Sps. Rudy Ampeloquio Sr. and Lagrimas Obnamia vs CA, Hon.

Federico Tanada, PNB

Topic: Construction of the Rules on Civil Procedure
Facts:
1. For failure of petitioners to pay a loan, private respondent Philippine National Bank (PNB)
instituted an extrajudicial foreclosure proceeding of two parcels of land owned by the former
and were used as security of the loan.
2. PNB, as highest bidder, acquired the properties, and was issued titles thereof upon the
expiration of the redemption period.
3. Later, petitioners filed a complaint for annulment of the mortgage contract they entered with
the PNB and asked for the declaration of nullity of the extra-judicial foreclosure of their
mortgaged property and the cancellation of the title issued in favor of PNB.
4. Instead of filing an answer, PNB filed a motion to dismiss on the ground of lack of cause of
action.
5. The trial court denied the motion, but the order did not reach PNB because of change of the
lawyer handling their case. Petitioners filed a motion to declare PNB in default for failure to
answer within the reglementary period.
6. PNB fled an opposition and attached its answer with counterclaim. The trial court denied the
motion.
7. Petitioners raised the matter to the Court of Appeals, which dismissed the petition for lack of
merit. Hence, this petition raising as issue the failure of the trial court to declare respondent in
default despite its failure to file an answer within the reglementary period as provided by law.
Issue:
1. WON respondent appellate court erred or abused its discretion when it eschewed
technicalities and allowed the parties to litigate. NO.
Held:
The petition was denied by the Supreme Court. The Court agreed that PNB's failure to plead on time was
excusable. Judgments by default are generally looked upon with disfavor. Under the circumstances of
the case, respondent appellate court did not err nor abused its discretion when it eschewed
technicalities and allowed the parties to litigate.
We note when the trial court denied petitioners' motion to declare respondent in default, petitioners
questioned the court’s order by filing a petition for certiorari under Rule 65 with the Court of Appeals.
Certiorari under Rule 65 is a remedy designed for the correction of errors of jurisdiction and not errors
of judgment. As a rule, only jurisdictional questions may be raised in a petition for certiorari, including
matters of grave abuse of discretion which are equivalent to lack of jurisdiction. Certiorari is not a
substitute for appeal. Any error imputable to the trial court in not declaring a defendant in default can
be reviewed in an appeal from the final decision on the merits of the case. If every error committed by
the trial court were to be a proper object of review by certiorari, the trial would never come to an end
and the appellate courts’ dockets would be clogged ad infinitum with the aggrieved parties-litigants
filing petitions against every interlocutory order of the trial court. Such a situation could only undermine
the proper conduct of litigation before the courts and ought not to be tolerated if we are to enhance the
prompt administration of justice at every level of the judicial hierarchy.

WHEREFORE, the petition is DENIED for lack of merit. COSTS against the petitioners.