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ELOISA MERCHANDISING, INC. vs.

TOPIC: RULE 17
BDO UNIVERSAL BANK

JUNE 13, 2012


PETITION FOR REVIEW ON CERTIORARI
PETITIONERS: Eloisa Merchandising, Inc. and Trebel International, Inc.
RESPONDENTS: BDO Universal Bank and Engracio Escasinas, Jr. (RTC Ex-Officio Sheriff of
Makati)

EMI executed a REM in R’s favor. The REM was amended to secure the principal obligation of
P29.9M, drawn from the Credit Line Agreement of EMI and Term Loan Agreement of Trebel,
EMI’s affiliate. EMI also executed a continuing suretyship in R’s favor to secure Trebel’s credit
accommodation by R.

PETITIONERS COURT RESPONDENTS


OFFICE OF THE EX-OFFICIO
SHERIFF OF RTC MAKATI APPLICATION FOR
R issued a notice setting the auction EXTRAJUDICIAL
sale of the mortgaged property FORECLOSURE

COMPLAINT FOR RTC MAKATI


ANNULMENT OF REM,
INJUNCTION &
MOTION TO DISMISS
DAMAGES W/ PRAYER
-lack of cause of action
FOR ISSUANCE OF WPI
AND/OR TRO

AMENDED COMPLAINT RTC MAKATI


-impleaded Register of Deeds GRANTED P’S MOTIONS
-alleged that mortgaged prop DENIED MOTION TO DISMISS
was sold at a public auction ISSUED NOTICE OF PRE-TRIAL

MOTION FOR LEAVE TO


FILE AND ADMIT
ANSWER
SECOND AMENDED
COMPLAINT
-Register of Deeds has
consolidated titles over
foreclosed properties

MOTION TO ADMIT RTC MAKATI


SUPPLEMENTAL DENIED
COMPLAINT -improper issues raised; pertained
-BDO’s petition for issuance of to issuances by another branch in a
writ of possession was granted separate petition for writ of
by RTC Makati, violating its possession
rights as surety-mortgagor
MOTION TO PRESENT RTC MAKATI
EVIDENCE EX-PARTE GRANTED
-in view of the absence of BDO
which was non-suited

BAUTISTA │ ESTERON │ HIPOLITO │ MANANTAN | RAMIREZ │ PIOQUINTO │ SALES | YAMO 3-EVE


ELOISA MERCHANDISING, INC. vs. TOPIC: RULE 17
BDO UNIVERSAL BANK

RTC MAKATI
MR
GRANTED
Failed to appear at PTC RTC MAKATI
DISMISSED CASE

MR GRANTED; RESCHEDULED
-failure to attend due to PTC
accidental falling on the stairs
of his house on the morning of
the scheduled PTC

Failed to appear at PTC for the 2nd RTC MAKATI


time DISMISSED CASE

MR GRANTED
-prior hearing on conflict with -“in the interest of justice”
PTC sched; lost calendar book

DISMISSED CASE
-failure to prosecute case for an
unreasonable length of time; failed
to set case anew for PTC
MR DENIED
-Ps inclined to abuse Court’s
leniency
APPEAL CA
AFFIRMED RTC
DENIED MR
PETITION FOR REVIEW
-Case was not yet ripe for pre-
trial because of unresolved
pending MR of the RTC’s
denial of the Motion to Admit
SC
Supplemental Complaint
DENIED
-AM No. 03-1-09-SC amended
1997 RCP; now imposes upon
clerk of court the duty to issue
a notice of pre-trial if the P fails
to file a motion to set case for
PTC

DISCUSSION:
1. Sec. 3, Rule 17, RCP failure on P, without any justifiable cause, to comply with any order of
the court or the Rules, or to prosecute his action for an unreasonable length of time, may result
in the dismissal of the complaint either motu proprio or on motion by the defendant
- gives rise to the presumption that P is no longer interested to obtain relief from the court
2. Sec. 1, Rule 18, 1997 RCP  duty of the plaintiff to promptly move ex parte that the case be set
for pretrial, after the last pleading has been served and filed

BAUTISTA │ ESTERON │ HIPOLITO │ MANANTAN | RAMIREZ │ PIOQUINTO │ SALES | YAMO 3-EVE


ELOISA MERCHANDISING, INC. vs. TOPIC: RULE 17
BDO UNIVERSAL BANK

3. Extreme sanction of dismissal of complaint might not be warranted if no substantial


prejudice would be caused to the defendant and there are special and compelling reasons
which would make the strict application of the rule clearly unjustified
- In this case, while there was no substantial prejudice caused to R, there was neither patent
abuse in the RTC’s dismissal of the complaint for the 3rd time  Ps themselves did nothing
to get the case moving for 9 months and set the case anew for pretrial even as BDO was
already seeking their judicial ejectment
- A party cannot blame his counsel when he himself was guilty of neglect
4. Ps belatedly raise as issue the unresolved MR of the denial of Ps’ Motion to admit
supplemental complaint
- Ps did not even file a motion to resolve said pending incident which could have been
brought to the RTC’s attention had Ps acted promptly to have the case set for PTC
5. While under the present rules, it is now the duty of clerk of court to set case for pretrial if the
plaintiff fails to do so within the prescribed period, this does not relieve P of his own duty to
prosecute the case diligently
-said case has been at the pretrial stage for more than 2 years and Ps have not shown special
circumstances or compelling reasons to convince the Court that the dismissal of their
complaint was unjustified.

BAUTISTA │ ESTERON │ HIPOLITO │ MANANTAN | RAMIREZ │ PIOQUINTO │ SALES | YAMO 3-EVE