G.R. No. L-57535 - Zenith Insurance Corp. vs. Purisima

The case involves Zenith Insurance Corporation (petitioner) challenging a default judgment rendered by the Court of First Instance of Manila, Branch VIII in an action for damages arising from a vehicular accident.
The action, entitled “Perla Cia. de Seguros, Inc. vs. Manalang, Garcia and Zenith Insurance Corp.,” had resulted in an order directing the defendants to pay respondent Perla Cia. de Seguros the sum of P35,000.00 with 12% per annum interest from January 17, 1979, plus an additional P2,000.00 as attorney’s fees.

Zenith Insurance Corporation filed its Answer with a counterclaim, yet it failed to appear at the scheduled pre-trial on January 16, 1981.
The absence led the lower court to declare the petitioner as in default, thereby allowing Perla Cia. de Seguros to introduce evidence ex-parte.
The trial court’s pre-trial order for January 16, 1981 noted that “the parties and their counsel were notified in open Court,” yet the petitioner maintained that no proper notice was received.

The petitioner contended that it never received any copy of the order setting the pre-trial for January 16, 1981, despite previous orders (e.g., notifications for pre-trial on November 17, 1980; December 18, 1980; and evidence presentation on February 4, 1980) which were duly served.
It was also submitted that its counsel was indisposed due to influenza from January 15 to January 18, 1981, confirmed by a verified medical certificate.
Zenith Insurance Corporation argued that the trial court acted either without or in excess of its jurisdiction or with grave abuse of discretion by declaring the petitioner in default and denying its Motion for Reconsideration and to Set Aside Order of Default.

An examination of the expediente revealed an absence of notification regarding the January 16, 1981 pre-trial, differing from the observable pattern of prior notifications in the case records.
The petitioner presented an Affidavit of Merit from its Senior Vice President, enumerating several defenses that it would have raised if given a day in court, including:

The absence of documentary evidence that defendant Roman Garcia’s vehicle was insured with Zenith Insurance Corporation.
The argument that the action had already prescribed, having been filed more than one year after the vehicular accident, in line with the New Insurance Code.
That even if the vehicle was insured, the liability would be subject to the specific terms and conditions of the insurance policy.
That there was no record on file of the accident being reported to Zenith Insurance Corporation.

Despite the technical availability of appeal, the petitioner insisted that certiorari was the more expedient and effective remedy in the circumstance where it was allegedly illegally declared in default.

The trial court had previously ordered the issuance of a Writ of Execution on September 17, 1981.
However, respondent Judge later held the resolution on the petitioner’s Motion to Quash the Writ in abeyance pending the resolution of the petition by the higher court.
The petition for certiorari argued that the issuance of the default order and subsequent proceedings should be nullified on grounds of lack of due notice and grave abuse of discretion.

Whether the trial court committed grave abuse of discretion by declaring Zenith Insurance Corporation in default due to non-appearance at the pre-trial scheduled on January 16, 1981, in the absence of clear proof of proper notification.
Whether the lack of due notice of the pre-trial session invalidated the default order and the proceedings that followed.
Whether certiorari is the appropriate remedy in cases where a party was illegally declared in default, especially when the technical appeal is neither speedy nor adequate.