GR 166104; (June, 2008) (Digest)
G.R. No. 166104 ; June 26, 2008
RN DEVELOPMENT CORPORATION (now Fontana Development Corporation), petitioner, vs. A.I.I. SYSTEM, INC., respondent.
FACTS
Respondent A.I.I. Systems, Inc. filed a complaint for sum of money against petitioner RN Development Corporation. The case underwent several pre-trial settings. On April 24, 2001, only petitioner’s counsel appeared. On August 7, 2001, respondent and its counsel were absent, prompting the trial court to reset the pre-trial to September 18, 2001, warning that another failure to appear would result in dismissal for lack of interest. On September 18, respondent’s new counsel appeared and requested another resetting to study settlement proposals, which the court granted, setting the pre-trial for November 27, 2001, again stating it was “for the last time.”
On November 27, 2001, only petitioner’s counsel appeared. The Regional Trial Court (RTC) dismissed the complaint for respondent’s failure to appear and lack of interest. The RTC denied respondent’s motion for reconsideration, noting it had been lenient in resetting the pre-trial five times. The Court of Appeals (CA) reversed the RTC, finding the dismissal too harsh, and remanded the case for further proceedings.
ISSUE
Whether the Court of Appeals erred in reversing the RTC’s order dismissing the complaint for respondent’s failure to appear at the pre-trial conference.
RULING
The Supreme Court denied the petition and affirmed the CA decision. The Court emphasized that while pre-trial is a mandatory procedural tool designed to simplify and expedite trial, its dismissal sanction for non-appearance is not automatic and must be exercised with caution. The power to dismiss is discretionary, not ministerial. Courts should decide cases on their merits whenever possible, and dismissal for procedural infirmities is a last resort.
Here, the respondent’s counsel arrived only four minutes late on the final setting, immediately filed a motion for reconsideration explaining the tardiness, and demonstrated a willingness to proceed by previously appearing and engaging in settlement discussions. The RTC’s dismissal, after having shown prior leniency, was unduly harsh under these specific circumstances. The overriding policy is to afford litigants full opportunity to litigate their claims on substantive grounds. Rules of procedure are tools for justice, not its defeat. Therefore, the CA correctly set aside the dismissal and ordered the remand of the case for trial on the merits.