Philippine National Bank v. Daradar
REITERATIONFacts
The Antecedents: Petitioner Philippine National Bank (PNB) and respondent Romeo B. Daradar (Daradar) entered into a Deed of Promise to Sell. Due to Daradar's failure to pay amortizations, PNB rescinded the Deed via a Notarial Notice of Rescission. Daradar filed an action for Annulment of Rescission (Civil Case No. 21375) which was provisionally dismissed by the Regional Trial Court (RTC) for his failure to appear. After four years, the RTC finally dismissed the case motu proprio for failure to prosecute under Rule 17, Section 3 of the Rules of Court. Procedural History: Daradar filed a second complaint for declaration of nullity of notarial rescission (Civil Case No. 25981). PNB moved to dismiss, invoking res judicata. The RTC granted the motion, holding that the second dismissal of Civil Case No. 21375 was an adjudication on the merits. The Court of Appeals (CA) reversed, ruling that the first dismissal divested the RTC of jurisdiction, rendering the second dismissal void and thus not a bar to the new action. The Petition: PNB seeks to reinstate the RTC's dismissal, arguing the CA erred in reinstating the complaint as the second dismissal was final and barred refiling, and that the CA erred in declaring the second order void.
Issue(s)
Whether the Court of Appeals erred in reinstating the complaint in Civil Case No. 25981 on the ground that the same is not barred by res judicata. Whether the first order provisionally dismissing Civil Case No. 21375 is void for lack of legal basis; and whether, even if valid, it divested the trial court of jurisdiction. Whether the second order dismissing Civil Case No. 21375 for failure to prosecute attained finality and bars the revival of the case.
Ruling
The Petition is granted. The June 8, 2007 Decision and September 19, 2007 Resolution of the Court of Appeals are reversed and set aside. The January 27, 2000 Order of the Regional Trial Court of Iloilo City, Branch 22 in Civil Case No. 25981 is reinstated.
Ratio Decidendi
On the applicability of res judicata: The Second Order, being a final judgment on the merits rendered by a court of competent jurisdiction, satisfies all the requisites of res judicata. There was an identity of parties, subject matter, and causes of action between Civil Case Nos. 21375 and 25981. Since the Second Order did not state that the dismissal was without prejudice, it operated as an adjudication on the merits and barred the refiling of the case. Therefore, respondent was barred from reviving his action by filing a new complaint. On the validity of the First Order and its effect: The Court of Appeals erred in reinstating the complaint based on the First Order. The concept of a "provisional dismissal" is contemplated in criminal actions, not civil cases. There is no provision in the Rules of Civil Procedure for such a dismissal. Furthermore, a judgment must be definitive. The First Order, being provisional, failed to meet this standard and is therefore void and without legal effect. A void order is non-existent and cannot divest the court of jurisdiction. Even if provisional dismissals were sanctioned in civil cases, the First Order would be considered interlocutory. An interlocutory order does not completely dispose of the case and leaves something to be done by the trial court. Such orders are always under the control of the court until final judgment and can be modified or rescinded. Therefore, the First Order could not have divested the trial court of jurisdiction, and the trial court acted within its jurisdiction in issuing the Second Order. On the finality and effect of the Second Order: The Second Order, which dismissed Civil Case No. 21375 for failure to prosecute under Rule 17, Section 3 of the Rules of Court, attained finality because respondent did not move for reconsideration or appeal it. Dismissal under Rule 17, Section 3, unless otherwise declared by the court, has the effect of an adjudication upon the merits. The CA's opinion that the circumstances did not amount to a failure to prosecute is disagreed with, as respondent's inaction for over four years demonstrated a lack of interest and due diligence.
Main Doctrine
A dismissal for failure to prosecute under Rule 17, Section 3 of the Rules of Court, unless otherwise declared by the court, operates as an adjudication on the merits and bars the refiling of the case on the ground of res judicata. A "provisional dismissal" is not recognized in civil procedure and an order that does not completely dispose of the case is interlocutory.