PLAINTIFF-APPELLANT, VS. GENERAL SANTOS CITY-SARANGANI FRUIT COOPERATIVE (GENSAFCO), HEREIN REPRESENTED BY ITS PRESIDENT REX RIVERA, VICE CHAIRMAN LUPE HERAMIL, TREASURER/SECRET…

Dole TropiFresh versus General Santos City-Sarangani Fruit Cooperative

The Case

This is a lecture on the case of Dole TropiFresh, a division of Dole Philippines, Incorporated, against the General Santos City-Sarangani Fruit Cooperative. The plaintiff filed a complaint for sum of money, damages, and attorney's fees, with a prayer for preliminary attachment, before the Regional Trial Court of Polomolok, South Cotabato. The trial court dismissed the complaint because the plaintiff failed to move the case for pre-trial, and later awarded damages on the defendant's counterclaim. The case matters because it fixes the consequence of a plaintiff's failure to set a case for pre-trial: the Rules impose a duty, but the sanction of dismissal for failure to prosecute does not automatically follow, and the clerk of court must step in.

Procedural History

The plaintiff filed its complaint before the Regional Trial Court, Eleventh Judicial Region, Branch 39, Polomolok, South Cotabato. The defendant sought extensions of time to answer, and the court granted the first extension. The defendant then filed its answer with counterclaim. Months later, the defendant moved to dismiss on the ground that the plaintiff had taken no steps to prosecute the case. The trial court granted the motion and dismissed the case. The plaintiff moved for reconsideration, while the defendant moved for the reception of evidence on its counterclaim. The trial court denied reconsideration and gave due course to the counterclaim. After an ex parte hearing, the trial court rendered a decision awarding moral damages, exemplary damages, and attorney's fees to the defendant's president, Rex Rivera, while denying the other defendants' claims. The plaintiff appealed to the Supreme Court under Rules 41 and 44 of the Rules of Court.

Facts

In November 2003, Dole TropiFresh sued the General Santos City-Sarangani Fruit Cooperative for a sum of money, damages, and attorney's fees, with a prayer for preliminary attachment. The defendant obtained an extension of time to answer, and in January 2004 it filed its answer with counterclaim.

From the filing of the answer, the plaintiff took no steps to prosecute its case. In July 2004, the defendant moved to dismiss, invoking the rule on dismissal due to the fault of the plaintiff and citing a case where a delay of almost two years warranted dismissal. The plaintiff opposed, arguing that a delay of six months is normal in the courts of the region, that the trial court may call a pre-trial on its own motion, and that its counsel had been preoccupied with his brother's reelection campaign for mayor.

The trial court found the plaintiff's reasons flimsy and dismissed the case. It later denied reconsideration and allowed the defendant to present evidence on its counterclaim. After an ex parte hearing, the trial court awarded the defendant's president moral damages of 200,000 pesos, exemplary damages of 50,000 pesos, and attorney's fees of 100,000 pesos. The plaintiff appealed.

Issues

• Whether or not the trial court may dismiss the complaint upon the plaintiff's failure to file a notice of pre-trial within six months from the filing of the last pleading.
• Whether or not the trial court may dismiss the complaint for failure to prosecute despite the mandates of the guidelines on pre-trial.
• Whether or not the trial court should allow the reception of evidence despite the appeal from the dismissal of the complaint.

Applicable Provisions

Section 1 of Rule 18 of the 1997 Rules of Civil Procedure provides:

Within five (5) days from date of filing of the reply, the plaintiff must promptly move ex parte that the case be set for pre-trial conference. If the plaintiff fails to file said motion within the given period, the Branch COC shall issue a notice of pre-trial.

This is the duty the plaintiff was said to have neglected, and the provision that supplies the remedy of a notice of pre-trial by the clerk of court.

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

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 is the sanction the trial court applied, and the question is whether the plaintiff's delay amounted to prosecution for an unreasonable length of time.

Ruling

On the first issue, the Court held that the appeal is meritorious. While Section 1 of Rule 18 imposes on the plaintiff the duty to promptly move for the setting of the case for pre-trial, nowhere in that section or rule is any sanction provided for the plaintiff's failure to do so.

On the second issue, the Court held that the guidelines require the clerk of court to act. If the plaintiff fails to file the motion within the given period, the clerk of court shall issue a notice of pre-trial. The clerk of court of Branch 39 should have issued that notice and set the case for pre-trial, instead of the court dismissing the case peremptorily. The Court also held that the dismissal for failure to prosecute cannot be applied in conjunction with the pre-trial rule, because a lapse of six months is not an unreasonable length of time. The Court noted that it had dismissed cases for failure to set the case for pre-trial only where the omission lasted almost one year, at the least, from receipt of the answer.

On the third issue, the Court held that because the dismissal was erroneous, the trial court also erred in proceeding with the ex parte hearing of the counterclaim.

Doctrine

A plaintiff has the duty under Section 1 of Rule 18 to promptly move ex parte to set the case for pre-trial after the last pleading is served and filed. But that rule provides no sanction for its violation. The remedy is administrative: the clerk of court must issue a notice of pre-trial and set the case for pre-trial.

Dismissal for failure to prosecute under Section 3 of Rule 17 requires prosecution for an unreasonable length of time. A delay of six months is not an unreasonable length of time. The two rules cannot be applied in conjunction to justify a peremptory dismissal.

When the dismissal of the complaint is set aside, the proceedings on the counterclaim, including the ex parte reception of evidence and the award of damages, must likewise be set aside.

Disposition

The appeal was granted. The trial court's orders dismissing the case and denying reconsideration, and its decision awarding damages on the counterclaim, were all set aside, and the clerk of court was directed to issue a notice of pre-trial to the parties.

Remember This

Memorize this line: the duty to move for pre-trial carries no sanction of dismissal, and six months is not an unreasonable length of time. Examiners use this case to test the distinction between the plaintiff's duty under Rule 18 and the sanction of dismissal under Rule 17, and the role of the clerk of court in setting the case for pre-trial.