FIRST DIVISION.
.
BOAZ
INTERNATIONAL
TRADING CORPORATION
AND F. R. CEMENT
CORPORATION,
Petitioners,
G.R.
No.
147793
December 11, 2003
-versus-
WOODWARD JAPAN,
INC.
AND NORTH FRONT
SHIPPING SERVICES, INC.,
Respondents.
D E C I S I O N
PANGANIBAN,
J.:
The liberal construction
of the Rules of
Court
is resorted to only to promote substantial justice, not to delay or
undermine
legal processes. The Rules
are designed to assure the orderly and predictable course of justice.
Unduly
relaxing them would be an injustice to the innocent parties who honor
and
obey them, and unfairly reward those who neglect or fail to follow
them.chanrobles virtuallaw libraryred
The Case
Before us is a Petition
for Review[1]
under Rule 45 of the Rules
of Court, assailing the January 18, 2001 Decision[2]
and the April 2, 2001 Resolution[3]
of the Court of Appeals (CA) in CA-GR SP No. 56848. We quote the
decretal
portion of the Decision:chanrobles virtuallaw libraryred
"WHEREFORE,
premises considered, the Order dated 09 August 1999 is MODIFIED in the
sense that the third-party complaint of Boaz International Trading
Corp.
and F. R. Cement Corp. against North Front Shipping Services, Inc. must
be as it is hereby reinstated. In all other respects, the Order is
AFFIRMED.
Finally, the writ of preliminary injunction issued by this Court on 29
June 2000 is perforce dissolved."[4]chanrobles virtuallaw libraryred
The assailed Resolution
denied petitioners' Motion for Reconsideration.
On the other hand, the
dispositive portion of the August 9, 1999 Order of the Regional Trial
Court
(RTC) of Makati City (Branch 135), which the CA later modified, reads
as
follows:chanrobles virtuallaw libraryred
"WHEREFORE,
premises considered, Order is hereby issued:
'1.
Reinstating
plaintiff's complaint and allowing plaintiff to present its evidence on
its complaint;chanrobles virtuallaw libraryred
'2. Allowing
plaintiff
to refute and/or present evidence against the ex-pare evidence
presented
by defendants on their counterclaim.'"[5]chanrobles virtuallaw libraryred
The Facts
The facts of the case
are summarized by the CA as follows:
"Respondent
Woodward Japan, Inc. (Woodward, for brevity) filed a complaint for a
'Sum
of Money and Damages' against petitioners Boaz International Trading
Corp.
(Boaz, for brevity) and F. R. Cement Corp. (F. R. Cement, for brevity).
The complaint, docketed as Civil Case No. 96-1440, was raffled to the
RTC
of Makati, Branch 135, presided over by public respondent Judge
Francisco
B. Ibay.chanrobles virtuallaw libraryred
"Petitioners Boaz
and
F. R. Cement filed their Answer to the complaint as well as a third
party
complaint against North Front Shipping Services, Inc. (North Front, for
brevity).chanrobles virtuallaw libraryred
"Respondent North
Front
filed its answer to the third-party complaint with a counterclaim
against
the third-party plaintiffs.chanrobles virtuallaw libraryred
"The court a quo
scheduled
a pre-trial conference for 04 November 1997. This initial pre-trial
conference
was however postponed to give the parties time to settle their
respective
claims amicably. Succeeding schedules of pre-trial conference were
likewise
cancelled for the same reason. Finally, when it became apparent that
the
parties would not be able to arrive at an amicable settlement, the
trial
court scheduled a pre-trial conference anew for 20 October 1998.chanrobles virtuallaw libraryred
"On the scheduled
day
of the pre-trial conference, both Woodward and its counsel failed to
appear.
Consequently, counsel for Boaz and F. R. Cement moved that Woodward be
declared non-suited, that the complaint against them be dismissed and
that
they be allowed to presence evidence on their counterclaim.chanrobles virtuallaw libraryred
"Third-party
defendant
North Front likewise filed a motion to dismiss the third-party
complaint
which was not objected to by third-party plaintiffs Boaz and F. R.
Cement.chanrobles virtuallaw libraryred
"In an Order dated
20
October 1998, the court a quo granted the motion of Boaz and F. R.
Cement
to dismiss the complaint of Woodward and the motion of North Front to
dismiss
the third-party complaint of Boaz and F. R. Cement.chanrobles virtuallaw libraryred
"Counsel for
Woodward
thereafter filed an urgent ex parte motion 1) to reconsider the Order
of
20 October 1998, 2) to set aside the same Order allowing Boaz and F. R.
Cement to present their evidence ex parte and 3) to allow Woodward to
present
its evidence. Petitioners Boaz and F. R. Cement filed their opposition
thereto.chanrobles virtuallaw libraryred
"In an Order dated
16
February 1999, Woodward's urgent ex-parte motion was denied for being
filed
out of time.
"On 28 April 1998,
Boaz
and F. R. Cement presented their evidence consisting of the testimony
of
one Jose Ernesto Rodriguez and reserved the right to present the
original
of certain documents. No formal offer of evidence has yet been made by
Boaz and F. R. Cement.
"On 25 June 1999,
Woodward
filed a 'Motion to Reinstate Plaintiff's (Woodward's) Complaint and
Allow
Them to Present Evidence Ex-Parte.' In support of its motion, Woodward
attached the affidavit of Atty. Pierre M. Alcantara, as associate
lawyer
of the law firm of Belo, Gozon, Parel, Asuncion and Lucila Law Office
which
handled Woodward's case in the court a quo. The affidavit of Atty.
Alcantara
explained the circumstances why Woodward was not represented in the
pre-trial
conference on 20 October 1998. The affidavit likewise contains Atty.
Alcantara's
tacit admission of his neglect to fully protect the interests of
Woodward.chanrobles virtuallaw libraryred
"Boaz and F. R.
Cement
filed their opposition to Woodward's motion to which Woodward filed a
reply.
"In an Order dated
9
August 1999, the trial court granted Woodward's 'Motion to Reinstate
Plaintiff's
(Woodward's) Complaint and Allow Them to Present Evidence
Ex-Parte,
x x xchanrobles virtuallaw libraryred
x x x
"Boaz and F. R.
Cement
moved for reconsideration but the trial court in its Order of 12
November
1999 denied the same."[6]
Imputing grave abuse of
discretion on the part of the trial court, petitioners elevated the
case
to the CA under Rule 65. Ruling of the
Court
of Appeals
In prosecuting the claim
of Woodward against petitioners, its lawyers acted negligently,
according
to the CA's ruling, which we quote:
"As
admitted
by Atty. Pierre M. Alcantara in his affidavit which was appended to
Woodward's
motion to reinstate complaint, a high fever prevented him from
attending
the pre-trial conference scheduled on 20 October 1998. This fact was
made
known to the handling lawyer, Atty. Jonel S. Mercado. However, no
action
was taken by Atty. Mercado to assign a substitute counsel for the
pre-trial
conference. Consequently, Woodward was declared non-suited and its
complaint
against Boaz and F. R. Cement was dismissed. To compound the initial
neglect
of the two lawyers, neither of them had seen fit to take appropriate
action
to protect their client's interest. While Atty. Alcantara filed a
motion
for reconsideration, the same was filed out of time, hence, denied by
the
trial court. Worse, both Attys. Alcantara and Mercado failed to inform
the handling partner, Atty. Enrique Belo, and most of all, the client
Woodward
of the status of the case a quo. Consequently, the order of dismissal
attained
finality leaving Woodward no option but to file the motion to reinstate
its complaint."[7]chanrobles virtuallaw libraryred
However, the appellate
court further ruled that "counsel's gross negligence should not be
allowed
to deprive Woodward of a chance to prove its claim as this would amount
to injustice and outright deprivation of property." It further held
that
"when the court a quo granted Woodward's motion to reinstate the
complaint,
it in effect amended, in the interest of justice, its previous order
declaring
Woodward non-suited." All considered, the CA found that the trial court
did not act without or in excess of jurisdiction or with grave abuse of
discretion when it reinstated Woodward's Complaint.chanrobles virtuallaw libraryred
Hence, this
Petition.chanrobles virtual law library[8]
The Issues
Petitioners raise the
following issues for our consideration:
"Whether or
not the Court of Appeals erred in ruling that Judge Ibay acted within
the
ambit of his jurisdiction and without grave abuse of discretion when he
granted Woodward's 'Motion To Reinstate Complaint.'chanrobles virtuallaw libraryred
"Whether or not
Judge
Ibay acted without or in excess of his jurisdiction or with grave abuse
of discretion amounting to lack or excess of jurisdiction in ordering
the
reinstatement of the complaint in Civil Case No. 96-1440.chanrobles virtuallaw libraryred
- Whether
or
not Woodward was bound by the negligence of its counsel
- Whether or not
the
appearance of the parties at the pre-trial conference is mandatory.
- Whether or not
Woodward's
consistent failure to observe the provisions of the Rules of Court
should
be considered fatal to its cause.chanrobles virtuallaw libraryred
- Whether or not
the
reinstatement of Woodward's Complaint had any legal basis.chanrobles virtuallaw libraryred
- Whether or not
Judge
Ibay already lost jurisdiction to amend, modify, reverse or set aside
his
dismissal order dated 20 October 1998 on 10 November 1998."[9]chanrobles virtuallaw libraryred
The main issue to be
resolved
is whether the CA erred in sustaining the RTC's Order reinstating the
Complaint
of Woodward. The Court's Ruling
The Petition has merit.cralaw:red
Main Issue:
Reinstatement of the Complaint
On October 20, 1998,
Woodward and its counsel failed to appear for a pre-trial conference in
Civil Case No. 96-1440. Hence, on motion of petitioners, its Complaint
was dismissed in an Order issued on the same day. Respondent Woodward
filed
a Motion for Reconsideration of the Order on November 12, 1998, 17 days
after it received a copy thereof. The trial court denied the Motion for
being filed out of time.chanrobles virtuallaw libraryred
On June 25, 1999, more
than seven (7) months after the finality of the November 12, 1998
Order,
Woodward filed a "Motion to Reinstate its Complaint and Allow it to
Present
Evidence." This Motion was granted by the RTC in its August 9, 1999
Order.chanrobles virtuallaw libraryred
Jurisdiction of
the RTC to Reverse Its October 20, 1998 Order
Indisputably, the August
9, 1999 Order reversed the one issued on October 20, 1998, which, as
early
as November 15, 1998, was already final as to Woodward. This reversal
cannot
be countenanced. When the dismissal of an order attains finality
through
the lapse of the 15-day reglementary period, the issuing court loses
jurisdiction
and control over that order, and it can no longer make any disposition
inconsistent with its dismissal.[10]
Upon the finality of the dismissal, the court has no more power to
amend,
modify, reverse or set aside the order.[11]chanrobles virtuallaw libraryred
Legal Basis of
the Motion Reinstating the Complaint
The Motion to Reinstate
Complaint asked the trial court to reverse or reconsider its Order
dismissing
the Complaint. Hence, this Motion was in reality Woodward's second
motion
for reconsideration, as it was filed months after the denial of its
first
one. Section 5 of Rule 37 explicitly states that "no party shall be
allowed
a second motion for reconsideration of a judgment or final order."
Clearly,
Woodward's Motion to Reinstate its Complaint was not sanctioned by the
Rules of Court or the law.chanrobles virtuallaw libraryred
Liberal Interpretation
of the Rules of Court
Respondent Woodward
pushes for a liberal interpretation of the Rules
of Court. It insists that the emerging trend in our jurisprudence
is
to afford all litigants the amplest opportunity for the proper and just
determination of their cause, free from the constraints of
technicalities.chanrobles virtuallaw libraryred
Indeed, espoused by
jurisprudence and the Rules is liberal interpretation which, however,
is
geared towards the attainment of a certain goal: "a just, speedy and
inexpensive
disposition of every action and proceeding."[12]
Respondent Woodward has failed to show how a liberal construction of
the
Rules, which it violated with impunity, would result in the attainment
of that goal. On the other hand, there are a number of reasons that
justify
the disallowance of such interpretation in the present case.chanrobles virtuallaw libraryred
Pre-trial
First, the rules on
pretrial were designed precisely to secure the just, speedy and
inexpensive
disposition of an action. The parties themselves — not only their
counsels
— are required to be present, so that they can discuss and possibly
agree
on a settlement and thus end the case justly, speedily and
inexpensively
right there and then. The Rules[13]
explicitly impose upon the former the duty to appear at the pretrial
conference.
The representative of Woodward, as well as its counsel, failed to do so
on the date set for the purpose — not just on October 20, 1998, but
also
earlier, on September 17, 1998. By its unexplained nonappearance, it
inexcusably
delayed the case and even caused added expense to the opposing party
who
had come to court in obedience to the Rules. Evidently, the RTC's
October
20, 1998 Order dismissing the case was proper and in accord with
Section
5 of Rule 18, which provides that "the failure of the plaintiff to
appear
for pretrial shall be cause for dismissal of the action."chanrobles virtuallaw libraryred
Procedural Rules
Second, after violating
the rules on pretrial, Woodward had the temerity to file a Motion for
Reconsideration
beyond the 15-day reglementary period, again in violation of the Rules.
Then, upon denial of that Motion, instead of properly elevating the
denial
to the appellate court for review, it filed a Motion to Reinstate
Complaint.
As previously explained, the latter Motion amounted to a second motion
for reconsideration, which is prohibited by the Rules. By its acts,
Woodward
unnecessarily delayed the disposition of the case and caused additional
expenses to all involved. Furthermore, such acts indicate a propensity
to violate the Rules or a gross ignorance thereof, either of which
deserves
nothing less than opprobrium.chanrobles virtuallaw libraryred
Negligence of
Counsel
Third, the CA did not
err in finding negligence on the part of the counsel of Woodward, which
is nonetheless bound by such negligence. "Settled is the rule that the
negligence of counsel binds the client."[14]
We find no cogent reason to depart from this settled rule, especially
because
the counsel's negligence in the present case has not been sufficiently
explained.chanrobles virtuallaw libraryred
To cater to the pleas
of Woodward and to reinstate its Complaint would put a premium on
negligence
and thus encourage the non-termination of this case. Like all other
clients,
Respondent Woodward is bound by the acts of its counsel in the conduct
of a case and has to bear with the consequences thereof. It cannot
thereafter
be heard to complain that the result might have been different had its
counsel proceeded differently. The rationale for the rule is easily
discernible.
If the negligence of counsel be admitted as a reason for opening a
case,
there would never be an end to litigation so long as there is a new
counsel
to be hired every time it is shown that the prior one had not been
sufficiently
diligent, experienced or learned.[15]chanrobles virtuallaw libraryred
Merit of
Respondent's
Collection Case
Fourth, Respondent Woodward
has failed to demonstrate that it has a meritorious case. It filed a
collection
case against Petitioner Boaz International Trading Corp. (hereinafter
referred
to as "Boaz") for demurrage charges in the total sum of US$75,065.96.
Yet
it has failed to show prima facie any agreement on the payment of
demurrages.
The April 18, 1995 Letter,[16]
which Woodward unilaterally made and which Petitioner Boaz did not
sign,
does not show that the latter agreed to pay demurrages of
"US$6,500/half
despatch" in case the discharge rate fell below 2,500MT.chanrobles virtuallaw libraryred
Contrary to Woodward's
contention, Boaz has not admitted the April 18, 1995 Letter-Agreement.
Paragraph 1.8 of the Answer is not a "negative pregnant." Woodward
itself
states that a "negative pregnant is that form of denial which at the
same
time involves an affirmative implication favorable to the opposing
party."
Since the aforementioned paragraph is explicitly an admission, not a
denial,
it follows that it cannot be taken as a denial pregnant with an
admission
of substantial facts.chanrobles virtuallaw libraryred
To sum up, the trial
court gravely abused its discretion in issuing its August 9, 1999
Order,
considering that (1) its October 20, 1998 Order was already final; (2)
the reinstatement of the Complaint is not in accordance with the Rules
of Court or the law; and (3) there is no justification for liberally
construing
the Rules in order to serve the ends of justice. Corollary to this
conclusion,
the CA erred in affirming the August 9, 1999 Order of the RTC and in
ordering
the reinstatement of the third-party Complaint of petitioners against
North
Front Shipping Services, Inc.chanrobles virtuallaw libraryred
WHEREFORE, the Petition
is GRANTED. The August 9, 1999 Order of the trial court is SET ASIDE
and
NULLIFIED. No pronouncement as to costs.cralaw:red
SO ORDERED. chanrobles virtuallaw libraryred
Davide, Jr., C.J.,
Ynares-Santiago, Carpio and Azcuna, JJ.,
concur.chan
robles virtual law library
____________________________
Endnotes:
[1]
Rollo, pp. 23–49.chanrobles virtuallaw libraryred
[2]
Id., pp. 53–65; penned by Justice Wenceslao I. Agnir Jr. and concurred
in by Justices Salome A. Montoya (Division chairman) and Salvador J.
Valdez
Jr. (member).
[3]
Id., pp. 67–69; penned by Justice Wenceslao I. Agnir Jr. and concurred
in by Justices Ma. Alicia Austria-Martinez (Division chair and now a
member
of this Court) and Salvador J. Valdez Jr.
[4]
Assailed CA Decision, pp. 12–13; rollo, pp. 64–65.chanrobles virtuallaw libraryred
[5]
RTC Decision, pp. 3–4; rollo, pp. 185–186. Written by Judge Francisco
B.
Ibay.
[6]
Assailed CA Decision, pp. 2–7; rollo, pp. 54–59.chanrobles virtuallaw libraryred
[7]
Id., pp. 9–10 & 61–62.chanrobles virtuallaw libraryred
[8]
This case was deemed submitted for resolution on September 30, 2002,
upon
receipt by the Court of petitioners' Memorandum, which was signed by
Atty.
Lorna Imelda M. Suarez. Respondent Woodward's Memorandum, filed on
August
29, 2002, was signed by Attys. Eric Vincent A. Estoesta and Regino A.
Moreno.chanrobles virtuallaw libraryred
[9]
Petitioners' Memorandum, pp. 10–11; rollo, pp. 463–464.chanrobles virtuallaw libraryred
[10]
Madarieta v. RTC, Branch 28, Mambajao, Camiguin, 383 Phil. 381,
February
28, 2000; citing Ortigas & Company Limited Partnership v. Velasco,
234 SCRA 455, July 25, 1994.
[11]
Olympia International, Inc. v. Court of Appeals, 180 SCRA 353, December
20, 1989.chanrobles virtuallaw libraryred
[12]
§6 of Rule 1 of the Rules of Court.chanrobles virtuallaw libraryred
[13]
§4 of Rule 18 of the Rules of Court.chanrobles virtuallaw libraryred
[14]
Greenhills Airconditioning and Services, Inc. v. NLRC, 315 Phil. 409,
417,
June 27, 1995, per Padilla, J.chanrobles virtuallaw libraryred
[15]
Gold Line Transit, Inc. v. Ramos, 415 Phil. 492, August 15, 2001;
Fernandez
v. Tan Tiong Tick, 111 Phil. 773, April 28, 1961.
[16]
Rollo, p. 431.chanrobles virtuallaw libraryred
chanrobles virtuallaw libraryred |