Rule-17.doc

1 Rule 17 – Dismissal of Actions Sec.1 Dismissal upon notice by plaintiff Dael v. Spouses Beltran, G.R. No. 156470, April 30, 2008 Petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure raising pure questions of law, and seeking a reversal of the Resolution dated May 28, 2002 of the Regional Trial Court (RTC), Branch 34, Negros Oriental, Dumaguete City, in Civil Case No. 13072, which dismissed with prejudice, petitioner’s complaint for breach of contract and damages against the respondents. Also assailed is the trial court’s Resolution dated December 5, 2002, denying petitioner’s motion for reconsideration. Petitioner's Claim: 1) Respondents’ non-disclosure of the extrajudicial foreclosure constituted breach of contract on the implied warranties in a sale of property as provided under Article 1547 of the New Civil Code. 2) He was entitled to damages because he had to pay for the property twice. Respondent's Action: 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. Facts: On November 23, 2001, petitioner Frederick Dael filed before the RTC, Branch 34, Negros Oriental, a Complaint for breach of contract and damages against respondent-spouses Benedicto and Vilma Beltran. In his complaint, petitioner alleged that respondents sold him a parcel of land covering three hectares located at Palayuhan, Siaton, Negros Oriental and that respondents did not disclose that the land was previously mortgaged. On August 6, 2001, petitioner discovered that an extrajudicial foreclosure over the property had already been instituted, and that he was constrained to bid in the extrajudicial sale of the land conducted on August 29, 2001. Possession and ownership of the property was delivered to him when he paid the bid price of P775,100. Petitioner argued that respondents’ non-disclosure of the extrajudicial foreclosure constituted breach of contract on the implied warranties in a sale of property as provided under Article 1547 of the New Civil Code. He likewise claimed that he was entitled to damages because he had to pay for the property twice. On January 10, 2002, 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. On February 12, 2002, in a hearing on the motion, Atty. Dirkie Y. Palma, 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 dated July 28, 2000. Atty. Palma 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. The 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 but was dismissed with prejudice on May 28,2002. Arguing 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, petitioner filed a Motion for Reconsideration but it was denied by the RTC in a Resolution dated December 5, 2002. Hence, this petition. Issue: WON the RTC erred in dismissing the Complaint for Breach of Contract and Damages based on the Motion to Dismiss filed by herein respondents and not on the Notice of Dismissal promptly filed by herein petitioner before respondents could file a responsive pleading under Rule 17, Section 1 of the 1997 Rules of Civil Procedure. Arguments of: Petitioner: Citing, Serrano v. Cabrera and Makabulo in his Memorandum, argues that the 1997 Rules of Civil Procedure expressly states that before the defendant has served his answer or moved for a summary judgment, he has, as a matter of right, the prerogative to cause the dismissal of a civil action filed, and such dismissal may be effected by a mere notice of dismissal. He further argues that such dismissal is without prejudice, except (a) where the notice of dismissal so provides; (b) where the plaintiff has previously dismissed the same case in a court of competent jurisdiction; or (c) where the dismissal is premised on payment by the defendant of the claim involved. 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. Respondent: On the other hand, respondents in their Memorandum, counter that the RTC is correct in dismissing the case with prejudice based on their Motion to Dismiss because they filed their motion on January 10, 2002, 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. Further, they point out that petitioner deceived the court when he filed the action knowing fully well that he was not the real party-in-interest representing himself as Frederick George Ghent Dael. Respondents also argue that petitioner’s recourse to this Court by way of a petition for review on certiorari was not proper since the proper remedy should have been to file an appeal of the order granting the Motion to Dismiss. He contends that the petitioner should have appealed to the Court of Appeals under Rule 41 instead of assailing the ruling of the RTC by way of a petition for review on certiorari before the Supreme Court. As to the propriety of dismissal of the complaint with prejudice, Section 1, Rule 17 of the 1997 Rules of Civil Procedure provides: SECTION 1. Dismissal upon notice by plaintiff. – A complaint may be dismissed by the plaintiff by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits

when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. Under this provision, 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. Respondents argue that the Motion to Dismiss they filed precedes the Notice of Dismissal filed by petitioner and hence, the trial court correctly gave it precedence and ruled based on the motion. Ruling: YES, 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 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 and imply that petitioner can no longer file a case against respondents without giving him a chance to present evidence to prove otherwise. Petitioner’s recourse to this Court by way of a petition for review on certiorari under Rule 45 is proper. An order of dismissal, whether correct or not, is a final order. It is not interlocutory because the proceedings were terminated; it leaves nothing more to be done by the lower court. Therefore, the remedy of the plaintiff is to appeal the order. Under the Rules of Court, a party may directly appeal to the Supreme Court from a decision of the trial court only on pure questions of law. WHEREFORE, the petition is GRANTED. The assailed Resolutions dated May 28, 2002 and December 5, 2002 of the Regional Trial Court, Branch 34, Negros Oriental are AFFIRMED with MODIFICATION such that the case is dismissed without prejudice.

Rule 17 Sec. 1- DISMISSAL BY THE PLAINTIFF G.R. No. L-58986 April 17, 1989 DANTE Y. GO vs. HON. FERNANDO CRUZ, Judge, etc., CITY SHERIFF OF CALOOCAN CITY, and CALIFORNIA MANUFACTURING CO., INC., The dismissal of civil actions is always addressed to the sound judgment and discretion of the court; this, (a) whether the dismissal is sought after a trial has been completed or otherwise, (b) whether it is prayed for by a defending party , (c) or by a plaintiff or claimant. There is one instance however where the dismissal of an action rests exclusively on the will of a plaintiff or claimant, to prevent which the defending party and even the court itself is powerless, requiring in fact no action whatever on the part of the court except the acceptance and recording of the causative document. This is dealt with in Section 1, Rule 17 of the Rules of Court, which reads as follows: SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by the plaintiff without order of court by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim. A class suit shall not be dismissed or compromised without approval of the court. FACTS: On October 26, 1981, California Manufacturing Co., Inc. (hereinafter, simply, California) brought an action in the Court of First Instance of Manila against Dante Go, accusing him of unfair competition. [The gravamen of California's complaint was that Dante Go, doing business under the name and style of "Sugarland International Products," and engaged like California in the manufacture of spaghetti, macaroni, and other pasta was selling his products in the open market under the brand name, "Great Italian," in packages which were in colorable and deceitful imitation of California's containers bearing its own brand, "Royal.”] Its complaint contained an application for preliminary injunction commanding Dante Go to immediately cease and desist from the further manufacture, sale and distribution of said products, and to retrieve those already being offered for sale. However, on November 12, 1981 (two weeks later), California filed a notice of dismissal with the Court. Four days afterwards, or on November 16, 1981, California received by registered mail a copy of Dante Go's answer with counterclaim dated November 6, 1981, which had been filed with the Court on November 9, 1981. On November 19, 1981 a fire broke out at the Manila City Hall destroying among others the sala of Judge Tengco and the records of cases therein kept, including that filed by California against Dante Go. On December 1, 1981, California filed another complaint asserting the same cause of action against Dante Go, this time with the Court of First Instance at Caloocan City. This second suit was docketed as Civil Case No. C-9702 and was assigned to the branch presided over by Judge Fernando A. Cruz. On December 3, 1981, Judge Cruz issued an ex parte restraining order directing "the defendant ... to immediately cease and desist from the further manufacture, sale, promotion and distribution of spaghetti, macaroni and other pasta products contained in packaging boxes and labels under the name 'GREAT ITALIAN,' which are similar to or copies of those of the plaintiff, and ... recall ... all his spaghetti, macaroni and other pasta products using the brand, 'GREAT ITALIAN.'" On the day following the rendition of the restraining order, Dante Go filed the present petition for certiorari, etc. with this Court praying for its nullification and perpetual inhibition. On December 11, 1981, this Court, in turn issued a writ of preliminary injunction restraining California, Judge Cruz and the City Sheriff from enforcing or implementing the restraining order of December 3, 1981, and from continuing with the hearing on the application for preliminary injunction in said Civil Case No. C-9702. The scope of the injunction was subsequently enlarged by this Court's Resolution of April 14,1982 to include the City Fiscal of Manila, who was thereby restrained from proceeding with the case of unfair competition filed in his office by California against Dante Go. Dante Go's thesis is that the case filed against him by California in the Manila Court remained pending despite California's notice of dismissal. According to him, since he had already filed his answer to the complaint before California sought dismissal of the action three (3) days afterwards, such dismissal was no longer a matter of right and could no longer be effected by mere notice in accordance with Section 1, Rule 17 of the Rules of Court, but only on plaintiff s motion, and by order of the Court; hence, the Caloocan Court acted without jurisdiction over the second action based on the same

2 cause. He also accused California of forum shopping, of selecting a sympathetic court for a relief which it had failed to obtain from another. Issue: Whether or not the first case filed before the Court of First Instance of Manila has been validly dismissed upon filing of the Notice of Dismissal. Ruling: YES. What marks the loss by a plaintiff of the right to cause dismissal of the action by mere notice is not the filing of the defendant's answer with the Court (either personally or by mail) but the service on the plaintiff of said answer or of a motion for summary judgment. This is the plain and explicit message of the Rules. "The filing of pleadings, appearances, motions, notices, orders and other papers with the court, according to Section 1, Rule 13 of the Rules of Court, means the delivery thereof to the clerk of the court either personally or by registered mail. Service, on the other hand, signifies delivery of the pleading or other paper to the parties affected thereby through their counsel of record, unless delivery to the party himself is ordered by the court, by any of the modes set forth in the Rules, i.e., by personal service, service by mail, or substituted service. Here, California filed its notice of dismissal of its action in the Manila Court after the filing of Dante Go's answer but before service thereof. Thus having acted well within the letter and contemplation of the afore-quoted Section 1 of Rule 17 of the Rules of Court, its notice ipso facto brought about the dismissal of the action then pending in the Manila Court, without need of any order or other action by the Presiding Judge. The dismissal was effected without regard to whatever reasons or motives California might have had for bringing it about, and was, as the same Section 1, Rule 17 points out, "without prejudice," the contrary not being otherwise "stated in the notice" and it being the first time the action was being so dismissed. There was therefore no legal obstacle to the institution of the second action in the Caloocan Court of First Instance based on the same claim. The filing of the complaint invested it with jurisdiction of the subject matter or nature of the action. In truth, and contrary to what petitioner Dante Go obviously believes, even if the first action were still pending in the Manila Court, this circumstance would not affect the jurisdiction of the Caloocan Court over the second suit. The pendency of the first action would merely give the defendant the right to move to dismiss the second action on the ground of auter action pendant or litis pendentia. G.R. No. 188956 March 20, 2013 ARMED FORCES OF THE PHILIPPINES RETIREMENT AND SEPARATION BENEFITS SYSTEM, Petitioner, vs. REPUBLIC OF THE PHILIPPINES, Respondent. FACTS: Petitioner created under Presidential Decree (P.D.) No. 361, 4 as amended, was designed to establish a separate fund to guarantee continuous financial support to the Armed Forces of the Philippines military retirement system as provided for in Republic Act No. 340."5 Petitioner filed an Application for Registration of Title 6 over three parcels of land located in West Bicutan, Taguig City, before the RTC of Pasig City. These three parcels of land constitute a land grant by virtue of Presidential Proclamation No. 1218, issued by former President Fidel V. Ramos on May 8, 1998.7 The application was filed by Mr. Honorio S. Azcueta (Mr. Azcueta), the then Executive Vice President and Chief Operating Officer of the petitioner, who was duly authorized to do so by the Board of Trustees of the petitioner, as evidenced by a notarized Secretary’s Certificate8 dated August 18, 2003. After due posting and publication of the requisite notices, the court a quo issued an order of general default against the whole world, and the petitioner was allowed to present evidence ex-parte.9 The petitioner then presented as its witness, Ms. Alma P. Aban (Ms. Aban), its Vice President and Head of its Asset Enhancement Office. She testified, inter alia, that: among her main duties is to ensure that the properties and assets of petitioner, especially real property, are legally titled and freed of liens and encumbrances; the subject properties were acquired by the petitioner through a land grant under Presidential Proclamation No. 1218; prior to Presidential Proclamation No. 1218, the Republic of the Philippines was in open, continuous, exclusive, notorious, and peaceful possession and occupation of the subject properties in the concept of an owner to the exclusion of the world since time immemorial; petitioner, after the Republic of the Philippines transferred ownership of the subject properties to it, assumed open, continuous, exclusive, notorious, and peaceful possession and occupation, and exercised control over them in the concept of owner, and likewise assumed the obligations of an owner; petitioner has been paying the real estate taxes on the subject properties; and the subject properties are not mortgaged, encumbered, or tenanted. 10 Finding the Petition meritorious, the Court DECLARES, CONFIRMS AND ORDERS the registration of AFPRSBS’ title thereto. In response, the Office of the Solicitor General (OSG) filed a Motion for Reconsideration arguing that the petitioner failed to prove that it has personality to own property in its name and the petitioner failed to show that the witness it presented was duly authorized to appear for and in its behalf. The court a quo dismissed the Application for Registration upon motion of the OSG. ISSUE: Whether the court a quo acted contrary to law and jurisprudence when it dismissed petitioner’s application for land registration on the ground that petitioner failed to prosecute the subject case? HELD: We answer in the affirmative. Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, provides only three instances wherein the Court may dismiss a case for failure to prosecute: 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. Jurisprudence has elucidated on this matter in De Knecht v. CA: 18 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. 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. (Emphasis supplied.) Clearly, the court a quo’s basis for pronouncing that the petitioner failed to prosecute its case is not among those grounds provided by the Rules.

There was no basis for the court a quo’s ruling that the petitioner failed to prosecute the subject case, because none of the grounds provided in the Rules for dismissing a case due to failure to prosecute is present. That the RTC dismissed the application for land registration of the petitioner for failure to prosecute after the petitioner presented all its evidence and after said court has rendered a decision in its favor, is highly irregular. There is no substantive or procedural rule which requires a witness for a party to present some form of authorization to testify as a witness for the party presenting him or her. No law or jurisprudence would support the conclusion that such omission can be considered as a failure to prosecute on the part of the party presenting such witness. All that the Rules require of a witness is that the witness possesses all the qualifications and none of the disqualifications provided therein. Rule 130 of the Rules on Evidence provides: SEC. 20. Witnesses; their qualifications.–Except as provided in the next succeeding section, all persons who can perceive, and perceiving, can make known their perception to others, may be witnesses. xxxx Cavili v. Judge Florendo20 speaks of the disqualifications: Sections 19 and 20 of Rule 130 provide for specific disqualifications.1âwphi1 Section 19 disqualifies those who are mentally incapacitated and children whose tender age or immaturity renders them incapable of being witnesses. Section 20 provides for disqualification based on conflicts of interest or on relationship. Section 21 provides for disqualifications based on privileged communications. Section 15 of Rule 132 may not be a rule on disqualification of witnesses but it states the grounds when a witness may be impeached by the party against whom he was called. x x x The specific enumeration of disqualified witnesses excludes the operation of causes of disability other than those mentioned in the Rules. It is a maxim of recognized utility and merit in the construction of statutes that an express exception, exemption, or saving clause excludes other exceptions. (In Re Estate of Enriquez, 29 Phil. 167) As a general rule, where there are express exceptions these comprise the only limitations on the operation of a statute and no other exception will be implied. (Sutherland on Statutory Construction, Fourth Edition, Vol. 2A, p. 90) The Rules should not be interpreted to include an exception not embodied therein. (Emphasis supplied.) A reading of the pertinent law and jurisprudence would show that Ms. Aban is qualified to testify as a witness for the petitioner since she possesses the qualifications of being able to perceive and being able to make her perceptions known to others. Furthermore, she possesses none of the disqualifications described above. The RTC clearly erred in ordering the dismissal of the subject application for land registration for failure to prosecute because petitioner’s witness did not possess an authorization to testify on behalf of petitioner. The court a quo also erred when it concluded that the subject case was not prosecuted by a duly authorized representative of the petitioner. The OSG and the court a quo did not question the Verification/Certification21 of the application, and neither did they question the authority of Mr. Azcueta to file the subject application on behalf of the petitioner. Case records would reveal that the application was signed and filed by Mr. Azcueta in his capacity as the Executive Vice President and Chief Operating Officer of the petitioner, as authorized by petitioner’s Board of Trustees. 22 The authority of Mr. Azcueta to file the subject application was established by a Secretary’s Certificate 23 attached to the said application. The asseveration that the subject case was not prosecuted by a duly authorized representative of the petitioner is thus unfounded. Philippine Charter Insurance Corporation vs. Explorer Maritime Co. FACTS: Petitioner Philippine Charter Insurance Corporation (PCIC), as insurersubrogee, filed with the RTC of Manila a Complaint against respondents, to wit: the unknown owner of the vessel M/V "Explorer" (common carrier), Wallem Philippines Shipping, Inc. (ship agent), Asian Terminals, Inc. (arrastre), and Foremost International Port Services, Inc. (broker). PCIC sought to recover from the respondents the sum of P342,605.50, allegedly representing the value of lost or damaged shipment paid to the insured, interest and attorney's fees. On the same date, PCIC filed a similar case against respondents Wallem Philippines Shipping, Inc., Asian Terminals, Inc., and Foremost International Port Services, Inc., but, this time, the fourth defendant is "the unknown owner of the vessel M/V "Taygetus." Respondents filed their respective answers with counterclaims. PCIC later filed its answer to the counterclaims. PCIC filed an ex parte motion to set the case for pre-trial conference, which was granted by the trial court. However, before the scheduled date of the pre-trial conference, PCIC filed an Amended Complaint. The "Unknown Owner" of the vessel M/V "Explorer" and Asian Terminals, Inc. filed anew their respective answers with counterclaims. Foremost International Port Services, Inc. filed a Motion to Dismiss, which was later denied by the trial court. On December 5, 2000, respondent common carrier, "the Unknown Owner" of the vessel M/V "Explorer," and Wallem Philippines Shipping, Inc. filed a Motion to Dismiss on the ground that PCIC failed to prosecute its action for an unreasonable length of time. PCIC allegedly filed its Opposition, claiming that the trial court has not yet acted on its Motion to Disclose which it purportedly filed on November 19, 1997. In said motion, PCIC supposedly prayed for the trial court to order respondent Wallem Philippines Shipping, Inc. to disclose the true identity and whereabouts of defendant "Unknown Owner of the Vessel M/V 'Explorer.'" In said motion, PCIC supposedly prayed for the trial court to order respondent Wallem Philippines Shipping, Inc. to disclose the true identity and whereabouts of defendant "Unknown Owner of the Vessel M/V 'Explorer.'" The Trial Court dismissed the case for failure of petitioner to prosecute for an unreasonable length of time. Upon receipt of the order of dismissal, PCIC allegedly realized that its Motion to Disclose was inadvertently filed with Branch 38 of the RTC of Manila, where the similar case involving the vessel M/V “Taygetus” was raffled to, and not with Branch 37, where the present case was pending. Thus, PCIC filed a Motion for Reconsideration explaining that its Motion to Disclose was erroneously filed with Branch 38. PCIC claimed that the mistake stemmed from the confusion created by an error of the docket section of the RTC of Manila in stamping the same docket number to the simultaneously filed cases. According to PCIC, it believed that it was still premature to move for the setting of the pre-trial conference with the Motion to Disclose still pending resolution. The Motion for Reconsideration was denied. On appeal, the CA affirmed the Order of the RTC. The MR filed by PCIC was also denied. Hence, this Petition for Review on Certiorari. ISSUES: Whether or not dismissal was due to the fault of the plaintiff RULING: YES. On June 27, 2007, this Court required the counsel of the "Unknown Owner" of the vessel M/V Explorer and Wallem Philippines Shipping, Inc. to submit proof of identification of the owner of said vessel. On September 17, 2007, this Court, pursuant to the information provided by Wallem Philippines Shipping, Inc., directed its

3 Division Clerk of Court to change "Unknown Owner" to "Explorer Maritime Co., Ltd." in the title of this case. In affirming the dismissal of Civil Case No. 95-73340, the Court of Appeals held that PCIC should have filed a motion to resolve the Motion to Disclose after a reasonable time from its alleged erroneous filing. PCIC could have also followed up the status of the case by making inquiries on the court's action on their motion, instead of just waiting for any resolution from the court for more than three years. The appellate court likewise noted that the Motion to Disclose was not the only erroneous filing done by PCIC's former counsel, the Linsangan Law Office. The records of the case at bar show that on November 16, 1997, said law office filed with Branch 37 a Pre-trial Brief for the case captioned as "Philippine Charter Insurance Corporation v. Unknown Owners of the Vessel MV 'Taygetus', et al., Civil Case No. 95-73340." The firm later filed a Manifestation and Motion stating that the same was intended for Civil Case No. 95-73341 which was pending before Branch 38. All these considered, the Court of Appeals ruled that PCIC must bear the consequences of its counsel's inaction and negligence, as well as its own. PCIC claims that the merits of its case warrant that it not be decided on technicalities. Furthermore, PCIC claims that its former counsel merely committed excusable negligence when it erroneously filed the Motion to Disclose with the wrong branch of the court where the case is pending. The basis for the dismissal by the trial court of Civil Case No. 95-73340 is Section 3, Rule 17 and Section 1, Rule 18 of the Rules of Court, which respectively provide: Section 3. Dismissal due to the fault of the 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 adjudication upon the merits, unless otherwise declared by the court. xxx xxx xxx Section 1. When conducted. — After the last pleading has been served and filed, it shall be the duty of the plaintiff to promptly move ex parte that the case be set for pre-trial. In the fairly recent case of Espiritu v. Lazaro in affirming the dismissal of a case for failure to prosecute on account of the omission of the plaintiff therein to move to set the case for pre-trial for almost one year from their receipt of the Answer, issued several guidelines in effecting such dismissal: Respondents Lazaro filed the Cautionary Answer with Manifestation and Motion to File a Supplemental/Amended Answer on July 19, 2002, a copy of which was received by petitioners on August 5, 2002. 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. In any case, petitioners should not have waited for the court to act on the motion to file a supplemental answer or for the defendants to file a supplemental answer. As previously stated, the rule clearly states that the case must be set for pre-trial after the last pleading is served and filed. Since respondents already filed a cautionary answer and [petitioners did not file any reply to it] the case was already ripe for pre-trial. 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. (Emphases supplied.) In the case at bar, the alleged Motion to Disclose was filed on November 19, 1997. Respondents filed the Motion to Dismiss on December 5, 2000. By that time, PCIC's inaction was thus already almost three years. There is therefore no question that the failure to prosecute in the case at bar was for an unreasonable length of time. Consequently, the Complaint may be dismissed 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 burden is now on PCIC to show that there are compelling reasons that would render the dismissal of the case unjustified. -petition is denied REPUBLIC V. ENRIQUEZ FACTS: On 23 July 1987, the Republic of the Philippines (Republic), represented by the Presidential Commission on Good Government (PCGG) and the Office of the Solicitor General (OSG), filed a Complaint against respondents. Docketed as Civil Case No. 0014, this civil action sought the recovery of ill-gotten wealth from respondents for the benefit of the Republic. Allegedly, these properties were illegally obtained during the reign of former President Ferdinand E. Marcos and, hence, were the subject of sequestration orders.Thereafter, Civil Case No. 0014 went through a series of inclusions of individual defendants and defendant corporations. As a result, respondents finished filing their separate Answers eight years later, or in 1995. In May 1996, some of the defendant corporations filed motions for dismissal. Six years thereafter, the Sandiganbayan resolved the motions. It ruled in favor of defendant corporations and lifted the sequestration orders against them.2 Aggrieved, the Republic filed a Petition for Certiorari3 before this Court on 23 August 2002. Docketed as G.R. No. 154560,4 the Rule 65 petition

questioned the lifting of the sequestration orders against defendant corporations. With these two cases at bay, the counsels for the Republic divided their responsibilities as follows: Special PCGG Counsel Maria Flora A. Falcon (Falcon) attended to Civil Case No. 0014, while OSG Senior State Solicitor Derek R. Puertollano (Puertollano) handled G.R. No. 154560. After receiving the Answers, the Sandiganbayan scheduled pretrial dates for Civil Case No. 0014. However, the court failed to conduct pretrial hearings from 2002 to 2007. For five years, it reset the hearings in view of the pending incidents, which included G.R. No. 154560, and because the case "was not yet ripe for a pretrial conference."5 On 28 June 2007, Civil Case No. 0014 was called for the initial presentation of plaintiff's evidence, but the proceedings did not push through. Finally, two decades after the inception of the case, both parties moved to set the pretrial and trial hearings on 1, 2, 29, and 30 October 2007. The Sandiganbayan granted their motions in this wise:6 When this case was called for initial presentation of plaintiff's evidence, both parties moved for postponement. In the interim, the contract of Falcon with the PCGG terminated on 1 July 2007.8 Through a letter dated 21 September 2007, she informed Puertollano that she was no longer connected with the PCGG. She also turned over to him the records of Civil Case.9 However, Puertollano belatedly received the letter on 8 October 2007. For all he knew, Falcon had attended the hearings prior to that date, while he was pursuing G.R. No. 154560. Thus, on 1 October 2007, no representative appeared on behalf of petitioner. Consequently, the Sandiganbayan issued its 1 October 2007 Order dismissing the case without prejudice. The court ruled thus:10 On motion of Atty. Nini Priscilla D. Sison-Ledesma for the dismissal of this case, since plaintiff's counsel failed to appear despite due notice and there was no representative from the plaintiff, this case is ordered DISMISSED without prejudice. However The OSG belatedly learned the dismissal of the of Civil Case No. 0014. Petitioner brought to the Sandiganbayan's attention the fact that Falcon, who was assigned to Civil Case No. 0014, had diligently attended to the civil action. But since she was no longer connected to the PCGG, and given that the OSG only learned of this circumstance seven days after the hearing on 1 October 2007, counsels for petitioner failed to appear during the hearing.17 Hence, petitioner comes before this Court to seek the reinstatement of the 26-year-old case. Therefore, this Court is tasked to resolve the two issues raised by petitioner as follow ISSUE: I. Whether the Sandiganbayan gravely erred in dismissing Civil Case No. 0014 for the failure of petitioner to appear during the hearing. RULING: This Court rules in favor of the Republic. As worded, Rule 17, Section 3 of the Rules of Court, provides that the court may dismiss a complaint in case there are no justifiable reasons that explain the plaintiff's absence during the presentation of the evidence in chief. Generally speaking, the use of "may" denotes its directory nature,20 especially if used in remedial statutes that are known to be construed liberally. Thus, the word "may" in Rule 17, Section 3 of the Rules of Court, operates to confer on the court the discretion21 to decide between the dismissal of the case on technicality vis-à-vis the progressive prosecution thereof. In Perez v. Perez, we held thus: The records show that every time the case was set for hearing, the plaintiffs and their counsel had always been present; however, the scheduled hearings were either cancelled by the court motu propio and/or postponed by agreement of the parties, until the case was eventually set for trial on the merits on February 15, 1967. It was only at this hearing where the plaintiffs and their counsel failed to appear, prompting the court to issue its controversial order of dismissal. Considering that it was the first time that the plaintiffs failed to appear and the added fact that the trial on the merits had not as yet commenced, We believe that it would have been more in consonance with the essence of justice and fairness for the court to have postponed the hearing on February 15, 1967. We are not unmindful of the fact that the matter of adjournment and postponement of trials is within the sound discretion of the court; but such discretion should always be predicated on the consideration that more than the mere convenience of the courts or of the parties in the case, the ends of justice and fairness should be served thereby. Postponements and continuances are part and parcel of our procedural system of dispensing justice. in this case no substantial rights are affected and the intention to delay is not manifest, it is sound judicial discretion to allow them. This Court further considers that based on the records, the contract of the handling lawyer, Falcon, with the PCGG terminated without the knowledge of Puertollano. After Falcon's resignation, it was only on 5 October 2007 that the case was transferred to the new lawyer. These facts then explain the nonattendance of petitioner on 1 October 2007, and why it failed to keep abreast with the succeeding 2, 29, and 30 October 2007 hearings. Moreover, this Court understands the absence of Puertollano in Civil Case No. 0014. The OSG has explained that he attends to G.R. 154560, as the main case has been delegated to the PCGG. We find this arrangement sensible, given that case management is needed to tackle this sensitive case involving a number of high-profile parties, sensitive issues and, of course, numerous offshoots and incidents. Here, we find it incongruous to tip the balance of the scale in favor of a technicality that would result in a complete restart of the 26-year-old civil case back to square one. Surely, this Court cannot waste the progress of the civil case from the institution of the complaint to the point of reaching the trial stage. Not only would this stance dry up the resources of the government and the private parties, but it would also compromise the preservation of the evidence needed by them to move forward with their respective cases. Thus, to prevent a miscarriage of justice in its truest sense, and considering the exceptional and special history of Civil Case No. 0014, this Court applies a liberal construction of the Rules of Court.1âwphi1 Every party-litigant must be afforded the amplest opportunity for the proper and just determination of its cause.26"Adventitious resort to technicality resulting in the dismissal of cases is disfavored because litigations must as much as possible be decided on the merits and not on technicalities."27 Inconsiderate dismissals, even if without prejudice to its refiling as in this case, merely postpone the ultimate reckoning between the parties. In the absence of a clear intention to delay, justice is better served by a brief continuance, trial on the merits, and final disposition of the case before the court.28 IN VIEW THEREOF, the 11 March 2008 Petition for Review on Certiorari filed by petitioner is GRANTED. The 1 October 2007 Order and 25 January 2008 Resolution of the Sandiganbayan (Second Division) are REVERSED. Consequently, Civil Case No. 0014 is hereby REINSTATED.

G.R. No. 210252 June 16, 2014 VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL I. QUINTOS, JR.; FLORENCIA I. DANCEL, represented by her Attorney-in-Fact FLOVY I. DANCEL; and CATALINO L. IBARRA, Petitioners, vs. PELAGIA I. NICOLAS, NOLI L. IBARRA, SANTIAGO L. IBARRA, PEDRO L. IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA, HEIRS OF AUGUSTO L. IBARRA, namely CONCHITA R., IBARRA, APOLONIO IBARRA, and NARCISO

4 IBARRA, and the spouses CANDELARIO,Respondents.

RECTO

CANDELARIO

and

ROSEMARIE

Facts: Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and respondents Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, Gilberto Ibarra, and the late Augusto Ibarra are siblings. Their parents, Bienvenido and Escolastica Ibarra, were the owners of a parcel of land situated along Quezon Ave., Poblacion C, Camiling, Tarlac, covered by Transfer Certificate Title (TCT) No. 318717. By 1999, both Bienvenido and Escolastica had already passed away, leaving to their ten (10) children ownership over the subject property. Subsequently, sometime in 2002, respondent siblings brought an action for partition against petitioners. The case was raffled to the RTC, Branch 68, Camiling, Tarlac. However, the trial court dismissed the case for failure of the parties, as well as their counsels, to appear despite due notice. As neither set of parties appealed, the ruling of the trial court became final, as evidenced by a Certificate of Finality it eventually issued on August 22, 2008. Having failed to secure a favorable decision for partition, respondent siblings instead resorted to executing a Deed of Adjudication to transfer the property in favor of the ten (10) siblings. As a result, TCT No. 318717 was canceled and in lieu thereof, TCT No. 390484 was issued in its place by the Registry of Deeds of Tarlac in the names of the ten (10) heirs of the Ibarra spouses. Subsequently, respondent siblings sold their 7/10 undivided share over the property in favor of their co-respondents, the spouses Recto and Rosemarie Candelario. By virtue of a Deed of Absolute Sale executed in favor of the spouses Candelario and an Agreement of Subdivision purportedly executed by them and petitioners, TCT No. 390484 was partially canceled and TCT No. 434304 was issued in the name of the Candelarios, covering the 7/10portion. Petitioners filed a complaint for Quieting of Title and Damages against respondents alleging that during their parents’ lifetime, the couple distributed their real and personal properties in favor of their ten (10) children. Upon distribution, they received the subject property and the house constructed thereon as their share. They likewise averred that they have been in adverse, open, continuous, and uninterrupted possession of the property for over four (4) decades and are, thus, entitled to equitable title thereto. Respondents countered that petitioners’ cause of action was already barred by estoppel when one of petitioners offered to buy the 7/10 undivided share of the respondent siblings. They point out that this is an admission on the part of petitioners that the property is not entirely theirs. Respondents sought, by way of counterclaim, the partition of the property. The quieting of title case was eventually raffled to Branch 68 of the court. During pre-trial, respondents, or defendants a quo, admitted having filed an action for partition, that petitioners did not participate in the Deed of Adjudication that served as the basis for the issuance of TCT No. 390484, and that the Agreement of Subdivision that led to the issuance of TCT No. 434304 in favor of respondent spouses Candelario was falsified. Despite the admissions of respondents, however, the RTC dismissed petitioners’ complaint. The court declared spouses Candelario as the absolute owners of the 7/10 portion of the subject lot and ordered the partition of the subject lots between the herein plaintiffs and the defendants-spouses Candelarios. Aggrieved, petitioners appealed the trial court’s decision to the CA, pleading the same allegations they averred in their underlying complaint for quieting of title. However, they added that the partition should no longer be allowed since it is already barred by res judicata, respondent siblings having already filed a case for partition that was dismissed with finality, as admitted by respondents themselves during pre-trial. The CA affirmed the Decision of the Regional Trial Court. Petitioners’ Motion for Reconsideration was likewise denied. Hence, the instant petition. Issue: Whether or not the respondents’ counterclaim for partition is already barred by res judicata. Ruling: No. The counterclaim for partition is not barred by prior judgment. In their answer to the counterclaim, petitioners countered that the action for partition has already been barred by res judicata. The doctrine of res judicata provides that the judgment in a first case is final as to the claim or demand in controversy, between the parties and those privy with them, not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which must have been offered for that purpose and all matters that could have been adjudged in that case. It precludes parties from relitigating issues actually litigated and determined by a prior and final judgment. As held in Yusingco v. Ong Hing Lian: It is a rule pervading every well-regulated system of jurisprudence, and is put upon two grounds embodied in various maxims of the common law; the one, public policy and necessity, which makes it to the interest of the state that there should be an end to litigation — republicae ut sit finis litium; the other, the hardship on the individual that he should be vexed twice for the same cause — nemo debet bis vexari et eadem causa. A contrary doctrine would subject the public peace and quiet to the will and neglect of individuals and prefer the gratitude identification of a litigious disposition on the part of suitors to the preservation of the public tranquility and happiness. The rationale for this principle is that a party should not be vexed twice concerning the same cause. Indeed, res judicata is a fundamental concept in the organization of every jural society, for not only does it ward off endless litigation, it ensures the stability of judgment and guards against inconsistent decisions on the same set of facts. There is res judicata when the following requisites are present: ( 1) the formal 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. In the case at bar, respondent siblings admit that they filed an action for partition docketed as Civil Case No. 02-52, which the RTC dismissed through an Order dated March 22, 2004 for the failure of the parties to attend the scheduled hearings. Respondents likewise admitted that since they no longer appealed the dismissal, the ruling attained finality. Moreover, it cannot be disputed that the subject property in Civil Case No. 02-52 and in the present controversy are one and the same, and that in both cases, respondents raise the same action for partition. And lastly, although respondent spouses Candelario were not party-litigants in the earlier case for partition, there is identity of parties not only when the parties in the case are the same, but also between those in privity with them, such as between their successors-in-interest.

With all the other elements present, what is left to be determined now is whether or not the dismissal of Civil case No. 02-52 operated as a dismissal on the merits that would complete the requirements of res judicata. In advancing their claim, petitioners cite Rule 17, Sec. 3 of the Rules of Court, to wit: Section 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. The afore-quoted provision enumerates the instances when a complaint may be dismissed due to the plaintiff's fault: (1) if he fails to appear on the date for the presentation of his evidence in chief on the complaint; (2) if he fails to prosecute his action for an unreasonable length of time; or (3) if he fails to comply with the Rules or any order of the court. The dismissal of a case for failure to prosecute has the effect of adjudication on the merits, and is necessarily understood to be with prejudice to the filing of another action, unless otherwise provided in the order of dismissal. Stated differently, the general rule is that dismissal of a case for failure to prosecute is to be regarded as an adjudication on the merits and with prejudice to the filing of another action, and the only exception is when the order of dismissal expressly contains a qualification that the dismissal is without prejudice. In the case at bar, petitioners claim that the Order does not in any language say that the dismissal is without prejudice and, thus, the requirement that the dismissal be on the merits is present. We have had the occasion to rule that dismissal with prejudice under the above-cited rule amply satisfies one of the elements of res judicata. It is, thus, understandable why petitioners would allege res judicata to bolster their claim. However, dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court cannot defeat the right of a co-owner to ask for partition at any time, provided that there is no actual adjudication of ownership of shares yet. Pertinent hereto is Article 494 of the Civil Code, which reads: Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of the thing owned in common, insofar as his share is concerned. Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may be extended by a new agreement. A donor or testator may prohibit partition for a period which shall not exceed twenty years. Neither shall there be any partition when it is prohibited by law. No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership. (emphasis supplied) From the above-quoted provision, it can be gleaned that the law generally does not favor the retention of co-ownership as a property relation, and is interested instead in ascertaining the co-owners’ specific shares so as to prevent the allocation of portions to remain perpetually in limbo. Thus, the law provides that each co-owner may demand at any time the partition of the thing owned in common. Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-owners under Art. 494 of the Civil Code, the latter must prevail. To construe otherwise would diminish the substantive right of a co-owner through the promulgation of procedural rules. Such a construction is not sanctioned by the principle, which is too well settled to require citation, that a substantive law cannot be amended by a procedural rule. This further finds support in Art. 496 of the New Civil Code, viz: Article 496.Partition may be made by agreement between the parties or by judicial proceedings. Partition shall be governed by the Rules of Court insofar as they are consistent with this Code. Thus, for the Rules to be consistent with statutory provisions, We hold that Art. 494, as cited, is an exception to Rule 17, Sec. 3 of the Rules of Court to the effect that even if the order of dismissal for failure to prosecute is silent on whether or not it is with prejudice, it shall be deemed to be without prejudice. This is not to say, however, that the action for partition will never be barred by res judicata. There can still be res judicata in partition cases concerning the same parties and the same subject matter once the respective shares of the co-owners have been determined with finality by a competent court with jurisdiction or if the court determines that partition is improper for co-ownership does not or no longer exists. So it was that in Rizal v. Naredo, We ruled in the following wise: Article 484 of the New Civil Code provides that there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. Thus, on the one hand, a co-owner of an undivided parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract. On the other hand, there is no coownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described. Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the coownership, and his proper remedy is an action for partition under Rule 69 of the Rules of Court, which he may bring at anytime in so far as his share is concerned. Article 1079 of the Civil Code defines partition as the separation, division and assignment of a thing held in common among those to whom it may belong. It has been held that the fact that the agreement of partition lacks the technical description of the parties’ respective portions or that the subject property was then still embraced by the same certificate of title could not legally prevent a partition, where the different portions allotted to each were determined and became separately identifiable. The partition of Lot No. 252 was the result of the approved Compromise Agreement in Civil Case No. 36-C, which was immediately final and executory. Absent any showing that said Compromise Agreement was vitiated by fraud, mistake or duress, the court cannot set aside a judgment based on compromise. It is axiomatic that a compromise agreement once approved by the court settles the rights of the parties and has the force of res judicata. It cannot be disturbed except on the ground of vice of consent or forgery. Of equal significance is the fact that the compromise judgment in Civil Case No. 36-C settled as well the question of which specific portions of Lot No. 252 accrued to the parties separately as their proportionate shares therein. Through their subdivision survey plan, marked as Annex "A" of the Compromise Agreement and made an integral part thereof, the parties segregated and separately assigned to themselves distinct portions of Lot No. 252. The partition was immediately executory, having been accomplished and completed on December 1, 1971 when judgment was rendered approving the same. The CA was correct when it stated that no co-ownership exist when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described. (emphasis supplied) In the quoted case, We have held that res judicata applied because after the parties executed a compromise agreement that was duly approved by the court, the

5 different portions of the owners have already been ascertained. Thus, there was no longer a co-ownership and there was nothing left to partition. This is in contrast with the case at bar wherein the co-ownership, as determined by the trial court, is still subsisting 30-70 in favor of respondent spouses Candelario. Consequently, there is no legal bar preventing herein respondents from praying for the partition of the property through counterclaim.