G.R. No. L-29802 - Perez vs. Perez

On August 23, 1965, the plaintiffs filed a complaint in the Court of First Instance of Davao, Branch III (Civil Case No. 4784).
The complaint sought the declaration of nullity of contract, an accounting of farm products, and damages against the defendants.
Following the filing, the defendants answered the complaint and raised the defense that the cause of action had prescribed, invoking the statute of limitations.

The case was set for trial on the merits on February 15, 1967.
The plaintiffs and their counsel failed to appear despite being duly notified, leading the court to issue an order dismissing the complaint on the ground of nonappearance.
Subsequently, the plaintiffs filed a motion for reconsideration of the dismissal on March 10, 1967, which was denied by the trial court.

On July 28, 1967, the plaintiffs refiled their complaint in the Court of First Instance of Davao, Branch II (Civil Case No. 5670), presenting substantially the same allegations against the same defendants.
The defendants moved to dismiss the new complaint based on the doctrine of res judicata, arguing that the earlier dismissal in Civil Case No. 4784 (alleged to have been rendered with prejudice) constituted an adjudication on the merits.

The February 15, 1967 order by Judge Manases G. Reyes stated: “For failure of the plaintiffs and their counsel to appear, notwithstanding notice, the complaint is hereby dismissed. Defendants counterclaim is likewise dismissed without prejudice.”
The trial court’s interpretation was that the dismissal of the complaint was with prejudice, while the “without prejudice” qualifier applied only to the defendants’ counterclaim.
The subsequent motion for reconsideration clarified that the dismissal was intended to be without prejudice, thereby leaving open the opportunity for refiling or appeal.

The court noted that, apart from the misinterpretation of the dismissal order, the failure to appear was due to the negligence of the plaintiffs’ lawyer who did not record the correct trial date in his diary.
It was emphasized that the case had never been tried on the merits, and that the relief of a postponement could have been granted, considering that the dismissal without prejudice preserved the possibility of a future trial.
The court underscored the principle that judicial discretion in postponement and continuances should align with the ends of justice and fairness, particularly when no substantial rights are affected.

Whether the dismissal of the complaint in Civil Case No. 4784 was rendered with prejudice, thereby constituting an adjudication on the merits that bars the subsequent complaint in Civil Case No. 5670 under the doctrine of res judicata.

Whether the proper interpretation of the February 15, 1967 dismissal order, in light of the subsequent motion for reconsideration, should render the dismissal without prejudice, thus allowing the case to be refiled or further litigated.

Whether the failure of the plaintiffs to appear at the scheduled trial, attributed to the negligence of their counsel, justifies a dismissal with prejudice or rather merits a more equitable remedy such as dismissal without prejudice.