BANK OF THE PHILIPPINE ISLANDS, PETITIONER, VS. SPOUSES ROBERTO AND TERESITA GENUINO, RESPONDENTS, G.R. No. 208792, July 22, 2015. - The Lawyer's Trust.
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The trial court dismissed the Complaint pursuant to Rule 17, Section 3 of the Rules of Court. This dismissal operated as an adjudication on the merits:
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. (Emphasis supplied)
A.M. No. 03-1-09-SC entitled 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 took effect on August 16, 2004. This provides that:
A. Civil Cases
Within five (5) days from date of filing of the reply, the plaintiff must promptly move ex parte that the case be set for pre-trial conference. If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial.1 (Emphasis supplied, citations omitted).
Respondents Spouses Genuino cannot rely on Olave v. Mistas as this involved a trial court Order dated October 20, 1997 dismissing the Complaint with prejudice.2 The facts in Olave took place before the effectivity of A.M. No. 03-1-09-SC on August 16, 2004.
Espiritu, et al. v. Lazaro, et al. quoted by petitioner Bank of the Philippine Islands “clarified the application of [A.M.] No. 03-l-09[-SC] to cases filed after its effectivity on August 16, 2004”:3
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.
Since the incidents occurred prior to the effectivity of A.M. No. 03-1-09-SC on August 16, 2004, the guidelines stated therein should not be made applicable to this case. Instead, the prevailing rule and jurisprudence at that time should be utilized in resolving the case.
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.4 (Emphasis supplied, citation omitted)
Nevertheless, nowhere in the text of A.M. No. 03-1-09-SC does it remove the plaintiff’s duty under Rule 18, Section 1 of the Rules of Court to set the case for pre-trial after the last pleading has been served and filed. Nowhere does it repeal Rule 17, Section 3 of the Rules of Court that allows dismissals due to plaintiff’s fault, including plaintiff’s failure to comply with the Rules for no justifiable cause. Nowhere does it impose a sole burden on the trial court to set the case for pre-trial.
Reading A.M. No. 03-1-09-SC together with Rule 17, Section 3 and Rule 18, Section 1 of the Rules of Court accommodates the outright dismissal of a complaint upon plaintiff’s failure to show justifiable reason for not setting the case for pre-trial within the period provided by the Rules. Thus, trial courts must consider the facts of each case.
This court has allowed cases to proceed despite failure by the plaintiff to promptly move for pre-trial when it finds that “the extreme sanction of dismissal of the complaint might not be warranted”:5
It must be stressed that even if the plaintiff fails to promptly move for pre-trial without any justifiable cause for such delay, the extreme sanction of dismissal of the complaint might not be warranted if no substantial prejudice would be caused to the defendant, and there are special and compelling reasons which would make the strict application of the rule clearly unjustified.
While “heavy pressures of work” was not considered a persuasive reason to justify the failure to set the case for pre-trial in Olave v. Mistas, however, unlike the respondents in the said case, herein respondent never failed to comply with the Rules of Court or any order of the trial court at any other time. Failing to file a motion to set the case for pre-trial was her first and only technical lapse during the entire proceedings. Neither has she manifested an evident pattern or a scheme to delay the disposition of the case nor a wanton failure to observe the mandatory requirement of the rules. Accordingly, the ends of justice and fairness would best be served if the parties are given the full opportunity to litigate their claims and the real issues involved in the case are threshed out in a full-blown trial. Besides, petitioners would not be prejudiced should the case proceed as they are not stripped of any affirmative defenses nor deprived of due process of law.
This is not to say that adherence to the Rules could be dispensed with. However, exigencies and situations might occasionally demand flexibility in their application. Indeed, on several occasions, the Court relaxed the rigid application of the rules of procedure to afford the parties opportunity to fully ventilate the merits of their cases. This is in line with the time-honored principle that cases should be decided only after giving all parties the chance to argue their causes and defenses. Technicality and procedural imperfection should thus not serve as basis of decisions.
Finally, A.M. No. 03-1-09-SC or the new Guidelines To Be Observed By Trial Court Judges And Clerks Of Court In The Conduct Of Pre-Trial And Use Of Deposition-Discovery Measures, which took effect on August 16, 2004, aims 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. A.M. No. 03-1-09-SC states that: Within five (5) days from date of filing of the reply, the plaintiff must promptly move ex-parte that the case be set for pre-trial conference. If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial.6 As such, the clerk of court of Branch 17 of the Regional Trial Court of Malolos should issue a notice of pre-trial to the parties and set the case for pre-trial. (Emphasis supplied, citations omitted)
On the other hand, this court has sustained dismissals due to plaintiff’s fault after finding that plaintiff’s failure to prosecute or comply with the rules was without justifiable reason. The Court of Appeals Decision cited Spouses Zarate v. Maybank Philippines, Inc.7 and Eloisa Merchandising, Inc. v. Banco de Oro Universal Bank8 on the need for vigilance in prosecuting one’s case, and Regner v. Logarta9 on the right to speedy trial.10
In Zarate, the trial court “dismiss[ed] the complaint for lack of interest to prosecute the case.”11 Pre-trial and presentation of evidence-in-chief were reset several times due to plaintiff spouses’ and/or their counsel’s failure to appear, without offering any explanation for most of their absences.12 This court sustained the trial court’s dismissal of the complaint after finding that “petitioners inexorably delayed the trial of the case without any justifiable reasons[.]”13
In Eloisa Merchandising, Inc., the case “had been at the pre-trial stage for more than two years and petitioners have not shown special circumstances or compelling reasons to convince [this court] that the dismissal of their complaint for failure to prosecute was unjustified.”14 The case remained at pre-trial stage when A.M. No. 03-1-09-SC took effect.15 The trial court already dismissed the complaint twice due to petitioners’ non-appearance at pre-trial.16 This court sustained the third dismissal since “despite the trial court’s leniency and admonition, petitioners continued to exhibit laxity and inattention in attending to their case.”17
This court discussed that “[w]hile under the present Rules, it is now the duty of the clerk of court to set the case for pre-trial if the plaintiff fails to do so within the prescribed period, this does not relieve the plaintiff of his own duty to prosecute the case diligently.”18
Regner does not involve the non-filing of a motion to set case for pre-trial, but the failure to serve summons on respondents in a Complaint for declaration of nullity of deed of donation filed in June 1999.19
Nevertheless, we can apply by analogy Regner‘s, ruling that “[although Section 1, Rule 14 of the Rules imposes upon the clerk of court the duty to serve summons, this does not relieve the petitioner of her own duty as the plaintiff in a civil case to prosecute the case diligently[,] [and] [i]f the clerk had been negligent, it was petitioner’s duty to call the court’s attention to that fact.”20 A plaintiff’s failure to vigilantly pursue his or her case also affects respondent’s right to speedy trial.21
The Court of Appeals Decision discussed that petitioner Bank of the Philippine Islands “cannot simply ‘fold its hands’ and say that it was the duty of the clerk of court to set the case for pre-trial for the prompt disposition of its case.”22
Trial courts should be more proactive in ensuring the progression of cases to pre-trial considering the significance of this stage in civil actions:
Pre-trial is an answer to the clarion call for the speedy disposition of cases. Although it was discretionary under the 1940 Rules of Court, it was made mandatory under the 1964 Rules and the subsequent amendments in 1997. Hailed as “the most important procedural innovation in Anglo-Saxon justice in the nineteenth century,” pre-trial seeks to achieve the following:
(a) The possibility of an amicable settlement or of a submission to alternative modes of dispute resolution;
(b) The simplification of the issues;
(c) The necessity or desirability of amendments to the pleadings:
(d) The possibility of obtaining stipulations or admissions of facts and of documents to avoid unnecessary proof;
(e) The limitation of the number of witnesses;
(f) The advisability of a preliminary reference of issues to a commissioner;
(g) The propriety of rendering judgment on the pleadings, or summary judgment, or of dismissing the action should a valid ground therefor be found to exist;
(h) The advisability or necessity of suspending the proceedings; and
(i) Such other matters as may aid in the prompt disposition of the action.23
Pre-trial promotes efficiency of case proceedings by allowing the parties to stipulate on facts and admissions that no longer need proof, and to agree on key issues, among others. It protects the right to speedy trial without compromising substantive justice.
A.M. No. 03-1-09-SC upholds this purpose in requiring the Clerk of Court to issue a notice of pre-trial “[i]f the plaintiff fails to file [the] said motion [to set case for pre-trial] within the given period[.]”24
However, petitioner Bank of the Philippine Islands also has the duty to set the case for pre-trial after the last pleading has been served and filed,25 and to diligently pursue its case and comply with the rules. Failure to do so without justifiable cause warrants an outright dismissal of the Complaint.26
Petitioner Bank of the Philippine Islands’ explanation of misfiling by previous counsel’s secretary of the case records together with terminated cases in the office bodega cannot be considered as justifiable cause for its failure to set the case for pre-trial. This court has held that “a counsel is required to inquire, from time to time, and whenever necessary, about the status of handled cases, as well as motions filed for a client.”27 Also, petitioner Bank of the Philippine Islands is one of the oldest and more established banks in the country. There is reasonable expectation that it has the necessary organizational structures, system flows, and procedures to address urgent matters and meet litigation deadlines.
Between the parties, petitioner Bank of the Philippine Islands is in a better position to bear the costs of a procedural misstep of its own doing as compared with respondents Spouses Genuine The bank may have had its reasons to waive payment or the pursuit of its claims. For instance, it could have weighed that the costs of pursuing its litigation against respondents Spouses Genuino outweigh the potential benefits. It could be that their business with the bank was far more valuable than the incidental rupture in their relationship caused by this transaction. In all these possible cases, respondents Spouses Genuino and other debtors have a right to rely on the non-action of the plaintiff. In their view, the non-filing of the basic motion for setting of pre-trial would have been, at best, a reasonable economic signal that the bank was no longer interested. At worse, it was clearly negligence of an entity with enough institutional resources to maintain a large arsenal of in-house and external counsel. The bank’s explanation for its own negligence is unavailing. While it is true that A.M. No. 03-1-09-SC does provide that the Clerk of Court set the date of pre-trial,28 plaintiff should not be rewarded for his or her negligence.
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