GOVERMENT OF THE PHILIPPINES, PLAINTIFF-APPELLANT, VS. MOISES SONGCUYA AND ISIDRO LABRADOR, DEFENDANTS-APPELLEES.

Appeal by the Government of the Philippines
from the order of the Court of First Instance of Cotabato
dismissing its amended complaint in Civil Case No. 699 against Moises Songcuya and Isidro
Labrador, on the ground of failure to prosecute, without special pronouncement
as to costs.

The action filed by appellant on March 24, 1954 was for the recovery of the sum of 24,224.30,
representing the total amount of
eleven (11) War Damage checks drawn on the National City Bank of New York (Manila Branch) in favor of Sabel Bankono and
10 other persons which appellees Labrador and Songcuya “endorsed x x x to the plaintiff Government of the Philippines”
(Record on Appeal p. 12).  When the
latter presented the 11 checks to the drawee bank,
the latter refused payment.  Whereupon appellant gave the corresponding notice of dishonor to both
appellees who refused payment.

In their separate answers appellees
disclaimed liability and as special defense alleged that, as bonded postmaster
and money order clerk, respectively, they were authorized under an unnumbered
circular of the Bureau of Posts dated January
26, 1948 to pay the checks of war damage claimants, and that other indorsers of said checks were not impleaded.  The case was called for trial on October 10, 1955 but as both
defendants asked for postponement without opposition on the part of the
provincial fiscal of Cotabato, the trial was postponed “until further
assignment”.

It was only on August
20, 1959 that the case was again called for trial, but as the
Director of Posts or his representative failed to appear, the provincial fiscal
of Cotabato was constrained to move, in open court,
for postponement.  On the same date,
however, the trial court denied the motion and dismissed the case on the ground
of appellant’s failure to prosecute the case with diligence.  On the same day – in fact, a few hours after
the dismissal of the case, the provincial fiscal of Cotabato
filed a motion for reconsideration alleging that the denied motion for
postponement was his first request for postponement
and also attached to his motion for reconsideration a copy of a telegram from
the Bureau of Posts Inspector Policarpio Baguio, one of the witnesses for appellant, stationed in Bacolod, Negros Occidental
stating that he was unable to appear for lack of transportation but that he
would arrive on August 24.

Appellees objected to the motion for
reconsideration alleging that sufficient time and notice had been given to
Inspector Baguio to enable him to appear on the date
of the trial, and alleging furthermore that it was not shown that his testimony
was material to the case.

On November 20, 1959
the trial court not only denied the motion for reconsideration but in its order
stated inter alia the following:

“The Court can not overlook the fact that the checks mentioned
in the complaint and which were paid by the defendant, were all signed by
witnesses who not only identified the payee but also guaranteed their
payment.  Everything was done in the
ordinary course of business.”

From the order of dismissal the Government appealed to the Court
of Appeals.  As the only issue involved is a question of law, the latter
certified the case to Us pursuant to Sec. 31
in relation to Sec. 17 (6) of Act No. 296, as amended.

The record sufficiently shows that counsel for appellant was
constrained to ask for the postponement of the trial set for August 20, 1959,
not only because of the failure of the Director of Posts or his representative to appear and testify on that
date, but also because other witnesses for the government were not served with
the subpoenas issued by the trial court. 
Moreover, it appears that the failure of Post Office Inspector Policarpio Baguio to appear was
due to lack of transportation from the place where he was officially assigned
on duty to the place of trial, for
which reason he sent the telegram mentioned heretofore.  Lastly, the statement made by the trial judge
in his order denying appellant’s motion for reconsideration quoted above seems
to be improper as, without due trial, he appears to have prejudged the merits
of the complaint.

It can not be denied, of course, that there was failure on the
part of appellant to show sufficient interest
in the prosecution of its case because it allowed four years to elapse from the first date of trial before
securing another assignment of date. 
Considering, however, the possibility that court sessions in the
jurisdiction where the case was pending were not continuous – for which reason
the Court itself seems to have forgotten the
case all together – and considering likewise the fact that appellees had also shown lack
of interest in having the case tried and disposed of, We feel that, in equity,
the order of dismissal – which by its terms would amount to a dismissal on the
merits – should not be allowed to stand to the prejudice of the claim of the
appellant entity.

WHEREFORE, the
appealed order is reversed and set aside,
and the case is remanded below for the corresponding proceedings.

Concepcion, C.J., Reyes, J.B.L., Regala, Makalintal, Bengzon, J.P., Zaldivar, Sanchez,
and Castro, JJ.,
concur.