G.R. No. L-48564 - Mercader vs. Bonto

This is a petition for review on certiorari challenging several orders issued by a respondent trial judge in Civil Case No. 1006 of the Court of First Instance of Sorsogon.
The underlying case is an interpleader action filed by plaintiff Arsenio Oliquino against multiple defendants, namely Ruperto Mercader, Severina Mercader, Benjamin Revilla, and Joaquina Vda. de Palanca, regarding contested ownership and payment of rents on a parcel of land.

Petitioners: Ruperto Mercader and Severina Mercader are defendants in the interpleader action, asserting ownership over a 154-square-meter parcel identified by Tax Declaration No. 16696, which they inherited from their late father, Alejandro Mercader.
Respondents:

Plaintiff Arsenio Oliquino, who has been renting a portion of the contested property since 1951 and has built his residence there.
Benjamin Revilla, who also asserted ownership claims over the property.
Joaquina Vda. de Palanca, the purported rightful owner of the large parcel of land, part of which is in dispute due to alleged erroneous consolidation of titles by the Palanca family.

The complaint for interpleader, along with summonses and an order to interplead, was served on petitioners on September 25, 1975, and on defendant Benjamin Revilla on October 4, 1975; the service date for defendant Joaquina Vda. de Palanca was not clearly recorded.
Instead of filing a responsive pleading, petitioners moved to dismiss the complaint on October 7, 1975, a motion that was later denied by the trial court on January 6, 1976.
Defendant Benjamin Revilla similarly moved to dismiss the complaint even before being served.

On February 9, 1976, plaintiff Oliquino moved to declare petitioners in default, asserting that the reglementary period for filing an answer had lapsed.
Although petitioners filed an opposition to this motion on February 20, 1976—submitting their answer to the complaint along with a petition to admit it—they were still declared in default by an order dated February 25, 1976.
Petitioners then filed a motion to set aside the order of default on March 17, 1976, providing reasons for their delayed filing and citing excusable neglect.
The trial court denied this motion on May 24, 1976, and further motions for reconsideration were filed and denied on July 13, 1976 and September 29, 1976 respectively.

Despite a brief notice of appeal on July 24, 1976, and subsequent filings including an appeal bond on October 7, 1976, the petitioners eventually advanced their case to the Supreme Court.
A petition for review on certiorari was duly filed on July 24, 1978, with appropriate extensions granted by the Court, leading to the present review.

The delay in filing the answer by defendants’ counsel was attributed to several factors, including advanced age (77 years), health issues (notably a history of high blood pressure and a cerebral stroke in 1972), heavy workload, lack of sufficient personnel, and delays in receiving the lower court’s ruling on their earlier motion to dismiss.
Notably, after the expiration of the reglementary period, petitioners promptly filed an opposition and the answer, demonstrating their intention to participate actively in the proceedings.

The property dispute centers on a 154-square-meter lot designated under Tax Declaration No. 16696, which belongs to a larger parcel owned by defendant Joaquina Vda. de Palanca.
Petitioners claim that an error occurred in the consolidation of two parcels (Tax Declarations Nos. 16695 and 12097) by the Palanca family, inadvertently incorporating the lot under Tax Declaration No. 16696.

Although plaintiff Oliquino’s claim is solely based on his status as a lessee, the dispute over the actual title and ownership has maintained the need for all claims to be resolved before disbursement of rental payments.
The plaintiff is not alleged to suffer any substantial prejudice directly related to the delayed answer, as his interest is limited to the rental arrangement.

Whether the respondent Judge abused his discretion in declaring petitioners Ruperto Mercader and Severina Mercader in default despite the circumstances outlined by their counsel.
Whether the refusal to set aside the default orders—despite the prompt filing of an opposition and answer after the lapse of the reglementary period—constituted an abuse of discretion.
Whether the strict, technical application of procedural rules, without due regard to the principle of liberal construction intended to promote substantial justice, is justified in this case.
Whether the equities and extenuating circumstances, including excusable neglect and the absence of prejudice to the plaintiff, warrant setting aside a default judgment.