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SHIMIZU PHILIPPINES CONTRACTORS v. MRS. LETICIA B. MAGSALIN

FACTS:

The petitioner, Shimizu Philippines Contractors, Inc., filed a complaint against Leticia Magsalin and FGU Insurance Corporation for breach of contract. The complaint sought damages for the breach of their subcontract agreement. FGU Insurance was served with summons, but Magsalin could not be located. FGU Insurance filed a motion to dismiss, which was denied. The petitioner filed a motion for leave to serve summons on Magsalin through publication. FGU Insurance filed a motion for leave to file a third-party complaint against Reynaldo Baetiong, Godofredo Garcia, and Concordia Garcia. The third-party complaint was admitted, and the motion to serve summons by publication was denied. The case was set for a hearing, but FGU Insurance filed a motion to cancel the hearing. Baetiong filed an answer to the third-party complaint, while the Garcias could not be located. On December 16, 2003, the RTC issued an order dismissing the case for failure to prosecute. The petitioner filed a motion for reconsideration, which was denied by the RTC. The petitioner then filed a petition for review with the Court of Appeals, which was dismissed on the ground of lack of jurisdiction.

ISSUES:

  1. Whether the December 16, 2003 dismissal order is null and void for violation of due process.

  2. Whether the appeal to challenge the dismissal order was properly filed under Rule 41 of the Rules of Court.

  3. Whether the dismissal of Civil Case No. 02-488 for failure to prosecute is supported by facts.

  4. Whether the filing of the appeal in CA-G.R. CV No. 83096 under Rule 41 of the Rules of Court was proper

  5. Whether the order appealed from in CA-G.R. CV No. 83096 discloses the factual basis for the dismissal of Civil Case No. 02-488

  6. Whether the dismissal of Civil Case No. 02-488 is supported by the facts of the case

  7. Whether the dismissal of Civil Case No. 02-488 is warranted.

  8. Whether the trial court erred in finding failure to prosecute on the part of the petitioner.

RULING:

  1. The Supreme Court found that the petition was sufficient and did not violate Rule 45. They granted the petition because the December 16, 2003 dismissal order violated due process. The Court also concluded that the appeal challenging the dismissal order was properly filed under Rule 41. The dismissal of the case for failure to prosecute was not supported by the facts in the records. The dismissal order was deemed null and void as it did not state the facts on which the legal conclusion of non prosequitur was based. Dismissals for failure to prosecute are authorized under Section 3, Rule 17 of the Rules of Court.

  2. The December 16, 2003 dismissal order is null and void for violation of due process because it failed to state the facts on which the conclusion of non prosequitur was based. It violated Section 1, Rule 36 of the Rules of Court which requires that decisions be in writing, stating clearly and distinctly the facts and the law on which it is based.

  3. The appeal to challenge the dismissal order was properly filed under Rule 41 of the Rules of Court. The Court disagreed with the Court of Appeals' reliance on the case of Joaquin v. Navarro, which concluded that a pleading of undisputed facts is equivalent to a prohibited appeal. The Court held that the dismissal order was a void decision that can be subject to collateral attack, and therefore, the appeal was properly filed.

  4. The dismissal of Civil Case No. 02-488 for failure to prosecute is not supported by facts, as shown by the records of the case. The dismissal order did not provide any justification for the dismissal, which violated the principle of due process.

  5. The filing of the appeal in CA-G.R. CV No. 83096 under Rule 41 of the Rules of Court was proper as it necessarily involved questions of fact.

  6. The order appealed from in CA-G.R. CV No. 83096 does not disclose the factual basis for the dismissal of Civil Case No. 02-488. Since the order appears to have been rendered motu proprio, the Court of Appeals is required to delve into the records to check whether facts supporting the dismissal even exist.

  7. The dismissal of Civil Case No. 02-488 is not warranted. The events chronologically proximate to the dismissal do not satisfy the grounds specified in Section 3, Rule 17 of the Rules of Court for the motu proprio dismissal of a case for failure to prosecute. The petitioner has demonstrated willingness to prosecute its complaint.

  8. The dismissal of Civil Case No. 02-488 is not warranted. The trial court erred in finding failure to prosecute on the part of the petitioner. The resolutions of the Court of Appeals and the order of the trial court are reversed and set aside. The petitioner's complaint in Civil Case No. 02-488 is ordered reinstated for further proceedings.

PRINCIPLES:

  • Dismissals of actions for failure to prosecute must state the reasons for the dismissal so that the parties and reviewing courts can readily determine the justification for the dismissal.

  • A dismissal order that fails to comply with the requirements of Section 1, Rule 36 of the Rules of Court, which provides for the writing of valid judgments and final orders, may be considered a nullity.

  • A void decision is open to collateral attack and the Supreme Court has authority to review an unassigned error if it is necessary in arriving at a just decision in an appeal.

  • Where a case is submitted upon an agreement of facts, or where all the facts are stated in the judgment and the issue is the correctness of the conclusions drawn therefrom, the question is one of law subject to review by the court. (Joaquin v. Navarro)

  • The Court of Appeals has jurisdiction over an ordinary appeal supported by undisputed facts and seeking the review of a prejudicial order of dismissal. (Olave v. Mistas)

  • The grounds for the motu proprio dismissal of a case for failure to prosecute are failure of the plaintiff, without justifiable reasons, to appear on the date of the presentation of his evidence in chief; failure of the plaintiff to prosecute his action for an unreasonable length of time; failure of the plaintiff to comply with the Rules of Court; or failure of the plaintiff to obey any order of the court. (Section 3, Rule 17 of the Rules of Court)

  • The test for non prosequitur is whether, under the circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed with reasonable promptitude. There must be unwillingness on the part of the plaintiff to prosecute.

  • Dismissals of actions should be made with care, as they may cut short a case even before it is fully litigated and bar a litigant from pursuing judicial relief under the same cause of action.

  • Sound discretion demands vigilance in recognizing the circumstances surrounding the case to ensure that technicality does not prevail over substantial justice.