OLYMPIA INTERNATIONAL, INC., PETITIONER, VS. THE HONORABLE COURT OF APPEALS, ALPHA INSURANCE & SURETY CO., INC., AND JUDGE JOSE C. CAMPOS, JR., RESPONDENTS.

Olympia International versus Court of Appeals

The Case

This is a petition for review on certiorari brought by Olympia International, Inc. against the Court of Appeals, Alpha Insurance and Surety Company, Inc., and the presiding judge of the Court of First Instance of Pasay City. Olympia sold typewriters to Alpha, sued for the unpaid price in an action for replevin with damages, and obtained a writ that placed the typewriters in its hands. The case was later dismissed without prejudice on the joint motion of both parties, and the trial court, years afterward, cancelled the writ and ordered the typewriters returned. The case matters because it teaches the exact procedural boundary between a dismissal that is without prejudice and a dismissal that has become final and executory, and it fixes the life of a provisional remedy once the principal case is gone.

Procedural History

Olympia filed two separate actions for replevin with damages against Alpha, one in the City Court of Manila and one in the Court of First Instance of Pasay City. The Pasay case is the root case of this petition. After the writ of replevin was issued and the typewriters were seized and delivered to Olympia, the trial court, on the joint motion of both parties, dismissed the case without prejudice on December 15, 1972. When the amicable settlement failed, Olympia moved to revive the case, and the trial court granted the motion on December 7, 1973. Alpha then moved for reconsideration, and on January 16, 1974 the trial court set aside its order of revival, reinstated the dismissal, and this time declared the dismissal to be with prejudice. No party moved for reconsideration or questioned that order for more than one and a half years. In October 1975 Alpha moved for the cancellation of the writ of replevin, and on November 7, 1975 the trial court granted the motion, cancelled the writ, and ordered Olympia to return the typewriters. Olympia's motion for reconsideration was denied. Olympia then filed a petition for certiorari in the Court of Appeals, which dismissed the petition on January 22, 1976, holding that the writ of replevin was provisional and that Olympia's right to replevin died with the dismissal. Its motion for reconsideration having been denied, Olympia came to the Supreme Court by petition for review on certiorari.

Facts

From November 1965 to March 1966, Olympia sold several typewriters to Alpha. Claiming that the purchase price remained unpaid, Olympia sued Alpha in two actions for replevin with damages. In the Pasay case, Olympia alleged that of the total purchase price of 24,430 pesos and 80 centavos, only 5,500 pesos had been paid. After Olympia posted a bond in an amount twice the value of the typewriters and its credit and collection manager filed an affidavit of ownership, the trial court issued a writ of replevin, and the typewriters were seized from Alpha and delivered to Olympia.

Alpha answered, denying that the invoices reflected the real terms of the sales because they had not been signed by its authorized officers. It prayed for the redelivery of the twenty four typewriters seized and for the delivery of six more units, and it set up a counterclaim for damages. Trial began, but on December 15, 1972, on the joint motion of both parties, the trial court dismissed the case without prejudice, the parties having chosen to settle amicably out of court.

When the settlement negotiations again failed, Olympia moved to revive the case, and the trial court granted the motion on December 7, 1973. Alpha objected, and on January 16, 1974 the trial court set aside the revival, reinstated the dismissal, and declared the case dismissed with prejudice. For more than one and a half years, neither party questioned that order. Then, in October 1975, Alpha moved for the cancellation of the writ of replevin, and the trial court granted the motion on November 7, 1975, cancelled the writ, and ordered Olympia to return the typewriters to Alpha.

Issues

• Whether or not the trial court acted in excess of jurisdiction when it granted Olympia's motion to revive the case on December 7, 1973, after the dismissal of December 15, 1972 had become final.
• Whether or not the trial court acted in excess of jurisdiction when it issued the order of January 16, 1974 dismissing the case anew, this time with prejudice.
• Whether or not the trial court acted in excess of jurisdiction when it cancelled the writ of replevin and ordered the return of the typewriters on November 7, 1975.

Applicable Provisions

Section 6 of Rule 39 of the Rules of Court, on execution by motion or by independent action, provides:

Sec. 6. Execution by motion or by independent action. A judgment may be executed on motion within five (5) years from the date of its entry or from the date it becomes final and executory. After the lapse of such time, and before it is barred by the statute of limitations, a judgment may be enforced by action.

This provision is the basis for the Court's holding that the trial court retained jurisdiction to carry into effect its final and executory dismissal order of December 15, 1972, even though Alpha's motion to cancel the writ was filed three years later.

Ruling

On the first issue, the Court held that the trial court acted in excess of jurisdiction when it granted the motion to revive the case. The dismissal of December 15, 1972 was expressly without prejudice, and the Court held that a dismissal on the motion of both parties is a dismissal without prejudice and not one that operates as an adjudication on the merits. But the Court stressed that a dismissal without prejudice is nonetheless final. It is complete in all details and finally disposes of the matter. Once that dismissal attained finality for failure of either party to appeal, the jurisdiction the court had acquired was finally discharged and terminated, and any subsequent action filed in accordance with the reservation cannot be considered a continuation of the first action. By December 7, 1973, the dismissal order had long become final and executory, and it was beyond the power of the court to amend, modify, reverse, or set it aside. The step open to Olympia was to institute a new action in accordance with the reservation, not to revive the dismissed case by motion.

On the second issue, the Court held that the trial court likewise acted in excess of jurisdiction when it issued the order of January 16, 1974 dismissing the case anew with prejudice, because that order had the same effect of reversing and setting aside the dismissal order of December 15, 1972, which had already become final and executory. Both orders were therefore null and void.

On the third issue, the Court held that the order cancelling the writ of replevin stood on a different footing. The first two orders reversed and set aside the final dismissal, but the order cancelling the writ enforced and implemented it. Alpha's motion was in the nature and character of a motion for execution of the dismissal order of December 15, 1972, and the trial court retained jurisdiction to carry that order into effect under Section 6 of Rule 39. The Court also held that logic and equity demanded the cancellation of the writ. Being provisional and ancillary in character, its existence and efficacy depended on the outcome of the case, and the case having been dismissed, the writ's existence and efficacy had to be dissolved. To let the writ stand after the dismissal would be adjudging Olympia the prevailing party when no decision on the merits had been rendered. The case having been dismissed, it is as if no case was filed at all, and the parties must revert to their status before the litigation. Olympia's claim of unjust enrichment did not persuade the Court, because Olympia, having failed to properly exercise its right of action, must suffer the consequences. The Court further noted that the right to file a new action had long prescribed, since the dismissal of an action leaves the parties in exactly the same position as though no action had been commenced at all.

Doctrine

A dismissal on the joint motion of both parties is a dismissal without prejudice, and it does not operate as an adjudication on the merits. But a dismissal without prejudice is still a final order that completely disposes of the case. Once it attains finality, the trial court loses jurisdiction to amend, modify, reverse, or set it aside, and the plaintiff may not revive the case by mere motion. The remedy is to file a new action in accordance with the reservation in the dismissal order. A writ of replevin is provisional and ancillary, and its life depends on the outcome of the principal case. When the case is dismissed, the writ must be dissolved, and the court retains jurisdiction to order its cancellation as an implementation of the final dismissal order, consistent with Section 6 of Rule 39 on execution by motion within five years from entry or from the date the judgment becomes final and executory.

Disposition

The petition was denied, with costs against Olympia, and the cancellation of the writ of replevin and the order to return the typewriters to Alpha were sustained.

Remember This

Memorize this line: a dismissal without prejudice is final as to the case but not as to the merits, so once it becomes final the court can no longer revive the case, only execute the dismissal. Examiners use this case to test the distinction between a dismissal without prejudice and a dismissal with prejudice, the finality of dismissal orders, and the provisional character of the writ of replevin under Rule 60.