GR 147793; (December, 2003) (Digest)
G.R. No. 147793; December 11, 2003
BOAZ INTERNATIONAL TRADING CORPORATION and F. R. CEMENT CORPORATION, petitioners, vs. WOODWARD JAPAN, INC. and NORTH FRONT SHIPPING SERVICES, INC., respondents.
FACTS
Respondent Woodward Japan, Inc. filed a complaint for a sum of money and damages against petitioners Boaz International Trading Corp. and F. R. Cement Corp. before the Regional Trial Court (RTC) of Makati. Petitioners filed their Answer with a third-party complaint against North Front Shipping Services, Inc. After several postponements for possible amicable settlement, the RTC scheduled a pre-trial conference for October 20, 1998. On that date, Woodward and its counsel failed to appear. Consequently, the RTC granted petitioners’ motion to dismiss Woodward’s complaint and also granted North Front’s unopposed motion to dismiss the third-party complaint.
Woodward’s counsel later filed an urgent ex-parte motion for reconsideration, which the RTC denied for being filed out of time. Subsequently, Woodward filed a motion to reinstate its complaint, attaching an affidavit from its associate lawyer, Atty. Pierre Alcantara, who admitted that a high fever prevented his attendance and that the handling lawyer failed to assign a substitute. The affidavit also tacitly admitted neglect in protecting the client’s interests, including the late filing of the motion for reconsideration and failure to inform the client of the case status. The RTC granted the motion to reinstate.
ISSUE
Whether the Court of Appeals erred in affirming the RTC’s Order reinstating Woodward’s complaint despite the finality of the order of dismissal and the gross negligence of its counsel.
RULING
The Supreme Court granted the petition and set aside the RTC’s reinstatement order. The Court emphasized that while procedural rules may be liberally construed to promote substantial justice, such liberality is not an excuse for counsel’s gross negligence, which undermines the orderly administration of justice. The October 20, 1998 Order dismissing Woodward’s complaint had already attained finality due to its counsel’s failure to timely appeal or seek reconsideration.
The negligence was egregious: counsel failed to attend the pre-trial, filed a belated motion for reconsideration, and, most critically, failed to inform the client of the dismissal, depriving Woodward of the opportunity to protect its interests. The Court ruled that a client is generally bound by the mistakes of its counsel, except in cases of gross negligence that amounts to a deprivation of due process. Here, the negligence was so severe that it prejudiced not only Woodward but also the opposing parties who had rightfully secured a final judgment. Reinstating the complaint would unjustly reward neglect and violate the rules designed for an orderly judicial process. The Court of Appeals’ decision was reversed.