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592 SUPREMECOURTREPORTSANNOTATED

RizalCommercialBankingCorporationvsMagwinMarketing
Corporation
*
G.R.No.152878.May5,2003.

RIZAL COMMERCIAL BANKING CORPORATION, petitioner,


vs. MAGWIN MARKETING CORPORATION, NELSON TIU,
BENITOSYandANDERSONUY,respondents.

ActionsDismissalsofCasesRefilingofCasesDocketFees Plead
ingsandPracticeThe procedure for dismissed cases where refiled is the
same as though it was initially lodged, i.e., the filing of answer, reply,
answer to counterclaim, including other footdragging maneuvers, except
fortherigmaroleofrafflingcaseswhichisdispensedwithsincetherefiled
complaintisautomaticallyassignedtothebranchtowhichtheoriginalcase
pertaineda complaint that is refiled leads to the reenactment of past
proceedings with the concomitant full attention of the same trial court
exercisinganimmaculateslewofjurisdictionandcontroloverthecasethat
was previously dismissed.On the task at hand, we see no reason why
RTCBr. 135 of Makati City should stop short of hearing the civil case on
the merits. There is no substantial policy worth pursuing by requiring
petitioner to pay again the docket fees when it has already discharged this
obligationsimultaneouslywiththefilingofthecomplaintforcollectionofa
sumofmoney.Theprocedurefordismissedcaseswhenrefiledisthesame
asthoughitwasinitiallylodged,i.e.,thefilingofanswer,reply,

_______________

*SECONDDIVISION.

593

VOL.402,MAY5,2003 593

RizalCommercialBankingCorporationvs.MagwinMarketing
Corporation
answer to counterclaim, including other footdragging maneuvers, except
fortherigmaroleofrafflingcaseswhichisdispensedwithsincetherefiled
complaintisautomaticallyassignedtothebranchtowhichtheoriginalcase
pertained. A complaint that is refiled leads to the reenactment of past
proceedings with the concomitant full attention of the same trial court
exercising an immaculate slew of jurisdiction and control over the case that
waspreviouslydismissed,whichinthecontextoftheinstantcaseisawaste
ofjudicialtime,capitalandenergy.
SameSameSameSame Once the dismissal attains the attribute of
finality, the trial court cannot impose legal fees anew because a final and
executory dismissal although without prejudice divests the trial court of
jurisdictionoverthecivilcase.Theadditionofthesecondsentenceinthe
secondparagraphdoesnotchangetheabsolutenullificationofthedismissal
without prejudice decreed in the first paragraph. The sentence [f]ailure on
the part of plaintiff to submit the said agreement shall cause the imposition
of payment of the required docket fees for refiling of this case is not a
directivetopaydocketfeesbutonlyastatementoftheeventthatmayresult
in its imposition. The reason for this is that the trial court could not have
possibly made such payment obligatory in the same civil case, i.e., Civil
Case No. 99518, since docket fees are defrayed only after the dismissal
becomes final and executory and when the civil case is refiled. It must be
emphasized however that once the dismissal attains the attribute of finality,
the trial court cannot impose legal fees anew because a final and executory
dismissal although without prejudice divests the trial court of jurisdiction
overthecivilcaseaswellasanyresidualpowertoorderanythingrelativeto
the dismissed case it would have to wait until the complaint is docketed
onceagain.Ontheotherhand,ifwearetoconcedethatthetrialcourtretains
jurisdictionoverCivilCaseNo.99518forittoissuetheassailedOrders,a
continuation of the hearing thereon would not trigger a disbursement for
docket fees on the part of petitioner as this would obviously imply the
settingasideoftheorderofdismissalandthereinstatementofthecomplaint.
SameSame Words and Phrases A final order issued by a court
has been defined as one which disposes of the subject matter in its entirety
or terminates a particular proceeding or action, leaving nothing else to be
done but to enforce by execution what has been determined by the court,
while an interlocutory order is one which does not dispose of a case
completelybutleavessomethingmoretobedecidedupon.Thesameistrue
with the Order of 16 November 2000 denying due course to petitioners
Notice of Appeal. There would have been no basis for such exercise of
discretion because the jurisdiction of the court a quo over the civil case
would have been discharged and terminated by the presumed dismissal
thereof.Moreover,wenotethegroundfordenyingduecoursetotheappeal:
theOrdersdated8September2000and6November2000arein

594
594 SUPREMECOURTREPORTSANNOTATED

RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

terlocutory orders and therefore, no appeal may be taken from x x x. This


declarationstronglysuggeststhatsomethingmorewastobeaccomplishedin
the civil case, thus negating the claim that the Order of dismissal without
prejudice was resurrected upon the parties failure to yield a compromise
agreement.Afinalorderissuedbyacourthasbeendefinedasonewhich
disposes of the subject matter in its entirety or terminates a particular
proceeding or action, leaving nothing else to be done but to enforce by
execution what has been determined by the court, while an interlocutory
order is one which does not dispose of a case completely but leaves
somethingmoretobedecidedupon.
SameSameAlternativeDisputeResolutionCompromiseAgreements
Thepropercourseofactionthatshouldhavebeentakenbythecourtaquo,
uponmanifestationofthepartiesoftheirwillingnesstodiscussasettlement,
is to suspend the proceedings and allow them reasonable time to come to
terms While the rules allow the trial court to suspend its proceedings
consistentwiththepolicytoencouragetheuseofalternativemechanismsof
disputeresolution,thegranttothepartiesofonly15daystoconcludeadeal
is,tosaytheleast,apassiveandpaltryattemptofthecourtaquoinitstask
of persuading litigants to agree upon a reasonable concession.As also
explainedtherein,thepropercourseofactionthatshouldhavebeentakenby
the court a quo, upon manifestation of the parties of their willingness to
discuss a settlement, was to suspend the proceedings and allow them
reasonable time to come to terms (a) If willingness to discuss a possible
compromiseisexpressedbyoneorbothpartiesor(b)Ifitappearsthatone
oftheparties,beforethecommencementoftheactionorproceeding,offered
to discuss a possible compromise but the other party refused the offer,
pursuanttoArt.2030oftheCivilCode.Ifdespiteeffortsexertedbythetrial
court and the parties the negotiations still fail, only then should the action
continue as if no suspension had taken place. Ostensibly, while the rules
allowthetrialcourttosuspenditsproceedingsconsistentwiththepolicyto
encourage the use of alternative mechanisms of dispute resolution, in the
instantcase,thetrialcourtonlygavethepartiesfifteen(15)daystoconclude
adeal.Thiswas,tosaytheleast,apassiveandpaltryattemptofthecourta
quoinitstaskofpersuadinglitigantstoagreeuponareasonableconcession.
Hence, if only to inspire confidence in the pursuit of a middle ground
between petitioner and respondents, we must not interpret the trial courts
Orders as dismissing the action on its own motion because the parties,
specificallypetitioner,wereanxioustolitigatetheircaseasexhibitedintheir
severalmanifestationsandmotions.
SameSameAcomplaintmaybedismissedduetoplaintiffsfault:(a)
ifhefailstoappearduringascheduledtrial,especiallyonthedateforthe
presentationofhisevidenceinchief,orwhensorequiredatthepretrial(b)
ifheneglectstoprosecutehisactionforanunreasonablelengthof
595

VOL.402,MAY5,2003 595

RizalCommercialBankingCorporationvs.MagwinMarketing
Corporation

timeor(c)ifhedoesnotcomplywiththerulesoranyorderofthecourt.
We also find nothing in the record to support respondent Uys conclusion
that petitioner has been mercilessly delaying the prosecution of Civil Case
No. 99518 to warrant its dismissal. A complaint may be dismissed due to
plaintiffs fault: (a) if he fails to appear during a scheduled trial, especially
onthedateforthepresentationofhisevidenceinchief,orwhensorequired
atthepretrial(b)ifheneglectstoprosecutehisactionforanunreasonable
lengthoftimeor(c)ifhedoesnotcomplywiththerulesoranyorderofthe
court.Noneofthesewasobtaininginthecivilcase.
Same Same To constitute a sufficient ground for dismissal, the
inattention of plaintiff to pursue his cause must not only be prolonged but
also be unnecessary and dilatory resulting in the trifling of judicial
processes. Admittedly, delay took place in this case but it was not an
interruptionthatshouldhaveentailedthedismissalofthecomplaintevenif
such was designated as without prejudice. To constitute a sufficient ground
for dismissal, the inattention of plaintiff to pursue his cause must not only
beprolongedbutalsobeunnecessaryanddilatoryresultinginthetriflingof
judicialprocesses.Intheinstantcase,theadjournmentwasnotonlyfleeting
as it lasted less than six (6) months but was also done in good faith to
accommodate respondents incessant pleas to negotiate. Although the
dismissalofacaseforfailuretoprosecuteisamatteraddressedtothesound
discretion of the court, that judgment however must not be abused. The
availability of this recourse must be determined according to the procedural
history of each case, the situation at the time of the dismissal, and the
diligence of plaintiff to proceed therein. Stress must also be laid upon the
officialdirectivethatcourtsmustendeavortoconvincepartiesinacivilcase
to consummate a fair settlement,and to mitigate damages to be paid by the
losing party who has shown a sincere desire for such giveandtake. All
things considered, we see no compelling circumstances to uphold the
dismissalofpetitionerscomplaintregardlessofitscharacterizationasbeing
withoutprejudice.
Same Same A court may dismiss a case on the ground of non
prosequitur but the real test of the judicious exercise of such power is
whetherunderthecircumstancesplaintiffischargeablewithwantoffitting
assiduousness in not acting on his complaint with reasonable promptitude.
Infine,petitionercannotbesaidtohavelostinterestinfightingthecivil
case to the end. A court may dismiss a case on the ground of non
prosequitur but the real test of the judicious exercise of such power is
whether under the circumstances plaintiff is chargeable with want of fitting
assiduousness in not acting on his complaint with reasonable promptitude.
Unless a partys conduct is so indifferent, irresponsible, contumacious or
slothful as to provide substantial grounds for dismissal, i.e., equivalent to
default or nonappearance in the case, the courts should consider lesser
sanctions which would still amount to achieving the desired end. In the
absenceofa

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RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

patternorschemetodelaythedispositionofthecaseorofawantonfailure
toobservethemandatoryrequirementoftherulesonthepartoftheplaintiff,
asinthecaseatbar,courtsshoulddecidetodispenseratherthanwieldtheir
authoritytodismiss.
SameSamePreTrialBy means of pretrial, the trial court is fully
empowered to sway the litigants to agree upon some fair compromise.
Clearly,anothercreativeremedywasavailabletothecourtaquotoattaina
speedy disposition of Civil Case No. 99518 without sacrificing the course
ofjustice.Sincethefailureofpetitionertosubmitacompromiseagreement
wastherefusalofjustoneofhereinrespondents,i.e.,BenitoSy,tosignhis
name on the conforme of the loan restructure documents, and the common
concernofthecourtsaquowasdispatchintheproceedings,theholdingofa
pretrialconferencewasthebestsuitedsolutiontotheproblemasthisstage
in a civil action is where issues are simplified and the dispute quickly and
genuinely reconciled. By means of pretrial, the trial court is fully
empoweredtoswaythelitigantstoagreeuponsomefaircompromise.
SameSameDismissing the civil case and compelling the plaintiff to
refileitscomplaintisadangerous,costlyandcircuitousroutethatmayend
up aggravating, not resolving, the disagreementinconsiderate dismissals,
even if without prejudice, do not constitute a panacea nor a solution to the
congestion of court dockets.Dismissing the civil case and compelling
petitionertorefileitscomplaintisadangerous,costlyandcircuitousroute
that may end up aggravating, not resolving, the disagreement. This case
management strategy is frighteningly deceptive because it does so at the
expenseofpetitionerwhosecauseofaction,perhaps,mayhavealreadybeen
admittedbyitsadversepartiesasshownbythree(3)offour(4)defendants
not willing to contest petitioners allegations, and more critically, since this
approach promotes the useless and thankless duplication of hard work
already undertaken by the trial court. As we have aptly observed,
[i]nconsiderate dismissals, even if without prejudice, do not constitute a
panaceanorasolutiontothecongestionofcourtdockets.Whiletheylenda
deceptive aura of efficiency to records of individual judges, they merely
postponetheultimatereckoningbetweentheparties.Intheabsenceofclear
lack of merit or intention to delay, justice is better served by a brief
continuance,trialonthemerits,andfinaldispositionofthecasesbeforethe
court.

PETITIONforreviewoncertiorariofadecisionoftheCourtof
Appeals.

ThefactsarestatedintheopinionoftheCourt.
SiguionReyna,MontecilloandOngsiakoforpetitioner.

597

VOL.402,MAY5,2003 597
RizalCommercialBankingCorporationvs.MagwinMarketing
Corporation

Sycip,Salazar,HernandezandGatmaitanforrespondentA.Uy.
ErnestS.Ang,Jr.forprivaterespondents.

BELLOSILLO,J.:

WEAREPERTURBEDthatthiscaseshoulddragthisCourtinthe
banalattemptstodecipherthehazyandconfusedintentofthetrial
court in proceeding with what would have been a simple,
straightforward and hardly arguable collection case. Whether the
dismissal without prejudice for failure to prosecute was
unconditionallyreconsidered,reversedandsetasidetoreinstatethe
civil case and have it ready for pretrial are matters which should
havebeenclarifiedandresolvedinthefirstinstancebythecourta
quo. Unfortunately, this feckless imprecision of the trial court
became the soup stock of the parties and their lawyers to further
delaythecasebelowwhentheycouldhaveotherwiseputthingsin
properorderefficientlyandeffectively.
On 4 March 1999 petitioner Rizal Commercial Banking
Corporation (RCBC) filed a complaint for recovery of a sum of
money with prayer for a writ of preliminary attachment against
respondentsMagwinMarketingCorporation,NelsonTiu,BenitoSy
1
andAndersonUy.2
On26April1999,thetrialcourtissuedawritof
attachment. On4June1999thewritwasreturnedpartiallysatisfied
sinceonlyaparceloflandpurportedlyownedbydefendantBenito
3
Sywasattached. Inthemeantime,summonswasservedoneachof
the defendants, respondents herein, who filed their respective
answers, except for defendant Gabriel Cheng who was dropped
without prejudice
4
as partydefendant as his whereabouts could not
be located. On 21 September 1999 petitioner moved for an alias
writ 5of attachment which on 18 January 2000 the court a quo de
nied.
_______________

1DocketedasCivilCaseNo.99518,Rizal Commercial Banking Corporation v.

Magwin Marketing Corporation, et al., which was raffled to RTCBr. 135, Makati
CityRollo,p.4.
2CARecord,p.234.

3Id.,atp.237.

4Id.,atp.7.

5Id.,atp.237.

598

598 SUPREMECOURTREPORTSANNOTATED
RizalCommercialBankingCorporationvsMagwinMarketing
Corporation
6
Petitionerdidnotcausethecasetobesetforpretrial. Foraboutsix
(6) months thereafter, discussions between petitioner and
respondentsMagwinMarketingCorporation,NelsonTiu,BenitoSy
and Anderson Uy, as parties in Civil Case No. 99518, were
undertaken to restructure
7
the indebtedness of respondent Magwin
MarketingCorporation. On9May2000petitionerapprovedadebt
payment scheme for the corporation which on 15 May 2000 was
communicatedtothelatterbymeansofaletterdated10May2000
for the conformity of its officers, i.e., respondent Nelson Tiu as
President/General Manager of Magwin Marketing8
Corporation and
respondentBenitoSyasDirectorthereof. Only respondent Nelson
Tiuaffixedhissignatureonthelettertosignifyhisagreementtothe
9
termsandconditionsoftherestructuring.
On 20 July 2000 the RTC of Makati City, on its own initiative,
issuedanOrderdismissingwithoutprejudiceCivilCaseNo.99518
forfailureofpetitionerasplaintiffthereintoprosecuteitsactionfor
10
anunreasonablelengthoftimexxx. On31July2000petitioner
movedforreconsiderationoftheOrderbyinformingthetrialcourt
of respondents unremitting desire to settle11
the case amicably
through a loan restructuring program. On 22 August 2000
petitioner notified the trial court of the acquiescence thereto of
respondent Nelson Tiu as an officer 12of Magwin Marketing
Corporationanddefendantinthecivilcase.
On 8 September 2000 the court a quo issued an Order
reconsideringthedismissalwithoutprejudiceofCivilCaseNo.99
518

ActingonplaintiffsMotionforReconsiderationoftheOrderdated20July
2000dismissingthiscaseforfailuretoprosecute,itappearingthattherewas
already conformity to the restructuring of defendants indebtedness with
plaintiff by defendant Nelson Tiu, President of defendant corporation per
Manifestation and Motion filed by plaintiff on 22 August 2000, there
being probability of settlement among the parties, as prayed for, the Order
dated20July2000isherebysetaside.

_______________

6Id.,atp.234.

7Rollo,p.6CARecord,p.136.

8Id.,atp.6id.,atpp.4243.

9Rollo,p.7.

10Ibid.

11CARecord,p.242.

12Rollo,p.7.

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Plaintiff is directed to submit the compromise agreement within 15 days


from receipt hereof. Failure on the part of plaintiff to submit the said
agreementshallcausetheimpositionofpaymentoftherequireddocketfees
13
forrefilingofthiscase.

On 27 July 2000 petitioner filed in Civil Case No. 99518 a


Manifestation and Motion to Set Case for PreTrial Conference
alleging that [t]o date, only defendant Nelson Tiu had affixed his
signatureontheMay10,2000letterwhichinformedthedefendants
thatplaintiff[hereinpetitioner]alreadyapproveddefendantMagwin
Marketing Corporations request for restructuring of its loan
obligations to plaintiff 14but subject to the terms and conditions
specified in said letter. This motion was followed on 5 October
2000 by petitioners Supplemental Motion to Plaintiffs
Manifestation and Motion to Set Case for PreTrial Conference
affirmingthatpetitionercouldnotsubmitacompromiseagreement
becauseonlydefendantNelsonTiuhadaffixedhissignatureonthe
15
May10,2000letterxxx. RespondentAndersonUyopposedthe
foregoing submissions of petitioner while respondents Magwin
MarketingCorporation,NelsonTiuandBenitoSyneithercontested
16
norsupportedthem.
The trial court, in an undated Order (although a date was later
inserted in the Order), denied petitioners motion to calendar Civil
CaseNo.99518forpretrialstatingthat

Acting on plaintiffs [herein petitioner] Manifestation and Motion to Set


CaseforPreTrialConference,theOppositionfiledbydefendantUyand
the subsequent Supplemental Motion filed by plaintiff defendant Uys
Opposition,andplaintiffsReplyforfailureoftheplaintifftosubmita
compromise agreement pursuant to the Order dated 8 September 17
2000
plaintiffsmotiontosetcaseforpretrialconferenceisherebydenied.

On15November2000petitionerfileditsNoticeofAppealfromthe
8 September 2000 Order of the trial court as well as its undated
OrderinCivilCaseNo.99518.On16November2000the

_______________

13OrderissuedbyJudgeFranciscoB.IbayCARecord,p.24.

14Rollo,p.8.

15Ibid.

16Id.,atp.9.

17OrderissuedbyJudgeFranciscoB.IbayCARecord,p.25.

600

600 SUPREMECOURTREPORTSANNOTATED
RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

trialcourtissuedtwo(2)Orders,oneofwhichinsertedthedate6
November2000intheundatedOrderrejectingpetitionersmotion
forpretrialinthecivilcase,andtheotherdenyingduecoursetothe
NoticeofAppealonthegroundthattheOrdersdated8September
2000 and 6 November 2000 are 18
interlocutory orders and therefore,
noappealmaybetakenxxx.
On 7 December 2000 petitioner elevated the Orders dated 8
September 2000, 6 November 2000 and 16 November 2000 of the
trialcourttotheCourtofAppealsinapetitionforcertiorariunder
19
Rule 65 of the Rules of Civil Procedure. In the main, petitioner
arguedthatthecourtaquohadnoauthoritytocompelthepartiesin
Civil Case No. 99518 to enter into an amicable settlement nor to
deny the holding of a pretrial conference on the ground 20
that no
compromiseagreementwasturnedovertothecourtaquo.
On 28 September 2001 the appellate court promulgated its
Decisiondismissingthepetitionforlackofmeritandaffirmingthe
21
assailedOrdersofthetrialcourt holdingthat

x x x although the language of the September 8, 2000 Order may not be


clear, yet, a careful reading of the same would clearly show that the setting
aside of the Order dated July 20, 2000 which dismissed petitioners
complaintxxxforfailuretoprosecuteitsactionforanunreasonablelength
oftimeisdependentonthefollowingconditions,towit:a)Thesubmission
of the compromise agreement by petitioner within fifteen (15) days from
noticeandb)Failureofpetitionertosubmitthesaidcompromiseagreement
shallcausetheimpositionofthepaymentoftherequireddocketfeesforthe
refiling of the case so much so that the noncompliance by petitioner of
condition no. 1 would make condition no. 2 effective, especially that
petitionersmanifestationandmotiontosetcaseforpretrialconferenceand
supplemental motion x x x [were] denied by the respondent judge in his
Order dated November 6, 2000, which in effect means that the Order dated
July20,2000wasultimatelynotsetasideconsideringthata

_______________

18CARecord,pp.3233.

19 Docketed as CAG.R. SP No. 62102,Rizal Commercial Banking Corporation v. Hon.

JudgeFranciscoB.Ibay,etal.
20Id.,atpp.1113.

21 Decision penned by Associate Justice Mercedes GozoDadole and concurred in by then

Presiding Justice (now Associate Justice of this Court) Ma. Alicia AustriaMartinez and
AssociateJusticeJoseL.Sabio,Jr.Rollo,pp.2635.

601

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party need not pay docket fees22for the refiling of a case if the original case
hasbeenrevivedandreinstated.

On2April2002reconsiderationoftheDecisionwasdeniedhence,
thispetition.
Intheinstantcase,petitionermaintainsthatthetrialcourtcannot
coercethepartiesinCivilCaseNo.99518toexecuteacompromise
agreement and penalize their failure to do so by refusing to go
forward with the pretrial conference. To hold otherwise, so
petitioner avers, would violate Art. 2029 of the Civil Code which
providesthat[t]hecourtshallendeavortopersuadethelitigantsin
acivilcasetoagreeuponsomefaircompromise,andthisCourts 23
ruling in Goldloop Properties, Inc. v. Court of Appeals where it
washeldthatthetrialcourtcannotdismissacomplaintforfailureof
thepartiestosubmitacompromiseagreement.
On the other hand, respondent Anderson Uy filed his comment
after several extensions asserting that there are no special and
important reasons for undertaking this review. He also alleges that
petitionersattackislimitedtotheOrderdated8September2000as
towhetheritisconditionalastheCourtofAppealssofoundandthe
applicabilitytothiscaseoftherulinginGoldloopProperties,Inc.v.
Court of Appeals. Respondent Uy claims that the Order
reconsidering the dismissal of Civil Case No. 99518 without
prejudice is on its face contingent upon the submission of the
compromise agreement which in the first place was the principal
reasonofpetitionertojustifythewithdrawaloftheOrderdeclaring
his failure to prosecute the civil case. He further contends that the
trial court did not force the parties in the civil case to execute a
compromise agreement, the truth being that it dismissed the
complaintthereinforpetitionersdereliction.
Finally, respondent Uy contests the relevance of Goldloop
Properties, Inc. v. Court of Appeals, and refers to its incongruence
with the instant case, i.e., that the complaint of petitioner was
dismissedforfailure to prosecute and not for its reckless disregard
to present an amicable settlement as was the situation in Goldloop
Properties, Inc., and that the dismissal was without prejudice, in
contrastwiththedismissalwithprejudiceorderedinthecited

_______________

22Id.,atp.34.

23G.R.No.99431,11August1992,212SCRA498.

602

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Corporation

case. For their part, respondents Magwin Marketing Corporation,


Nelson Tiu and Benito Sy waived their right to file a comment on
the instant
24
petition and submitted the same for resolution of this
Court.
The petition of Rizal Commercial Banking Corporation is
meritorious.Itdirectsourattentiontoquestionsofsubstancedecided
by the courts aquo plainly in a way not in accord with applicable
precedents as well as the accepted and usual course of judicial
proceedingsitoffersspecialandimportantreasonsthatdemandthe
exercise of our power of supervision and review. Furthermore,
petitionersobjectionstotheproceedingsbelowencompassnotonly
the Order of 8 September 2000 but include the cognate Orders of
thetrialcourtof6and16November2000.Thisisevidentfromthe
prayeroftheinstantpetitionwhichseekstoreverseandsetasidethe
Decisionoftheappellatecourtandtodirectthetrialcourttoproceed
with the pretrial conference in Civil Case No. 99518. Evidently,
the substantive issue involved herein is whether the proceedings in
thecivilcaseshouldprogress,aquestionwhichatbottomembroils
alltheOrdersaffirmedbytheCourtofAppeals.
On the task at hand, we see no reason why RTCBr. 135 of
MakatiCityshouldstopshortofhearingthecivilcaseonthemerits.
Thereisnosubstantialpolicyworthpursuingbyrequiringpetitioner
to pay again the docket fees when it has already discharged this
obligation simultaneously with the filing of the complaint for
collection of a sum of money. The procedure for dismissed cases
whenrefiledisthesameasthoughitwasinitiallylodged,i.e., the
filing of answer, reply, answer to counterclaim, including other
footdraggingmaneuvers,exceptfortherigmaroleofrafflingcases
whichisdispensedwithsincetherefiledcomplaintisautomatically25
assigned to the branch to which the original case pertained. A
complaint that is refiled leads to the reenactment of past
proceedings with the concomitant full attention of the same trial
courtexercisinganimmaculateslewofjurisdictionandcontrolover
26
thecasethatwaspreviouslydismissed, whichinthecontextofthe
instantcaseisawasteofjudicialtime,capitalandenergy.

_______________

24Resolutiondated18September2002Rollo,p.43.

25The2002RevisedManualforClerksofCourts,Vol.I,p.223.

26BaaresIIv.Balising,G.R.No.132624,13March2000,328SCRA36.

603

VOL.402,MAY5,2003 603
RizalCommercialBankingCorporationvs.MagwinMarketing
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What judicial benefit do we derive from starting the civil case all
overagain,especiallywherethree(3)ofthefour(4)defendants,i.e.,
MagwinMarketingCorporation,NelsonTiuandBenitoSy,havenot
contestedpetitionerspleabeforethisCourtandthecourtsaquoto
advance to pretrial conference? Indeed, to continue hereafter with
theresolutionofpetitionerscomplaintwithouttheusualprocedure
fortherefilingthereof,wewillsavethecourtaquoinvaluabletime
and other resources far outweighing the docket fees that petitioner
wouldbeforfeitingshouldweruleotherwise.
Going over the specifics of this petition and the arguments of
respondent Anderson Uy, we rule that the Order of 8 September
2000didnotreserveconditionsonthereconsiderationandreversal
of the Order dismissing without prejudice Civil Case No. 99518.
Thisisquiteevidentfromitstextwhichdoesnotusewordstosignal
anintenttoimposeridersonthedispositiveportion

Acting on plaintiffs Motion for Reconsideration of the Order dated 20


July2000dismissingthiscaseforfailuretoprosecute,itappearingthatthere
wasalreadyconformitytotherestructuringofdefendantsindebtednesswith
plaintiff by defendant Nelson Tiu, President of defendant corporation per
Manifestation and Motion filed by plaintiff on 22 August 2000, there
being probability of settlement among the parties, as prayed for, the Order
dated20July2000isherebysetaside.
Plaintiffisdirectedtosubmitthecompromiseagreementwithin15days
from receipt hereof. Failure on the part of plaintiff to submit the said
agreementshallcausetheimpositionofpaymentoftherequireddocketfees
27
forrefilingofthiscase.

ContrarytorespondentUysasseverations,theimpactofthesecond
paragraph upon the first is simply to illustrate what the trial court
would do after setting aside the dismissal without prejudice:
submission of the compromise agreement for the consideration of
thetrialcourt.Nothinginthesecondparagraphdowereadthatthe
reconsideration is subject to two (2) qualifications. Certainly28far
from it, for in Goldloop Properties, Inc. v. Court of Appeals a
similardirective,i.e.,[t]hepartiesaregivenaperiodoffifteen(15)
daysfromtodaywithinwhichtosubmitaCompromiseAgreement,
washeldtomeanthatshouldthepartiesfailintheir

_______________

27IssuedbyJudgeFranciscoB.IbayCARecord,p.24.

28SeeNote22atp.506.

604

604 SUPREMECOURTREPORTSANNOTATED
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Corporation

negotiations the proceedings would continue from where they left


off.GoldloopProperties,Inc.furthersaidthatitsorder,oraspecie
ofit,didnotconstituteanagreementorevenanexpectationofthe
parties that should they fail to settle their differences within the
stipulatednumberofdaystheircasewouldbedismissed.
Theadditionofthesecondsentenceinthesecondparagraphdoes
not change the absolute nullification of the dismissal without
prejudice decreed in the first paragraph. The sentence [f]ailure on
the part of plaintiff to submit the said agreement shall cause the
imposition of payment of the required docket fees for refiling of
thiscaseisnotadirectivetopaydocketfeesbutonlyastatement
oftheeventthatmayresultinitsimposition.Thereasonforthisis
that the trial court could not have possibly made such payment
obligatoryinthesamecivilcase,i.e.,CivilCaseNo.99518, since
docketfeesaredefrayedonlyafterthedismissalbecomesfinaland
executoryandwhenthecivilcaseisrefiled.
Itmustbeemphasizedhoweverthatoncethedismissalattainsthe
attribute of finality, the trial court cannot impose legal fees anew
becauseafinalandexecutorydismissalalthoughwithoutprejudice
divests the trial court of jurisdiction over the civil case as well as
anyresidualpowertoorderanythingrelativetothedismissedcase 29
it would have to wait until the complaint is docketed once again.
On the other hand, if we are to concede that the trial court retains
jurisdiction over Civil Case No. 99518 for it to issue the assailed
Orders, a continuation of the hearing thereon would not trigger a
disbursementfordocketfeesonthepartofpetitionerasthiswould
obviously imply the setting aside of the order of dismissal and the
reinstatementofthecomplaint.
Indubitably,itisspeculativetoreckontheeffectivityoftheOrder
ofdismissalwithoutprejudicetothepresentationofthecompromise
agreement.Ifwearetoadmitthattheefficacyoftheinvalidationof
the Order of dismissal is dependent upon this condition, then we
must inquire: from what date do we count the fifteen (15)day
reglementaryperiodwithinwhichtheallegedrevivaloftheorderof
dismissal began to run? Did it commence from the lapse of the
fifteen(15)daysprovidedforintheOrderof8Septem

_______________

29Ortigas & Company Limited Partnership v. Velasco,G.R. No. 109645, 25 July

1994,234SCRA455Aquizapv.Basilio,No.L21293,29December1967,21SCRA
1434.

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VOL.402,MAY5,2003 605
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ber2000?Ordowecountitfromthe6November2000Orderwhen
thetrialcourtdeniedtheholdingofapretrialconference?Ormust
it be upon petitioners receipt of the 16 November 2000 Order
denyingduecoursetoitsNoticeofAppeal?Thecourta quo could
not have instituted an Order that marked the proceedings before it
with a shadow of instability and chaos rather than a semblance of
constancyandfirmness.
Thesubsequentactionsofthetrialcourtalsobelieanintentionto
revive the Order of dismissal without prejudice in the event that
petitionerfailstosubmitacompromiseagreement.TheOrdersof6
and 16 November 2000 plainly manifest that it was retaining
jurisdiction over the civil case, a fact which would not have been
possible had the dismissal without prejudice been resuscitated.
Surely,thecourtaquocouldnothavedeniedon6November2000
petitionersmotiontocalendarCivilCaseNo.99518forpretrialif
thedismissalhadbeenrestoredtolifeinthemeantime.Bythenthe
dismissal without prejudice would have already become final and
executorysoastoeffectivelyremovethecivilcasefromthedocket
ofthetrialcourt.
ThesameistruewiththeOrderof 16November2000 denying
duecoursetopetitionersNoticeofAppeal.Therewouldhavebeen
no basis for such exercise of discretion because the jurisdiction of
thecourtaquooverthecivilcasewouldhavebeendischargedand
terminated by the presumed dismissal thereof. Moreover, we note
thegroundfordenyingduecoursetotheappeal:theOrdersdated8
September2000and6November2000areinterlocutoryordersand
30
therefore, no appeal may be taken from x x x. This declaration
strongly suggests that something more was to be accomplished in
the civil case, thus negating the claim that the Order of dismissal
withoutprejudicewasresurrecteduponthepartiesfailuretoyielda
compromiseagreement.Afinalorderissuedbyacourthasbeen
definedasonewhichdisposesofthesubjectmatterinitsentiretyor
terminatesaparticularproceedingoraction,leavingnothingelseto
be done but to enforce by execution what has been determined by
the court, while an interlocutory order is one which does not
dispose of a31case completely but leaves something more to be
decidedupon.

_______________

30CARecord,pp.3233.

31SeeNote26.

606

606 SUPREMECOURTREPORTSANNOTATED
RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

Besides the semantic and consequential improbabilities of


respondent Uys argument, our ruling in GoldloopProperties,Inc.,
is decisive of the instant case. In Goldloop Properties, Inc., we
reversedtheactionofthetrialcourtindismissingthecomplaintfor
failureoftheplaintifftoprosecuteitscase,whichwasinturnbased
onitsinabilitytoforgeacompromisewiththeotherpartieswithin
fifteen(15)daysfromnoticeoftheordertodosoandheld

SincethereisnothingintheRulesthatimposesthesanctionofdismissalfor
failing to submit a compromise agreement, then it is obvious that the
dismissal of the complaint on the basis thereof amounts no less to a gross
procedural infirmity assailable by certiorari. For such submission could at
mostbedirectoryandcouldnotresultinthrowingoutthecaseforfailureto
effect a compromise. While a compromise is encouraged, very strongly in
fact, failure to consummate one does not warrant any procedural sanction,
muchlessanauthoritytojettisonacivilcomplaintworthP4,000,000.00xx
xPlainly,submissionofacompromiseagreementisnevermandatory,noris
32
itrequiredbyanyrule.

As also explained therein, the proper course of action that should


have been taken by the court a quo, upon manifestation of the
parties of their willingness to discuss a settlement, was to suspend
theproceedingsandallowthemreasonabletimetocometoterms(a)
Ifwillingnesstodiscussapossiblecompromiseisexpressedbyone
orbothpartiesor(b)Ifitappearsthatoneoftheparties,beforethe
commencement of the action or proceeding, offered to discuss a
possiblecompromisebuttheotherpartyrefusedtheoffer,pursuant
toArt.2030oftheCivilCode.Ifdespiteeffortsexertedbythetrial
courtandthepartiesthenegotiationsstillfail,onlythenshouldthe
33
actioncontinueasifnosuspensionhadtakenplace.
Ostensibly, while the rules allow the trial court to suspend its
proceedings consistent with the policy to encourage the use of
alternativemechanismsofdisputeresolution,intheinstantcase,the
trialcourtonlygavethepartiesfifteen(15)daystoconcludeadeal.
Thiswas,tosaytheleast,apassiveandpaltryattemptofthecourta
quoinitstaskofpersuadinglitigantstoagreeuponareasonable

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32SeeNote22atp.506.

33Ibid.

607

VOL.402,MAY5,2003 607
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34
concession. Hence,ifonlytoinspireconfidenceinthepursuitofa
middle ground between petitioner and respondents, we must not
interpretthetrialcourtsOrdersasdismissingtheactiononitsown
motion because the parties, specifically petitioner, were anxious to
litigate their case as exhibited in their several manifestations and
motions.
We reject respondent Uys contention that Goldloop Properties,
Inc.v.CourtofAppealsisirrelevanttothecaseatbaronthedubious
reasoningthatthecomplaintofpetitionerwasdismissedforfailure
to prosecute and not for the nonsubmission of a compromise
agreement which was the bone of contention in that case, and that
the dismissalimposed in the instant case was without prejudice, in
contrasttothedismissalwithprejudicedecreedinthecitedcase.To
begin with, whether the dismissal is with or without prejudice if
grievously erroneous is detrimental to the cause of the affected
party Goldloop Properties, Inc. does not tolerate a wrongful
dismissal just because it was without prejudice. More importantly,
thefactsinGoldloopProperties,Inc.involve,asintheinstantcase,
a dismissal for failure to prosecute on the ground of the parties
inability to come up with a compromise agreement within fifteen
(15) days from notice of the courts order therein. All told, the
parallelismbetweenthemisunmistakable.
Even if we are to accept on face value respondents
understanding of Goldloop Properties, Inc. as solely about the
failure to submit a compromise agreement, it is apparent that the
presentcaseconfrontsasimilarproblem.Perhapsinitiallytheissue
wasoneoffailuretoprosecute,ascanbeobservedfromtheOrder
dated 20 July 2000, although later reversed and set aside. But
thereafter,intheOrderof6November2000,thetrialcourtrefused
toproceedtopretrialowingtothefailureoftheplaintifftosubmit
a compromise agreement pursuant to the Order dated 8 September
2000.Whenthecivilcasewasstalledonaccountofthetrialcourts
refusaltocallthepartiestoapretrialconference,thereasonorbasis
thereforwastheabsenceofanegotiatedsettlementacircumstance
that takes the case at bar within the plain ambit of Goldloop
Properties, Inc. In any event, given that the instant case merely
revolvesaroundthesearchforareasonableinterpretation

_______________

34CivilCode,art.2029seeSCAdm.OrderNo.2101seealsoA.M.No.99601

SC.

608

608 SUPREMECOURTREPORTSANNOTATED
RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

of the several Orders of the trial court, i.e., as to whether the


dismissal without prejudice was revived upon petitioners
helplessness to perfect an outofcourt arrangement, with more
reason must we employ the ruling in Goldloop Properties, Inc. to
resolvethepartiesdifferencesofopinion.
We also find nothing in the record to support respondent Uys
conclusion that petitioner has been mercilessly delaying the
prosecution of Civil Case No. 99518 to warrant its dismissal. A
complaintmaybedismissedduetoplaintiffsfault:(a)ifhefailsto
appear during a scheduled trial, especially on the date for the
presentationofhisevidenceinchief,orwhensorequiredatthepre
trial (b) if he neglects to prosecute his action for an unreasonable
length of time or (c) if he does not comply with the rules or any
orderofthecourt.Noneofthesewasobtaininginthecivilcase.
Whiletherewasalullofaboutsix(6)monthsintheprosecution
of Civil Case No. 99518, it must be remembered that respondents
themselvescontributedlargelytothisdelay.Theyrepeatedlyasked
petitionertoconsiderrestructuringthedebtofrespondentMagwin
Marketing Corporation to which petitioner graciously acceded.
Petitionerapprovedanewdebtpaymentschemethatwassoughtby
respondents,whichitthencommunicatedtorespondentCorporation
through a letter for the conformity of the latters officers, i.e.,
respondent Nelson Tiu as President/General Manager and
respondent Benito Sy as Director thereof. Regrettably, only
respondent Nelson Tiu affixed his signature on the letter to signify
his concurrence with the terms and conditions of the arrangement.
The momentary lag in the civil case was aggravated when
respondentBenitoSyforunknownandunexplainedreasonspaidno
heed to the adjustments in the indebtedness although curiously he
has not opposed before this Court or the courts a quo petitioners
desiretogoaheadwiththepretrialconference.
Admittedly, delay took place in this case but it was not an
interruptionthatshouldhaveentailedthedismissalofthecomplaint
even if such was designated as without prejudice. To constitute a
sufficientgroundfordismissal,theinattentionofplaintifftopursue
his cause must not only be prolonged but also be unnecessary and
dilatory resulting in the trifling of judicial processes. In the instant
case,theadjournmentwasnotonlyfleetingasitlastedlessthansix
(6)monthsbutwasalsodoneingoodfaithtoaccommo

609

VOL.402,MAY5,2003 609
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date respondents incessant pleas to negotiate. Although the


dismissalofacaseforfailuretoprosecuteisamatteraddressedto
thesounddiscretionofthecourt,thatjudgmenthowevermustnotbe
abused. The availability of this recourse must be determined
accordingtotheproceduralhistoryofeachcase,thesituationatthe
time of35 the dismissal, and the diligence of plaintiff to proceed
therein. Stress must also be laid upon the official directive that
courts must endeavor to convince
36
parties in a civil case to
consummateafairsettlement, andtomitigatedamagestobepaid
by the losing
37
party who has shown a sincere desire for such give
andtake. All things considered, we see no compelling
circumstances to uphold the dismissal of petitioners complaint
regardlessofitscharacterizationasbeingwithoutprejudice.
Infine,petitionercannotbesaidtohavelostinterestinfighting
thecivilcasetotheend.Acourtmaydismissacaseontheground
ofnonprosequiturbuttherealtestofthejudiciousexerciseofsuch
power is whether under the circumstances plaintiff is chargeable
with want of fitting assiduousness in not acting on his complaint
with reasonable promptitude. Unless a partys conduct is so
indifferent, irresponsible, contumacious or slothful as to provide
substantial grounds for dismissal, i.e., equivalent to default or
nonappearance in the case, the courts should consider lesser 38
sanctionswhichwouldstillamounttoachievingthedesiredend. In
the absence of a pattern or scheme to delay the disposition of the
caseorofawantonfailuretoobservethemandatoryrequirementof
the rules on the part of the plaintiff, as in the case at bar, courts
should 39decide to dispense rather than wield their authority to
dismiss.
Clearly,anothercreativeremedywasavailabletothecourtaquo
to attain a speedy disposition of Civil Case No. 99518 without
sacrificing the course of justice. Since the failure of petitioner to
submitacompromiseagreementwastherefusalofjustoneofherein
respondents,i.e.,BenitoSy,tosignhisnameonthecon

_______________

35Calalangv.CourtofAppeals,G.R.No.103185,22January1993,217SCRA462.

36SeeNote34.

37CivilCode,art.2031.

38BankofthePhilippineIslandsv.CourtofAppeals,G.R.No.117385,11February

1999,303SCRA19.
39Ibid.

610

610 SUPREMECOURTREPORTSANNOTATED
RizalCommercialBankingCorporationvsMagwinMarketing
Corporation

forme of the loan restructure documents, and the common concern


ofthecourtsaquowasdispatchintheproceedings,theholdingofa
pretrial conference was the bestsuited solution to the problem as
this stage in a civil action is where issues are simplified and the
disputequicklyandgenuinelyreconciled.Bymeansofpretrial,the
trial court is fully empowered to sway the litigants to agree upon
somefaircompromise.
Dismissingthecivilcaseandcompellingpetitionertorefileits
complaint is a dangerous, costly and circuitous route that may end
up aggravating, not resolving, the disagreement. This case
managementstrategyisfrighteninglydeceptivebecauseitdoessoat
theexpenseofpetitionerwhosecauseofaction,perhaps,mayhave
alreadybeenadmittedbyitsadversepartiesasshownbythree(3)of
four (4) defendants not willing to contest petitioners allegations,
and more critically, since this approach promotes the useless and
thankless duplication of hard work already undertaken by the trial
court.Aswehaveaptlyobserved,[i]nconsideratedismissals,even
ifwithoutprejudice,donotconstituteapanaceanorasolutiontothe
congestion of court dockets. While they lend a deceptive aura of
efficiencytorecordsofindividualjudges,theymerelypostponethe
ultimatereckoningbetweentheparties.Intheabsenceofclearlack
of merit or intention to delay, justice is better served by a brief
continuance, trial40on the merits, and final disposition of the cases
beforethecourt.
WHEREFORE, the Petition for Review is GRANTED. The
Decision dated 28 September 2001 and Resolution dated 2 April
2002 of the Court of Appeals in CAG.R. SP No. 62102 are
REVERSEDandSETASIDE.
TheOrders dated 8 September 2000, 6 November 2000 and 16
November2000oftheRegionalTrialCourt,Branch135,ofMakati
City,docketedasCivilCaseNo.99518,arealsoREVERSEDand
SETASIDEinsofarastheseOrdersareinterpretedtoimposeupon
and collect anew from petitioner RIZAL COMMERCIAL
BANKINGCORPORATIONdocketorlegalfeesforitscomplaint,
or to dismiss without prejudice Civil Case No. 99518, or to
preclude the trial court from calling the parties therein to pretrial
conference, or from proceeding thereafter with dispatch to resolve
thecivilcase.

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40Macasav.Herrera,101Phil.44,48(1957).

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VOL.402,MAY5,2003 611
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CivilCaseNo.99518isdeemedREINSTATEDin,asitwasnever
takenoutfrom,thedocketsoftheRegionalTrialCourt,Branch135,
of Makati City. The trial court is ORDERED to exercise its
jurisdictionoverCivilCaseNo.99518,toCONDUCTthepretrial
conference therein with dispatch, and to UNDERTAKE thereafter
suchotherproceedingsasmayberelevant,withoutpetitionerbeing
charged anew docket or other legal fees in connection with its
reinstatement.Costsagainstrespondents.
SOORDERED.

Quisumbing,AustriaMartinezandCallejo,Sr.,JJ.,concur.

Petitiongranted,judgmentandresolutionreversedandsetaside.

Notes.Dismissal of action on ground of lack of interest or


failure to prosecute has the effect of judgment on the merits and
constitutesresjudicata.(Ilasco,Jr.vs.CourtofAppeals,228SCRA
413[1993])
Theremedyagainstafinalorderisanappeal,notapetitionfor
certiorari. (Province of Bulacan vs. Court of Appeals, 299 SCRA
442[1998])

o0o

612

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