G.R. No. 31025 - Gutierrez vs. Carpio

The petitioners, Marciana Hoyo-a and her eight children, initiated two separate injunction cases in 1978 against Dominador Virata.
The subject matter involves homesteads—portions of Lot No. 2527 at Sitio Labilabi, Barrio Mabini, Escalante, Negros Occidental—with respective areas of sixteen and eight hectares.
These homesteads were applied for by Heracleo Hoyo-a, the deceased husband of Marciana, and by Marciana Hoyo-a herself.

On April 19, 1978, the trial court (Court of First Instance of Negros Occidental, San Carlos City branch) dismissed both cases on the ground of prematurity.
The petitioners filed a motion for reconsideration of the dismissal, which was resolved by Judge Corpuz-Macandog in an order issued on December 18, 1981.
Later, on February 20, 1984, Judge Severino C. Aguilar declared Dominador Virata in default upon the petitioners’ motion.

Virata filed a motion to set aside the order of default purportedly affecting the progress of the cases.
His motion was denied by the trial court in an order dated June 19, 1984.
This denial was reaffirmed when his subsequent motion for reconsideration was also dismissed.
Despite his efforts, Judge Aguilar did not grant Virata the opportunity to appeal the denial of his motion.

The case continued with the trial court setting the matter for the reception of evidence, with Mrs. Hoyo-a testifying on March 6, 1985.
Parallel to the trial court proceedings, Dominador Virata secured a resolution from the Intermediate Appellate Court (Justices PV Sison, Bidin, and Veloso) dated April 10, 1985, ordering the elevation of the records of the two cases.
The petitioners challenged this appellate resolution through a separate prohibition proceeding.

The Supreme Court, through the resolution penned by Justice Aquino, addressed the crucial issue of whether the order denying the motion to set aside the order of default was appealable.
The Court held that the denial of the motion is interlocutory, given that no final judgment by default had yet been rendered.
To ensure substantive adjudication of the pending issues, the Court ordered an unextendible period of ten (10) days from notice of the judgment’s finality within which Virata must answer the complaints.
The subsequent procedural order allowed for the presentation of evidence, possible cross-examination of Mrs. Hoyo-a by Virata’s counsel, and further pretrial and trial proceedings.
If Virata failed to file an answer, the order of default would stand, allowing the petitioners to continue presenting their evidence.
Ultimately, the Court granted the petition and remanded the records of the two cases to the lower court for further proceedings, without imposing costs.

Whether the order denying Virata’s motion to set aside the order of default is appealable.
Determination if the denial is categorized as an interlocutory order, given that the trial court has not yet rendered a final judgment by default.

How to ensure that the prolonged delay in the disposition of the cases does not prejudice the parties, particularly with regard to Defendant Virata’s opportunity to be heard.
Whether providing Virata with a stipulated period to answer the complaints is sufficient remedy for the delay and for any potential abuse of procedural rights.

Whether the appellate intervention—specifically the issuance of a resolution by the Intermediate Appellate Court—appropriately substituted for the trial court's prerogative in handling the pending default.
Examination of the limits of appellate review over interlocutory orders in light of established rules and precedents.