768 Phil. 309
PEREZ, J.:
Petitioner argues that the 19 May 2008 Order dismissing the case for failure to prosecute and the 26 August 2008 Order denying the Motion for Reconsideration have already attained finality when respondents chose to file a second motion for reconsideration, instead of filing a notice of appeal. The petition for certiorari before the Court of Appeals was filed out of time because the petition was filed more than 60 days upon receipt of the denial of respondents' first motion for reconsideration on 10 September 2008.
- WHETHER OR NOT THE COURT OF APPEALS IN GRANTING THE PETITION FOR CERTIORARI VIOLATED THE WELL-SETTLED RULE ON FINALITY OF ORDERS AND JUDGMENTS.
- WHETHER THE COURT OF APPEALS MANIFESTLY ERRED IN FINDING THAT THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING RESPONDENTS' SECOND MOTION FOR RECONSIDERATION.
- WHETHER OR NOT THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN FINDING THAT THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN DENYING RESPONDENTS' NOTICE OF APPEAL.
- WHETHER OR NOT THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN NOT HOLDING RESPONDENTS BOUND BY THE ACTIONS OF THEIR FORMER COUNSEL AND MORE SO, BY THEIR NEW COUNSEL.
- WHETHER OR NOT THE COURT OF APPEALS MANIFESTLY ERRED IN GIVING DUE COURSE TO RESPONDENTS' PETITION FOR CERTIORARI, HAVING FAILED TO COMPLY WITH THE REQUIREMENTS OF VERIFICATION AND CERTIFICATE OF NON-FORUM SHOPPING.
- WHETHER OR NOT THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN HOLDING THAT RESPONDENTS HAVE JUSTIFIABLE CAUSE FOR THEIR ABSENCE ON THE DATE OF THE PRESENTATION OF THEIR EVIDENCE IN CHIEF.
- WHETHER OR NOT THE COURT OF APPEALS COMMITTED SERIOUS AND REVERSIBLE ERROR IN FINDING THAT THERE IS NO PATTERN OF DELAY IN THE PROCEDURAL HISTORY OF THE CASE TANTAMOUNT TO A FAILURE TO PROSECUTE.[14]
VIII. Sec. 3. Dismissal due to fault of plaintiff. - If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.An action may be dismissed for failure to prosecute in any of the following instances: (1) if the plaintiff fails to appear at the time of trial; or (2) if he fails to prosecute the action for an unreasonable length of time; or (3) if he fails to comply with the Rules of Court or any order of the court.[15]
In view of the objection interposed by [petitioner's] counsel Atty. Chemtou Patricia B. Lamit for the postponement of the hearing and considering that the [respondents] have been long notified of today's hearing, and considering further that none of the [respondents'] supposed ten (10) witnesses particularly the [respondents] themselves appeared, the Court is constrained to DISMISS this case for failure to prosecute in accordance with Section 3, Rule 17 of the 1997 Rules of Civil Procedure.[17]The basis for such pronouncement lies on the first of three instances mentioned in the Rules, i.e., that plaintiffs failed to appear at the time of trial. The excuse proffered by respondents was not acceptable to the trial court that made the following observation when it denied the motion for reconsideration by respondents:
The explanations offered as regards the absence of [respondents] and their witnesses do not merit reconsideration.The conclusion of the trial court is well-based. The factual antecedents were unrebutted. Furthermore, the actions exhibited by respondents demonstrate their lack of interest in prosecuting the case. Almost two years had lapsed from finality of the Court of Appeals Decision dated 14 March 2005 but respondents have not filed any pleading to revive the case. Respondents acted only upon the behest of petitioner who filed a' Motion to Dismiss. On the scheduled pre-trial on 6 August 2007, respondents and counsel again failed to appear.[19] Respondents failed to attend the mediation set by the trial court. And finally, on the 19 May 2008 hearing for the initial presentation of their evidence-in-chief, respondents failed to appear.
Significantly during the 19 May 2008 hearing, [respondents'] counsel Atty. John Patrick Lubaton, manifested that he filed a motion for postponement as early as 15 May 2008 as [Maria Leisa], the complaining [respondent] left to attend a conference in the United States of America from 14 May to 18 May 2008, together with her family.
A careful scrutiny of the cancelled plane tickets attached to the motion discloses, however, that [Maria Leisa] and her children were issued tickets for a trip to Hong Kong on 15 May 2008 and their destination was not the United States contrary to the claim by [respondent Maria Leisa] in the instant motion and by counsel during the 19 May 2008 hearing. Also, co-[respondent] and the husband of [Maria Leisa] George Gaviola was not among those issued with ticket for travel to Hong Kong. Hence, counsel and [respondents] were not candid with this court when they sought postponement of the hearing on 19 May 2008 as George Gaviola was not going to travel either to Hong Kong or United States.
As regards the certificates presented regarding the medical condition of [Maria Leisa], the same could not likewise be given much credence because it was not supported by an affidavit of the issuing officer regarding the veracity thereof.
The above facts could only lead this court to conclude that [respondents] and counsel lack candor in their dealing with the court. They made excuses one after another in order to explain their failure to appear on the date of initial hearing. It should be stressed that other [respondents] and witnesses who were not sick or out of the country on 19 May 2008 should have been presented.[18]
The fact stressed by the trial court clearly states the reason why it considered the order appealed from as interlocutory. Here, the trial court is in error. Section 3, Rule 17 of the 1997 Rules of Civil Procedure is explicit that the dismissal of the complaint due to failure to prosecute "shall have the effect of an adjudication upon the merits unless otherwise declared by the Court." The Rule says:ORDER
Acting on the "Notice of Appeal" filed by [respondent] through counsel from the Order of this Court dated 19 May 2008, 26 August 2008 and 23 October 2008 the court resolves to deny due course to the said appeal, considering that the Order appealed from is a mere interlocutory Order which may not be the subject of an appeal pursuant to Rule 41 Section 1 of the 1997 Rules of Civil Procedure to wit:"No appeal may be taken from:It must be stressed that, the trial of this case, is not yet terminated in view of the pendency of the scheduled hearing on the counterclaim on 19 January 2009.[22] (Emphasis Supplied)
a) An order denying a motion for new trial or reconsideration;
b) An order denying a petition for relief or any similar motion seeking relief from judgment;
c) An interlocutory order;"
If, for no justifiable cause, the plaintiff to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in separate action. This dismissal shall have the effect of an adjudication upon the merits unless otherwise declared by the court. (Emphasis supplied)In the herein questioned order of dismissal, there was no mention of any reason why the ruling should not be considered as an adjudication on the merits. The respondent, therefore, had the right to appeal the dismissal of their complaint. They could have timely done so. But, as already discussed, they filed the Notice of Appeal only after the lapse of the reglementary period to do so.
To be certain, when the Court promulgated the 1997 Rules of Civil Procedure, including the amended Rule 17, those previous jural doctrines that were inconsistent with the new rules incorporated in the 1997 Rules of Civil Procedure were implicitly abandoned insofar as incidents arising after the effectivity of the new procedural rules on 1 July 1997. BA Finance, or even the doctrine that a counterclaim may be necessarily dismissed along with the complaint, clearly conflicts with the 1997 Rules of Civil Procedure. The abandonment of BA Finance as doctrine extends as far back as 1997, when the Court adopted the new Rules of Civil Procedure. If, since then, such abandonment has not been affirmed in jurisprudence, it is only because no proper case has arisen that would warrant express confirmation of the new rule. That opportunity is here and now, and we thus rule that the dismissal of a complaint due to fault of the plaintiff is without prejudice to the right of the defendant to prosecute any pending counterclaims of whatever nature in the same or separate action. We confirm that BA Finance and all previous rulings of the Court that are inconsistent with this present holding are now abandoned.Having figured out the incorrectness of the reversal by the Court of Appeals of the dismissal order of the trial court, we must hasten to point out that the trial of the case must nonetheless proceed, not for the sake of the respondents who as we have seen failed to prosecute their complaint, but for the litigation of the counterclaim of the petitioner, in compliance with the Rule.
Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the dismissal of the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a remand is necessary for trial on the merits of the counterclaim.
x x x x
The formalistic distinction between a complaint and a counterclaim does not detract from the fact that both of them embody causes of action that have in their end the vindication of rights. While the distinction is necessary as a means to facilitate order and clarity in the rules of procedure, it should be remembered that the primordial purpose of procedural rules is to provide the means for the vindication of rights. A party with a valid cause of action against another party cannot be denied the right to relief simply because the opposing side had the good fortune of filing the case first. Yet this in effect was what had happened under the previous procedural rule and correspondent doctrine, which under their final permutation, prescribed the automatic dismissal of the compulsory counterclaim upon the dismissal of the complaint, whether upon the initiative of the plaintiff or of the defendant.
Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal by reason of the dismissal of the complaint.[24]