G.R. No. 186175; August 25, 2010
3A APPAREL CORPORATION AND RAY SHU, Petitioners, vs. METROPOLITAN BANK AND TRUST CO., ET AL., Respondents.

FACTS

Petitioner 3A Apparel Corporation, represented by its president Ray Shu, filed a complaint for annulment of real estate mortgage, promissory note, and foreclosure sale against respondent Metropolitan Bank and Trust Company (MBTC) before the Regional Trial Court (RTC) of Pasig. The case stemmed from the extrajudicial foreclosure of a mortgage securing the corporation’s loan obligation to MBTC. After the case was set for the presentation of the corporation’s evidence, almost two years passed without any evidence being presented. Consequently, upon MBTC’s motion, the RTC dismissed the complaint for failure to prosecute. The corporation’s motion for reconsideration was denied.
The corporation then filed a petition for certiorari before the Court of Appeals, arguing that substantial justice should prevail over technicalities. The appellate court dismissed the petition, ruling that the dismissal for failure to prosecute under Rule 17, Section 3 of the Rules of Court has the effect of an adjudication on the merits, and the proper remedy against such a final order is an ordinary appeal, not certiorari. The corporation’s motion for reconsideration was likewise denied.

ISSUE

Whether the Court of Appeals erred in dismissing the petition for certiorari for being the wrong remedy and in upholding the trial court’s dismissal of the complaint for failure to prosecute.

RULING

The Supreme Court denied the petition, affirming the Court of Appeals. On the procedural issue, the Court held that a dismissal for failure to prosecute under Rule 17, Section 3 is an adjudication upon the merits unless the court declares otherwise. The RTC’s order contained no such qualifying declaration, making it a final order appealable via a notice of appeal. Since the ordinary remedy of appeal was available and was not taken within the reglementary period, the special civil action of certiorari was an improper substitute. The rules of procedure are not to be trifled with by merely invoking “substantial justice.”
On the substantive issue, the Court found no grave abuse of discretion in the RTC’s dismissal. The corporation’s justifications for the repeated postponements—including the alleged unavailability of witnesses and counsel due to illness, family emergencies, and schedule conflicts over multiple hearings—were insufficient to demonstrate reasonable promptitude in prosecuting its case. The duty to expedite cases rests on the plaintiff as much as on the court. The corporation’s failure to present its evidence for an unreasonable length of time, despite opportunities, justified the dismissal. The trial court’s exercise of discretion was sound and warranted no intervention.