Shimizu V Magsalin

SHIMIZU PHILIPPINES CONTRACTORS, INC.
vs MAGSALIN
G.R. No. 170026, June 20, 2012
BRION, J.
FACTS:
 Petitioner claims that Leticia Magsalin had breached their subcontract agreement for the supply, delivery,
installation and finishing of the tiles in certain floors in petitioner’s condominium project. The agreement was
terminated.
 Due to Magsalin’s refusal to return unliquidated advance payment and other monetary liabilities, petitioner sent a
notice to respondent FGU Insurance demanding damages pursuant to the bonds the former had issued for the
subcontract.
 Petitioner filed a complaint for actual damages for breach of contract against Magsalin and FGU. FGU was duly
served with summons. With respect to Magsalin, despite efforts, their new addresses could not be determined.
 FGU filed a motion to dismiss but was denied. Likewise, MR was denied. FGU was obliged to file an answer.
 Petitioner filed a motion for leave to serve summons on respondent Magsalin by way of publication.
 Then, the petitioner filed its reply to FGU Insurance’s answer.
 FGU filed a motion for leave of court to file a third-party complaint. Baetiong, G. Garcia and C. Garcia were named
as third-party defendants.
 FGU claims that the three had executed counter-guaranties over bonds it executed for the subcontract w/
Magsalin and, hence, should be held jointly and severally liable
 RTC admitted the third-party complaint and denied the motion to serve summons by publication on the ground
that the action against respondent Magsalin was in personam.
 RTC issued a notice setting the case for hearing. FGU filed a motion to cancel the hearing on the ground that the
third-party defendants had not yet filed their answer. The motion was granted.
 Of the three third-party defendants, only Baetiong filed an answer, the officer’s returns on the summons to the
Garcias state that both could not be located at their given addresses. Petitioner was not served w/ Baetiong’s
answer.
 For failure of petitioner to prosecute, RTC dismissed the case. RTC denied the petitioner’s MR prompting the
latter to elevate its case to the CA via a Rule 41 petition for review.
 CA dismissed the appeal on the ground of lack of jurisdiction. The appeal raised a pure question of law as it did
not dispute the proceedings before the issuance of the December 16, 2003 dismissal order.
Issue + Ruling
W/N Dismissal was voidY
 Dismissals of actions for failure of the plaintiff to prosecute is authorized under Section 3, Rule 17 of the Rules of
Court. Dismissal with prejudice means dismissal on adjudication of merits.
 It is imperative that the dismissal order conform with Section 1, Rule 36 of the Rules of Court on the writing of
valid judgments and final orders.
o Section 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of
the case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the
facts and the law on which it is based, signed by him, and filed with the clerk of the court.)
 The December 16, 2003 dismissal order clearly violates this rule for its failure to disclose how and why the
petitioner failed to prosecute its complaint.
o A trial court should always specify the reasons for a complaint’s dismissal so that on appeal, the reviewing
court can readily determine the prima facie justification for the dismissal
 There was a denial of due process. Elementary due process demands that the parties to a litigation be given
information on how the case was decided, as well as an explanation of the factual and legal reasons that led to
the conclusions of the court. Where the reasons are absent, a decision has absolutely nothing to support it and is
thus a nullity.
W/N The appeal was properly filed under Rule 41 of the Rules of CourtY
 In Olave vs. Mistas, among the critical factual questions was whether, based on the records, there had
been factual basis for the dismissal of the subject complaint. This same question is particularly significant in the
present case given that the order appealed does not even indicate the factual basis for the dismissal of the case.
 Due to the absence of any stated factual basis, and despite the admissions of the parties, the CA still had to delve
into the records to check whether facts to justify the prejudicial dismissal even exist. Since the dismissal of the
case appears to have been rendered motu proprio (as the December 16, 2003 dismissal order does not state if it
was issued upon the respondents’ or the trial court’s motion), the facts to be determined by the CA should
include the grounds specified under Section 3, Rule 17 of the Rules of Court.
 A court could only issue a motu proprio dismissal pursuant to the grounds mentioned in this rule and for lack of
jurisdiction over the subject matter. These grounds are matters of facts. Thus, given that the dismissal order does
not disclose its factual basis, we are thus persuaded that the petitioner had properly filed its appeal from the
dismissal order under Rule 41 of the Rules of Court.
W/N the dismissal of the case is supported by the facts of the caseNO
 The following events were chronologically proximate to the dismissal of Civil Case No. 02-488: (a) the court
admitted FGU Insurance’s third-party complaint; (b) the trial court cancelled hearing upon FGU Insurance’s
motion; and (c) Baetiong filed his Answer to the third-party complaint but did not serve it upon the petitioner.
 None of these events square with the grounds specified by Section 3, Rule 17 of the Rules of Court for the motu
proprio dismissal of a case for failure to prosecute.
o (a)Failure of the plaintiff, without justifiable reasons, to appear on the date of the presentation of his
evidence in chief;
o (b) Failure of the plaintiff to prosecute his action for an unreasonable length of time;
o (c) Failure of the plaintiff to comply with the Rules of Court; or
o (d) Failure of the plaintiff to obey any order of the court.
 This does not satisfy the standards of non prosequitur. The fundamental test for non prosequitur is whether,
under the circumstances, the plaintiff is chargeable with want of due diligence in failing to proceed
with reasonable promptitude. There must be unwillingness on the part of the plaintiff to prosecute.
 In this case, the parties’ own narrations of facts demonstrate the petitioner’s willingness to prosecute its
complaint. Indeed, neither respondents FGU Insurance nor Baetiong was able to point to any specific act
committed by the petitioner to justify the dismissal of their case.
 While it is discretionary on the trial court to dismiss cases, dismissals of actions should be made with care. The
sound discretion demands vigilance in duly recognizing the circumstances surrounding the case to the end that
technicality shall not prevail over substantial justice.
RULING: The petition is granted. The Dismissal Order is Void, the December 16, 2003 dismissal order shows that it is an
unqualified order and, as such, is deemed to be a dismissal with prejudice.

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