MARIE PAZ D. GONZALES, PLAINTIFF-APPELLANT, VS. TRADERS ROYAL BANK, ESTER L. PISCOSO-FLOR AND REGISTER OF DEEDS OF QUEZON CITY, DEFENDANTS-APPELLEES.

Gonzales versus Traders Royal Bank

The Case

This is an appeal by Marie Paz Gonzales against Traders Royal Bank, Ester Piscoso-Flor, and the Register of Deeds of Quezon City, arising from her complaint for the declaration of nullity of a certificate of sale covering a transfer certificate of title. The Regional Trial Court of Quezon City dismissed her complaint for failure to prosecute for an unreasonable length of time, and she brought the matter to the Supreme Court. The case matters because it fixes the consequences of a dismissal for failure to prosecute, the finality of such an order even when it is without prejudice, and the strict prohibition against a second motion for reconsideration.

Procedural History

Gonzales filed her complaint before the Regional Trial Court of Quezon City, Branch 98. On June 30, 1999, the trial court dismissed the complaint without prejudice for lack of interest to prosecute. Gonzales moved for reconsideration, and the trial court reconsidered and reinstated the case, but ordered her to cause the service of summons on Traders Royal Bank and archived the case until jurisdiction over that bank was acquired. Several motions followed, including a motion to de-archive and an omnibus motion to amend the complaint, to issue summons, and to re-open the case. On November 15, 2010, the trial court denied the omnibus motion and dismissed the case for failure to prosecute. Gonzales moved for reconsideration, which the trial court denied on November 22, 2012. Gonzales then filed an appeal with the Supreme Court, which denied the appeal and affirmed the dismissal.

Facts

On May 8, 1998, Gonzales filed a complaint for the declaration of nullity of a certificate of sale of a transfer certificate of title registered with the Registry of Deeds of Quezon City. Summonses were issued to Traders Royal Bank, to Ester Piscoso-Flor, the notary public who conducted the extrajudicial foreclosure of mortgage, and to the Register of Deeds. Only the summonses for the Register of Deeds and Piscoso-Flor were served. Piscoso-Flor moved to dismiss, but the trial court denied her motion and admitted Gonzales' amended complaint.

On June 30, 1999, the trial court dismissed the complaint without prejudice for lack of interest to prosecute. On Gonzales' motion for reconsideration, the trial court reinstated the case on July 23, 1999, but noted that it had not yet acquired jurisdiction over Traders Royal Bank. It ordered Gonzales to cause the service of summons on that bank and archived the case until jurisdiction was acquired. Gonzales committed herself to serve the summons within five days, but she did not comply. Instead, she filed a series of motions, including a motion for partial reconsideration, a motion for leave to serve summons before archival, a motion to de-archive, and an omnibus motion to amend the complaint, to issue summons, and to re-open the case.

On November 15, 2010, the trial court denied the omnibus motion and dismissed the case for failure to prosecute, noting that two years had passed since the last order and that Gonzales had made no move to prosecute. Gonzales moved for reconsideration, which the trial court denied on November 22, 2012. More than ten years had lapsed from the time she was ordered to serve summons on Traders Royal Bank, and she never complied.

Issues

• Whether or not Gonzales' motion for reconsideration of the November 15, 2010 order was filed out of time.
• Whether or not Gonzales' motion for reconsideration of the November 15, 2010 order was a prohibited second motion for reconsideration.
• Whether or not Gonzales, under the circumstances, lost interest in prosecuting the case, warranting dismissal for failure to prosecute for an unreasonable length of time.

Applicable Provisions

Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, provides:

Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. This dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.

This provision is the basis for the dismissal of Gonzales' complaint and supplies the rule that such a dismissal operates as an adjudication upon the merits unless the court declares otherwise.

Section 5, Rule 37 of the Rules of Court provides:

Section 5. Second motion for reconsideration. — No party shall be allowed a second motion for reconsideration of a judgment or final order.

This provision bars Gonzales' second motion for reconsideration of the dismissal order.

Ruling

On the first issue, the Court held that Gonzales' motion for reconsideration of the November 15, 2010 order was timely filed. Counting from her receipt of the order on December 21, 2010, the fifteenth day fell on January 5, 2011, so her motion filed on January 4, 2011 was within the period.

On the second issue, the Court held that the motion violated the prohibition against a second motion for reconsideration. The dismissal order of June 30, 1999 was a final order, and Gonzales had already filed a motion for reconsideration of it, which was granted. When the trial court again issued a dismissal order on November 15, 2010 on the same ground, a motion for reconsideration of that order was prohibited. The Court stressed that a dismissal without prejudice is not any less final; it is complete in all details and finally disposes of the matter. It is not merely an interlocutory order but a final disposition of the complaint.

On the third issue, the Court held that the trial court correctly dismissed the complaint for failure to prosecute. Section 3, Rule 17 allows dismissal in three instances: if the plaintiff fails to appear at the time of trial, if he fails to prosecute the action for an unreasonable length of time, or if he fails to comply with the Rules of Court or any order of the court. Once a case is dismissed for failure to prosecute, it has the effect of an adjudication on the merits and is with prejudice unless the order of dismissal provides otherwise. The Court found that Gonzales showed laxity: from July 23, 1999, when she was ordered to serve summons on Traders Royal Bank, to November 15, 2010, she never complied, and she merely filed several motions that delayed the case. Traders Royal Bank was an indispensable party whose participation was necessary for the case to proceed, and Gonzales offered no valid reason for her noncompliance.

Doctrine

A complaint may be dismissed for failure to prosecute for an unreasonable length of time under Section 3, Rule 17 of the Rules of Court, and such dismissal has the effect of an adjudication upon the merits unless the court declares otherwise. A dismissal without prejudice is nonetheless a final order, not a mere interlocutory one, and finally disposes of the complaint. Under Section 5, Rule 37, no party may file a second motion for reconsideration of a judgment or final order, and this prohibition applies even where the dismissal is without prejudice.

Disposition

The Supreme Court denied the appeal and affirmed the orders of the Regional Trial Court of Quezon City, Branch 98, insofar as they dismissed the case.

Remember This

A dismissal for failure to prosecute is an adjudication on the merits unless the court says otherwise, and even a dismissal without prejudice is a final order that admits of only one motion for reconsideration. Examiners use this case to test the finality of dismissal orders and the strict bar against a second motion for reconsideration.