G.R. No. 177711 ; September 5, 2012
Suico Industrial Corp., and Spouses Esmeraldo and Elizabeth Suico, Petitioners, vs. Hon. Marilyn Lagura-Yap, Presiding Judge of Regional Trial Court of Mandaue City, Branch 28; Private Development Corp. of the Phils. (PDCP now First E-Bank); and Antonio Agro Development Corporation, Respondents.

FACTS

In 1993, respondent PDCP Bank foreclosed on properties mortgaged by petitioners due to loan defaults. After the redemption period lapsed, ownership was consolidated in the bank’s favor. Petitioners, however, filed an action for specific performance, injunction, and damages before the RTC, Branch 56 in Mandaue City, alleging a secret agreement with PDCP Bank to intentionally default, have the bank purchase the properties at auction, and later allow petitioners to repurchase them. This action sought to prevent the bank from selling or taking possession. The Supreme Court, in a prior 1999 decision ( G.R. No. 123050 ), ruled that PDCP Bank’s right to possession was clear upon consolidation of title and that petitioners’ proper remedy was a petition to set aside the sale under Act 3135, not a separate action for specific performance.
Despite this final ruling, the specific performance case continued. The case was re-raffled to RTC Branch 55 and eventually to Branch 28, presided by respondent Judge Marilyn Lagura-Yap. During a pre-trial conference on September 6, 2002, petitioners’ counsel requested a resetting to prepare a pre-trial brief. Respondents opposed and moved for dismissal due to petitioners’ failure to file the mandatory pre-trial brief. Judge Yap granted the motion and dismissed the case for failure to prosecute.

ISSUE

Whether the Regional Trial Court committed grave abuse of discretion in dismissing the petitioners’ action for specific performance, injunction, and damages.

RULING

No, the RTC did not commit grave abuse of discretion. The Supreme Court affirmed the dismissal. The legal logic rests on the principle of res judicata and the mandatory nature of pre-trial procedures. First, the Court emphasized that its 1999 decision in G.R. No. 123050 had already conclusively ruled on the core issue, declaring PDCP Bank as the lawful owner entitled to possession and stating that petitioners’ chosen action for specific performance was a procedural misstep. This prior final judgment constitutes res judicata, barring the re-litigation of the same cause of action between the same parties. The continuation of the specific performance case was therefore fundamentally flawed.
Second, the dismissal for failure to prosecute was proper. The rules mandate the filing of a pre-trial brief, and failure to do so authorizes dismissal under Section 5, Rule 18 of the Rules of Court. Petitioners’ counsel requested a resetting during the pre-trial conference precisely because no brief was filed. The trial court’s discretion to dismiss the case for such non-compliance, especially in a case that had been pending since 1994, was not exercised arbitrarily or capriciously. The Supreme Court found no grave abuse of discretion, defined as a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction. The trial court’s orders were consistent with procedural rules aimed at expediting case disposition. Thus, both the Court of Appeals and the Supreme Court correctly upheld the dismissal.