Santiago Land Development Co. vs. Court of Appeals

G.R. No. 103922 (July 9, 1996)

Santiago Land challenged dismissal of its motion vs. Komatsu for non-compliance; court called certiorari unsuitable.

Facts:

The case involves a dispute between Santiago Land Development Corporation (SLDC) and Komatsu Industries (Phil.) Inc. (Komatsu) regarding the foreclosure of a property mortgaged to the Philippine National Bank (PNB). Komatsu had an outstanding debt of P27,000,000 to PNB, which led to the initiation of foreclosure proceedings on an 18,000 square meter property located in Makati. In response, Komatsu filed a civil action (Civil Case No. 5937) in the Regional Trial Court, seeking to prevent the foreclosure. The trial court issued a temporary restraining order, but PNB proceeded with the extrajudicial foreclosure of the property.

Subsequently, SLDC purchased the property from PNB for P90,000,000, and a deed of absolute sale was executed on November 21, 1989. SLDC then moved to intervene in the ongoing civil case, asserting that any ruling adverse to PNB would affect its rights as the new owner of the property. The trial court allowed SLDC to intervene.

On November 20, 1990, SLDC served written interrogatories to Komatsu's counsel, which were not answered. SLDC filed a motion to dismiss Komatsu's action with prejudice, citing the failure to respond to the interrogatories as grounds for dismissal under Section 5, Rule 29 of the Rules of Court. Komatsu opposed the motion, arguing that the interrogatories were improperly served since they were directed to its counsel rather than to an officer competent to testify on its behalf.

The trial court denied SLDC's motion to dismiss, leading SLDC to file a petition for review with the Court of Appeals. The Court of Appeals upheld the trial court's decision, stating that while there was a valid service of interrogatories, the trial court's denial of the motion to dismiss did not constitute grave abuse of discretion.

Legal Issues:

  1. Whether the trial court erred in denying SLDC's motion to dismiss Komatsu's action based on its failure to answer the interrogatories.
  2. Whether the Court of Appeals correctly ruled that certiorari was not the proper remedy for SLDC's grievances regarding the trial court's decision.

Arguments:

  • Petitioner (SLDC): SLDC argued that the trial court should have dismissed Komatsu's action with prejudice due to its deliberate refusal to answer the interrogatories. SLDC contended that the failure to respond warranted dismissal under Section 5, Rule 29 of the Rules of Court, which allows for such a sanction in cases of non-compliance with interrogatories. SLDC maintained that the civil action was baseless and intended for harassment.

  • Respondent (Komatsu): Komatsu countered that the trial court did not commit grave abuse of discretion in denying the motion to dismiss. It argued that the interrogatories were served after it had rested its case, making the service improper. Komatsu asserted that the court's discretion in dismissing a case for failure to answer interrogatories is not absolute and must consider the context of the case.

Court's Decision and Legal Reasoning:

The Court of Appeals dismissed SLDC's petition for review, affirming the trial court's decision. The appellate court acknowledged that while there was an error in the trial court's judgment regarding the denial of the motion to dismiss, such an error did not amount to grave abuse of discretion. The court emphasized that certiorari is not a remedy for correcting errors of procedure or mistakes in the judge's findings and conclusions.

The court reiterated that the dismissal of an action for failure to prosecute is within the sound discretion of the trial court and will not be reversed unless there is clear evidence of abuse. The court also noted that the denial of a motion to dismiss is interlocutory and cannot be questioned by certiorari until a final judgment is rendered.

Significant Legal Principles Established:

  1. Discretion of the Trial Court: The dismissal of an action for failure to answer interrogatories rests on the sound discretion of the trial court, and such discretion will not be disturbed unless there is a clear showing of grave abuse.

  2. Certiorari as a Remedy: Certiorari is not available to correct errors of procedure or to address mistakes in the judge's findings and conclusions. It is intended to address grave abuse of discretion amounting to lack of jurisdiction.

  3. Interlocutory Orders: The denial of a motion to dismiss is considered an interlocutory order and is not subject to immediate review by certiorari.