Crisologo vs. Globe Telecom Inc.

A default judgment rendered by the Regional Trial Court is appealable by ordinary appeal to the Court of Appeals under Section 2(a), Rule 41 of the 1997 Rules of Civil Procedure, not by direct petition for review on certiorari to the Supreme Court under Section 2(c), Rule 41 and Rule 45; however, when such an erroneous appeal raises questions of fact, the Supreme Court may, in its discretion, refer the case to the Court of Appeals under Rule 56, Section 6 rather than dismiss it outright.

Petitioner Jenette Marie B. Crisologo was employed by respondent Globe Telecom Inc. Upon her promotion to Director of Corporate Affairs and Regulatory Matters, she became entitled to an executive car and procured a 1997 Toyota Camry. In April 2002, petitioner was separated from the company. She filed an illegal dismissal complaint with the National Labor Relations Commission (NLRC), which was dismissed. While her petition for certiorari against the NLRC’s dismissal was pending before the Court of Appeals, respondent Globe Telecom filed a replevin action in the Regional Trial Court of Mandaluyong to recover possession of the vehicle and to seek damages. Petitioner was declared in default, and the trial court rendered a judgment by default against her.

• Employment and Replevin Action: Petitioner was an employee of respondent Globe Telecom Inc. who, upon promotion, procured a 1997 Toyota Camry as an executive car. She was separated from employment in April 2002. While her petition for certiorari relating to her illegal dismissal complaint was pending before the Court of Appeals (CA-G.R. SP No. 85679), Globe filed an action for recovery of possession of the vehicle with application for a writ of replevin and damages in the RTC of Mandaluyong (Civil Case No. MC04-2480).
• Default and Judgment: The trial court denied petitioner’s motion to dismiss based on litis pendentia and forum shopping. On Globe’s motion, petitioner was declared in default; the motion for reconsideration of the order of default was denied. The RTC allowed ex-parte presentation of evidence and rendered a default judgment on April 5, 2005, ordering petitioner to pay: (a) ₱2,556,460.00 as unpaid daily car rental for 730 days at ₱3,502.00 per day; (b) ₱200,000.00 attorney’s fees; (c) ₱200,000.00 exemplary damages; and (d) costs of suit.
• Appeal to the Supreme Court: Petitioner, admitting she was “properly declared in default,” filed directly with the Supreme Court a petition for review on certiorari under Rule 45. She anchored her choice of remedy on Matute v. Court of Appeals (1969), which cited Section 2, paragraph 3 of Rule 41 of the old Rules of Court — a provision that allowed a defendant in default to appeal from the judgment as contrary to the evidence or the law. Petitioner equated this to the current Rule 41, Section 2(c) providing for “appeal by certiorari” to the Supreme Court on pure questions of law. The Supreme Court denied the petition in a Resolution dated May 16, 2005, for being the wrong remedy.

• Proper Remedy: Petitioner maintained that under Matute v. Court of Appeals and the current Section 2(c), Rule 41, a party validly declared in default may appeal directly to the Supreme Court via petition for review on certiorari, and that her petition was the correct recourse.
• Questions of Law: Petitioner argued that her petition raised only questions of law (e.g., litis pendentia, forum shopping, unwarranted damages not supported by law and jurisprudence), and thus the Supreme Court should have taken cognizance of the case.
• Referral to the Court of Appeals: Petitioner contended that even if the remedy was erroneous, the Court could refer the case to the Court of Appeals under Rule 56, Section 6, paragraph 2 of the 1997 Rules of Civil Procedure, which provides that an appeal by certiorari taken to the Supreme Court from the RTC submitting issues of fact “may” be referred to the Court of Appeals.

• Proper Remedy from Default Judgment: Whether a direct petition for review on certiorari to the Supreme Court under Rule 45 and Section 2(c), Rule 41 is the correct mode of appeal from a judgment by default rendered by the Regional Trial Court.
• Referral to the Court of Appeals: Whether the Supreme Court may, in the interest of substantial justice, refer such an erroneously filed appeal to the Court of Appeals under Rule 56, Section 6, despite the petitioner having availed of the wrong remedy, given that the petition raises questions of fact.

• Proper Remedy from Default Judgment: The filing of a direct petition for review on certiorari to the Supreme Court was not the proper remedy to assail the default judgment. Under the 1997 Rules of Civil Procedure, the available remedies for a party declared in default — as reiterated in Cerezo v. Tuazon — are: (a) a motion under oath to set aside the order of default before judgment (Rule 9, Section 3(b)); (b) a motion for new trial if the judgment has been rendered but has not yet become final (Rule 37, Section 1(a)); (c) a petition for relief after the judgment has become final (Rule 38, Section 1); and (d) an appeal from the judgment as contrary to the evidence or the law under Rule 41, Section 2. The applicable mode of appeal is the ordinary appeal to the Court of Appeals under Rule 41, Section 2(a) — not the extraordinary appeal by certiorari to the Supreme Court under Section 2(c) — because a default judgment by the RTC is a decision rendered in the exercise of its original jurisdiction. The Matute case relied upon by petitioner pertained to the old Rules which explicitly provided for an ordinary appeal to the Court of Appeals, not a direct review by the Supreme Court. Thus, the petition was correctly denied as the wrong remedy.
• Referral to the Court of Appeals: Notwithstanding the error in the mode of appeal, the case involved questions of fact — particularly the propriety of the awards for damages, which called for re-evaluation of the evidence — and thus fell within the exclusive appellate jurisdiction of the Court of Appeals. Under Rule 56, Section 6, paragraph 2, the Supreme Court may, in its discretion, refer an appeal by certiorari taken to it from the RTC that submits issues of fact to the Court of Appeals, rather than dismiss it outright under Section 5(f) of the same Rule. The Court found that the presence of factual issues and the substantial ends of justice warranted the exercise of that discretion. Accordingly, the motion for reconsideration was granted, the petition reinstated, and the case referred to the Court of Appeals.

• Remedies of a party declared in default — A defendant validly declared in default has the following remedies under the Rules of Court:

  1. Motion under oath to set aside the order of default before judgment on the ground that the failure to answer was due to fraud, accident, mistake, or excusable negligence, and that a meritorious defense exists (Rule 9, Section 3(b));
  2. Motion for new trial if the judgment has been rendered but has not yet become final (Rule 37, Section 1(a));
  3. Petition for relief after the judgment has become final and executory (Rule 38, Section 1);
  4. Appeal from the judgment as contrary to the evidence or the law, even without a prior petition to set aside the order of default (Rule 41, Section 2). The Court applied this hierarchy and clarified that the correct appeal is the ordinary appeal to the Court of Appeals, not a direct petition for review on certiorari to the Supreme Court.

• Test for distinguishing questions of law from questions of fact — A question is one of law if the appellate court can determine the issue without reviewing or evaluating the evidence; otherwise, it is a question of fact. The Court applied this principle to determine that the grounds raised in the petition (particularly the award of damages) required an evaluation of the evidence, thereby making the appeal a case involving questions of fact properly cognizable by the Court of Appeals.

• Discretionary referral under Rule 56, Section 6 — When an appeal by certiorari is erroneously taken to the Supreme Court from an RTC decision involving questions of fact, the Court may, in the exercise of its discretion, refer the case to the Court of Appeals, instead of dismissing the appeal outright under Section 5(f) of the same Rule. The ruling emphasizes that both provisions use the term “may,” and the Court’s discretion is to be guided by the interests of substantial justice.

• “The test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise, it is a question of fact.” — This passage restates the controlling standard for determining appellate jurisdiction and was dispositive in finding that the petition involved questions of fact.

• “Note that the old Rules of Court then applicable explicitly laid down the remedy of an ordinary appeal to the Court of Appeals, and not appeal by certiorari to this Court, by a defendant declared in default.” — Explains the critical distinction between the 1969 Matute ruling under the old Rules and the current procedural regime.

• Matute v. Court of Appeals, 26 SCRA 798 (1969) — Distinguished; the ruling was based on the old Rules of Court which provided for an ordinary appeal to the Court of Appeals from default judgments, not a direct petition for review on certiorari to the Supreme Court.
• Cerezo v. Tuazon, G.R. No. 141538, March 23, 2004, 426 SCRA 167 — Followed; restated the complete enumeration of remedies available to a party declared in default, which guided the determination that the proper appeal lies with the Court of Appeals.
• China Road and Bridge Corporation v. Court of Appeals, G.R. No. 137898, December 15, 2000, 348 SCRA 401 — Cited for the test distinguishing questions of law from questions of fact.
• Far East Marble (Phils.), Inc. v. Court of Appeals, G.R. No. 94093, August 10, 1993, 225 SCRA 249 — Cited for the principle that cases involving questions of fact, of law, or both fall within the exclusive appellate jurisdiction of the Court of Appeals.

• Rule 41, Section 2, 1997 Rules of Civil Procedure — Defines the modes of appeal from the RTC: ordinary appeal to the Court of Appeals (Section 2(a)), petition for review to the Court of Appeals (Section 2(b)), and appeal by certiorari to the Supreme Court on pure questions of law (Section 2(c)). The default judgment fell under Section 2(a), rendering petitioner’s invocation of Section 2(c) erroneous.
• Rule 56, Sections 5(f) and 6, 1997 Rules of Civil Procedure — Provide that an appeal may be dismissed for error in the choice or mode of appeal (Section 5(f)), but also that an appeal by certiorari taken to the Supreme Court from the RTC submitting issues of fact may be referred to the Court of Appeals (Section 6). The Court exercised discretion to refer rather than dismiss.
• Rule 9, Section 3(b), Rule 37, and Rule 38, 1997 Rules of Civil Procedure — Enumerate the remedies of a party declared in default, as synthesized in Cerezo v. Tuazon and referenced to clarify the proper course for petitioner.
• Old Rule 41, Section 2, paragraph 3 — Provided for an ordinary appeal to the Court of Appeals by a defendant in default; cited to demonstrate that Matute never authorized a direct appeal to the Supreme Court.

Puno, J. (Chairman), Callejo, Sr., J., Tinga, J., and Chico-Nazario, J. concurred.