GR 148026; (July, 2006) (Digest)
G.R. No. 148026 . July 27, 2006.
STRONGWORLD CONSTRUCTION CORPORATION, LEO CLETO A. GAMOLO, and REYNOLD P. MOLO, petitioners, vs. HON. N.C. PERELLO in her capacity as Presiding Judge of Branch 276 of the Regional Trial Court of Muntinlupa City, FIRST PEOPLE’S BANK, BANK OF COMMERCE, ORLANDO O. FRANCISCO, and EDITHA LIZARDA, respondents.
FACTS
Petitioner Strongworld Construction Corporation, through its directors Leo Cleto A. Gamolo and Reynold P. Molo, filed a complaint for sum of money and damages against several respondents, including banks and individuals. The complaint alleged that checks payable to Strongworld were fraudulently diverted and deposited into unauthorized personal accounts without the knowledge or consent of petitioners Gamolo and Molo. Private respondent First People’s Bank filed a Motion to Dismiss on the grounds that petitioners Gamolo and Molo lacked legal capacity to sue and that the complaint stated no cause of action.
The Regional Trial Court initially dismissed the complaint, finding that Gamolo and Molo, while corporate officers, failed to show proper authority from the corporation to institute the suit, as no board resolution was attached to the complaint. Upon petitioners’ Motion for Reconsideration, the RTC reinstated the case, but later recalled its reinstatement order. The trial court declared the Motion for Reconsideration a “mere scrap of paper” due to lack of proof of service on other private respondents and the absence of a notice of hearing, thus leaving the dismissal in effect.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s dismissal of the complaint on the ground that petitioners Gamolo and Molo lacked legal capacity to sue.
RULING
The Supreme Court granted the petition and reversed the lower courts’ rulings. The legal logic is clear: the ground invoked for dismissal—that petitioners Gamolo and Molo are not the real parties-in-interest—is not one of the grounds under Section 1, Rule 16 of the Rules of Court that bars the refiling of an action if dismissed. A dismissal based on a plaintiff not being the real party-in-interest is not an adjudication on the merits. Therefore, such a dismissal is without prejudice.
The Court clarified that the defect of a party not being the real party-in-interest is not a ground for a motion to dismiss under Rule 16, but is a matter to be raised in a motion to dismiss based on the complaint’s failure to state a cause of action. Critically, even if treated as a dismissal for failure to state a cause of action, such a dismissal would still not bar the refiling of the complaint, as it is not among the specific grounds enumerated in Section 5, Rule 16 that produce the effect of res judicata. Consequently, the trial court’s dismissal order was interlocutory and not a final judgment that could preclude the petitioners from refiling a properly instituted action. The case was remanded to the trial court for further proceedings.