Otero v.

Tan
August 15, 2012 (Effect of Default; Remedies Thereof) Facts: Tan filed a complaint for collection of sum of money and damages in the MTCC Cagayan de Oro City against Otero, for the latter's failure to pay his obligations arising from purchased on credit petroleum products from Tan's Petron outlet. Despite receipts of summons which was served to Otero's wife, no answer was filed. This prompted Tan to file a motion to declare him in default. Otero opposed on the ground that he never received the summons. Hence, a hearing on the motion was set. However, Otero failed to appear on the day of the hearing. The Court, thus, declared him in default. Tan then allowed to present his evidence ex parte. In due time, MTCC ruled in favor of Tan, ordering Otero to pay Tan a sum of money. The decision was affirmed by the RTC and CA. Hence this, instant petition. Otero's contention: The statements of account presented by Tan as pieces of evidence were not authenticated. Hence, inadmissible before the court. Issue: Whether or not Otero, having been declared in default by the MTCC, may, in the appellate proceedings, still raise the failure of Tan to authenticate the statements of account which was adduced in evidence. Held: YES he may raise that issue, but it would not modify the ruling of declaring him liable to Tan. Loss of standing in court, the forfeiture of one's right as a party litigant, contestant or legal adversary, is the consequence of an order of default . A party in default loses his right to present his defense, control the proceedings, and examine or cross-examine witnesses. He has no right to expect that his pleadings would be acted upon by the court nor may be object to or refute evidence or motions filed against him. A defendant who has been declared in default is precluded from raising any other ground in his appeal from the judgment by default, since otherwise, he would then be allowed to adduce evidence in his defense, which right he had lost after he was declared in default. Indeed, he is proscribed in the appellate tribunal from adducing any evidence to bolster his defense against the plaintiff's claim. Remedies to a party who has been declared in default: 1. The defendant in default, may, at any time after discovery thereof and before judgment, file a motion under oath, to set aside the order of default on the ground that his failure to answer was due to fraud, mistake, accident, or excusable neglect, and that he has meritorious defense; 2. If the judgment has already been rendered when the defendant discovered the default, but before the same has become final and executory, he may file a motion for new trial (Rule 37); 3. If defendant has discovered the default after the judgment has become final and executor, he may file a petition for relief (Rule 38); or 4. He may also appeal from the judgment rendered against him as contrary to the evidence or the law, even if no petition to set aside the order of default has been presented by him.

- [Otero availed of the 4 th remedy. True indeed, it was erroneous for the lower courts to rely on the statements of account, as they were inadmissible in evidence. The statements of account presented by Tan, which are private documents, were merely hearsay as the genuineness and due execution of the same were not established. Nevertheless, Otero's obligation to pay was still proven by a preponderance of evidence, through the direct testimonies of Tan's employees. Hence, judgment affirmed.]