Zarate v. Maybank Philippines, Inc.
REITERATIONFacts
The Antecedents Spouses Ernesto and Ma. Rosario Zarate obtained a loan from PNB Republic Bank (now Maybank Philippines, Inc.) secured by a real estate mortgage. Upon their failure to pay the loan and accrued interests, the bank foreclosed the mortgage and purchased the property at auction. The spouses were notified of the impending expiration of their redemption period and were presented with a redemption price. They sought extensions and claimed a prior payment was not reflected in their statement of account, while also disputing the interest rates charged. Procedural History The spouses Zarate filed a complaint for injunction and damages against the bank and its subsidiary, seeking to prevent consolidation of title, compel an accounting, and extend the redemption period. The Regional Trial Court (RTC) initially received ex parte testimony but did not rule on the injunction. Despite numerous postponements, often at the behest of the spouses and their counsel, and a clear warning from the RTC, the spouses and their counsel repeatedly failed to appear for scheduled hearings. Consequently, the RTC dismissed the complaint for failure to prosecute. The spouses' motions for reconsideration were denied, and their subsequent petition for certiorari before the Court of Appeals (CA) was also dismissed. The CA affirmed the RTC's dismissal, finding no grave abuse of discretion. The Petition The petitioners, Spouses Zarate, seek review on certiorari of the CA's decision, arguing that the appellate court erred in affirming the RTC's dismissal of their complaint and motions for reconsideration for failure to prosecute. They contend that the CA erred in not ordering the case to proceed by directing the respondents to cross-examine their witness and in affirming the denial of their motion for reconsideration as pro forma. The petitioners maintain that their absences were excusable and that the RTC committed grave abuse of discretion. They specifically argue that their evidence presented during the ex parte hearing should have been considered and that the respondents should have been compelled to cross-examine their witness.
Issue(s)
Whether the Court of Appeals committed an error in law when it affirmed the Regional Trial Court’s dismissal of petitioners’ complaint and motions for reconsideration for failure to prosecute for an unreasonable period of time. Whether the Court of Appeals committed an error in law when it affirmed the decision of the trial court instead of ordering the case to proceed by directing respondent to cross-examine petitioners’ witness. Whether the Court of Appeals committed an error in law in affirming the decision of the trial court denying petitioners’ motion for reconsideration on the ground that the same is pro-forma/second motion for reconsideration.
Ruling
The petition is DENIED for lack of merit. The Decision of the Court of Appeals in CA-G.R. SP No. 66321, dated May 22, 2003, and the Resolution dated October 8, 2003 are AFFIRMED. Costs against the petitioners.
Ratio Decidendi
On the issue of dismissal for failure to prosecute: The Supreme Court affirmed the CA's ruling that the RTC did not commit grave abuse of discretion in dismissing the complaint. The Court emphasized that certiorari cannot be a substitute for a lost appeal, and the petitioners failed to appeal the RTC's November 28, 2000 Order. Furthermore, their second motion for reconsideration was a prohibited pleading under Section 5, Rule 37 of the Rules of Court, which did not toll the period to appeal. The Court found that the petitioners' repeated failures to appear for trial, despite warnings and accommodations from the RTC, constituted a failure to prosecute for an unreasonable length of time. The Court noted that the negligence of the petitioners was compounded by the negligence of their counsel, who repeatedly sought postponements for other hearings and had difficulty contacting his clients. The Court stressed that litigation must end at some point, and parties cannot indefinitely delay proceedings through stratagems or maneuverings. On the issue of ordering the case to proceed for cross-examination: The Supreme Court held that the petitioners' plea to have the evidence presented during the ex parte hearing of October 30, 1998, considered as their evidence-in-chief, was belatedly raised in their second motion for reconsideration. This plea should have been raised in their first motion for reconsideration. The Court found no valid justification for this delay. Moreover, the proceedings on October 30, 1998, were ex parte, and the respondents had no opportunity to cross-examine petitioner Ma. Rosario Zarate. The trial court did not act on the documentary evidence presented at that time, as the spouses also pleaded for more time to raise funds for redemption. The Court reiterated that parties must present all grounds in their initial motion, as piecemeal impugnation of a judgment is not allowed. On the issue of the second motion for reconsideration being pro-forma: The Supreme Court agreed with the CA that the second motion for reconsideration was pro forma. The Court cited Section 5, Rule 37 of the 1997 Rules of Court, which explicitly states that "No party shall be allowed a second motion for reconsideration of a judgment or final order." Such a motion does not toll the period for appeal. The Court found that the petitioners' attempt to raise the issue of using evidence from the ex parte hearing in their second motion was a last-ditch effort to prolong the proceedings, especially since this issue could have been raised earlier. The Court emphasized that the rules of procedure must be followed, and relaxation is not justified without valid grounds.
Main Doctrine
A second motion for reconsideration of a judgment or final order is a prohibited pleading and does not toll the period to appeal. The negligence of counsel, when accompanied by the client's own negligence, binds the client and can lead to the dismissal of the case for failure to prosecute.