Case Summary (G.R. No. 180203)
Antecedent Facts
PNB and Daradar executed a Deed of Promise to Sell covering two parcels owned by PNB. PNB issued a Notarial Notice of Rescission on November 27, 1989 because Daradar failed to pay yearly amortizations and interest. Daradar then filed Civil Case No. 21375 in the RTC seeking annulment of the notarial rescission, accounting, and damages; the case was raffled to Branch 24.
Early Trial-Court Dispositions and Subsequent Filing
Due to Daradar’s failure to appear at a scheduled hearing, the RTC issued an April 5, 1995 Order provisionally dismissing Civil Case No. 21375 “without prejudice.” No motion for reconsideration was filed. Four years later the RTC, motu proprio, issued a June 17, 1999 Order finally dismissing Civil Case No. 21375 for failure to prosecute pursuant to Rule 17, Section 3 of the Rules of Court. Daradar then filed a new complaint on October 18, 1999, which became Civil Case No. 25981 (raffled to Branch 22).
RTC Ruling on Res Judicata in Civil Case No. 25981
PNB was properly served and moved to dismiss Civil Case No. 25981 on res judicata grounds, asserting that the Second Order dismissing Civil Case No. 21375 operated as an adjudication on the merits and therefore barred refiling. The RTC, in its January 27, 2000 Order, granted PNB’s motion and dismissed the complaint. Daradar’s motion for reconsideration was denied on March 14, 2000, and he appealed to the Court of Appeals.
Court of Appeals Decision
The Court of Appeals, in its June 8, 2007 Decision, granted Daradar’s appeal, set aside the RTC’s January 27, 2000 Order, and reinstated the complaint in Civil Case No. 25981. The CA reasoned that the April 5, 1995 First Order provisionally dismissing Civil Case No. 21375 divested the trial court of jurisdiction, rendering the June 17, 1999 Second Order null and void for lack of jurisdiction; consequently, the CA held the Second Order did not operate as adjudication on the merits and did not bar the new suit. The CA denied PNB’s motion for reconsideration in a September 19, 2007 Resolution.
Issue Presented to the Supreme Court
Whether the Court of Appeals erred in reinstating the complaint in Civil Case No. 25981 on the ground that it was not barred by res judicata, given the prior provisional dismissal (First Order) and the trial court’s subsequent final dismissal (Second Order) of Civil Case No. 21375 for failure to prosecute.
Supreme Court Holding — Disposition
The Supreme Court granted PNB’s petition, reversed and set aside the CA’s June 8, 2007 Decision and September 19, 2007 Resolution, and reinstated the RTC’s January 27, 2000 Order dismissing Civil Case No. 25981. The Court concluded that the First Order was void for lack of legal basis and that the Second Order was a valid, final dismissal on the merits that barred the refiling of the same cause of action.
Legal Analysis — Provisional Dismissal, Interlocutory Orders, and Voidness
The Court explained that the Rules of Civil Procedure do not provide for a “provisional dismissal” of civil cases; the concept of a provisional dismissal properly belongs in criminal procedure. A judgment or order in a civil case must be definitive. The April 5, 1995 First Order, styled a “provisional dismissal,” lacked legal basis and was therefore void and without legal effect. The Court noted precedent holding that judgments lacking definitiveness are null and void (Cu Unjieng), and a void order is non-existent in contemplation of law and does not divest the trial court of jurisdiction. The Court further observed historical authority equating a provisional order with an interlocutory order, and concluded that even if the First Order were treated as interlocutory, it did not finally dispose of the case and therefore could not have divested the court of jurisdiction prior to the Second Order.
Legal Analysis — Finality of the Second Order and Failure to Prosecute
The RTC’s June 17, 1999 Second Order dismissing Civil Case No. 21375 for failure to prosecute was issued under Rule 17, Section 3, which authorizes dismissal when a plaintiff inexcusably fails to prosecute the action and provides that such dismissal “shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.” The Supreme Court emphasized that once a judgment becomes final and executory, it cannot be amended or revoked except in limited circumstances (clerical errors, nunc pro tunc entries, or when the judgment is void). Because Daradar did not seek reconsideration nor appeal the Second Order, that order attained finality. The Court found no abuse of discretion in the trial court’s dismissal, given the record of inaction: Daradar allowed four years to lapse after the First Order and did not challenge the Second Order, and then waited another four years before filing a new complaint. The Court cited prio
...continue readingCase Syllabus (G.R. No. 180203)
Case Caption and Source
- Supreme Court, Third Division, G.R. No. 180203, Decision promulgated June 28, 2021; penned by Justice Hernando.
- Petition for Review on Certiorari by petitioner Philippine National Bank (PNB) challenging: (a) Court of Appeals (CA) Decision dated June 8, 2007 and (b) CA Resolution dated September 19, 2007 in CA-G.R. CV No. 71029.
- Case below involved Civil Case No. 25981 (action for nullity of notarial rescission of a Deed of Sale) in the Regional Trial Court (RTC) of Iloilo City, Branch 22.
- Parties: petitioner Philippine National Bank (PNB) and respondent Romeo B. Daradar (Daradar).
Antecedent Facts
- PNB and Daradar entered into a Deed of Promise to Sell covering two parcels of land and improvements owned by PNB.
- Daradar failed to pay yearly amortizations and interest due under the Deed.
- PNB issued a Notarial Notice of Rescission dated November 27, 1989, rescinding the Deed.
- Daradar filed an action for Annulment of Rescission, Accounting and Damages against PNB in the RTC of Iloilo City, docketed as Civil Case No. 21375 and raffled to Branch 24.
- Due to Daradar’s failure to appear at a scheduled hearing, the RTC issued an April 5, 1995 Order (referred to in the decision as the "First Order") provisionally dismissing Civil Case No. 21375 without prejudice.
- No motion for reconsideration was filed by Daradar against the April 5, 1995 Order.
- On June 17, 1999 the RTC, motu proprio, issued a Second Order finally dismissing Civil Case No. 21375 for failure to prosecute under Section 3, Rule 17 of the Rules of Court, in view of Daradar’s failure to reinstate or revive the case after more than four years from the first dismissal.
- On October 18, 1999 Daradar filed a new complaint for declaration of nullity of the notarial rescission of the Deed; this was docketed as Civil Case No. 25981 and raffled to Branch 22 of the RTC.
Procedural History — RTC Rulings in Civil Case No. 25981
- Summons was properly served on PNB.
- PNB moved to dismiss Civil Case No. 25981 on grounds that the Second Order dismissing Civil Case No. 21375 was an adjudication on the merits and therefore constituted res judicata barring the new action.
- RTC, Branch 22, issued an Order dated January 27, 2000 granting PNB’s motion to dismiss on the ground of res judicata, holding that the prior dismissal (Second Order) had the effect of adjudication upon the merits pursuant to Section 3, Rule 17, without prejudice to PNB’s counterclaim.
- The RTC’s dispositive language read: “WHEREFORE, in view of the foregoing, the Complaint is hereby ordered DISMISSED. No pronouncement as to costs. IT IS SO ORDERED.”
- Daradar filed a motion for reconsideration which the RTC denied in its March 14, 2000 Order.
- Daradar appealed the dismissal to the Court of Appeals.
Court of Appeals Ruling (June 8, 2007) and Subsequent Resolution
- The CA, in its June 8, 2007 Decision, granted Daradar’s appeal, set aside the RTC’s January 27, 2000 Order, and reinstated the complaint in Civil Case No. 25981, directing the trial court to conduct further proceedings.
- The CA’s rationale: the First Order (April 5, 1995) provisionally dismissing Civil Case No. 21375 divested the trial court of jurisdiction; consequently, the June 17, 1999 Second Order, which purported to dismiss Civil Case No. 21375 with prejudice, was null and void for lack of jurisdiction and could not bind Daradar or prevent him from filing another complaint.
- PNB moved for reconsideration of the CA Decision; the CA denied the motion in its September 19, 2007 Resolution.
- PNB filed the present Petition for Review on Certiorari to the Supreme Court.
Issue Presented to the Supreme Court
- Whether the Court of Appeals erred in reinstating the complaint in Civil Case No. 25981 on the ground that the action was not barred by res judicata—specifically, whether:
- the First Order (April 5, 1995) was merely interlocutory and not a final order, and
- the Second Order (June 17, 1999) finally dismissing Civil Case No. 21375 for failure to prosecute operated as an adjudication on the merits that barred refiling and thus rendered Civil Case No. 25981 res judicata.
Parties’ Positions before the Supreme Court
- PNB’s Contentions:
- The First Order was interlocutory (a dismissal without prejudice) and did not terminate proceedings.
- The Second Order finally dismissed Civil Case No. 21375 for failure to prosecute and thus constituted an adjudication on the merits, barring Daradar from refiling the same cause of action.
- The Second Order had become final and immutable; the trial court did not lack jurisdiction in issuing it.
- Daradar’s Contentions:
- The First Order dismissed Civil Case No. 21375 without prejudice and therefore did not bar the filing of Civil Case No. 25