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SOCIAL SECURITY SYSTEM v. NAZAR U. CHAVES

FACTS:

Private respondents, spouses Juanito and Agustina Obedencio, filed a civil case against the Social Security System (SSS) for specific performance. They sought the cancellation of the mortgage on their properties, the release of the related documents, and the payment of moral damages, litigation expenses, and attorney's fees. The SSS, in its answer with counterclaim, alleged that the private respondents had an unpaid obligation.

During the pre-trial conference, Atty. Rodrigo B. Filoteo, the SSS's lawyer, failed to attend due to an official mission. As a result, the respondent judge declared the SSS in default and allowed the private respondents to present their evidence ex parte. The SSS filed a motion for reconsideration to lift the order of default but it was denied. The SSS appealed the denial of their motion to the Court of Appeals, but the appeal was dismissed. The SSS then filed a motion for reconsideration, which was also denied. Consequently, the SSS filed a petition for review on certiorari seeking to reverse the decision and resolution of the Court of Appeals.

ISSUES:

  1. Whether the default order of the lower court should be lifted.

  2. Whether the petitioner has a meritorious defense or something to gain by having the order of default set aside.

RULING:

  1. The Court denies the petition and affirms the decision of the Court of Appeals. The default order of the lower court should not be lifted because the petitioner failed to comply with the requirements under Rule 18 of the Rules of Court. The motion to lift the order of default was not under oath, not accompanied by an affidavit of merit, and did not show that the petitioner had a meritorious defense or something to gain by having the order of default set aside.

PRINCIPLES:

  • It is the discretion of the trial judge to declare a party-defendant as in default for failure to appear at a pre-trial conference.

  • To be relieved of the effects of the order of default, the defendant must file a motion under oath to set aside the order of default and show that his failure to appear at the pre-trial was due to fraud, accident, mistake, or excusable neglect.

  • A motion to lift order of default should be under oath, verified, and accompanied with an affidavit of merit.

  • The motion to lift the order of default must show that the defendant has a meritorious defense or that something would be gained by having the order of default set aside.