Suico Industrial Corp. v. Lagura-Yap
REITERATIONFacts
The Antecedents: In 1993, respondent Private Development Corporation of the Philippines (PDCP Bank), later renamed First E-Bank, foreclosed the mortgage on two real estate properties owned by petitioners Suico Industrial Corporation and spouses Esmeraldo and Elizabeth Suico due to the corporation's failure to pay the balance of secured loans. PDCP Bank emerged as the highest bidder in the foreclosure sale. The mortgagors' failure to redeem the properties led to the consolidation of ownership in PDCP Bank's name. Petitioners alleged an agreement with PDCP Bank to intentionally default, allowing the bank to purchase the properties and then resell them to petitioners through a recommended buyer for P5,000,000.00. Petitioners claimed PDCP Bank increased the price, preventing the sale. Procedural History: Petitioners filed an action for specific performance, injunction, and damages on December 9, 1994, before the Regional Trial Court (RTC) of Mandaue City, Branch 56, seeking to prevent PDCP Bank from selling and taking possession of the foreclosed properties. An injunctive writ was issued by Branch 56, which the Court of Appeals (CA) later declared as an interference with the proceedings of RTC Branch 28. This Court affirmed the CA's ruling in 1999, stating PDCP Bank had a clear right to possession as the owner-purchaser. Despite this, the case before RTC Branch 56 continued. Antonio Agro Development Corporation (AADC), having purchased the properties from PDCP Bank, intervened. After several judge inhibitions and delays, RTC Branch 55 denied petitioners' motion to declare PDCP Bank in default and admitted PDCP Bank's answer and AADC's answer-in-intervention. The case was transferred to RTC Branch 28, presided over by Judge Marilyn Lagura-Yap. During the pre-trial conference, petitioners' counsel requested a resetting to prepare a pre-trial brief, which was opposed by respondents. Judge Yap dismissed the case on September 6, 2002, for failure to file a pre-trial brief, citing Section 6 of Rule 18 of the Rules of Court. Petitioners' motion for reconsideration was denied on February 21, 2003. The RTC refused to give due course to petitioners' notice of appeal filed on April 4, 2003, deeming it filed out of time. The CA dismissed petitioners' subsequent petition for certiorari, affirming the RTC's dismissal and the denial of the appeal. The Petition: Petitioners seek review on certiorari under Rule 45 of the Rules of Court, assailing the CA's Decision dated January 16, 2006, and Resolution dated April 11, 2007. They argue that the CA erred in upholding the RTC's dismissal of their case due to failure to file a pre-trial brief, and in ruling that their notice of appeal was filed out of time. Petitioners contend that the dismissal constituted grave abuse of discretion and that their appeal was timely filed under the "fresh period rule" established in Neypes v. Court of Appeals. They pray for the reversal of the CA's rulings and the annulment of the RTC's orders dismissing their action and denying their motion for reconsideration.
Issue(s)
Whether the Court of Appeals committed grave reversible error in not ruling that the Regional Trial Court committed grave abuse of discretion in declaring the petitioners non-suited and dismissing the case on the ground of failure to file a pre-trial brief; and whether the alleged procedural misstep of filing a suit for specific performance, injunction, and damages instead of a petition to set aside the sale and cancellation of the writ of possession warrants dismissal. Whether the Honorable Court of Appeals committed grave reversible error in ruling that petitioners’ notice of appeal filed on the 14th day after receipt of the order denying their motion for reconsideration was filed out of time.
Ruling
The petition is denied. The Decision dated January 16, 2006 and Resolution dated April 11, 2007 of the Court of Appeals in CA-G.R. SP No. 78676, upholding the Regional Trial Court, Mandaue City, Branch 28's dismissal of petitioners' action for specific performance, injunction and damages, are affirmed.
Ratio Decidendi
On the dismissal of the action for failure to file a pre-trial brief and the alleged procedural misstep: The Court found that the trial court had a valid basis to dismiss the petitioners' action for failure to file a pre-trial brief, citing Section 6 of Rule 18 of the Rules of Court. The Court rejected the petitioners' plea for a liberal interpretation of the rules, noting that the grounds for suspending strict adherence to procedural rules were not present. The Court referenced its prior ruling in G.R. No. 123050, stating that the petitioners undertook a procedural misstep. The Court found no injustice caused by the dismissal, as the petitioners failed to satisfy their obligations and redeem the properties, and the alleged agreement was not sufficiently proven. On the timeliness of the appeal: The Court affirmed the RTC's ruling that the notice of appeal was filed out of time. The Court clarified that while the "fresh period rule" established in Neypes v. Court of Appeals allows a fresh period of fifteen (15) days from receipt of the resolution on a motion for reconsideration to file a notice of appeal, this rule applies when the appeal period has not yet lapsed. In this case, the RTC correctly calculated that the appeal was filed beyond the remaining period after the motion for reconsideration was filed and denied.
Main Doctrine
Failure to file a pre-trial brief, as required by the Rules of Court, constitutes a valid ground for the dismissal of an action, and such dismissal is generally with prejudice, unless otherwise ordered by the court. The negligence of counsel in failing to comply with procedural rules binds the client.