G.R. No. L-23069 October 31, 1969
Teofila Ramos and Leonila Estanislao, petitioners, vs. Felicisimo Raymundo and Court of Appeals, respondents.

FACTS

Petitioners Teofila Ramos and Leonila Estanislao filed a complaint for recovery of ownership and possession of two parcels of unregistered rice land in Morong, Rizal, against respondent Felicisimo Raymundo. Their claim was based on a deed of sale executed in their favor by Dionisia Balajadia on July 15, 1957, and registered under Act No. 3344 on July 19, 1957. They could not take possession as Raymundo was on the land, claiming ownership by virtue of an alleged prior sale from the same vendor in 1948. Raymundo alleged continuous possession since 1948 and that the petitioners knew this before their purchase. The petitioners denied bad faith, alleging no knowledge of any encumbrance and that the tax declarations were in the vendor’s name. After impleading the vendor and her husband as additional defendants (who were declared in default), the case was set for trial. On May 15, 1959, Raymundo and his counsel failed to appear, and the trial court allowed the petitioners to present evidence before the Clerk of Court as commissioner, subsequently rendering judgment in their favor. Raymundo moved for reconsideration and new trial, which was granted by a different judge, setting aside the decision and resetting the case. After several postponements, on February 25, 1960, the petitioners’ counsel failed to appear due to being in Cotabato City for another case, leading the trial court to dismiss the complaint. The Court of Appeals affirmed the dismissal. The Supreme Court reviewed the case via certiorari.

ISSUE

Whether the Court of Appeals committed a grave abuse of discretion in affirming the dismissal of the complaint for the petitioners’ counsel’s failure to appear at a hearing, considering the procedural history and the need for a decision on the merits.

RULING

The Supreme Court reversed the decision of the Court of Appeals and set aside the trial court’s order dismissing the complaint, remanding the case for further proceedings. The Court held that justice and fair play called for equal treatment of the parties. The respondent had previously been guilty of similar negligence when he and his counsel failed to appear at the May 15, 1959 hearing, for which he was given relief by having the decision set aside and the case reopened. The petitioners should be accorded the same treatment, especially since the dismissal was for a procedural reason. The Court noted that the merits of the case involved significant unresolved issues: (1) the alleged 1948 sale to Raymundo had yet to be proven, with discrepancies in his pleadings regarding the execution date of the documents, and (2) the question of the petitioners’ good faith, presumed by law and specifically averred, was vital given their registered transaction, and the Court of Appeals’ finding on this point was conjectural and premature as no trial or evidence had been taken. In the interest of justice, the case should be heard and decided on the merits.