Title
Austria vs. Lichauco
Case
G.R. No. 170080
Decision Date
Apr 3, 2007
Siblings dispute property partition; petitioner declared in default, delaying proceedings. SC upheld partition but invalidated sale favoring respondents, ensuring equitable division among co-owners.
partition of land
sale of properties
division of proceeds
A

Case Summary (G.R. No. 170080)

Factual Background

The Court of Appeals narrated that the parties were co-owners of two parcels of land with a combined area of six hundred sixty one (661) square meters located in Palanan, Makati City. The registered titles were held jointly by the parties as co-owners, and the improvements straddled both lots. In the early part of 1996, the plaintiffs-appellees informed Austria of their desire to have the properties partitioned based on each co-owner’s respective share. A realtor was engaged to prepare schemes for a physical partition, but Austria refused to accede to any scheme presented for physically apportioning the properties among the co-owners.

Because the parties failed to mutually agree on a partition arrangement, the plaintiffs-appellees filed, on July 1, 1997, a complaint with the Regional Trial Court of Makati City, Branch 142, docketed as Civil Case No. 97-1485, against Austria and two other defendants, Benedicto Quintos and Antonio Quintos, as unwilling co-plaintiffs, for partition of the subject property. Austria entered an Omnibus Motion to Dismiss within the period to file an answer. The trial court denied the motion in an order dated November 10, 1997, directing the defendants to file their answer within the remaining period under the Rules. Austria later filed a Motion for Reconsideration of the denial; the trial court denied it in an order dated February 2, 1998.

Pre-Trial and Procedural History

Austria then filed a Rule 65 petition for certiorari and prohibition with the Court of Appeals, docketed as CA-GR SP No. 46907, seeking to annul the trial court orders of November 10, 1997 and February 2, 1998. The Court of Appeals required comments and issued a temporary restraining order in a Resolution dated July 9, 1998, restraining the respondent judge and those acting for him from proceeding in Civil Case No. 97-1485 to prevent mootness. Austria received notice of the Court of Appeals Decision dated October 30, 1998 dismissing her petition on November 9, 1998, and her motion for reconsideration was later denied by Resolution dated July 9, 2001; the Court of Appeals Resolution was received on July 19, 2001.

Still dissatisfied, Austria filed a petition for review under Rule 45 with the Supreme Court. In a Resolution dated October 15, 2001, the Supreme Court denied the petition for failure to comply with the 1997 Rules of Civil Procedure, particularly for not paying on time docket and other fees and for violating Sec. 3, Rule 45 in relation to Sec. 5(c), Rule 56. Austria moved for reconsideration, which the Supreme Court denied with finality in a Resolution dated January 24, 2002.

Proceedings in the Trial Court Despite the Appellate Petitions

While Austria’s Rule 65 petition was pending, the plaintiffs-appellees filed on April 6, 1998 in the trial court a motion seeking a declaration of default and leave to present evidence ex parte. On July 13, 1998, the presiding judge held proceedings in abeyance while awaiting resolution of Austria’s pending motion for reconsideration before the Court of Appeals. Even with that holding, the plaintiffs-appellees filed a manifestation and motion on September 14, 1998 to resolve the April 6, 1998 motion. In an order dated September 25, 1998, the trial court deemed the incident submitted for resolution.

While Austria’s motion for reconsideration was still pending at the Court of Appeals, the trial court issued an order dated July 6, 1999 declaring the defendants in default, setting the reception of ex parte evidence, and commissioning the Branch Clerk of Court to receive such evidence and submit a report as soon as the evidence was concluded. On August 4, 1999, Austria filed a Motion for Reconsideration of the July 6, 1999 default order, with an urgent prayer to cancel the plaintiffs’ ex parte presentation of evidence scheduled for August 9, 1999. The trial court denied the motion in an order dated January 14, 2000 for lack of merit. The plaintiffs then presented their evidence ex parte on January 28, 2000.

The trial court rendered its decision on February 14, 2000, ruling in favor of the plaintiffs-appellees. Austria filed a motion for new trial, which the trial court denied on August 7, 2000 for lack of merit. The Court of Appeals affirmed the trial court’s decision, but deleted the portion requiring Austria to pay reasonable rental for use of part of the disputed properties. The Court of Appeals denied reconsideration in Resolution dated October 7, 2005.

Issues Raised in the Petition

Only two issues were presented before the Supreme Court. The first issue concerned whether the trial court’s judgment by default, which the Court of Appeals affirmed, amounted to a denial of Austria’s day in court. The second issue concerned whether the trial court committed reversible error in its alternative disposition ordering either partition of the subject properties or authorizing the sale of the properties to a third party and dividing the proceeds.

Parties’ Contentions

Austria argued that her procedural remedies were valid and that the Court of Appeals should have reversed the declaration of default because she had questioned the default order through a seasonably filed petition for review. She further contended that the trial court erred in allowing the sale of the entire property in dispute.

The respondents maintained that Austria was correctly declared in default because of her obstinate refusal to file an answer despite the trial court’s orders. They also argued that the co-ownership should not be allowed to continue indefinitely solely because of Austria’s unjustified refusal to consent to partition. Austria, in reply, asserted that she was denied the right to fully ventilate her case.

Legal Framework on Default Remedies

The Court explained that a defendant declared in default has several remedies: (a) a motion to set aside the order of default under Sec. 3(b), Rule 9 of the Rules of Court; (b) a motion for new trial under Sec. 1(a), Rule 37 if the default was discovered after judgment but while appeal remained available; (c) a petition for relief under Rule 38 if the judgment had become final and executory; and (d) an appeal under Sec. 1, Rule 41, even without first moving to set aside the order of default.

The Court’s Ruling on the Day-in-Court Issue

The Court held that Austria did not move to set aside the trial court’s order of default. Instead, she filed a motion for new trial after a decision had already been rendered. The trial court denied the motion for new trial for lack of merit, and Austria then appealed to the Court of Appeals, attacking both the denial of her motion for new trial and the adverse decision. The Court recognized that Austria had invoked the remedies available to her, but it emphasized that the mere fact of availing of correct remedies did not automatically entitle her to reversal.

The Court agreed with the Court of Appeals that Austria was declared in default because of her adamant refusal to file an answer despite being required to do so. It distinguished the cases relied upon by Austria, namely Heirs of Akut v. Court of Appeals and Ampeloquio v. Court of Appeals, by noting that in those cases the delay in filing an answer was not indicative of an intention to delay the proceedings. In Heirs of Akut, petitioners failed to obtain counsel on time and two petitioners were sick. In Ampeloquio, the order denying the motion to dismiss was mistakenly served upon counsel on record rather than the lawyer in charge, and thus the answer was not filed on time.

By contrast, the Court found circumstances showing a deliberate intention to delay. The complaint was filed in 1997, but was only finally resolved after multiple procedural detours, including Austria’s successive filings challenging the trial court’s denial of her motion to dismiss. The Court also noted that the Court of Appeals initially issued a temporary restraining order incident to the Rule 65 petition, but the restraining order’s validity expired after sixty (60) days. Once it expired, the prescribed period to file an answer ran, and the trial court properly continued the proceedings. Austria’s obstinate refusal to file an answer under these circumstances justified the declaration of default, and its affirmation by the Court of Appeals.

The Court further cautioned that procedural rules were not tools of delay but mechanisms for prompt and just disposition. Having “fully availed of, even exploited,” these remedies, Austria could not feign denial of day in court, since she had been given opportunity to ventilate her position.

Legal Framework on Partition and the Two Stages

On the second issue, the Court reiterated that partition actions have two stages. The first stage involves determining whether a co-ownership in fact exists and whether partition is proper and not legally prohibited, including whether it may be made through voluntary agreement among all interested parties. This phase may end either with a ruling that the plaintiff is not entitled to partition due to absence of co-ownership or legal prohibition, or with a ruling that co-ownership exists and partition is proper, in which case an accounting of rents and profits may be ordered, and the court confirms any partition agreed upon by proper conveyances.

The second stage begins once it appears that the parties cannot agree on the partition directed by the court. Then, partition is to be done by the court with the assistance of not more than three (3) commissioners, and the process may include accounting, approval, and awa

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