GR 152878; (May, 2003) (Digest)
G.R. No. 152878 ; May 5, 2003
RIZAL COMMERCIAL BANKING CORPORATION, petitioner, vs. MAGWIN MARKETING CORPORATION, NELSON TIU, BENITO SY and ANDERSON UY, respondents.
FACTS
Petitioner RCBC filed a collection case against respondents. The trial court initially dismissed the case without prejudice for failure to prosecute. RCBC moved for reconsideration, informing the court of ongoing settlement talks and a debt restructuring program where only respondent Nelson Tiu had signed a conformity letter. On September 8, 2000, the trial court issued an Order reconsidering the dismissal and setting aside its prior order. Crucially, this reinstatement order contained a conditional directive: it required RCBC to submit a compromise agreement within 15 days and warned that failure to do so would cause “the imposition of payment of the required docket fees for re-filing of this case.” RCBC could not submit an agreement as only one respondent had consented. It then moved to set the case for pre-trial, which the trial court denied due to the non-submission of a compromise agreement.
ISSUE
Whether the trial court acted with grave abuse of discretion in (1) conditioning the reinstatement of the case on the submission of a compromise agreement and the payment of new docket fees, and (2) consequently denying the motion for pre-trial.
RULING
Yes, the trial court committed grave abuse of discretion. The Supreme Court clarified the legal effect of the September 8, 2000 Order. An order reconsidering and setting aside a dismissal unconditionally reinstates the case to the court’s docket; it reverts to the status quo ante as if the dismissal never occurred. The trial court’s appended condition for submitting a compromise agreement and its threat to impose new docket fees for “re-filing” were legally erroneous and ultra vires. A court cannot compel parties to settle; mediation and compromise, while encouraged, are voluntary under the Civil Code and the rules. Furthermore, the conditional language created an impermissible “dismissal upon a condition” which is not recognized by the Rules of Court. Since the dismissal was validly set aside, the case stood reinstated. The trial court’s subsequent denial of the motion for pre-trial, based solely on the non-fulfillment of this invalid condition, was therefore a capricious and whimsical refusal to perform a ministerial duty to proceed with the trial. The Orders dated September 8, 2000 and November 6, 2000 were reversed and set aside insofar as they imposed the unlawful conditions. Civil Case No. 99-518 was deemed reinstated without the need for new docket fees, and the trial court was ordered to conduct pre-trial with dispatch.