A DEFENDANT'S ANSWER SHOULD BE ADMITTED WHERE IT IS FILED BEFORE A DECLARATION OF DEFAULT:

Petitioner correctly points out that the rule is that a defendant's answer should be admitted where it is filed before a declaration of default and no prejudice is caused to the plaintiff. Indeed, where the answer is filed beyond the reglementary period but before the defendant is declared in default and there is no showing that defendant intends to delay the case, the answer should be admitted (Sablas v. Sablas, G.R. No. 144568, July 3, 2007, 526 SCRA 292, 298). x x x x 

In the case at bar, it is inconsequential that the trial court declared petitioner in default on the same day that petitioner filed its Answer. As reflected above, the trial court slept on petitioner’s Motion to Dismiss for almost a year, just as it also slept on respondents’ Motion to Declare petitioner in Default. It was only when petitioner filed a Motion to Withdraw Motion to Dismiss and to Admit Answer that it denied the Motion to Dismiss, and acted on/granted respondents’ Motion to Declare petitioner in Default. This is procedurally unsound. The policy of the law is to have every litigant's case tried on the merits as much as possible. Hence, judgments by default are frowned upon. A case is best decided when all contending parties are able to ventilate their respective claims, present their arguments and adduce evidence in support thereof. The parties are thus given the chance to be heard fully and the demands of due process are subserved. Moreover, it is only amidst such an atmosphere that accurate factual findings and correct legal conclusions can be reached by the courts. (SAN PEDRO CINEPLEX PROPERTIES vs. HEIRS OF MANUEL HUMADA ENAÑO, G.R. No. 190754, November 17, 2010, CARPIO MORALES, J.)