G.R. No. 180203 , June 28, 2021
PHILIPPINE NATIONAL BANK, PETITIONER, VS. ROMEO B. DARADAR, RESPONDENT.

FACTS

Petitioner Philippine National Bank (PNB) and respondent Romeo B. Daradar entered into a Deed of Promise to Sell. Due to Daradar’s failure to pay, PNB rescinded the deed via a Notarial Notice of Rescission. Daradar filed an action for Annulment of Rescission, Accounting and Damages against PNB in the RTC of Iloilo City, docketed as Civil Case No. 21375. Due to Daradar’s failure to appear at a scheduled hearing, the RTC, in an April 5, 1995 Order (First Order), provisionally dismissed the case without prejudice. No motion for reconsideration was filed. Four years later, the RTC, motu proprio, issued a June 17, 1999 Order (Second Order) finally dismissing Civil Case No. 21375 for failure to prosecute under Rule 17, Section 3 of the Rules of Court. Daradar did not move for reconsideration or appeal this Second Order. On October 18, 1999, Daradar filed a new complaint for declaration of nullity of notarial rescission, docketed as Civil Case No. 25981. PNB moved to dismiss this new complaint on the ground of res judicata, arguing the Second Order was an adjudication on the merits. The RTC granted the motion to dismiss. Daradar appealed to the Court of Appeals (CA), which reversed the RTC, reinstated the complaint in Civil Case No. 25981, and directed further proceedings. The CA ruled the First Order, being a provisional dismissal without prejudice, divested the trial court of jurisdiction; thus, the subsequent Second Order was null and void for lack of jurisdiction and could not bar the new complaint. PNB filed this Petition for Review on Certiorari.

ISSUE

Whether the appellate court erred in reinstating the complaint in Civil Case No. 25981 on the ground that it is not barred by res judicata.

RULING

The Petition is GRANTED. The Supreme Court reversed the CA Decision and Resolution and reinstated the RTC’s order dismissing Civil Case No. 25981 on the ground of res judicata.
The Supreme Court held:
1. The First Order provisionally dismissing Civil Case No. 21375 is void for lack of legal basis. The Rules of Civil Procedure do not provide for a “provisional dismissal” of a civil case. A judgment or order must be definitive. A provisional dismissal, being subject to a contingency, contains no disposition and is null and void. A void order has no legal effect, is non-existent, and can never attain finality. However, even assuming it could be sanctioned, such an order would be interlocutory and would not divest the trial court of jurisdiction.
2. The Second Order, which dismissed Civil Case No. 21375 for failure to prosecute under Rule 17, Section 3, had already attained finality. Daradar did not move for reconsideration or appeal this order. Absent any indication it is void, a final judgment is no longer subject to change. Dismissal under Rule 17, Section 3 has the effect of an adjudication upon the merits unless otherwise declared by the court. The Second Order did not state the dismissal was without prejudice; therefore, it operated as a dismissal with prejudice.
3. All elements of res judicata are present to bar the filing of Civil Case No. 25981: (a) the prior judgment (Second Order in Civil Case No. 21375) is final; (b) the court which rendered it had jurisdiction; (c) it is a judgment on the merits; and (d) there is identity of parties, subject matter, and causes of action between Civil Case Nos. 21375 and 25981. Consequently, the RTC correctly granted PNB’s motion to dismiss the subsequent complaint on the ground of res judicata.