Certiorari as a Remedy Against Default Judgments for Grave Abuse of Discretion

The Supreme Court has clarified an important point in civil procedure: a party declared in default may sometimes use a petition for certiorari under Rule 65 instead of an ordinary appeal. This is allowed when the trial court committed grave abuse of discretion in declaring the party in default and rendering judgment against it. The ruling in National Power Corporation v. Baysic (G.R. No. 213893, September 25, 2019) guides litigants on choosing the correct remedy.

The Case Before the Trial Court

In July 2007, private respondents—retirees of the National Power Corporation (NPC)—filed a petition for mandamus against NPC and its board. They sought gratuity pay and financial assistance that allegedly accrued before the enactment of Republic Act No. 9136 (the Electric Power Industry Reform Act).

NPC filed its Answer in October 2008. The retirees moved to strike it out, claiming the verification was defective. The trial court agreed and ordered the Answer expunged from the records, treating it as an unsigned pleading under Section 4, Rule 7 of the Rules of Court. In November 2009, the court declared NPC in default. NPC's motion to lift the default order was denied.

The Dispute Over the Proper Remedy

While NPC's case was pending, the trial court rendered a default judgment. NPC then amended its petition before the Court of Appeals to include an attack on the default judgment itself.

The Court of Appeals dismissed the petition. It ruled that NPC should have appealed the default judgment instead of filing a petition for certiorari. Since an appeal was available, certiorari was improper.

The Supreme Court disagreed and reversed the Court of Appeals.

The Rule on Remedies for a Party in Default

The Supreme Court reiterated the well-settled remedies available to a party declared in default. These include:

• Filing a motion to set aside the order of default before judgment, on grounds of fraud, accident, mistake, or excusable negligence;
• Filing a motion for new trial if judgment has been rendered but is not yet final;
• Filing a petition for relief from judgment if the judgment has become final; and
• Appealing the default judgment.

But the Court added an important qualification. Citing David v. Judge Gutierrez-Fruelda (597 Phil. 354, 361 [2009]) and Martinez v. Republic of the Philippines (536 Phil. 868, 876-877 [2006]), it held that a petition for certiorari is also available when the trial court improperly declared a party in default, or when grave abuse of discretion attended the declaration.

Why Certiorari Was Proper in This Case

The Court explained that while an appeal was technically available to NPC, it was not a plain, speedy, and adequate remedy under the circumstances. NPC vigorously asserted that the trial court committed grave abuse of discretion—both in expunging its Answer and in declaring it in default. The Court noted that NPC was raising a prima facie meritorious defense involving the disbursement of public funds. Substantial justice required that NPC be given its day in court.

Practical Takeaways

• A party declared in default generally has several remedies: motion to set aside, motion for new trial, petition for relief, or appeal.
• Certiorari under Rule 65 is an additional remedy when the default order or judgment is tainted with grave abuse of discretion amounting to excess of jurisdiction.
• The mere availability of an appeal does not automatically bar certiorari if the appeal is not a plain, speedy, and adequate remedy.
• A defective verification can cause a pleading to be treated as unsigned, so pleadings must be verified properly.
• When public funds are involved, courts may be more willing to set aside defaults to allow a full hearing on the merits.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.