G.R. No. 96432 - Lesaca vs. Court of Appeals

Case Summary (G.R. No. 96432)

Procedural History and Material Facts

On February 23, 1990, Lesaca, as plaintiff, filed in the MeTC a complaint for ejectment against Ravelo. The complaint sought to oust Ravelo on two grounds: (one) the expiration of a month-to-month lease contract between the parties; and (two) non-payment of rentals. Ravelo filed an answer to the complaint.

A preliminary conference was conducted on April 19, 1990, with all parties present and duly represented by counsel. The parties later requested a reset to May 3, 1990 to explore the possibility of an amicable settlement and to submit a compromise agreement. On May 3, 1990, only the plaintiff appeared. On the motion of plaintiff’s counsel, the MeTC declared Ravelo “as in default” for failure to appear at the preliminary conference despite notice. The MeTC then treated the case as submitted for decision based on the facts alleged in the complaint and, on May 23, 1990, ordered Ravelo to vacate the premises.

Ravelo appealed to the RTC of Manila, which affirmed the MeTC decision in toto. Ravelo then filed a petition in the Court of Appeals to annul the MeTC and RTC decisions and to remand the case to the MeTC for reception of evidence. On November 29, 1990, the Court of Appeals set aside both lower court decisions and remanded the case to the MeTC for further proceedings and reception of evidence as provided in the Rule on Summary Procedure. The Court of Appeals’ dispositive portion expressly directed the MeTC to conduct further proceedings and receive the parties’ evidence under that rule.

Issues Raised by the Petition

Lesaca sought Supreme Court review, arguing that the Court of Appeals erred: first, in ruling that the only instance when Section 5 of the Rule on Summary Procedure can be applied is when the defendant fails to answer; second, in ruling that when a party fails to attend or comply with the preliminary conference mandated under Section 6, the trial court is not powerless but should instead still proceed under Section 6 to issue a preliminary conference order defining issues and proceed under Section 7 for submission of affidavits; and third, in ruling that an “as in default” declaration is prohibited by the Rule on Summary Procedure.

Governing Provisions of the Rule on Summary Procedure

The Supreme Court focused on the internal structure of the Rule on Summary Procedure, particularly Sections 5, 6, 7, and the limitations on pleadings under Section 15 (h).

Under Section 6, the case must be calendared for a preliminary conference not later than thirty (30) days after the last answer is filed. If the parties fail to arrive at an amicable settlement, the court must clarify and define the issues in an order issued immediately after the preliminary conference.

Under Section 7, within ten (10) days from receipt of the preliminary conference order, the parties must submit the affidavits of witnesses and other evidence on the factual issues defined therein, together with a brief statement of their positions on the law and facts relied upon.

Under Section 5, the rule on judgment without trial based on the complaint’s allegations applies only when the defendant fails to answer within the reglementary period; in such case, the court may render judgment as warranted by the facts alleged in the complaint, limited to what is prayed for, subject to the court’s discretion regarding damages.

The Court also emphasized that a motion to declare a defendant in default is prohibited under Section 15 (h) of the Rule on Summary Procedure.

The Supreme Court’s Reasoning

The Supreme Court agreed with the Court of Appeals that Ravelo’s situation at the preliminary conference was analogous to the operative situation contemplated by Section 6—that is, the parties did not reach an amicable settlement despite being given the opportunity to do so. The decisive procedural point was that Ravelo had already filed an answer. Because he had answered, the trial court could not resort to the default mechanism that the MeTC employed when Ravelo and his counsel failed to appear at the rescheduled preliminary conference.

The Court held that the MeTC should have issued the required “preliminary conference order” defining the issues under Section 6. After that, the parties should have been directed to submit their affidavits and evidence under Section 7. The Court explained that the special effect described in Section 5—rendering judgment as warranted by the facts alleged in the complaint—may be invoked only upon the defendant’s failure to answer. Since Ravelo filed an answer, the trial court was not authorized to declare him in default based on his non-appearance at the preliminary conference.

The Supreme Court further ruled that the MeTC’s “as in default” declaration was barred because a motion to declare a defendant in default is a prohibited pleading under Section 15 (h) of the Rule on Summary Procedure. The Court relied on the policy that litigated cases should be decided on the merits, not through default adjudication. It noted that default judgments are generally disfavored because they do not pretend to be based upon the merits of the controversy and can cause positive and considerable injustice to the defendant.

To underscore the principle, the Supreme Court cited the doctrine from Coombs vs. Santos, 24 Phil. 446, as quoted in Trajano vs. Cruz, 80 SCRA 712, explaining the rationale for carefully examining grounds to set aside defaults. It also cited Rosario vs. Alonzo, 8 SCRA 397, where the Court ruled that defendants could not be in default after they had answered the complaint.

Ruling of the Court of Appeals and Disposition by the Supreme Court

The Supreme Court sustained the Court of Appeals’ conclusion that the MeTC and the RTC committed reversible error by bypassing the proper steps mandated by the Rule on Summary Procedure and by declaring Ravelo in default notwithstanding the filing of an answer. The Supreme Court held that the case had to be remanded to the MeTC for further proceedings consistent with Sections 6 and 7 of the Rule on Summary Procedure, requiring the defined issues to be crystallized in a preliminary conferen

Case Syllabus (G.R. No. 96432)

The case involved a petition for review by certiorari under Rule 45 of the Revised Rules of Court.
The petition challenged the Court of Appeals decision dated November 29, 1990.
The challenged appellate ruling set aside the Metropolitan Trial Court (MeTC) and Regional Trial Court (RTC) decisions and remanded the case to the MeTC for further proceedings under the Rule on Summary Procedure.
The underlying controversy was an ejectment suit filed by the petitioner as plaintiff against the private respondent as defendant for commercial premises in Manila.

Parties and Procedural Posture

Lorenzo P. Lesaca appeared as petitioner and plaintiff in the ejectment case.
Alfredo Ravelo appeared as respondent and defendant in the ejectment case.
The Court of Appeals served as respondent in the petition for review.
The MeTC rendered a decision ordering the defendant to vacate the premises.
The RTC affirmed the MeTC decision in toto after the defendant filed an appeal.
The defendant then filed a petition in the Court of Appeals seeking annulment of the MeTC and RTC decisions and remand for reception of evidence.
The Court of Appeals granted the petition and remanded the case to the MeTC for further proceedings under the Rule on Summary Procedure.
The present petition by the plaintiff alleged errors committed by the Court of Appeals in construing and applying the Summary Rule.

Key Factual Allegations

The petitioner filed a complaint for ejectment in the MeTC of Manila on February 23, 1990.
The ejectment complaint sought to oust the private respondent from the commercial premises at 671 Sales Street, Sta. Cruz, Manila.
The complaint relied on two grounds: (1) expiration of the month-to-month lease contract and (2) non-payment of rentals.
The private respondent filed an answer to the complaint.
A preliminary conference occurred on April 19, 1990, where both parties were present and duly represented by counsel.
The parties requested a reset of the preliminary conference to May 3, 1990 to explore an amicable settlement and submit a compromise agreement.
At the May 3, 1990 conference date, only the plaintiff appeared; neither the defendant nor his counsel appeared.
On motion of the plaintiff’s counsel, the MeTC declared the defendant “as in default” due to non-appearance at the preliminary conference despite prior notice.
The MeTC considered the case submitted for decision based on the facts alleged in the complaint.
The MeTC rendered its decision on May 23, 1990 ordering the defendant to vacate.
The defendant appealed to the RTC, which affirmed the MeTC decision after submission of memoranda.

Legal Issues Raised

The petitioner assigned error to the Court of Appeals for allegedly ruling that the only instance to apply Section 5 of the Summary Rule was when the defendant fails to answer.
The petitioner also assigned error for allegedly ruling that when a party fails to attend or comply with the preliminary conference under Section 6 of the Summary Rule, the trial court allegedly lacks discretion and must proceed under Section 6 and then Section 7 for submission of affidavits.
The petitioner further assigned error for allegedly ruling that “as in default” declaration was prohibited by the Rule on Summary Procedure.
The core controversy turned on the proper procedural handling under the Summary Rule when the defendant answered but failed to appear at the scheduled preliminary conference.

Statutory Framework

The case was governed by the Rule on Summary Procedure.
Section 6 of the Rule on Summary Procedure required a preliminary conference not later than thirty (30) days after the last answer was filed.
Section 6 further required that when the parties failed to arrive at an amicable settlement, the court must clarify and define the issues and set them out clearly and distinctly in an order issued immediately after the preliminary conference.
The defined issues then formed the basis for the parties’ e