G.R. No. L-44387 November 5, 1976
NEW JAPAN MOTORS, INC., plaintiff-appellee, vs. MARIANO PERUCHO, defendant-appellant.

FACTS

New Japan Motors, Inc. filed a collection suit against Mariano Perucho in the City Court of Manila based on two promissory notes. Perucho, in his answer, generally denied the allegations, stating he lacked sufficient knowledge to form a belief as to their truth. He interposed special defenses, including that his failure to pay was due to a fortuitous event—specifically, an accident involving one of his vehicles leading to an attachment of all his trucks in another case, which crippled his business and income. He also claimed the promissory notes were part of a chattel mortgage agreement and that he was illiterate. On the trial date, Perucho and his counsel failed to appear. The trial court granted the plaintiff’s motion to present evidence ex-parte and rendered a judgment against Perucho.
Perucho filed a motion for reconsideration, attributing his absence to a broken bridge causing travel delay. The trial court denied this motion. Perucho appealed to the Court of First Instance (CFI). However, after the case was docketed in the CFI, Perucho failed to take any action to prosecute his appeal for an extended period. Consequently, the CFI dismissed his appeal for failure to prosecute. Perucho’s motion to reconsider this dismissal was also denied, prompting his appeal to the Court of Appeals, which certified the case to the Supreme Court as it involved pure questions of law.

ISSUE

The primary issue is whether the Court of First Instance acted with grave abuse of discretion in dismissing Perucho’s appeal for failure to prosecute.

RULING

The Supreme Court ruled that the CFI did not commit grave abuse of discretion. The legal logic is anchored on the principle that a court has the inherent power to dismiss an appeal for the appellant’s unreasonable failure to prosecute, which is deemed a failure to comply with the rules. The records showed that after the case was docketed in the CFI in June 1971, Perucho did nothing to advance his appeal for over a year and a half until the dismissal order in December 1972. This prolonged inaction constituted a clear failure to prosecute.
Furthermore, the Court found Perucho’s appeal to be without merit, substantiating the dismissal. His general denial in his answer regarding the promissory notes was insufficient. Under Section 8, Rule 8 of the Rules of Court, the genuineness and due execution of an instrument attached to the complaint are deemed admitted unless specifically denied under oath. Perucho’s unverified general denial did not constitute a specific denial under oath, thereby rendering the promissory notes deemed admitted. His defenses of fortuitous event and business failure are not valid legal defenses that extinguish the obligation to pay a sum of money; they do not constitute force majeure that makes payment impossible. The Supreme Court affirmed the dismissal of the appeal, emphasizing the need to decongest court dockets of unmeritorious and dormant cases.