PINGA vs SANTIAGO

Topic: Grounds for dismissal

FACTS:

The Heirs of Santiago filed an injunction against Pinga alleging that Pinga had been unlawfully entering the coco
lands of the respondent cutting wood and bamboos and harvesting the fruits of the coconut trees. As a
counterclaim, Pinga contests the ownership of the lands to which Pinga was harvesting the fruits. However, due
to failures of Heirs of Santiago to attend the hearings, the court ordered the dismissal of said case.
Respondents thus filed an MR not to reinstate the case but to ask for the entire action to be dismissed and not
to allow petitioner to present evidence ex parte. RTC granted the MR, hence the counterclaim was dismissed.
RTC ruled that compulsory counterclaims cannot be adjudicated independently of plaintiff’s cause of action vis
a vis the dismissal of the complaint carries with it the dismissal of the counterclaim. Petitioner then elevates it
to the SC by way of Rule 45 on pure questions of law. (Santiagos motive: They justa sked for the dismissal of
their entire case so that their ownership wouldn·t be put in controversy in the counterclaim)

ISSUE: Whether or not dismissal of original complaint affects that of the compulsory counter claims?

RULING:

NO. the counterclaims, in this case, can stand on its own. Rule 17 Sec 3 provides: ´If for any cause, the plaintiff
fails to appear on the date of his presentation of his evidence x x x 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. The dismissal of the complaint does not carry
with the dismissal of the counterclaim, compulsory or otherwise. In fact, the dismissal of the complaint is
without prejudice to the right of defendants to prosecute his counterclaim. Section 3 contemplates a dismissal
not procured by plaintiff, albeit justified by causes imputable to him and which, in the present case, was
petitioner's failure to appear at the pre-trial. This situation is also covered by Section 3, as extended by judicial
interpretation, and is ordered upon motion of defendant or motu proprio by the court. Here, the issue of
whether defendant has a pending counterclaim, permissive or compulsory, is not of determinative significance.
The dismissal of plaintiff's complaint is evidently a confirmation of the failure of evidence to prove his cause of
action outlined therein, hence the dismissal is considered, as a matter of evidence, an adjudication on the
merits. This does not, however, mean that there is likewise such absence of evidence to prove defendant's
counterclaim although the same arises out of the subject matter of the complaint which was merely
terminated for lack of proof. To hold otherwise would not only work injustice to defendant but would be
reading a further provision into Section 3 and wresting a meaning therefrom although neither exists even by
mere implication. Thus understood, the complaint can accordingly be dismissed, but relief can nevertheless be
granted as a matter of course to defendant on his counterclaim as alleged and proved, with or without any
reservation therefor on his part, unless from his conduct, express or implied, he has virtually consented to the
concomitant dismissal of his counterclaim. 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.

G.R. No. 142439 December 6, 2006

FILINVEST LAND, INC., petitioner,
vs.
HON. COURT OF APPEALS and ROMEO, ANTONIO, JOSEFINA, RICARDO (JR.), all
surnamed ALVAREZ and VENANCIA R. Vda. de ALVAREZ, for herself as guardian
ad litem for her minor children, RAMON, VERONICA, and FLORDELIZA, all
surnamed ALVAREZ, and as necessary and indispensable party plaintiffs JAIME,
VICTORIA, and MANUEL, all surnamed ALVAREZ, and ROSARIO PARAM Vda. de
ALVAREZ, respondents.

The subject matter in this case is a parcel of land of the Laguna Resettlement
Project in Barrio San Vicente, San Pedro, Laguna, with an area of 16,495 square meters.
The Department of Agrarian Reform (DAR) awarded to Ricardo Alvarez the right to
purchase the land in question. On 15 August 1977, Ricardo Alvarez, purchased the land,
evidenced by a Deed of Sale executed by the DAR. Deed of Sale specifically prohibited
the transfer of the land within ten (10) years from the issuance of the certificate of title
to any person other than the vendee’s relatives within the third civil degree by
consanguinity or affinity who are, at the same time, qualified beneficiaries.

Presidential Decree No. 1474, Declaring the San Pedro Tunasan Estate (also
known as the Laguna Resettlement Project) was enacted. This effectively repealed the
ten-year prohibition on the transfer of agrarian lands situated in the Laguna
Resettlement Project. Presidential Decree No. 1474 provided that:

Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro

Tunasan Estate, is hereby ordered to convert such estate into a commercial,
industrial and residential site and to transfer the same to the National Housing
Authority.
Section 2. Individuals who have legally acquired farm lots in the Estate under
Orders of Award or Certificates of Land Transfer or Agreement to Sell or Deeds of
Sale, may sell or transfer their lots covered thereby or convert the same for the
purposes mentioned in Section 1 hereof.

The Register of Deeds of the Province of Laguna issued (TCT) No. 62731,
covering the subject land, in the name of Ricardo Alvarez. Only 16 days after the title
was issued, Ricardo Alvarez and his wife, Rosario Param, sold the said land to Mercedes
Oliver for Ten Thousand Pesos (P10, 000.00). Oliver was not a relative within the third
degree of consanguinity and had no capacity to personally cultivate the land, as required
of a qualified beneficiary.On 22 December 1989, Mercedes Oliver sold the subject land to
Filinvest.

The heirs of the late Ricardo Alvarez filed a case for reconveyance, redemption
and damages against Mercedes Oliver, Avelino Ramos and Jose Nunez, before the
Regional Trial Court (RTC) of Biñan, Laguna. They alleged that their mother and father,
both illiterate, were deceived by the defendants into executing the Deed of Sale covering
the subject land in favor of Mercedes Oliver. This case was, however, dismissed for
failure of the respondents and counsel to appear during the hearing for the reception of
their evidence, despite due notice and after eight postponements . The order became final
and executory.

Respondents filed a complaint against Mercedes Oliver and Filinvest before the
Provincial Agrarian Reform Adjudication (PARAD) of Sta. Cruz, Laguna, seeking to annul
the Deed of Sale between the Spouses Alvarez and Mercedes Oliver and the subsequent
transfer between Mercedes Oliver and Filinvest, on grounds similar to the complaint filed
before the RTC of Biñan.

Filinvest argued that under Section 1 of Presidential Decree No. 1474, the Laguna
Resettlement Project was no longer agricultural land but was effectively converted into a
commercial, industrial and residential site, and was therefore outside the jurisdiction of
the DARAB. Section 1 of Presidential Decree No. 1474 reads:
 Section 1. The Department of Agrarian Reform, as Administrator of the San Pedro
Tunasan Estate, is hereby ordered to convert such estate into a commercial,
industrial and residential site and to transfer the same to the National Housing
Authority.

W/N DARAB has jurisdiction over the case?

SC = NO.
It is clear that the DAR had lost jurisdiction over government lands located in the
Laguna Resettlement Project formerly under its administration which it was ordered to
transfer to the National Housing Authority (NHA). At that time, the transfer between
Alvarez and Oliver was made, these aforementioned rules were repealed by the
provisions of Presidential Decree No. 1474. These rules were no longer applicable as it
was no longer under the administration of the DAR nor agrarian in character. The validity
of the subsequent transfer of the subject land between Ricardo Alvarez and Mercedes
Oliver, or even the later transfer between Mercedes Oliver and Filinvest, was no longer
subject to agrarian laws, as the land was already commercial, industrial, or residential in
nature at the time of the transfer. Therefore, any proceeding which attacks the validity
of the subsequent transfers are within the jurisdiction of regular courts.

Clearly, the respondents filed the case before the PARAD, not because the case
involved a dispute that would be properly resolved by the PARAD, but because they were
already barred from filing the case before the proper forum. The allegations and relief
found in the Complaint filed by the respondents before the PARAD are conspicuously
similar to those in the Amended Complaint which they had earlier filed before the trial
court of Biñan. As earlier discussed, the trial court ordered the dismissal of the case for
failure to prosecute. When the respondents failed to file a motion for reconsideration,
despite due notice, such order became final.

This Court cannot countenance the party-litigant’s recourse to such measures.

The foundation principle upon which the doctrine of res judicata rests is that parties
should not be permitted to litigate the same issue more than once. When a right or fact
has been judicially tried and determined by a court of competent jurisdiction, or an
opportunity for such trial has been given, the judgment of the court, so long as it is not
reversed, should be conclusive upon the parties and those in privity with them in law or
estate.
The following requisites must concur in order that a prior judgment may bar a
subsequent action: (1) the former judgment or order must be final; (2) it must be a
judgment or order on the merits, that is, it was rendered after a consideration of the
evidence or stipulations submitted by the parties at the trial of the case; (3) it must
have been rendered by a court having jurisdiction over the subject matter and the
parties; and (4) there must be, between the first and second actions, identity of parties,
of subject matter and of cause of action.

The first, third and fourth requirements have been complied with in this case. The
Order rendered by Branch XXIV of the RTC of Biñan, dated 17 February 1989, dismissing
the case, is clearly final, as it disposed of all the rights and obligations of the parties
before it. There was never any question raised on the jurisdiction of Branch XXIV of the
RTC to hear and decide the question of whether the sale executed between Ricardo
Alvarez and Mercedes Oliver was valid. It is also obvious that the allegations of the
respondents in their Amended Complaint filed before the RTC of Biñan are substantially
identical to the Complaint filed before the PARAD; involved the same subject matter, and
raised the same causes of action. Filinvest was named as a party only in the complaint
before the PARAD, since it acquired the property from Mercedes Oliver only on 22
December 1989,34 after the case before the RTC was dismissed on 17 February 1997.
Moreover, the fact that its predecessor-in interest, Mercedes Oliver, was a party in the
case filed before the RTC of Biñan satisfies the requirement on the identity of parties.
 The only contention between the parties was whether the second requirement,
that the decision or order must have been based on the merits of the case, was met. In
situations contemplated in Section 3, Rule 17 of the Rules of Court, where a complaint is
dismissed for failure of the plaintiff to comply with a lawful order of the court, such
dismissal has the effect of an adjudication upon the merits. A dismissal for failure to
prosecute has the effect of an adjudication on the merits, and operates as res judicata,
particularly when the court did not direct that the dismissal was without prejudice.

Having complied with the four requisites needed for the doctrine of res judicata to
operate, the Order rendered by the RTC of Biñan dismissing Civil Case No. B-1941 finally
determined the ownership of the subject land, the heirs of the late Ricardo Alvarez,
Mercedes Oliver, and her successor-in-interest, Filinvest, as no motion for
reconsideration on this Order was filed. Moreover, this would bar any dispute over the
subject land from being brought before any judicial forum. Rule 39, Section 47 of the
Rules of Court, provides that in case of a judgment or final order over a specific thing,
rendered by a court having jurisdiction, the judgment or final order is conclusive upon
the title to the thing and binding upon the parties and their successors-in-interest.

RN DEVELOPMENT CORPORATION, PETITIONER, VS. A.I.I. SYSTEM, INC.,RESPONDENT.

FACTS

On 28 July 2000, AII Systems, Inc. [respondent] filed a Complaint for Sum of Money against RN
Development Corporation [petitioner], seeking to collect the outstanding balance of the purchase price
of the pipes and fittings, valves and electrical panels which [petitioner] allegedly ordered from
[respondent].

On 09 November 2000, [petitioner] filed its answer.

The pre-trial in this case has been reset for five times already: first on February 6, 2001, then on April
24, 2001, on August 7, 2001, September 18, 2001 and on November 27, 2001.

On April 24, 2001, there was no appearance for [respondent] and counsel. Again, on August 7, 2001,
[respondent] and counsel did not appear, which prompted the Court to reset the pre-trial for the last
time to September 18, 2001, with a warning that should the [respondent] and counsel not appear on
the next setting, the Court will dismiss the case for lack of interest. On September 18, 2001, counsel
for the [respondent] moved for a resetting since the new counsel had not yet studied the proposals for
settlement made by the [petitioner]. Thus, pre-trial was again reset for the last time to November 27,
2001. On November 27, 2001, there was again no appearance for the [respondent] and its counsel.

The record thus bears out that the Court had been very lenient to the [respondent] when it allowed the
resetting of the pre-trial for five times. In fact, the Court set the pre-trial "for the last time" twice. It is
litigants like [respondent] who unduly clog the court dockets by taking advantage of the court's
leniency. If only to decongest the court dockets and to serve as a lesson to [respondent] and counsel
to be more considerate of the time and resources of the Court, the amended motion for
reconsideration is DENIED, for lack of merit.
MR DENIED. CA DISMISSED ALSO.

ISSUE: whether for failure to appear during trial or prosecute an action for an unreasonable length of
time rests on the sound discretion of the trial court?

HELD: YES> But this discretion must not be abused, nay gravely abused, and must be exercised
soundly. Deferment of proceedings may be tolerated so that cases may be adjudged only after a full
and free presentation of all the evidence by both parties. The propriety of dismissing a case must be
determined by the circumstances surrounding each particular case. There must be sufficient reason to
justify the dismissal of a complaint.

Pre-trial is not a mere technicality in court proceeding for it is essential in the simplification and the
speedy disposition of disputes. The Court observed in the case of Development Bank of the
Philippines v. Court of Appeals [6] that:

Everyone knows that a pre-trial in civil actions is mandatory, and has been so since January 1, 1964.
Yet to this day its place in the scheme of things is not fully appreciated, and it receives but perfunctory
treatment in many courts. Some courts consider it a mere technicality, serving no useful purpose save
perhaps, occasionally to furnish ground for non-suiting the plaintiff, or declaring a defendant in default,
or, wistfully, to bring about a compromise. The pre-trial device is not thus put to full use. Hence it has
failed in the main to accomplish the chief objective for it: the simplification, abbreviation and
expedition of the trial, if not indeed its dispensation. This is a great pity, because the objective is
attainable, and with not much difficulty, if the device were more intelligently and extensively handled.

It is the policy of the Court to afford every litigant the amplest opportunity for the proper and just
determination of his cause, free from the constraints of technicalities. Since rules of procedure are
mere tools designed to facilitate the attainment of justice, courts must avoid the rigid application
thereof which tends to frustrate rather than promote the ends of justice. [7] Here, the counsel for
respondent, upon receiving the order dismissing the complaint, immediately filed a motion for
reconsideration which adequately explained his late arrival for four (4) minutes, which was not
disputed before the trial court. Under the circumstances, the latter should have granted respondent's
motion for reconsideration of the dismissal of the complaint. The interest of justice will be better
served by the continuation of the proceedings and final disposition of the case on the merits before
the trial court. Thus, the appellate court did not commit any reversible error when it set aside the order
of the trial court dismissing the respondent's complaint. DENIED

G.R. No. 119879 March 11, 2004

HEIRS OF JUANA GAUDIANE, namely: DATIVA M. PASTOR, MARIA M.

ALCORIZA, BEATRIZ M. PATROCIÑO, SOLOMON I. MARIÑO, BENJAMIN I.
MARIÑO, LILI MARIÑO, VERONICA I. MARIÑO, SEVERINA MARIÑO VDA. DE
ISO, ROSITA ISO, AGRIPINO ISO, ELIZABETH ISO, VIRGINIA ISO, LEOPOLDO
ISO, NAPOLEON ISO, petitioners,
vs.
COURT OF APPEALS and THE HEIRS OF FELIX GAUDIANE, namely: ARNULFO
GAUDIANE, GEORGE GAUDIANE, RODOLFO GAUDIANE, RAYMUNDO
GAUDIANE, SANDRA GAUDIANE, CEFERINA GAUDIANE, JONNA GAUDIANE,
MILLARD GAUDIANE, GLORIA TORRES-GAUDIANE, WILFREDO GAUDIANE,
ROLANDO GAUDIANE, ANTONIO GAUDIANE, KATHRYN GAUDIANE,
PRISCILLA GAUDIANE, CATALINA PACIOS, DONATELLA PACIOS, REMEDIOS
PACIOS, GUALBERTO GAUDIANE, VICTOR GAUDIANE, LORNA GAUDIANE,
DOLORES GAUDIANE, respondents.

F: The disputed lot was originally in the names of Felix and Juana Gaudiane. The former
executed a document whereby he sold his one-half of his share to the latter. They both passed away,
hence the parties in this case are the descendants of Felix as R’s and the descendants of Gaudiane as
the P’s.

P’s predecessors-in-interest, believed that the sale by Felix to their mother Juana included
another parcel of land, hence they filed a Petition seeking the Register of Deeds to cancel the OCT
over the disputed lot. They tried their luck again by filing a Petition for Quieting of Title which was
dismissed by the RTC for P’s failure to prosecute.

Eventually, the R’s filed the present case for partition.

RTC found for the R’s ordering the partition of the land. It dismissed the P’s case for Quieting
of Title because it had an effect of an adjudication on the merits, hence it was barred by the order of
dismissal. CA affirmed. Hence this appeal.

I: WN the SC may still delve into the case for Quieting of Title despite the dismissal for failure
to prosecute.

H/R: NO, the dismissal amounts to an adjudication on the merits, hence the courts are barred by
res judicata from delving into the issue.

We cannot delve anymore into the legality and validity of the order of dismissal because it
has long become final and executory for failure of the petitioners to file an appeal. In accordance
with Section 3, Rule 17 of the 1997 Rules of Civil Procedure, said order had the effect of judgment on
the merits although no trial was conducted because it did not contain any statement that the case
was dismissed without prejudice to the filing of a similar future action. As such, based on the
principle of res judicata, the petitioners are barred in another action (involving the same subject
matter, parties and issues) from raising a defense and from asking for a relief inconsistent with an
order dismissing an earlier case with prejudice.

P’s contention that res judicata does not apply for the reason that a Petition for Quieting of
Title has a different cause of action than a Petition for Partition is erroneous. In Mejia v. Patcho, the
SC ruled that the two cases have identical causes of action. A party cannot, by varying the form of
action, or adopting a different method of presenting his case, escape the operation of the principle
that one and the same cause of action shall not be twice litigated between the same parties

CRUZ vs. COURT OF APPEALS, BUNAG

G.R. No. 164797 February 13, 2006

Doctrines:
1. A dismissal for failure to prosecute shall have the effect of adjudication upon the merits, unless
otherwise declared by the court.
2. A ruling based on a motion to dismiss, without any trial on the merits or formal presentation of
evidence, can still be a judgment on the merits.

Facts: This involves 4 cases in controversy:

Case No. Parties Nature Status

4365 Cruz vs. Bunag Unlawful detainer Decided in favour of Cruz
(MTC)
1600 Bunag vs. Cruz Quieting of Title Dismissed for failure to prosecute (FINAL AND
(RTC) EXECUTORY)
2573 Bunag vs. Bunag Injunction (RTC) Dismissed on ground of res judicata, citing there is a
substantial identity of parties with Case no. 1600
2583 Bunag vs. Cruz Annulment of Title RTC: dismissed on the ground of res judicata and
(Case in with Damages (RTC) accion pendente lite, but reversed itself upon MR.
Controversy) CA: dismissed certiorari by Cruz for lack of merit.

Bunag asserts that there was no res judicata. Two of the four elements of res judicata were not complied in this
case:
1. there must be a final judgment or order
2. said judgment or order must be on the merits
 The dismissal of Case No. 1600 was not a dismissal on the merits. The dismissal will not bar
the filing of the instant case because there was neither litigious consideration of the evidence
nor any stipulations submitted by the parties at the trial. In fact, there was no pre-trial
conference and that after four years of court inactivity, the case was dismissed for failure to
prosecute.
3. the Court rendering the same must have jurisdiction on the subject matter and the parties
4. there must be between the two cases identity of parties, identity of subject matter, and identity of
causes of action
 There was no identity of parties. Mariano Bunag was not a party litigant in the Quieting of
Title case because he denied in an affidavit that he authorized Carlos Bunag to sign the
Verified Complaint and to make him a party thereof.

Issue: Does the dismissal of a case on the ground of failure to prosecute operate as a judgment on the merits?
Was there res judicata?

Held:

Second Ground: Was the dismissal of Case No. 1600 a dismissal on the merits?
Yes. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the
court. Once a case is dismissed for failure to prosecute, this has the effect of an adjudication on the merits and
is understood to be with prejudice to the filing of another action unless otherwise provided in the order of
dismissal. In other words, unless there be a qualification in the order of dismissal that it is without prejudice,
the dismissal should be regarded as an adjudication on the merits and is with prejudice.

In this case, it is clear from the aforementioned order that said case was dismissed, upon petitioners' motion,
for failure of private respondents and their counsel to attend several scheduled hearings for the presentation of
their evidence. Since the order did not contain a qualification whether same is with or without prejudice,
following Section 3, it is deemed to be with prejudice and shall have the effect of an adjudication on the
merits. A ruling based on a motion to dismiss, without any trial on the merits or formal presentation of
evidence, can still be a judgment on the merits.
Fourth Ground: Was there identity of the parties?

Yes. It is evident from the affidavit of Mariano Bunag that it is a mere afterthought executed after his Motion
for Reconsideration in the injunction case was denied because the court gave no weight on his counsel's
allegation that he was unaware of the complaint signed and filed by Carlos Bunag. It is too late in the day for
him to claim lack of knowledge. It is very clear that the execution of the affidavit is to make it appear that there
is no identity of parties in the instant case and in the case for Quieting of Title.

The principle of res judicata may not be evaded by the mere expedient of including an additional party to the
first and second action. Only SUBSTANTIAL IDENTITY is necessary to warrant the application of res judicata.
The addition or elimination of some parties does not alter the situation. There is substantial identity of parties
when there is a community of interest between a party in the first case and a party in the second case albeit
the latter was not impleaded in the first case.

Dispositive portion: Civil case for Annulment of Title with Damages dismissed.

[G.R. No. 156470, April 30, 2008]

FREDERICK DAEL, Petitioner, vs. SPOUSES BENEDICTO and VILMA BELTRAN, Respondents.

FACTS:
 respondents sold a land to petitioner

 Petitioner alleged that respondents did not disclose that the land was previously mortgaged and that an extrajudicial
foreclosure over the property had already been instituted so he was constrained to bid in the extrajudicial sale

 petitioner Frederick Dael filed before the RTC a Complaint for breach of contract and damages against respondent-
spouses Beltran

 respondents filed a Motion to Dismiss on the ground that petitioner had no cause of action since the contract to sell
stated that the vendor was Benedicto Beltran and the vendee was Frederick George Ghent Dael, not the petitioner.

 in a hearing on the motion, petitioner's counsel, disclosed that petitioner is the father of Frederick George Ghent Dael
whose name appears as the contracting party in the Contract to Sell. They moved to reset the hearing to enable the
petitioner to withdraw and have the complaint dismissed, amended, or to enter into a compromise agreement with
respondents

 RTC on the same day ordered petitioner to clarify whether or not he and Frederick George Ghent Dael were one and
the same person; whether or not they were Filipinos and residents of Dumaguete City; and whether or not Frederick
George Ghent Dael was of legal age, and married, as stated in the Contract to Sell

 Petitioner did not comply. Instead, he filed a Notice of Dismissal on February 20, 2002

 RTC dismissed the complaint with prejudice

 Petitioner argued that the RTC erred in dismissing the complaint with prejudice based on respondents' Motion to
Dismiss, and not without prejudice based on his Notice of Dismissal

 He asserts it is the prerogative of the plaintiff to indicate if the Notice of Dismissal filed is with or without
prejudice and the RTC cannot exercise its own discretion and dismiss the case with prejudice

 respondents on the other hand counter that the RTC is correct in dismissing the case with prejudice based on their
Motion to Dismiss because they filed their motion ahead of petitioner who filed his Notice of Dismissal only on
February 20, 2002

 They further argue that although it is correct that under the 1997 Rules of Civil Procedure a complaint may
be dismissed by the plaintiff by filing a notice of dismissal before service of the answer or of a motion for
summary judgment, the petitioner filed the Notice of Dismissal only as an afterthought after he realized
that the Motion to Dismiss was meritorious

ISSUE: Whether or not the RTC was correct in dismissing the complaint with prejudice

HELD: NO
  Under Section 1, Rule 17 of the 1997 Rules of Civil Procedure it is mandatory that the trial court issue an order
confirming such dismissal and, unless otherwise stated in the notice, the dismissal is without prejudice and could be
accomplished by the plaintiff through mere notice of dismissal, and not through motion subject to approval by the
court. Dismissal is ipso facto upon notice, and without prejudice unless otherwise stated in the notice

 The trial court has no choice but to consider the complaint as dismissed, since the plaintiff may opt for
such dismissal as a matter of right, regardless of the ground

 Section 1 of Rule 17 does not encompass a Motion to Dismiss. The provision specifically provides that a plaintiff may
file a notice of dismissal before service of the service of the answer or a motion for summary judgment. Thus, upon
the filing of the Notice of Dismissal by the plaintiff, the Motion to Dismiss filed by respondents became moot and
academic and the trial court should have dismissed the case without prejudice based on the Notice of Dismissal filed
by the petitioner

 Moreover, to allow the case to be dismissed with prejudice would erroneously result in res judicata [18] and imply that
petitioner can no longer file a case against respondents without giving him a chance to present evidence to prove
otherwise

Counterclaim
Mendoza vs. Paule (2009)

Facts:

Engineer Paule is the proprietor of E.M. Paule Construction and Trading (EMPCT). PAULE executed a
special power of attorney (SPA) authorizing Zenaida G. Mendoza to participate in the pre-qualification and
bidding of a National Irrigation Administration (NIA) project and to represent him in all transactions related.
Mendoza participated in the bidding of the NIA-Casecnan Multi-Purpose Irrigation and Power Project and was
awarded. Mendoza received the Notice of Award, which involved the construction of a road system, canal
structures, etc. Mendoza also dealt with Manuel de la Cruz to lease heavy equipment. Paule revoked the SPA he
issued in favor of Mendoza, so NIA refused to pay Mendoza on her billings, and in turn, could not pay Cruz for
the rental of equipment.

Since Cruz could not collect, he filed a case for collection of sum of money and damages against
Paule, NIA, etc. Paule filed a third party complaint against Mendoza, then the latter filed a cross-claim against
Paule. During the pendency of the case, Paule again constituted Mendoza as his attorney-in-fact. The other
parties were declared in default for failure to appear at the pre-trial conference, so Cruz was able to present his
evidence ex parte. Cruz presented Mendoza who was impleaded as defendant in Paule’s 3 rd party complaint.
Mendoza filed a motion to declare Paule as non-suited so she can present her evidence. The TC rendered a
decision holding Paule liable for the rentals. The TC reasoned that Mendoza was an agent, and that she validly
contracted with Cruz for the rental of equipment.

Paule and Mendoza appealed to the CA which were both dismissed by the CA. The CA reasoned that
the SPAs did not give Mendoza authority to contract with Cruz, and that the latter was well aware of the limits of
Mendoza’s authority.

Issue: Whether or not there was a cross claim in this case?

Held: YES.

PAULE should be made civilly liable for abandoning the partnership, leaving MENDOZA to fend for her
own, and for unduly revoking her authority to collect payments from NIA, payments which were necessary for the
settlement of obligations contracted for and already owing to laborers and suppliers of materials and equipment
like CRUZ, not to mention the agreed profits to be derived from the venture that are owing to MENDOZA by
reason of their partnership agreement. Thus, the trial court erred in disregarding and dismissing
MENDOZA’s cross-claim – which is properly a counterclaim, since it is a claim made by her as defendant
in a third-party complaint – against PAULE, just as the appellate court erred in sustaining it on the justification
that PAULE’s revocation of the SPAs was within the bounds of his discretion under Article 1920 of the Civil Code.

Where the defendant has interposed a counterclaim (whether compulsory or permissive) or is seeking
affirmative relief by a cross-complaint, the plaintiff cannot dismiss the action so as to affect the right of the
defendant in his counterclaim or prayer for affirmative relief. The reason for that exception is clear. When the
answer sets up an independent action against the plaintiff, it then becomes an action by the defendant against
the plaintiff, and, of course, the plaintiff has no right to ask for a dismissal of the defendant’s action. The present
rule embodied in Sections 2 and 3 of Rule 17 of the 1997 Rules of Civil Procedure 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.

Notwithstanding the immutable character of PAULE’s liability to MENDOZA, however, the exact amount
thereof is yet to be determined by the trial court, after receiving evidence for and in behalf of MENDOZA on her
counterclaim, which must be considered pending and unresolved.

Benidicto vs Lacson

The National Sugar Trading Corporation (NASUTRA) was in charge of the buying and marketing of
sugar in the country. Benidicto, who was the chairman of NASUTRA and also the president of Traders
Royal Bank (TRB) was sued by the Sugar Planters in Bacolod (Bacolod Case) for under valuing the
sugar prices (The sugar was valued at $90M but only $60M was paid). NASUTRA filed for MTD,
alleging Forum-shopping against the planters. Apparently there are 2 other cases file by the Planters;
1) Lacson Case (over charging of trading costs)and the 2)Pasig Case (deficiency of payment). So the
main contention of NASUTRA really was there was an issue of Litis pendencia and res judicata that
would be prejudiced if this case continues (The Bacolod Case) along with the 2 other cases. RTC ruled
in favor of Benedicto, but CA over-ruled and denied the MTD. SC upheld the CA.

ISSUE:

(The case was mostly about litis pendencia, and as the SC would later hold, there is none. The 3 cases
actually have different causes of actions and need different evidences, the denial of MTD was proper.
BUT, for the sake of our lesson, I will only highlight the effect of denial of MTD.)

HELD:

It is a settled rule that an Order denying a motion to dismiss is merely interlocutory and, therefore,
not appealable, nor can it be subject of a petition for review on certiorari. Such order may only be
reviewed in the ordinary course of law by an appeal from the judgment after trial. The ordinary
procedure to be followed in that event is to file an answer, go to trial, and if the decision is adverse,
reiterate the issue on appeal from the final judgment.

While the rule refers to instances when a motion to dismiss is completely denied, this Court finds no
reason not to apply the same in instances when some of the grounds raised in a motion to dismiss
are denied by the lower court. The “other grounds” now raised by petitioner were not before the CA
because the same were not put in issue by respondents when they chose to assail the RTC’s Order to
dismiss the complaint. This is understandable especially since the “other grounds” were not made
the basis of the RTC’s Order. Procedurally then, the proper remedy of petitioner, should he choose to
reassert the “other grounds,” is to interpose the same as defenses in his answer and not to put them
in issue in this appeal.
 A.M. No. 03-1-09-SC
RE: PROPOSED RULE ON GUIDELINES TO BE OBSERVED BY TRIAL COURT
JUDGES AND CLERKS OF COURT IN THE CONDUCT OF PRE-TRIAL
AND USE OF DEPOSITION-DISCOVERY MEASURES

RESOLUTION
Acting on the recommendation of the Chairman of the Committee on Revision of
the Rules of Court submitting for this Court's, consideration and approval the
Proposed Rule on Guidelines to be Observed by Trial Court Judges and Clerks of
Court in the Conduct of Pre-Trial and Use of Deposition-Discovery Measures, the
Court Resolved to APPROVE the same. The said Rule is hereto attached as an
integral part of this Resolution.
The Rule shall take effect on August 16, 2004 following its publication in a
newspaper of general circulation not later than July 30, 2004.
July 13, 2004.
(Sgd.)Davide, Jr. C.J., Puno, Vitug, Panganiban, Quisumbing, Ynarez-Santiago,
Sandoval-Gutierrez, Carpio, Austria-Martinez, Corona, Carpio-Morales, Callejo, Sr.,
Azcuna and Tinga JJ.

GUIDELINES TO BE OBSERVED BY TRIAL COURT JUDGES AND CLERKS

OF COURT IN THE CONDUCT OF PRE-TRIAL AND USE OF
DEPOSITION-DISCOVERY MEASURES
The use of pre-trial and the deposition-discovery measures are undeniably
important and vital components of case management in trial courts. To abbreviate
court proceedings, ensure prompt disposition of cases and decongest court dockets,
and to further implement the pre-trial guidelines laid down in Administrative
Circular No. 3-99 dated January 15, 1999 and except as otherwise specifically
provided for in other special rules, the following guidelines are issued for the
observance and guidance of trial judges and clerks of court:
I. PRE-TRIAL
A. Civil Cases
1. Within one day from receipt of the complaint:
1.1 Summons shall be prepared and shall contain a reminder to defendant to
observe restraint in filing a motion to dismiss and instead allege the
grounds thereof as defenses in the Answer, in conformity with IBP-OCA
Memorandum on Policy Guidelines dated March 12, 2002. A copy of the
summons is hereto attached as Annex "A;" and
1.2 The court shall issue an order requiring the parties to avail of
interrogatories to parties under Rule 25 and request for admission by
adverse party under Rule 26 or at their discretion make use of depositions
under Rule 23 or other measures under Rules 27 and 28 within five days
 from the filing of the answer. 1 A copy of the order shall be served upon
the defendant together with the summons and upon the plaintiff.
Within five (5) days from date of filing of the reply, 2 the plaintiff must
promptly move ex parte that the case be set for pre-trial conference. 3 If the
plaintiff fails to file said motion within the given period, the Branch COC
shall issue a notice of pre-trial.

2. The parties shall submit, at least three (3) days before the pre-trial, pre-trial
briefs containing the following:4

a. A statement of their willingness to enter into an amicable settlement

indicating the desired terms thereof or to submit the case to any of the
alternative modes of dispute resolution;
b. A summary of admitted facts and proposed stipulation of facts;
c. The issues to be tried or resolved;
d. The documents or exhibits to be presented, stating the purpose
thereof. (No evidence shall be allowed to be presented and offered
during the trial in support of a party's evidence-in-chief other than
those that had been earlier identified and pre-marked during the pre-
trial, except if allowed by the court for good cause shown);
e. A manifestation of their having availed or their intention to avail
themselves of discovery procedures or referral to commissioners; and
f. The number and names of the witnesses, the substance of their
testimonies, and the approximate number of hours that will be required
by the parties for the presentation of their respective witnesses.

A copy of the Notice of Pre-trial Conference is hereto attached as Annex "B."

The rule on the contents of the pre-trial brief must strictly be complied with.

The parties are bound by the representations and statements in their respective pre-
trial briefs.

3. At the start of the pre-trial conference, the judge shall immediately refer the
parties and/or their counsel if authorized by their clients to the PMC
mediation unit for purposes of mediation if available. 5 If mediation fails, the
judge will schedule the continuance of the pre-trial conference. Before the
continuance, the Judge may refer the case to the Branch COC for a
preliminary conference to assist the parties in reaching a settlement, to mark
the documents or exhibits to be presented by the parties and copies thereof
to be attached to the records after comparison and to consider such other
matters as may aid in its prompt disposition.6

During the preliminary conference, the Branch COC shall also ascertain
from the parties the undisputed facts and admissions on the genuineness
 and due execution of the documents marked as exhibits. The proceedings
during .the preliminary conference shall be recorded in the "Minutes of
Preliminary Conference" to be signed by both parties and/or counsel, the
form of which is hereto attached as Annex. "C".

The minutes of preliminary conference and the exhibits shall be attached by

the Branch COC to the case record before the pre-trial.

4. Before the continuation of the pre-trial conference, the judge must study
all the pleadings of the case, and determine the issues thereof and the
respective positions of the parties thereon to enable him to intelligently
steer the parties toward a possible amicable settlement of the case, or, at
the very least, to help reduce and limit the issues. The judge should not
allow the termination of pre-trial simply because of the manifestation of
the parties that they cannot settle the case. He should expose the parties
to the advantages of pre-trial. He must also be mindful that there are
other important aspects of the pre-trial that ought to be taken up to
expedite the disposition of the case.7

The Judge with all tact, patience, impartiality and with due regard to the
rights of the parties shall endeavor to persuade them to arrive at a
settlement of the dispute.8 The court shall initially ask the parties and their
lawyers if an amicable settlement of the case is possible. If not, the judge
may confer with the parties with the opposing counsel to consider the
following:

a. Given the evidence of the plaintiff presented in his pre-trial brief to

support his claim, what manner of compromise is considered
acceptable to the defendant at the present stage?
b. Given the evidence of the defendant described in his pre-trial brief to
support his defense, what manner of compromise is considered
acceptable to the plaintiff at the present stage?

If not successful, the court shall confer with the party and his counsel
separately.

If the manner of compromise is not acceptable, the judge shall confer with
the parties without their counsel for the same purpose of settlement.

5. If all efforts to settle fail, the trial judge shall:

a. Adopt the minutes of preliminary conference as part of the pre-trial

proceedings and confirm markings of exhibits or substituted
photocopies and admissions on the genuineness and due execution of
documents;
b. Inquire if there are cases arising out of the same facts pending before
other courts and order its consolidation if warranted;
c. Inquire if the pleadings are in order. If not, order the amendments if
necessary;
d. Inquire if interlocutory issues are involved and resolve the same;
e. Consider the adding or dropping of parties;
f. Scrutinize every single allegation of the complaint, answer and other
pleadings and attachments thereto and the contents of documents
and all other evidence identified and pre-marked during pre-trial in
determining further admissions of facts and documents. To obtain
admissions, the Court shall ask the parties to submit the depositions
taken under Rule 23, the answers to written interrogatories under
Rule 25 and the answers to request for admissions by the adverse
party under Rule 26. It may also require the production of documents
or things requested by a party under Rule 27 and the results of the
physical and mental examination of persons under Rule 28;
g. Define and simplify the factual and legal issues arising from the
pleadings. Uncontroverted issues and frivolous claims or defenses
should be eliminated. For each factual issue, the parties/counsel shall
state all the evidence to support their positions thereon. For each
legal issue, parties/counsel shall state the applicable law and
jurisprudence supporting their respective positions thereon. If only
legal issues are presented, the judge shall require the parties to
submit their respective memoranda and the court can proceed to
render judgment;9
h. Determine the propriety of rendering a summary judgment
dismissing the case based on the disclosures made at the pre-trial or a
judgment based on the pleadings, evidence identified and admissions
made during pre-trial;10
i. Ask parties to agree on the specific trial dates for continuous trial in
accordance with Circular No. 1-89 dated January 19, 1989; adhere to
the case flow chart determined by the court, which shall contain the
different stages of the proceedings up to the promulgation of the
decision and use the time frame for each stage in setting the trial
dates. The One-Day Examination of Witness Rule, that is, a witness
has to be fully examined in one (1) day only, shall be strictly adhered
to subject to the courts' discretion during trial on whether or not to
extend the direct and/or cross-examination for justifiable reasons. On
the last hearing day allotted for each party, he is required to make his
formal offer of evidence after the presentation of his last witness and
the opposing party is required to immediately interpose his objection
thereto. Thereafter, the Judge shall make the ruling on the offer of
evidence in open court. However the judge has the discretion to
allow the offer of evidence in writing in conformity with Section 35,
Rule 132;
 j. Determine the most important witnesses to be heard and limit the
number of witnesses (Most Important Witness Rule). The facts to be
proven by each witness and the approximate number of hours per
witness shall be fixed;
k. At his discretion, order the parties to use the affidavits of witnesses as
direct testimonies subject to the right to object to inadmissible
portions thereof and to the right of cross-examination by the other
party. The affidavits shall be based on personal knowledge, shall set
forth facts as would be admissible in evidence, and shall show
affirmatively that the affiant is competent to testify to the matters
stated therein. The affidavits shall be in question and answer form,
and shall comply with the rules on admissibility of evidence;
l. Require the parties and/or counsel to submit to the Branch COC the
names, addresses and contact numbers of the witnesses to be
summoned by subpoena;
m. Order the delegation of the reception of evidence to the Branch COC
under Rule 30; and
n. Refer the case to a trial by commissioner under Rule 32.
During the pre-trial, the judge shall be the one to ask questions on issues
raised therein and all questions or comments by counsel or parties must
be directed to the judge to avoid hostilities between the parties.
6. The trial judge shall schedule the pre-trial in the afternoon sessions and
set as many pre-trial conferences as may be necessary.
7. All proceedings during the pre-trial shall be recorded. The minutes of
each pre-trial conference shall contain matters taken up therein more
particularly admissions of facts and exhibits and shall be signed by the
parties and their counsel.
8. The judge shall issue the required Pre-Trial Order within ten (10) days
after the termination of the pre-trial. Said Order shall bind the parties,
limit the trial to matters not disposed of and control the course of the
action during the trial. A sample Pre-Trial Order is hereto attached as
Annex "D."
However, the Court may opt to dictate the Pre-Trial Order in open court
in the presence of the parties and their counsel and with the use of a
computer, shall have the same immediately finalized and printed. Once
finished, the parties and/or their counsel shall sign the same to manifest
their conformity thereto.
9. The court shall endeavor to make the parties agree to an equitable
compromise or settlement at any stage of the proceedings before
rendition of judgment.
B. Criminal Cases
1. Before arraignment, the Court shall issue an order directing the public
prosecutor to submit the record of the preliminary investigation to the
Branch COC for the latter to attach the same to the record of the criminal
case.
Where the accused is under preventive detention, his case shall be raffled
and its records transmitted to the judge to whom the case was raffled
within three days from the filing of the complaint or information. The
accused shall be arraigned within ten days from the date of the raffle. The
pre-trial of his case shall be held within ten days after arraignment unless
a shorter period is provided for by law.11
2. After the arraignment, the court shall forthwith set the pre-trial conference
within thirty days from the date of arraignment, and issue an order: (a)
requiring the private offended party to appear thereat for purposes of
plea-bargaining except for violations of the Comprehensive Dangerous
Drugs Act of 2002, and for other matters requiring his presence; 12 (b)
referring the case to the Branch COC, if warranted, for a preliminary
conference to be set at least three days prior to the pre-trial to mark the
documents or exhibits to be presented by the parties and copies thereof to
be attached to the records after comparison and to consider other matters
as may aid in its prompt disposition; and (c) informing the parties that no
evidence shall be allowed to be presented and offered during the trial
other than those identified and marked during the pre-trial except when
allowed by the court for good cause shown. A copy of the order is hereto
attached as Annex "E". In mediatable cases, the judge shall refer the
parties and their counsel to the PMC unit for purposes of mediation if
available.
3. During the preliminary conference, the Branch COC shall assist the
parties in reaching a settlement of the civil aspect of the case, mark the
documents to be presented as exhibits and copies thereof attached to the
records after comparison, ascertain from the parties the undisputed facts
and admissions on the genuineness and due execution of documents
marked as exhibits and consider such other matters as may aid in the
prompt disposition of the case. The proceedings during the preliminary
conference shall be recorded in the Minutes of Preliminary Conference to
be signed by both parties and counsel. (Please see Annex "B")
The Minutes of Preliminary Conference and the exhibits shall be attached
by the Branch COC to the case record before the pre-trial.
4. Before the pre-trial conference the judge must study the allegations of the
information, the statements in the affidavits of witnesses and other
documentary evidence which form part of the record of the preliminary
investigation.
5. During the pre-trial, except for violations of the Comprehensive
Dangerous Drugs Act of 2002, the trial judge shall consider plea-
bargaining arrangements.13 Where the prosecution and the offended party
agree to the plea offered by the accused, the court shall:
 a. Issue an order which contains the plea bargaining arrived at;
b. Proceed to receive evidence on the civil aspect of the case; and
c. Render and promulgate judgment of conviction, including the civil
liability or damages duly established by the evidence. 14
6. When plea bargaining fails, the Court shall:
a. Adopt the minutes of preliminary conference as part of the pre-trial
proceedings, confirm markings of exhibits or substituted
photocopies and admissions on the genuineness and due execution
of documents and list object and testimonial evidence;
b. Scrutinize every allegation of the information and the statements in
the affidavits and other documents which form part of the record of
the preliminary investigation and other documents identified and
marked as exhibits in determining farther admissions of facts,
documents and in particular as to the following:15

1. the identity of the accused;

2. court's territorial jurisdiction relative to the offense/s charged;

3. qualification of expert witness/es;

4. amount of damages;

5. genuineness and due execution of documents;

6. the cause of death or injury, in proper cases;

7. adoption of any evidence presented during the preliminary

investigation;

8. disclosure of defenses of alibi, insanity, self-defense, exercise of

public authority and justifying or exempting circumstances; and

9. such other matters that would limit the facts in issue.

c. Define factual and legal issues;

d. Ask parties to agree on the specific trial dates and adhere to the flow
chart determined by the court which shall contain the time frames for
the different stages of the proceeding up to promulgation of decision
and use the time frame for each stage in setting the trial dates;
e. Require the parties to submit to the Branch COC the names, addresses
and contact numbers of witnesses that need to be summoned
by subpoena;16 and
 f. Consider modification of order of trial if the accused admits the
charge but interposes a lawful defense.
7. During the pre-trial, the judge shall be the one to ask questions on issues
raised therein and all questions must be directed to him to avoid
hostilities between parties.
8. All agreements or admissions made or entered during the pre-trial
conference shall be reduced in writing and signed by the accused and
counsel, otherwise, they cannot be used against the accused. The
agreements covering the matters referred to in Section 1 of Rule 118 shall
be approved by the court. (Section 2, Rule 118)
9. All proceedings during the pre-trial shall be recorded, the transcripts
prepared and the minutes signed by the parties and/or their counsels.
10. The trial judge shall issue a Pre-trial Order within ten (10) days after the
termination of the pre-trial setting forth the actions taken during the pre-
trial conference, the facts stipulated, the admissions made, evidence
marked, the number of witnesses to be presented and the schedule of
trial. Said Order shall bind the parties, limit the trial to matters not
disposed of and control the course the action during the trial.17
Encl:
Annex "A" - Summons
Annex "B" - Notice of Pre-trial Conference in Civil Cases
Annex "C" - Minutes of Preliminary Conference
Annex "D" - Pre-trial Order in Civil Cases
Annex "E" - Notice of Pre-trial Conference in Criminal Cases

SAGUID VS CA

FACTS:

- 17 year old Gina S. Rey was married, but separated de facto from her husband, when she met
petitioner Jacinto Saguid in Marinduque,
- the two decided to cohabit as husband and wife in a house built on a lot owned by Jacinto’s father.
They did not have any children. Jacinto was a patron of their fishing vessel while Gina was a fishdealer
before going to Japan to work when her relationship with Jacinto’s relatives turned sour
- They decided to separate after a 9year cohabitation
- private respondent filed a complaint for Partition and Recovery of Personal Property with Receivership
against the petitioner with the Regional Trial Court of Boac, Marinduque.
- She alleged that she was able to contribute 70k for the house, 111,375 for furnitures .She also claims
that she has 35k worth of shares in her joint accounts
- He claims that all the expenses were from him.
- , the trial court declared the petitioner is in default for failure to file a pre-trial brief as required by
Supreme Court Circular No. 1-89.
- petitioner filed a motion for reconsideration, which was denied on June 2, 1997, and private
respondent was allowed to present evidence ex parte. Petitioner filed another motion for
reconsideration but the same was also denied on October 8, 1997.
- CA affirmed RTC
ISSUE: whether or not the trial court erred in allowing private respondent to present evidence ex parte;

HELD: NO,

Under Section 6, Rule 18 of the 1997 Rules of Civil Procedure, the failure of the defendant to file a pre-
trial brief shall have the same effect as failure to appear at the pre-trial, i.e., the plaintiff may present his
evidence ex parte and the court shall render judgment on the basis thereof.The remedy of the defendant is
to file a motion for reconsideration showing that his failure to file a pre-trial brief was due to fraud, accident,
mistake or excusable neglect. The motion need not really stress the fact that the defendant has a valid and
meritorious defense because his answer which contains his defenses is already on record.

In the case at bar, petitioner insists that his failure to file a pre-trial brief is justified because he was not
represented by counsel. This justification is not, however, sufficient to set aside the order directing private
respondent to present evidence ex parte, inasmuch as the petitioner chose at his own risk not to be
represented by counsel. Even without the assistance of a lawyer, petitioner was able to file a motion for
extension to file answer the required answer stating therein the special and affirmative defenses, and several
other motions. If it were true that petitioner did not understand the import of the April 23, 1997 order
directing him to file a pre-trial brief, he could have inquired from the court or filed a motion for extension
of time to file the brief. Instead, he waited until May 26, 1997, or 14 days from his alleged receipt of the
April 23, 1997 order before he filed a motion asking the court to excuse his failure to file a brief. Pre-trial
rules are not to be belittled or dismissed because their non-observance may result in prejudice to a
party’s substantive rights.

In the instant case, the fact that petitioner was not assisted by a lawyer is not a persuasive reason to relax the
application of the rules.

WHEREFORE, in view of all the foregoing, the Decision of the Court of Appeals is AFFIRMED with
MODIFICATION. Private respondent Gina S. Rey is declared co-owner of petitioner Jacinto Saguid in the
controverted house to the extent of P11,413.00 and personal properties to the extent of P55,687.50. Petitioner is
ordered to reimburse the amount of P67,100.50 to private respondent, failing which the house shall be sold at
public auction to satisfy private respondent’s claim.

JAZMIN ESPIRITU vs VLADIMIR LAZARO

Topic: Effect of failure to appear (actually, failure to prosecute tong case na to)

FACTS:

Petitioners Jazmin Espiritu and Porfirio Lazaro Jr. filed a complaint for recovery of personal property with
damages and preliminary attachment against respondents. Petitioners and respondent Vladimir Lazaroare the
legitimate children and only surviving heirs of the late Porfirio Lazaro Sr. The complaint alleged that the
deceased had two dollar time deposit accounts with respondent China Banking, petitioners demanded from
respondents their share in the said amounts but the latter told them that the deposits had already been
transferred to their children. Upon request to the branch manager as to the transfer of the accounts, the bank
manager replied that there was no existing accounts in the children’s names. The bank manager refused to
comply when asked to apprise petitioners the status of the time deposits. The trial court granted the
preliminary attachment and the corresponding writ was subsequently issued, 5 real properties were levied
upon. Respondents filed an urgent motion to set aside and discharge the attachment which was opposed by
petitioners. Respondents also moved to dismiss on the ground that the complaint failed to state a cause of
action. The trial court denied motion to dismiss. Respondents questioned the order in a petition for certiorari
in the CA, denied. SC also denied petition, thus the resolution became final and executor. After a couple of
years, respondents filed a Cautionary Answer. Petitioners received a copy of the cautionary answer, that the
counsel for respondents had heavy workload and that they are adopting part of co-defendant Sison’s answer as
to the denials of the admissions, special and affirmative defense and counterclaim.
The trial court dismissed the complaint due to petitioners’ failure to prosecute for an unreasonable length of
time. The court noted that despite the cautionary answer, petitioners failed to file a motion to set case for pre-
trial. They explained that they did not move to set case for pre-trial because the case was not yet ripe, they
point out that the trial court had not resolved the motion for extension to file a supplemental answer together
with the cautionary answer of respondents.

RULING:

In every action, the plaintiffs are duty-bound to prosecute their case with utmost diligence and with reasonable
dispatch to enable them to obtain the relief prayed for and, at the same time, to minimize the clogging of the
court dockets. Parallel to this is the defendants’ right to have a speedy disposition of the case filed against
them, essentially, to prevent their defenses from being impaired. Section 1 of Rule 18 of the Rules of Court
imposes upon the plaintiff the duty to set the case for pre-trial after the last pleading is served and filed. Under
Section 3 of Rule 17, failure to comply with the said duty makes the case susceptible to dismissal for failure to
prosecute for an unreasonable length of time or failure to comply with the rules.

Believing that the pending motion had to be resolved first, petitioners waited for the court to act on the
motion to file a supplemental answer. Despite the lapse of almost one year, petitioners kept on waiting,
without doing anything to stir the court into action. It bears stressing that the sanction of dismissal may be
imposed even absent any allegation and proof of the plaintiff’s lack of interest to prosecute the action, or of
any prejudice to the defendant resulting from the failure of the plaintiff to comply with the rules. The failure of
the plaintiff to prosecute the action without any justifiable cause within a reasonable period of time will give
rise to the presumption that he is no longer interested in obtaining the relief prayed for.

In this case, there was no justifiable reason for petitioners’ failure to file a motion to set the case for pre-trial.
Petitioners’ stubborn insistence that the case was not yet ripe for pre-trial is erroneous. Although petitioners
state that there are strong and compelling reasons justifying a liberal application of the rule, the Court finds
none in this case. The burden to show that there are compelling reasons that would make a dismissal of the
case unjustified is on petitioners, and they have not adduced any such compelling reason.

SPOUSES HENDRIK and ALICIA S. BIESTERBOS vs. COURT OF APPEALS[G.R. No.

152529. September 22, 2003.]

FACTS:

In April 1992, respondent Efren Bartolome entered into a contract to

sell a house and lot with petitioners spouses Biesterbos, the property at the
time being mortgaged to the Philippine National Bank (PNB). In the said contract,
the parties agreed to certain stipulations, some of which include an immediate
transfer of ownership upon the giving of the initial downpayment by the
petitioners to respondent, and that respondent will advance P600,000 as cost
of the adjacent vacant lot which will be reimbursed by the petitioners after a
reasonable time on or before July 30,1992 when ownership has been transferred to the
buyers, among other conditions.
Subsequently, petitioners paid the requisite downpayment over t
h e p r o p e r t y , a n d i n conformance with the agreement, respondent advanced
the P600,000 as cost for the adjacent vacant lot. Petitioners however, were unable
to allegedly pay their remaining obligations, including the amount advanced by
respondent, within the given period under the contract, though it was admitted
later on by respondent that he continued to receive payment from petitioners even after
the stipulated period. Despite such payments however, respondent claimed that there
was still a remaining balance left unpaid by petitioners, and despite repeated demands
made by Bartolome, the petitioners failed to pay the amounts stated by
respondent, prompting the latter to file suit against the spouses.
 Petitioners countered, by stating that they had opened an account with PNB
depositing an amount “in trust for Mr. Efren Bartolome” which he could withdraw
at anytime during banking hours, representing their consignation for their
obligation. They also averred that the period stated in the contract was
novated when respondent continued to receive payment even after the
stipulated deadline, hence they have complied with their obligation to respondent.
The trial court ruled in favor of the petitioners that they have complied
with their obligation, but ordered the spouses to reimburse the amount advanced by
respondent, the order for consignation having been denied, and directed
respondent to effect immediate transfer of ownership of the property.
On appeal, the decision was affirmed but modified to include payment of interest
at the rate of 12% per annum, with regard to the payment to be made by the petitioners
from the time of default until full payment. Petitioners argue that there was
grave abuse of discretion when the appellate court ordered the payment of interest,
considering that there was no such stipulation in the agreement for payment of interest.
They further averred that there was no need for them to pay the P600,000 as there
was already a valid tender of payment even before the filing of the complaint,
as evidenced by the account opened by the petitioners with PNB.

ISSUES:
Did the PNB account opened by the petitioners constitute a valid tender
of payment fortheir obligation under the contract?

HELD:
NO.
In their letter of 03 July 1993, likewise included among the stipulation of facts of the
parties during the pre-trial conference, petitioners, through counsel, informed
respondent that the former had deposited the amount of P521,691.76 "In Trust For Mr.
Efren Bartolome" at the PNB, Session Road, Baguio City, which sum could be withdrawn
by respondent at anytime during banking h o u r s .
While such a procedure did not strictly constitute a valid ten
d e r o f p a y m e n t a n d consignation, still, it could be considered an act of
good faith on the part of petitioners to fully settle their obligation. Equity and
justice would demand that such an act, placing at the disposal of respondent the
deposited sum, should have the effect of suspending the running of the interest on said
outstanding amount.

While the trial court and the appellate court did not make any categorical statement
as to when an initial demand was made by respondent, the parties, however, agreed at
the pre-trial conference in the trial court to stipulate on the authenticity of the demand-
letter of 18 May 1993 sent to petitioners by Atty. George Florendo (respondent’s
counsel). The Court would here then consider such date, absent any contrary showing,
as the demand to occasion default.
Doctrine: Where the parties agreed at the pre-trail conference in the trial court to
stipulate on the authenticity of a demand letter sent on a particular date, the Court
would then consider such date, absent any contrary showing, as the demand to occasion
default.

G.R. No. 137247 August 7, 2006

ANATALIA B. RAMOS, Petitioner,
vs.
SPOUSES DOMINGO A. DIZON and EDNA MEDINA DIZON, Respondents.

F: P alleged that respondents are the owners of an undivided one-half portion of a parcel of
land with an area of about 89.35 square meters. R Domingo executed an SPA authorizing Elpidio
Domingo to sell to P one-half portion of said land with a right to repurchace. R failed to repurchase
the land, hence ownership of the land belongs to the P.

R filed an Answer alleging that the SPA was so that Elpidio Domingo could obtain a loan,
instead he sold the land, and was thus in excess of his authority. As for the sale, R alleges that the
same was merely simulated. It was also revealed during Elpidio’s cross-examination that respondent
Domingo had previously filed a case for specific performance.

In the pre-trial, the parties’ exhibits were enumerated. P’s exhibits were lettered A to C;
while R’s exhibits were numbered 1 – 7.

RTC decided in favor of P by rescinding the sale (in rescinding the sale, the RTC considered
the R’s exhibits 1-7 in the Pre-trial). CA affirmed. Hence this appeal.

P contends that the Exhibits 1-7 of the pre-trial order should not have been considered by
the RTC considering the same was not formally offered in evidence.

I: WN it was erroneous for the RTC judge to consider facts stipulated in the Pre-trial order.
H/R:

The record shows, however, as noted earlier, that at the pre-trial conference, both P Marmont and R
spouses had agreed upon a stipulation of facts and issues recognizing the existence of those same
two (2) agreements. Such stipulation of facts constitutes a judicial admission, the veracity of which
requires no further proof and which may be controverted only upon a clear showing that such
stipulation had been entered into through "palpable mistake" pursuant to Section 2, Rule 129.

Absent any such showing, that stipulation of facts is incontrovertible, and may be relied upon by the
courts. R spouses are estopped from raising as an issue in this case the existence and admissibility in
evidence of both the first and second Memoranda of Agreement which, having been marked as
exhibits during pre-trial, properly form part of the record of this case, event though not formally
offered in evidence after trial.

The pre-trial forms part of the proceedings and matters dealt with therein may not be brushed aside
in the process of decision making. Thus, notwithstanding the fact that respondents’ exhibits were not
formally offered prior to the rendition of case by the court a quo, the trial court judge committed no
error when he admitted and considered them in the resolution of the case.