G.R. No. L-14911 - Ong Peng vs. Custodio

Ong Peng, the plaintiff-appellee, filed a suit against Jose Custodio, the defendant-appellant, to recover P2,527.30 with interest, representing the value of goods and materials, plus P500 as attorney’s fees.
The complaint was originally filed on April 15, 1958, alleging that defendant had taken possession of goods and materials on credit, supported by a promissory note.

On April 30, 1958, the defendant moved to dismiss the complaint by arguing that the cause of action had already prescribed.
The plaintiff responded to the motion to dismiss by filing an answer and, crucially, attaching an amended complaint that set forth the promissory note underlying his claim.
No answer or objection was filed by the defendant to the amended complaint.
The court admitted the amended complaint on May 21, 1958, on the basis that no objection had been presented, and subsequently denied the defendant’s motion to dismiss on May 28, 1958.

Copies of the court’s orders were sent by mail: the order admitting the amended complaint was sent by ordinary mail on May 31, 1958, and the order denying the motion to dismiss was sent by registered mail, received by the defendant on June 16, 1958.
As the defendant did not file an answer to the amended complaint, the plaintiff moved on June 27, 1958, for the defendant to be declared in default.
The court granted the motion on June 28, 1958, declared the defendant in default, and scheduled the hearing for July 17, 1958, for the reception of the plaintiff’s evidence.
Prior to the July 17 hearing, on July 5, 1958, the defendant filed a motion to set aside the order of default and to permit him to file his answer, which was heard on July 12, 1958, but ultimately denied.

On July 17, 1958, after hearing the plaintiff’s evidence, the court entered judgment ordering the defendant to pay the sum demanded along with legal interest and costs.
After the judgment, the defendant filed a motion for reconsideration under oath, claiming he possessed a strong defense on the ground that the promissory note was false and spurious, and asserting his reputation as an intelligent and respectable member of the community.
This motion was accompanied by an affidavit alleging that he could prove the note was forged if allowed to present evidence.
The plaintiff countered with affidavits attesting to the authenticity of the promissory note, including testimony that indicated the note was delivered by his clerk and that witnesses were present when the defendant signed it.
The court denied the motion for reconsideration, and after the subsequent denial of another similar motion, the defendant-appellant advanced the present appeal.

The defendant argued that he had never come under the jurisdiction of the court with respect to the amended complaint because it was not served upon him with the requisite summons in accordance with Section 10, Rule 27 of the Rules of Court, citing Atkins, Kroll and Co. vs. Domingo.
He further contended that the lower court acted erroneously in allowing the plaintiff to amend his complaint after a motion to dismiss had been filed.

Was the amended complaint properly served on the defendant given that he had already appeared in response to the original complaint through a proper summons?
Does the rule requiring service by summons apply to an amended complaint that does not introduce new matters but merely outlines the promissory note underlying the cause of action?

Is it procedurally and substantively proper for the court to allow the plaintiff to amend his complaint after the defendant had filed a motion to dismiss?
Does the amendment, which did not change the cause of action but only set forth the promissory note, warrant the exercise of the plaintiff’s right under Section 1 of Rule 17?

Was the defendant’s motion to set aside the order of default sufficient in terms of meeting the formal requirements, such as the submission of an affidavit of merits?
Can the issue of forgery of the promissory note, raised belatedly in the motion for reconsideration, be entertained or re-litigated under Rule 38 of the Rules of Court?