FILINVEST CREDIT CORPORATION, PETITIONER, VS. HONORABLE BERNARDO LL. SALAS, NICARIO AVISADO AND WARSITO CAPANGPANGAN, RESPONDENTS.

In January, 1981, Nicario Avisado bought a Colt Lancer from Wheels
Distributors, Inc. payable on monthly installments. The obligation was
evidenced by a promissory note secured by a chattel mortgage on the car.
The promissory note carries a stipulation on acceleration of maturity
for the entire obligation in the event of default in the payment of any
installment. Later, the obligation together with the supporting security
was transferred by Wheels Distri­butors, Inc. to Filinvest Credit
Corporation (Filinvest) with the consent of Avisado.

For failure of Avisado to pay the installments due on May 1 through
October 1, 1981, Filinvest filed on October 12, 1981 against him a
replevin/collection suit (Civil Case No. F-21040). But this case was
dismissed with prejudice at the instance of Filinvest after the
defendant had agreed to update his installment payments.

Later, however, Avisado again defaulted in the payment of subsequent
installments, this time, those due on December 1, 1981 and the four
succeeding months, which impelled Filinvest to file another
replevin/collection suit against Avisado (Civil Case No. R-21996). After
commencement of the action, a writ of replevin was issued against a
bond duly posted, by virtue of which the car was seized by the sheriff
and turned over to Filinvest. Once in possession of the car, Filinvest
extra-judicially foreclosed the chattel mortgage thereon. At the
foreclosure sale, the car was sold to Filinvest for an amount equal to
its claim against the mortgagor. Later, Filinvest re-sold the car to
Warsito Capangpangan.

However, upon motion of Avisado, the trial court issued an Order dated
September 21, 1982 dismissing the complaint on the ground of res
judicata. Said the court:

“Admittedly, in Case No. 21040, demanded was payment of P81,819.25
with interest from October 3, 1981, until full payment in case manual
delivery of the motor vehicle cannot be effected. Supposedly, this
amount repre­sented the entire unpaid balance after alleged default in
the payment of the installment which fell due on May 1, 1981, and the
succeeding five (5) installments ending October 1, 1981. If at all there
was a demand for full payment of the balance, it was pre­cisely because
of the stipulation in the pro­missory note and the chattel mortgage
that in case of failure to pay any of the monthly installments, the
entire balance shall automatically become due and payable or a system
typical of an acceleration clause. This is equally true with respect to
the demand in the present case for payment of the entire balance of
P64,313.28 with interest computation supposedly at 24% per annum from
March 20, 1982, until full payment in case of failure to do manual
delivery of the motor vehicle pursuant to an identical accelaration
clause as provided for in par. 8 of the complaint. No doubt, the motor
vehicles, subject matter of the present case and Case No. 21040, are one
and the same.

“It is obvious, the prior dismissal was by virtue of Rule 17, Sec.
1 of the Rules of Court. This Court would like to recall, the formal
notice of dismissal with prejudice was at the instance of the plaintiff.
Likewise, the Order of Dismissal was one with prejudice.

“It is a matter of jurisprudence that at anytime before service of
the answer, the plaintiff may dismiss its action even without order of
the Court by the mere filing of a Notice of Dismissal. The dismissal is
supposedly without prejudice but the plaintiff in his motion may make
the dismissal without day which is equivalent to a waiver of his cause
of action (Estate of Yangco vs. De Asis, 22 Phil. 201) or a ‘retraxit’. (9 RCL 191-192).
The effect of a dismissal without day is an adjudication upon the
merits of the case. The implication necessarily is a waiver of the cause
of action irrespective of whether or not a default in payment of the
monthly installments in Case No. 21040 was for a period entirely
different from the period or term being mentioned in the present case.
Otherwise stated, differences in installment terms as basis of the
action in the prior and the present case is immaterial. This Court
cannot accept the pretention that the present case should be given due
course notwithstanding prior dismissal with prejudice only because the
contract stipulated a schedule of payment by way of installments or a
stipulation which supposedly provided performance of several
obligations. What the Court cannot take lightly is the observation that
in Case No. 21040 the alternative option, in case of failure to return
the motor vehicle, was the payment of the entire obligation with
interest computation but less prior amortizations. Also in the present
case, identical prayer was for payment of the entire unpaid balance with
interests but less prior installment payments in case of failure to
return the unit.

“A dismissal necessarily should be given due course. To be
precise, Rule 17, Sec. 1 of the Rules of Court does not establish any
qualification. A dismissal with prejudice would amount to an absolute
waiver of the cause of action.” (Petition, Annex “E.)

Twenty days after receipt (September 28, 1982) of the order of
dismissal, Filinvest filed (October 18, 1982) a motion for
reconsideration on the ground that the dismissal with prejudice of the
first case did not bar the filing of the second because they had
different causes of action; while Avisado filed an ex-parte motion for
the return of the re-possessed vehicle on the ground that the (second)
replevin/collection case, having been ordered dismissed, “it necessarily
follows that the car which is the subject matter (thereof)… should be
returned to defendant.” (Petition, Annex “G”.)

On January 3, 1983, the court issued an order denying the motion for
reconsideration and at the same time directing the return to Avisado of
the vehicle without waiting for the order of dismissal (on which the
return order was based) to become final. A copy of the said order was served on Filinvest on February 1, 1983.

Meanwhile, i.e., on January 5, 1983, Avisado filed an ex-parte motion
praying that a writ of execution be issued directing Filinvest or any
person in possession of the motor vehicle in question to de­liver the
same to Avisado. On January 11, 1983, the court ordered the counsel of
Filinvest to comment on the said motion within 20 days “from today”.

On February 7, 1983 (six days following notice to Filinvest of denial of
its motion for reconsidera­tion), after noting that no opposition to
the motion for execution had been filed, the Court ordered the issuance
of a writ of execution, without waiting for the order dismissing the
case to become final. Note that the notice of denial of the motion for
reconsi­deration was received by Filinvest only on February 1, 1983; and
from the date Filinvest received a copy of the order dismissing the
case up to the date it filed the motion for reconsideration, there was a
spread of only 20 days.

It appears that petitioner was never served with a copy either of
Avisado’s ex-parte motion for execution or the court’s order of January
11, 1983 directing it to comment thereon.

Accordingly, a writ of execution was issued on February 9, 1983; and the
vehicle was on the same date seized from Warsito Capangpangan and
delivered to Avisado.

Filinvest has therefore filed the instant petition assailing the dismissal by the court a quo
of C.C. R-21996 on the ground of res judicata, the precipitate return
of the car in question to Avisado and the premature grant of a writ of
execution before finality of the order dismissing the case.

Required to comment on the petition, private respondent Warsito
Capangpangan did so. On the other hand, private respondent Avisado asked
for an extension of ten days from April 4, 1983 within which to file
his comment, which was granted; but his comment never came.

Private respondent Avisado having failed to controvert the allegations
of the petition which appears to be fully supported by the documents
annexed thereto, the Court resolved to give due course to the petition
and deem it submitted for decision.

We hold that the court a quo erred in dismissing C.C. R-21996.
Since the first case instituted by Filinvest against Avisado (C.C.
R-21040) was for nonpayment of installments different from those on
which the second suit (C.C. R-21996) was based, the dismissal of the
former with prejudice would not bar the filing of the latter, nor serve
as basis for its dismissal. The causes of action being different, there
could be no res judicata.

For having thus dismissed C.C. R-21996, and for having granted the writ
of execution with undue haste before finality of the order dismissing
the case and in prematurely ordering the return to the mortgagor of the
re-possessed vehicle, the court a quo committed grave abuse of discretion.

WHEREFORE, the assailed order of dismissal dated September 21, 1982 of the court a quo,
its order dated January 3, 1983 directing the return of the vehicle in
question to the mortgagor, and the order dated February 7, 1983 for the
issuance of a writ of execution and the writ of execution issued in
pursuance thereof, are set aside. Accordingly, the disputed vehicle
shall be restored to the possession of Warsito Capangpangan, without
prejudice to the outcome of C.C. R-21996. Costs against private
respondent Nicario Avisado.
SO ORDERED.

Teehankee, (Chairman), Relova, Gutierrez, Jr., and De La Fuente, JJ., concur.

Melencio-Herrera, J., on leave.