Republic
of the
Supreme Court
SECOND DIVISION
CONTRACTORS,
INC.,
Petitioner, Present:
CARPIO, J.,
Chairperson,
BRION,
- versus -
PEREZ,
SERENO, and
REYES, JJ.
MRS. LETICIA
B. MAGSALIN,
doing business under the trade name Promulgated:
KARENS
TRADING, FGU
INSURANCE
CORPORATION,
GODOFREDO
GARCIA, June 20, 2012
CONCORDIA
GARCIA, and
REYNALDO
BAETIONG,
Respondents.
x--------------------------------------------------------------------------------------x
BRION, J.:
We resolve the petition for review on certiorari[1]
filed by Shimizu Philippines Contractors, Inc. (petitioner) to challenge
the twin resolutions of the
Court of Appeals (CA)[2] in
CA-G.R. CV No. 83096 which dismissed the appeal of the petitioner on the ground
of lack of jurisdiction[3]
and denied the petitioners subsequent motion for reconsideration.[4]
The appeal in CA-G.R. CV No. 83096 had sought to nullify the December 16, 2003 order[5]
of the Regional Trial Court (RTC) dismissing the petitioners
complaint for sum of money and damages on the ground of non prosequitur.
The antecedent facts of the
petition before us are not disputed.
An alleged breach of
contract was the initial event that led to the present petition. The petitioner
claims that one Leticia Magsalin, doing business as Karens Trading, had breached
their subcontract agreement for the supply, delivery, installation, and
finishing of parquet tiles for certain floors in the petitioners Makati City
condominium project called The Regency at Salcedo. The breach triggered the
agreements termination. When Magsalin also refused to return the petitioners
unliquidated advance payment and to account for other monetary liabilities
despite demand, the petitioner sent a notice to respondent FGU Insurance
Corporation (FGU Insurance) demanding damages pursuant to the surety and
performance bonds the former had issued for the subcontract.
On P2,329,124.60) as actual damages for the breach
of contract.
FGU Insurance was duly
served with summons. With respect to Magsalin, however, the corresponding
officers return declared that both she and Karens Trading could not be
located at their given addresses, and that despite further efforts, their new
addresses could not be determined.
In August 2002, FGU
Insurance filed a motion to dismiss the complaint. The petitioner filed its opposition to the motion. The motion
to dismiss was denied as well as the ensuing motion for reconsideration, and
FGU Insurance was obliged to file an answer.
In October 2002, in an
effort to assist the RTC in acquiring jurisdiction over Magsalin, the
petitioner filed a motion for leave to serve summons on respondent Magsalin by
way of publication. In January 2003, the
petitioner filed its reply to FGU Insurances answer.
In February 2003, FGU
Insurance filed a motion for leave of court
to file a third-party complaint. Attached to the motion was the subject
complaint,[6]
with Reynaldo Baetiong, Godofredo Garcia and Concordia Garcia named as
third-party defendants. FGU Insurance claims that the three had executed
counter-guaranties over the surety and performance bonds it executed for the
subcontract with Magsalin and, hence, should be held jointly and severally
liable in the event it is held liable in Civil Case No. 02-488.
The RTC admitted the
third-party complaint and denied the
motion to serve summons by publication on the ground that the action against
respondent Magsalin was in personam.
In May 2003, the RTC issued
a notice setting the case for hearing on
In June 2003, Baetiong filed
his answer to the third-party
complaint. He denied any personal knowledge about the surety and performance
bonds for the subcontract with Magsalin.[7]
Of the three (3) persons named as third-party defendants, only Baetiong filed
an answer to the third-party complaint;
the officers returns on the summons to the Garcias state that both could not
be located at their given addresses. Incidentally, the petitioner claims, and
Baetiong does not dispute, that it was not served with a copy of Baetiongs answer. The petitioner now
argues before us that FGU Insurance, which is the plaintiff in the third-party
complaint, had failed to exert efforts to serve summons on the Garcias. It
suggests that a motion to serve summons by publication should have been filed
for this purpose. The petitioner also asserts that the RTC should have
scheduled a hearing to determine the status of the summons to the third-party defendants.[8]
With the above procedural
events presented by both parties as the only backdrop, on December 16, 2003 the
RTC issued a tersely worded order[9]
dismissing Civil Case No. 02-488. For clarity, we quote the dismissal order in
full:
O R D E R
For failure of [petitioner]
to prosecute, the case is hereby DISMISSED.
SO ORDERED.
The RTC denied the
petitioners motion for reconsideration,[10] prompting
the latter to elevate its case to the CA via
a Rule 41 petition for review.[11]
The Ruling of the Appellate Court
FGU Insurance moved for the
dismissal of the appeal on the ground of lack of jurisdiction. It argued that
the appeal raised a pure question of law as it did not dispute the proceedings before
the issuance of the December 16, 2003 dismissal order.
The
petitioner, on the other hand, insisted that it had raised questions of fact in
the appeal.[12]
Thus -
While, the instant appeal does not involve the merits
of the case, the same involves questions of fact based on the records of the
case. It must be emphasized that the lower courts dismissal of the case
based on alleged failure to prosecute on the part of plaintiff-appellant was
too sudden and precipitate. This being the case, the facts [sic] to be
determined is whether based on the records of the case, was there a definite
inaction on the part of plaintiff-appellant? A careful examination of all
pleadings filed as well as the orders of the lower court vis--vis the rules
should now be made in order to determine whether there was indeed a failure to
prosecute on the part of plaintiff-appellant[.][13]
(emphases supplied)
The CA agreed with FGU Insurance and dismissed the appeal, and denied as well the subsequent motion for reconsideration.[14] The petitioner thus filed the present petition for review on certiorari.
The Present Petition
The petitioner pleads five (5) grounds to reverse the CAs resolutions and to reinstate Civil Case No. 02-488. In an effort perhaps to make sense of the dismissal of the case (considering that the trial court had not stated the facts that justify it), the petitioner draws this Courts attention to certain facts and issues that we find to be of little materiality to the disposition of this petition:
Grounds/
Statement of Matters Involved
I.
The Appellate Court has jurisdiction to determine the merits of the
Appeal as the matters therein involve both questions of law and fact.
II.
The
III.
The lower court erred in declaring that petitioner failed to
prosecute the case despite the fact that there is no joinder of indispensable
parties and issues yet because defendant-respondent Leticia B. Magsalin as well
as third-party defendant-respondents Godofredo and Concordia Garcias
whereabouts were unknown, hence no service yet on them of the copy of the
summons and complaint with annexes[.]
IV.
The
V.
It is evident that the
In our Resolution dated February 13, 2006,[16] we required the respondents to comment. FGU Insurances comment[17] alleges that the present petition is fatally defective for being unaccompanied by material portions of the record. It reiterates that the appeal in CA-G.R. CV No. 83096 was improperly filed under Rule 41 and should have been filed directly with this Court under Rule 45 of the Rules of Court. Baetiong, in his comment,[18] asserts that the dismissal of the appeal was in accord with existing laws and applicable jurisprudence.
Preliminarily, we resolve the claim that the petition violates Rule 45 of the Rules of Court on the attachment of material portions of the record. We note that FGU Insurance fails to discharge its burden of proving this claim by not specifying the material portions of the record the petitioner should have attached to the petition. At any rate, after a careful perusal of the petition and its attachments, the Court finds the petition to be sufficient. In other words, we can judiciously assess and resolve the present petition on the basis of its allegations and attachments.
After due consideration, we resolve to grant the petition on the ground that the December 16, 2003 dismissal order is null and void for violation of due process. We are also convinced that the appeal to challenge the dismissal order was properly filed under Rule 41 of the Rules of Court. We further find that the dismissal of Civil Case No. 02-488 for failure to prosecute is not supported by facts, as shown by the records of the case.
The Dismissal Order
is Void
The nullity of the dismissal order is patent on its face. It simply states its conclusion that the case should be dismissed for non prosequitur, a legal conclusion, but does not state the facts on which this conclusion is based.
Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section 3, Rule 17 of the Rules of Court. A plain examination of the December 16, 2003 dismissal order shows that it is an unqualified order and, as such, is deemed to be a dismissal with prejudice. Dismissals of actions (under Section 3) which do not expressly state whether they are with or without prejudice are held to be with prejudice[.][19] As a prejudicial dismissal, the December 16, 2003 dismissal order is also deemed to be a judgment on the merits so that the petitioners complaint in Civil Case No. 02-488 can no longer be refiled on the principle of res judicata. Procedurally, when a complaint is dismissed for failure to prosecute and the dismissal is unqualified, the dismissal has the effect of an adjudication on the merits.[20]
As an adjudication on the merits, it is imperative that the dismissal order conform with Section 1, Rule 36 of the Rules of Court on the writing of valid judgments and final orders. The rule states:
RULE 36
Judgments, Final Orders and
Entry Thereof
Section 1. Rendition of judgments and final orders.
A judgment or final order determining the merits of the case shall be in
writing personally and directly prepared by the judge, stating clearly and
distinctly the facts and the law on which it is based, signed by him, and filed
with the clerk of the court.
The December 16, 2003 dismissal order clearly
violates this rule for its failure to disclose how and why the petitioner failed to prosecute its complaint.
Thus, neither the petitioner nor the reviewing court is able to know the
particular facts that had prompted the prejudicial dismissal. Had the petitioner perhaps
failed to appear at a scheduled trial date? Had it failed to take appropriate
actions for the active prosecution of its complaint for an unreasonable length
of time? Had it failed to comply with the rules or any order of the trial
court? The December 16, 2003 dismissal order
does not say.
We have in the past admonished trial courts against issuing dismissal orders similar to that appealed in CA-G.R. CV No. 83096. A trial court should always specify the reasons for a complaints dismissal so that on appeal, the reviewing court can readily determine the prima facie justification for the dismissal.[21] A decision that does not clearly and distinctly state the facts and the law on which it is based leaves the parties in the dark and is especially prejudicial to the losing party who is unable to point the assigned error in seeking a review by a higher tribunal.[22]
We thus agree with the petitioner that the dismissal of Civil Case No. 02-488 constituted a denial of due process. Elementary due process demands that the parties to a litigation be given information on how the case was decided, as well as an explanation of the factual and legal reasons that led to the conclusions of the court.[23] Where the reasons are absent, a decision (such as the December 16, 2003 dismissal order) has absolutely nothing to support it and is thus a nullity.[24]
For this
same reason, we are not moved by respondent FGU Insurances statement that the
disposition of the present petition must be limited to the issue of whether the
CA had correctly dismissed the appeal in CA-G.R. CV No. 83096.[25]
This statement implies that we cannot
properly look into the validity of the December 16, 2003 dismissal
order in this Rule 45 petition. A void decision, however, is
open to collateral attack. While we note that the validity of the dismissal order with
respect to Section 1, Rule 36 of the Rules of Court was never raised by the petitioner as an issue in the
present petition, the Supreme Court is
vested with ample authority to review an unassigned error if it finds that
consideration and resolution are indispensable or necessary in arriving at a
just decision in an appeal.[26]
In this case, the interests of substantial justice warrant the review of an
obviously void dismissal order.
The appeal
was properly filed
under
Rule 41 of the Rules of Court
While the nullity of the
December 16, 2003 dismissal order
constitutes the ratio decidendi for this petition, we
nevertheless rule on the contention that the appeal was erroneously filed.[27]
In dismissing the appeal,
the CA relied on the premise that since the facts presented in the petitioners
appeal were admitted and not disputed, the appeal must thereby raise a pure
question of law proscribed in an ordinary appeal. This premise was effectively
the legal principle articulated in the case of Joaquin v. Navarro,[28]
cited by the CA in its April 8, 2005 resolution.
Respondent FGU Insurance thus contends that the proper remedy to assail the dismissal
of Civil Case No. 02-488 was an appeal filed under Rule 45 of the Rules of Court.
The reliance on Joaquin is
misplaced as it is based on the conclusion the appellate court made in its April 8, 2005 resolution i.e., that
the pleading of undisputed facts is equivalent to a prohibited appeal. The
reliance is inattentive to both the averments of the subject appeal and to the
text of the cited case. The operative
legal principle in Joaquin is this: [W]here a case is submitted upon an agreement of facts, or where
all the facts are stated in the judgment and the issue is the correctness
of the conclusions drawn therefrom, the question is one of law which [is
properly subject to the review of this Court.][29]
In this case, as already pointed out above, the facts supposedly supporting the
trial courts conclusion of non prosequitur were not stated in
the judgment. This defeats the application of Joaquin.
At any rate, we believe that
the filing of the appeal in CA-G.R. CV No. 83096 under Rule 41 of the Rules of
Court was proper as it necessarily involved questions of fact.
An authority material to
this case is the case of Olave v. Mistas.[30]
Directly addressed in Olave was the CAs jurisdiction over an ordinary
appeal supported by undisputed facts and seeking the review of a
prejudicial order of dismissal. In this case, a complaint was filed before the
RTC in
The CA denied the motion and
entertained the appeal. It rendered a decision reinstating the complaint on the
ground that there was no evidence on record that the plaintiffs had
deliberately failed to prosecute their complaint.
When the case was elevated
to this court on a Rule 45 petition, we squarely addressed the propriety of the
plaintiffs appeal. Though mindful that the circumstances pleaded in the appeal
were all admitted, we categorically held in Olave that the appeal was
correctly filed. We observed that despite undisputed records, the CA, in its review,
still had to respond to factual questions such as the length of time between
the plaintiffs receipt of the last pleading filed up to the time they moved to
set the case for pre-trial, whether there had been any manifest intention on
the plaintiffs part not to comply with the Rules of Court, and whether the
plaintiffs counsel was negligent.
Significantly, in Olave, we agreed with the plaintiffs that
among the critical factual questions was whether, based on the records, there had
been factual basis for the dismissal of
the subject complaint. This same question is particularly significant in the
present case given that the order appealed
from in CA-G.R. CV No. 83096 does not even indicate the factual basis
for the dismissal of Civil Case No. 02-488. Due to the absence of any stated
factual basis, and despite the admissions of the parties, the CA, in CA-G.R. CV
No. 83096, still had to delve into the records to check whether facts to justify
the prejudicial dismissal even exist. Since the dismissal of Civil Case No.
02-488 appears to have been rendered motu proprio (as the December 16,
2003 dismissal order does not state
if it was issued upon the respondents or the trial courts motion), the facts
to be determined by the CA should include the grounds specified under Section 3,
Rule 17 of the Rules of Court. A court could only issue a motu proprio dismissal pursuant to the grounds mentioned in this
rule and for lack of jurisdiction over the subject matter.[32]
These grounds are matters of facts. Thus, given that the dismissal order does
not disclose its factual basis, we are thus persuaded that the petitioner had
properly filed its appeal from the dismissal order under Rule 41 of the Rules
of Court.
The Dismissal
of Civil Case No. 02-488
is not Supported by the Facts of the Case
We also find that the dismissal of Civil Case No. 02-488 is not warranted. Based on available records and on the averments of the parties, the following events were chronologically proximate to the dismissal of Civil Case No. 02-488: (a) on March 24, 2003, the court admitted FGU Insurances third-party complaint; (b) the trial court cancelled the June 20, 2003 hearing upon FGU Insurances motion; and (c) on June 16, 2003, Baetiong filed his Answer to the third-party complaint but did not serve it upon the petitioner.
None of these events square with the grounds specified by Section 3, Rule 17 of the Rules of Court for the motu proprio dismissal of a case for failure to prosecute. These grounds are as follows:
(a) Failure of the plaintiff, without justifiable reasons, to appear on the date of the presentation of his evidence in chief;
(b) Failure of the plaintiff to prosecute his action for an unreasonable length of time;
(c) Failure of the plaintiff to comply with the Rules of Court; or
(d) Failure of the plaintiff to obey any order of the court.
In our view, the developments in the present case do not satisfy the stringent standards set in law and jurisprudence for a non prosequitur.[33] The fundamental test for non prosequitur is whether, under the circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude.[34] There must be unwillingness on the part of the plaintiff to prosecute.[35]
In this case, the parties own narrations of facts demonstrate the petitioners willingness to prosecute its complaint. Indeed, neither respondents FGU Insurance nor Baetiong was able to point to any specific act committed by the petitioner to justify the dismissal of their case.
While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The repressive or restraining effect of the rule amounting to adjudication upon the merits may cut short a case even before it is fully litigated; a ruling of dismissal may forever bar a litigant from pursuing judicial relief under the same cause of action. Hence, sound discretion demands vigilance in duly recognizing the circumstances surrounding the case to the end that technicality shall not prevail over substantial justice.[36]
This court is thus of the opinion that the dismissal of Civil Case No. 02-488 is not warranted. Neither facts, law or jurisprudence supports the RTCs finding of failure to prosecute on the part of the petitioner.
Wherefore, premises considered, the
instant petition is Granted. The resolutions
of the Court of Appeals dated April 8, 2005 and October 4, 2005 are REVERSED and SET ASIDE. The order
dated December 16, 2003 of the Regional Trial Court, Branch 61,
SO ORDERED.
ARTURO D.
BRION
Associate
Justice
WE CONCUR:
ANTONIO T. CARPIO
Senior Associate
Justice
Chairperson
JOSE Associate
Justice |
MARIA Associate
Justice |
BIENVENIDO L. REYES
Associate
Justice
C E R T I F I C A T I O N
I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.
ANTONIO
T. CARPIO
Senior Associate Justice
(Per Section 12, R.A. 296,
The Judiciary Act of 1948, as amended)
[1] Filed under Rule 45 of the Rules of Court; rollo, pp. 10-31.
[2] Penned by Associate Justice Marina L. Buzon, and concurred in by Associate Justices Mario L. Guaria III and Santiago Javier Ranada.
[3] Rollo, pp. 35-37.
[4]
[5]
[6] Rollo, pp. 213-220.
[7]
[8]
[9]
[10]
[11] Dated December 3, 2004; id. at 244-248. On December 16, 2004, the petitioner filed a COMMENT/OPPOSITION (To Motion to Dismiss Appeal); id. at 58-64.
[12]
[13]
[14] Supra note 4.
[15] Rollo, p. 19.
[16]
[17] Dated March 13, 2006; id. at 47-57.
[18] Filed on April 5, 2006; id. at 70-76.
[19] Vallangca v. Court of Appeals, G.R. No. 55336, May 4, 1989, 173 SCRA 42, 54.
[20] Peninsula Construction, Inc. v. Eisma, G.R. No. 84098, March 5, 1991, 194 SCRA 667, 671, citing Olivares v. Judge Gonzales, 242 Phil. 493 (1988); Vda. de Denoso v. Court of Appeals, 246 Phil. 674 (1988); and Vallangca v. Court of Appeals, supra note 19. Gutierrez v. Court of Appeals, G.R. No. 82475, January 28, 1991,193 SCRA 437; see also Cruz v. Court of Appeals (Second Division), 517 Phil. 572 (2006).
[21] Cf. Continental Bank v. Tiangco, No.
50480,
[22] Nicos Industrial Corp. v. Court of Appeals, G.R. No. 88709, February 11, 1992, 206 SCRA 127.
[23] Velarde v. Social Justice Society, G.R. No. 159357, April 28, 2004, 428 SCRA 283, 307, citing Nicos Industrial Corp. v. Court of Appeals, supra note 22; People v. Judge Bellaflor, June 15, 1994, 233 SCRA 196; and Anino v. National Labor Relations Commission, 352 Phil. 1098 (1998).
[24] Air
[25] Ibid.
[26] Heirs of Teofilo Gabatan v. Court of Appeals, G.R. No. 150206, March 13, 2009, 581 SCRA 70; Ang v. Associated Bank, G.R. No. 146511, September 5, 2007, 532 SCRA 244; and Mendoza v. Bautista, 493 Phil. 804 (2005).
[27]
In
[28] 93 Phil. 257 (1953).
[29]
[30] 486 Phil. 708 (2004).
[31]
[32] Oscar M. Herrera, Remedial Law, Vol. 1 (Rules 1 to 22), 2007 ed., p. 1062, citing Baja v. Macandog, 158 SCRA 391 (1981 [sic]). There appears to be an error in Herreras citation of Baja v. Macandog as a 1981 case. The correct citation for the Baja v. Judge Macandog containing the doctrine discussed above is 242 Phil. 123 (1988).
[33] CF. Calalang v. Court of Appeals, G.R. No.
103185,
[34] Producers
Bank of the
[35] Gapoy v. Adil, No. L-46182, February 28, 1978, 81 SCRA 739.
[36] Cf. Ruiz v. Estenzo, G.R. No. 50082, June 4, 1990, 186 SCRA 8; see also Macasa et al. v. Herrera, 101 Phil. 44, 48 (1957); and Dayo, et al. v. Dayo, et al., 95 Phil. 703 (1954).