GR 196670; (October, 2016) (Digest)
G.R. No. 196670. October 12, 2016
ALLIED BANKING CORPORATION, PETITIONER, VS. SPOUSES RODOLFO AND GLORIA MADRIAGA, RESPONDENTS.
FACTS
Respondent Spouses Madriaga obtained a loan from Allied Bank, secured by a real estate mortgage. They alleged they had made payments through a bank officer, Leo Nolasco. In 2001, the Bank demanded payment for an amount the spouses claimed to have already paid. After the Bank initiated extrajudicial foreclosure, the spouses filed a Complaint for Specific Performance to enjoin the foreclosure and compel the Bank to produce their loan records. The Bank filed its Answer.
The procedural history was marked by delays attributed to the respondents’ counsel. The trial court granted their new counsel leave to file an Amended Complaint, but it was never filed despite extensions. Counsel withdrew, and new counsel from the PAO appeared belatedly. The trial court dismissed the case for failure to prosecute and to comply with court orders. The Court of Appeals reversed, finding the dismissal too harsh and reinstating the case, prompting the Bank’s appeal to the Supreme Court.
ISSUE
Whether the trial court committed grave abuse of discretion in dismissing the case for failure to prosecute.
RULING
The Supreme Court granted the petition and reinstated the trial court’s order of dismissal. The legal logic centered on the principle that a dismissal for failure to prosecute is within the sound discretion of the trial court, which should not be disturbed absent a patent abuse. The Court found no such abuse here.
The respondents’ inaction spanned over a year, from the initial order to amend the complaint in April 2002 to the dismissal in August 2003. The Court ruled that the successive changes and withdrawals of counsel did not excuse the failure to prosecute. Litigants are bound by the actions of their counsel, and the respondents themselves were remiss in not diligently securing representation and pursuing their case, especially given the high stakes involving their property. The delay was unreasonable, and the respondents slept on their rights. The Court of Appeals erred in substituting its own judgment for the trial court’s discretion, which was reasonably exercised based on the protracted inactivity and non-compliance with orders.