G.R. No. 97535 - Manila Electric Co. vs. La Campana Food Products, Inc.

Case Digest (G.R. No. 97535)
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Facts:

Background of the Case

A complaint was filed on August 21, 1990, by private respondent La Campana Food Products, Inc. (La Campana) against petitioner Manila Electric Company (Meralco) to recover a sum of money, accompanied by a preliminary injunction.
The disputed amounts were:

Differential billing of P65,619.26, alleging electric energy not recorded due to tampering of the metering installation discovered on September 22, 1986.
Underbilling of P169,941.29 (with a remaining balance of P28,323.55), arising from a meter multiplier failure covering the period from January 16, 1987, to December 16, 1987.

Procedural History and Initial Events

Summons and a copy of the complaint were properly served on Meralco on August 23, 1990.
The case was originally docketed as Civil Case No. Q-90-6480 and initially assigned at Branch 78 of the RTC in Quezon City, presided over by Judge Percival M. Lopez.
Owing to Judge Lopez’s inhibition at Meralco’s request, the case was re-raffled on September 25, 1990, to Branch 80 where Judge Benigno T. Dayaw presided.
On September 7, 1990, Meralco filed a motion for a fifteen-day extension to file its answer, submitted to the Office of the Clerk of Court at Branch 78.

The motion was defective because it lacked the required notice of hearing, as mandated by Sections 4 and 5, Rule 15 of the Rules of Court.

Meralco’s “Answer With Counterclaim” was later received on September 21, 1990, after the reglementary period had lapsed but within the extended period requested.

Default and Subsequent Orders

Due to Meralco’s failure to file an answer within the prescribed period (which expired on September 7, 1990), La Campana on September 28, 1990, filed an “Ex-Parte Motion to Declare Defendant in Default.”

Judge Dayaw granted the motion in an order dated October 8, 1990.

The court a quo rendered its decision on November 20, 1990, with the following key orders:

Meralco was ordered to reconnect the electric service within twenty-four hours or face reconnection by a licensed electrician at Meralco’s expense.
Meralco was further ordered to refund P141,617.74 with 12% per annum interest from the date of payment until fully reimbursed.
Meralco was also ordered to pay attorney’s fees amounting to P50,000.00 plus court costs.

Post-Judgment Motions and Appeals

Instead of an appeal via the Court of Appeals under Section 2, Rule 41, Meralco filed on December 3, 1990, a “Motion to Set Aside Judgment by Default and/or for New Trial,” arguing:

That it had filed an answer within an extension period.
That the judgment by default was procured by fraud.

Judge Dayaw, in his order dated January 10, 1991, denied the motion, noting:

Meralco’s extension motion was defective because it lacked a notice of hearing.
The motion to set aside was merely pro forma as it failed to detail the alleged fraud.

Meralco subsequently filed a notice of appeal on January 28, 1991.

La Campana opposed on the basis that the appeal was filed out of time—the period to appeal having expired on December 14, 1990 (15 days from receipt of the November 29, 1990 decision).

The trial court, in its February 22, 1991, order, denied Meralco’s notice of appeal and granted the motion for execution filed by La Campana.
Execution-related orders followed:

On March 11, 1991, Judge Dayaw appointed Deputy Sheriff Jose Martinez as special sheriff for enforcing the writ of execution.
The writ of execution was issued on March 12, 1991.

On March 15, 1991, Meralco filed the instant petition for certiorari and prohibition with a request for a restraining order and/or preliminary injunction, alleging grave abuse of discretion by Judge Dayaw.

On March 20, 1991, the Court’s First Division issued a temporary restraining order in Meralco’s favor.

Final Developments

Upon thorough examination, the Court found that:

Meralco was clearly in default due to its failure to timely file an answer.
The ex-parte motion declaring default was correct under the applicable rules.
The motion to set aside default judgment or grant a new trial was deficient in alleging particulars regarding the alleged fraud.

The petition for certiorari and prohibition was ultimately dismissed.
The temporary restraining order issued on March 20, 1991, was dissolved.
The decisions and orders by Judge Dayaw, including the November 20, 1990, judgment, remain final, and the writ of execution dated March 12, 1991, was declared valid.
Costs were ordered against the petitioner.

Issues:

Timeliness and Sufficiency of Meralco’s Response

Whether Meralco’s motion for extension of time to file an answer, lacking a notice of hearing, could be accepted.
Whether the subsequent “Answer With Counterclaim” filed on September 21, 1990, even if within the requested extension period, was effective given that the reglementary period had expired.

Appropriateness of the Default Judgment

Whether La Campana’s ex-parte motion to declare Meralco in default was proper under the Rules of Court.
Whether Meralco, having filed its answer after the default period, could legitimately challenge the default judgment.

Validity of the Motion to Set Aside Judgment by Default/For New Trial

Whether Meralco’s motion was a valid application considering it did not provide a notice of hearing or sufficient explanation for the alleged fraud.
Whether the motion could serve to interrupt or toll the running of the appeal period.

Timeliness of the Notice of Appeal and Its Consequences

Whether the notice of appeal filed on January 28, 1991, was timely or if Meralco had lost its right to appeal by exceeding the prescribed period.
Whether Meralco may, under any circumstances, resort to a petition for certiorari and prohibition in lieu of an appeal.

Ruling:

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Ratio:

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Doctrine:

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