On November 11, 1998, herein petitioner Paraluman Tolentino, assisted by her husband Narciso Rayoan, filed a complaint^[1] before the Regional Trial Court (RTC) of Nueva Vizcaya against herein respondents Allan Fronda (Fronda) and Spouses Charlito Valdez and Avelina Valdez, for Cancellation/Annulment of Title and/or Reconveyance of Land and Damages. The complaint was docketed as Civil Case No. 728 and raffled to Branch 37 of the Nueva Vizcaya RTC.

In her complaint, Paraluman alleged that she obtained a loan of P50,000.00 from Charlito Valdez, to secure which she delivered to him her owner's copy of Transfer Certificate of Title (TCT) No. 73555; that she later discovered that her title had been cancelled by virtue of a falsified deed of sale she and her husband purportedly executed in 1993 in favor of Charlito Valdez' brother-in-law Fronda; that in view of the falsified deed of sale, her title was cancelled and in its stead TCT No. 84914 was issued in the name of Fronda who in turn executed a deed of sale in favor of the spouses Valdez; and that Fronda's title was subsequently cancelled and in its stead TCT No. T-109568 was issued in the name of the spouses Valdez.

In their Answer filed on February 16, 1999 in Civil Case No. 728, Fronda et al. denied Paraluman's allegation in her complaint. Nine months later or on November 17, 1999, the defendants Fronda et al. filed a Motion to Dismiss the case for failure of the plaintiff Paraluman to prosecute her case for an unreasonable length of time.

To the Motion to Dismiss Paraluman filed an Opposition which merited a Reply from Fronda et al.

By Resolution of December 20, 1999, Branch 37 of the Nueva Vizcaya RTC granted the Motion to Dismiss in this wise, quoted verbatim:

x x x

Undoubtedly, plaintiffs have been remiss in their duty to prosecute the case. Sec. 1, Rule 18 expressly required them "to promptly move ex-parte that the case be set for pre-trial." Under Administrative Circular 3-99 addressed to all courts and the Integrated Bar of the Philippines, Chief Justice Hilario Davide, Jr. pronounced that plaintiff should file the motion within five (5) days from the filing of the last pleading. The inaction for nine (9) months is clearly incompatible with the duty to file the motion within five (5) days. Plaintiff have failed to show with convincing or uncontroverted proof that their inaction for such longer period of time was justified.

x x x^[2] (Underscoring in the original)

Paraluman did not file any Motion for Reconsideration of the above-said RTC Branch 37 December 20, 1999 Resolution of dismissal nor appeal the same.

Subsequently or on June 27, 2000, Paraluman, this time joined by her husband Narciso Rayoan, filed another complaint for Annulment of Title, Specific Performance and Damages against Fronda et al., the same defendants in Civil Case No. 728. The complaint,^[3] docketed as Civil Case No. 780 at the RTC of Nueva Vizcaya, echoed essentially the same allegations as those in the complaint in Civil Case No. 728.

Paraluman and her co-plaintiff spouse were of course candid in their second complaint (Civil Case No. 780) by informing that they had earlier filed an "identical case against the defendants." Thus they alleged:

x x x

3. To be candid with the Honorable Court, the herein plaintiffs earlier filed identical case against defendants and was docketed as Civil Case No. 728-37 but was dismissed by the court for the reason that their/our counsel in said case failed to set the case for pre-trial conference as provided by the rules of court prompting the defendants to file a motion to dismiss the complaint with prejudice, but the court only granted the motion but without granting the prayer that the dismissal "be with prejudice," hence in the interest of substantial justice to once and for all determine the validity of the documents in questions as well as the issue on the ownership of the land in litis, plaintiffs respectfully file the case at bar;

x x x^[4] (Underscoring supplied)

In their Answer^[5] to the complaint in Civil Case No. 780 dated September 20, 2000 which was mailed on September 22, 2000 and received by the RTC on October 12, 2000, Fronda et al. denied, among other things, the falsification of the deed of sale executed by Paraluman and her spouse in his favor as well as the deed of sale he executed in favor of the Valdez spouses, they alleging, inter alia, as follows:

x x x

9. To be candid with the Honorable Court, the actual and real consideration of both contested deeds of sale appear consistently as P50,000.00, but in truth and in fact, the property was bought by defendants for P385,000.00 and as requested by the plaintiffs themselves and to which defendants acceded, the true amount of the sale should not be reflected in the deed in order to avoid paying a big transfer tax/cost as it was their agreement that plaintiff and her husband will take care of the property's transfer to them (Valdezes) and to which incident people from the [O]ffice of the Registrar (RD) will prove that it was plaintiff Narciso Rayaoan who effected the transfer himself.

x x x^[6] (Underscoring supplied)

On October 23, 2000, the defendants Fronda et al. filed a Motion to Dismiss^[7] the complaint in Civil Case No. 780 on the ground that the cause of action of Paraluman and her husband was barred by prior judgment, citing Section 1(f), Rule 16 of the 1997 Rules of Civil Procedure,^[8] and quoting the resolution of dismissal of Branch 37 of the RTC of Nueva Vizcaya in Civil Case No. 728.

In their Motion to Dismiss, Fronda et al. noted that since the dismissal of Civil Case No. 728 was "silent on whether [it] is with prejudice or otherwise, . . . mandatory application of Section 3, Rule 17, 1997 Rules of Civil Procedure becomes an absolute legal necessity."

Fronda et al. thus concluded that res judicata had set in.

By Order^[9] of October 23, 2000, Presiding Judge of Branch 30 of the RTC of Nueva Vizcaya dismissed the complaint in this wise:

Guided by Sec. 3 of Rule 17 of the 1997 Rules of Civil Procedure, as amended, the Court on its own hereby DISMISSES the instant case.

The spouses-herein petitioners Rayoan filed a Motion for Reconsideration^[10] of the order of dismissal of their complaint, they alleging that a verification of the records showed that the defendants Fronda et al. filed their Answer on October 12, 2002 but no copy thereof was furnished to them nor to the notary public, Rufino Lumase, who acknowledged the verification of their complaint, hence, the Answer filed by the defendants is a mere scrap of paper.

By Order^[11] of November 9, 2000, Branch 30 of the RTC of Nueva Vizcaya denied the Motion for Reconsideration in this wise, quoted verbatim:

With or without defendants' answer, the failure of receipt of which the plaintiffs are relying on for the reconsideration of the Court's earlier order of dismissal and even showing it up with a citation of Sec. 1, Rule 13 of the Rules of Court, the Court would have dismissed the complaint as in fact it dismissed it.

That earlier order of dismissal rendered by RTC Branch 37 with which this same case was earlier filed had "the effect of an adjudication upon the merits unless otherwise declared by the Court." (Sec. 3, Rule 17, Rules of Court).

That magic word "without prejudice" being an exception to the rule is not unintentionally omitted by the presiding Judge of RTC Branch 37 to render his order of dismissal an adjudication upon the merits and who is this Judge now before whom is filed the identical case to overturn that order issued by a Judge of equal authority and jurisdiction.

WHEREFORE, premises considered, the Motion for Reconsideration is DENIED and the earlier order of dismissal stands^[12] (Emphasis and italics in the original; underscoring supplied)

Petitioners appealed the dismissal of the complaint to the Court of Appeals assigning to the RTC the following errors in their Brief:^[13]

1. THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT MOTU PROPIO OR ON ITS OWN;
   
   
2. THE LOWER COURT ERRED IN ITS APPLICATION OF THE RULES.^[14]
   

Taking exception to the order of Branch 37 of the RTC dismissing petitioners' first complaint (Civil Case No. 728) "for failure to prosecute for an unreasonable length of time [which] operates as an adjudication on the merits under Section 3, Rule 17, Rules of Court," petitioners invited attention, in their Brief filed before the appellate court, to the fact that Branch 37 of the RTC granted Fronda's Motion to Dismiss "but omitted and denied the prayer that it is with prejudice."

In any event, petitioners justified their not prosecuting the case on causes they mentioned in their Brief.

By the assailed the decision^[15] of May 26, 2003, the appellate court affirmed the RTC dismissal of the second case - Civil Case No. 780.

Citing Section 3, Rule 17 of the 1997 Revised Rules on Civil Procedure,^[16] the appellate court held that petitioners had been "heedless in their duty to prosecute the case" following their receipt of respondents' Answer on October 12, 2000, for they failed to "punctually" move ex-parte within five (5) days for the setting of the case for pre-trial in accordance with Administrative Circular No. 3-99 the pertinent portion of which reads:

x x x

A. Pre-Trial

1. Within five (5) days after the last pleading joining the issues has been filed and served, the plaintiff must move ex-parte that the case be set for pre-trial conference.

x x x^[17]

On petitioners' claim that they were not furnished a copy of the defendants' Answer, the appellate court brushed it aside as bereft of merit, it noting that "Registry Receipt No. 909" covering the mailing of copy of the defendants' Answer belied their claim.

Petitioners filed a Motion for Reconsideration^[18] of the appellate court's decision upon the following grounds:

1. DEFENDANTS-APPELLEES SENT A COPY OF THEIR ANSWER TO THE WRONG LAWYER WHICH FACT WAS OVERLOOKED BY THE LOWER COURT AND THIS HONORABLE COURT;
   
   
2. NBI FINDINGS SHOW FALSIFICATION AND FORGERY; and
   
   
3. IN THE PARAMOUNT INTEREST OF SUBSTANTIAL JUSTICE. (Underscoring supplied)
   

In support of their motion, petitioners, zeroing in on only the first ground for obvious reasons, claimed that Fronda et al. furnished by registered mail a copy of their Answer to Atty. Romeo Montefalco who was their lawyer in the first case - Civil Case No. 728 but not in the second case - Civil Case No. 780.

By Resolution of December 8, 2003,^[19] the appellate court found "no compelling justification or a valid reason" to disturb its decision under reconsideration.

Hence, the present petition for review^[20] raising as sole error of the appellate court its ruling that they failed to comply with Rule 18, Section 1 of the 1997 Rules of Civil Procedure and thereby affirming of the trial court's order of dismissal.

Petitioners explain that they could not have complied with Rule 18 (on Pre-trial), Section 1 of the Rules which provides:

SEC. 1. When conducted. - After the last pleading has been served and filed, it shall be the duty of the plaintiff to promptly move ex parte that the case be set for pre-trial

as they were not furnished a copy of the Answer, for Atty. Romeo Montefalco to whom respondents furnished a copy is not their lawyer, hence, the dismissal of their complaint was erroneous and deprived them of procedural due process.

This Court affirms the dismissal of Civil Case No. 780, not for failure to prosecute as held by the appellate court, but on the ground of res judicata.

The dismissal of petitioners' first complaint in Civil Case No. 728, which admittedly was "identical" to that in Civil Case No. 780, for failure to prosecute was not appealed, hence, it became final and executory several months before petitioners filed their second complaint. The dismissal of the first complaint had, as the earlier-quoted Rule 17, Section 3^[21] clearly provides, the effect of an adjudication upon the merits, RTC Branch 37 not having declared otherwise.

WHEREFORE, the petition is hereby DENIED. The Court of Appeals Decision and Resolution affirming the dismissal of Civil Case No. 780 by the Regional Trial Court of Nueva Vizcaya are, on the ground of res judicata, AFFIRMED.

Costs against petitioners.

SO ORDERED.

Panganiban, (Chairman), Sandoval-Gutierrez, and Corona, JJ., concur.
Garcia, J., no part.

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^[1] CA Rollo at 31-37.

^[2] Id. at 23-24.

^[3] Records at 1-5, exclusive of annexes.

^[4] Id. at 1-2.

^[5] Id. at 22-25, exclusive of annexes.

^[6] Id. at 24.

^[7] Id. at 32-34.

^[8] Section 1. Grounds. - Within the time for but before filing the answer to the complaint or pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
x x x (f) That the cause of action is barred by a prior judgment or by the statute of limitations;
x x x
^[9] Id. at 35.

^[10] Id. at 36-37.

^[11] Id at 38.

^[12] Ibid.

^[13] CA Rollo at 13-20.

^[14] Id. at 16.

^[15] Id. at 86-90.

^[16] SEC. 3. Dismissal due to fault of plaintiff. - 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. (Italics in the original; underscoring supplied)

^[17] CA Rollo at 88.

^[18] Id. at 91-94, exclusive of annexes.

^[19] Id. at 123.

^[20] Rollo at 8-19, exclusive of annexes.

^[21] Supra at note 16.