LOURDES SUITES v. NOEMI BINARAO

FACTS:

Lourdes Suites, the petitioner, entered into two contracts with Noemi Binarao, the respondent, for room accommodations for two groups of students. The respondent was able to pay the total contract price but the petitioner claimed there was an unpaid balance for damages to the furniture, a lost key, and excess guests. The petitioner sent a demand letter to the respondent for the unsettled amount but the respondent failed to pay, prompting the petitioner to file a Statement of Claim for the collection of the sum of money plus damages before the MeTC. The MeTC found that the respondent had already paid her monetary obligation and even made an overpayment. The MeTC dismissed the complaint with prejudice.

ISSUES:

  1. Whether the dismissal of the complaint based on lack of cause of action can be deemed a dismissal with prejudice.

  2. Whether lack of cause of action is a valid ground for dismissal.

  3. Whether lack of cause of action is set forth as a ground for dismissal under the Rules of Civil Procedure.

RULING:

  1. The Supreme Court denied the petition and affirmed the decision of the lower court. The Court ruled that the dismissal of the complaint with prejudice based on lack of cause of action is valid. Lack of cause of action refers to a situation where the evidence does not prove the cause of action alleged in the pleading, while failure to state a cause of action refers to the insufficiency of the pleading. The remedy for failure to prove a cause of action is to demur to the evidence. The courts have the authority to dismiss a case for lack of cause of action if the plaintiff fails to preponderantly establish their claim with clear and convincing evidence. In small claims cases, decisions are rendered final and unappealable, so a dismissal is necessarily with prejudice.