G.R. No. L-16035, December 31, 1960
THERESE VILLANUEVA, petitioner, vs. THE HON. PANTALEON A. PELAYO, Judge of the Court of First Instance of Iloilo and PEDRO CASIPE, respondents.

FACTS

Petitioner Therese Villanueva sued respondent Pedro Casipe for debt and unpaid rentals. Casipe failed to answer, leading the Iloilo Court of First Instance to declare him in default. After receiving Villanueva’s evidence, the court rendered a judgment on November 29, 1958, ordering Casipe to pay P4,697.80 with legal interest, P500.00 as attorney’s fees, and costs. On December 26, 1958, Casipe filed a verified petition to set aside the default and judgment, alleging invalid service of summons and that he only learned of the case upon issuance of a writ of garnishment and execution. He claimed a good defense, stating his debt was only about P75.00 for three monthly installments, not P4,697.80. Over Villanueva’s opposition, the court revoked the default order and judgment on March 21, 1959, directed Casipe to answer, and set the case for trial. Casipe filed an answer on March 30, 1959, admitting a debt of about P87.50. Meanwhile, an execution order had been issued on December 2, 1958, and the Sheriff garnished proceeds from Casipe’s fire insurance policies, from which Villanueva received P5,327.32. Casipe moved to lift the execution and for Villanueva to return the money. The court, on May 26, 1959, annulled the writ of execution and ordered Villanueva to return the money to Casipe. Villanueva later objected, arguing the execution was lawful and she had spent the money in good faith. The court overruled her objection on July 20, 1959, reiterating the order to return the money. Villanueva then filed a petition for certiorari with preliminary injunction in the Supreme Court, charging the respondent judge with abuse of discretion and lack of jurisdiction in revoking the default and judgment and ordering the return of the money, arguing the judgment had been executed and was beyond the lower court’s control.

ISSUE

Whether the respondent judge committed abuse of discretion or acted without jurisdiction in (1) revoking the default order and judgment, and (2) ordering the return of the money Villanueva received from the execution.

RULING

The Supreme Court dismissed the petition, finding no abuse of discretion or lack of jurisdiction by the respondent judge. On the first issue, the Court held that the interests of justice warranted granting Casipe an opportunity to present his defense, as his petition for relief was filed within thirty days and the document supporting Villanueva’s claim indicated the debt was payable in monthly installments of P25.00, making the maximum owed around P250.00 by November 1958, far less than the P4,697.80 awarded. On the second issue, the Court ruled that the execution was either premature or precarious, as it was issued just three days after the judgment when the possibility of relief for Casipe was still open. If the execution was based on a voided judgment due to the lifting of the default, the court had authority to rectify the error. If treated as execution pending appeal under Rule 39, section 2, the rules provide for restoring the status quo ante. The Court emphasized that the execution having been carried out did not deprive the court of power to order the return of prematurely or unduly received money, citing the principle that no one should enrich themselves at another’s expense. The writ of preliminary injunction issued by the Supreme Court was dissolved.