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This is a petition for CERTIORARI under Rule 65 assailing the CA order granting the TRO and Preliminary
Injunction.
Parties entered into an Agreement whereby Delbros financed, built, and furnished a hotel, while Hilton Intl
managed it.
1985, Feb 27 - Petitioner Delbros filed a complaint for termination of agreement and damages against
Hilton International and Chapman (as GM of said corporation) with the RTC Manila.
It alleged
mismanagement of the hotel, and failure to remit profits as stated in their agreement.
o Hilton Intl filed an Answer with Compulsory Counterclaim of damages. It alleged that there was no
cause of action (as the agreement provided for a 5 day prior notice before termination), and that it
was barred by estoppel, laches, and/or waived.
o RTC Judge issued a writ of Preliminary Injunction preventing Hilton from destroying records of
operations, moving any hotel property, moving funds, etc.
o Hilton and Chapman assailed the writ on certiorari (Rule 65) to the IAC. 1985 July 3 IAC issued TRO,
which became a prelim injunction writ on 1985 August 21.
April 12 Delbros filed a Motion to Admit Supplemental Complaint. It impleaded as additional defendant
Mosquera as Comptroller, and further alleged that the 5-day notice had been served on Hilton pursuant to
the agreement. It prayed for confirmation of termination of Agreement [similar to the original but adding
Mosquera].
o Over the opposition of Hilton and Chapman, RTC admitted the Supplemental Complaint. RTC
ordered the service of summons to Mosquera, and Hilton and Chapman to file an Answer within 5
days from notice. Copies were received on June 21 1985.
o July 6, Hilton, Chapman, and Mosquera filed via registered mail an extension, but RTC didnt
receive it until July 16.
o July 9, Delbros filed a Motion to Declare Defendants (Hilton and Chapman) in Default with respect
to the Supplemental Complaint. RTC granted, and Delbros was allowed to present evidence exparte.
o July 15, RTC rendered judgment by default, confirming the termination of the agreement.
o July 18, copies of the default judgment were given to Hilton. In the afternoon of same day, Hilton
et al. filed an Answer to the Supplemental Complaint.
o July 19, Delbros filed a Motion for Execution Pending Appeal. July 24, Hilton et al. filed a notice of
appeal from default judgment.
o September 3, RTC granted in a Special Order the execution pending appeal amid opposition by
Hilton et al. and a writ of Execution was issued and served upon defendants on the same day.
Partial Sheriffs Return stated that defendants voluntarily vacated their offices, and that Delbros
took over the possession and control of the hotel as evidenced by notices of takeover by Delbros
president issued to the hotels employees and officers.
o September 4, Hilton et al. filed a certiorari petition with IAC assailing the Special Order (execution
pending appeal) with prayer for restraining order/preliminary injunction. September 5, a TRO was
granted by the IAC.
Delbros filed the instant petition.
ISSUE:
WON the July 9 Order Declaring Defendants in Default is proper. [considering the intricacy of the IAC resolutions to
the default order]
RULING:
NO. Evidence must be given to prove the allegations, even in default.
Fundamentally, default orders are taken on the legal presumption that in failing to file an answer, the defendant
does not oppose the allegations and relief demanded in the complaint. In the case at bar, however, no such
presumption can arise vis-a-vis the Answer filed by HILTON and Chapman to the original complaint ;
their institution of the certiorari proceedings in opposition to petitioner's attempt to interfere with and/or take over
the control and management of the hotel pendente lite; and their vigorous opposition to the admission of the
supplemental complaint under consideration. These factors, of which the trial judge had full knowledge and notice,
should have cautioned him from precipitately rendering the default order as well as the default judgment.
"A supplemental pleading is not like an amended pleading substitute for the original one. It does not
supersede the original, but assumes that the original pleading is to stand, and the issues joined under the
original pleading remain as issues to be tried in the action."
While it is conceded that there is authority in support of a default judgment being predicated upon defendant's
failure to answer a supplemental complaint, the same cannot apply here. The reason is that although in the
supplemental complaint, the relief prayed for was altered from termination of the management contract to judicial
confirmation of its termination, the basic and principal issue of whether or not petitioner was entitled to terminate
the management contract, remained. As this basic issue had been previously traversed and joined by the
Answer filed by HILTON and Chapman, there was no necessity for requiring them to plead further to the
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SPOUSES GEORGE
GATCHALIAN
AND
YOLANDA
BARAZZA
VS
CFI
JUDGE
CAMPOS
AND
FACTS:
This is a petition for CERTIORARI under Rule 65 assailing the CFI judgment by default as well as the Order
declaring the spouses in default.
October 3 1978 Gatchalian filed a complaint for damages based on petitioners alleged use of the
business name GATCHALIAN THE HOUSE OF NATIVE LECHON in CFI Pasay.
October 30 1978 petitioner-spouses filed an Urgent Ex-Parte Motion for Extension of 15 days to file their
Answer, which the CFI granted on November 2 1978. The order granted an extension of 15 days or up to
November 18 1978.
November 17 1978 petitioner-spouses filed a MTD, instead of an Answer, alleging: (1) no cause of
action, (2) improper venue, (3) another action is pending between the same parties for the same cause of
action [Infringement of Trade Name filed with the Manila City Fiscals Office]. MTD was set for hearing on
November 20, 1978, but was never resolved.
November 29 1978 - Gatchalian filed an Ex Parte Motion to Declare Defendants in Default. CFI granted the
motion on December 1 1978.
January 29 1979 CFI rendered a judgment by default in favor of Gatchalian. MR was filed by petitionerspouses but was denied. Gatchalian moved for a writ of execution, which was granted. Petitioner-spouses
with the aid of a new counsel, filed an Omnibus Motion to set aside the Order declaring them in default, the
judgment be set aside, and to be given 3 days from receipt of Order within which to file an Answer. CFI
denied the motion.
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