013 Decision and its related orders.
Malayan subsequently submitted a Comment with Omnibus Motion on March 12, 2015, which, among other prayers, sought to lift the earlier default order.
The RTC, on April 20, 2015, was directed by the Court in Judge Ruiz’s administrative case to decide on the recalled decisions, including the Complaint at bar.
On August 11, 2015, the RTC invited comments on its pending resolution, and upon receipt of the comments, it deemed the case submitted for decision by issuing an Order dated October 29, 2015.
Malayan moved for reconsideration on the basis that the RTC should first resolve the Comment with Omnibus Motion (notably its prayer to lift the default order) before finalizing the decision.
Holcim opposed this motion, arguing:

The recall of Judge Ruiz’s orders did not authorize revisiting earlier orders such as the default order;
The issue of default had already been definitively settled; and
The finality of the default order constituted the law of the case.

The RTC eventually granted Malayan’s Motion for Reconsideration in a Resolution dated June 3, 2016.
Holcim, however, filed a motion to reconsider this RTC Resolution, which was denied on June 9, 2017.
The CA, in a Decision dated October 30, 2019, annulled the RTC’s assailed resolutions on the ground that the RTC gravely abused its discretion by reopening a matter that had already acquired finality.
Malayan sought reconsideration from the CA, which was denied in the Resolution dated July 3, 2020, leading to the present Petition for Review.

Whether the CA erred in finding that the RTC committed grave abuse of discretion in granting Malayan’s Motion for Reconsideration to lift the default order.

Acted within its authority by allowing a motion to lift the default order even after the issuance of a final decision.
Exercised its discretion consistent with the Rules of Court since a motion to lift the default order is distinct from a petition challenging the default itself.
Has full judicial power to resolve the issue before judgment is rendered.

The default order had already attained finality as it was upheld by both the CA and the Supreme Court’s earlier resolutions.
The RTC violated the doctrine of the “law of the case” by reopening issues that were already judicially settled.
The RTC exceeded its jurisdiction by revisiting and effectively relitigating the default issue, in contravention of established legal principles regarding immutability of judgments.