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ALLIED BANKING CORPORATION v. SPOUSES RODOLFO AND GLORIA MADRIAGA

Respondents obtained a loan from Allied Bank secured by real estate, which they claimed to have paid in full. However, the Bank demanded payment of an unpaid balance. Respondents filed a complaint seeking to examine their loan records and enjoin foreclosure. The trial court dismissed the complaint for failure to prosecute, citing respondents changing lawyers three times without filing an amended complaint, which manifested delay tactics. The appellate court reversed, but the Supreme Court reinstated dismissal, finding respondents failed to comply with court orders or prosecute their case reasonably due to their dilatory actions.

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176 views1 page

ALLIED BANKING CORPORATION v. SPOUSES RODOLFO AND GLORIA MADRIAGA

Respondents obtained a loan from Allied Bank secured by real estate, which they claimed to have paid in full. However, the Bank demanded payment of an unpaid balance. Respondents filed a complaint seeking to examine their loan records and enjoin foreclosure. The trial court dismissed the complaint for failure to prosecute, citing respondents changing lawyers three times without filing an amended complaint, which manifested delay tactics. The appellate court reversed, but the Supreme Court reinstated dismissal, finding respondents failed to comply with court orders or prosecute their case reasonably due to their dilatory actions.

Uploaded by

Lara Cacal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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G.R. No.

196670, October 12, 2016


ALLIED BANKING CORPORATION v. SPOUSES RODOLFO AND GLORIA MADRIAGA

FACTS:

Respondents obtained a loan from Allied Bank secured by a real estate mortgage.
Respondents alleged to have religiously paid the loan through Nolasco, the Bank's Creditor
Investigator/Appraiser, in the aggregate amount of P628,953.96. Respondents converted
the remaining Balance of their loan, including interest, in the amount of P380,000.00 to a
term loan. Payments were regularly coursed to Nolasco. Subsequently, respondents
received a demand letter from the Bank for the payment of P399,898.56 representing their
unpaid obligation. Respondents claimed to have paid for the same. They requested for a
copy of the ledger and/or record of their loan obligation but the Bank ignored the same.

The Bank filed a petition for extrajudicial foreclosure of mortgage over respondents'
property. Respondents, through Atty. Santos Atty. Santos, countered with a Complaint for
Specific Performance with prayer for a Writ of Preliminary Injunction to enjoin the
extrajudicial foreclosure and to compel the Bank to allow them to examine their loan
record. Respondents changed lawyers thrice, one after the after and manifested that they
will file an amended complaint which they never did, that consequently resulted in the
delay in the proceeding. The Bank contends that respondents failed to exercise their
utmost diligence and reasonable promptitude in prosecuting their action for an
unreasonable length of time. The Bank emphasizes that respondents' dilatory tactics were
meant to thwart the foreclosure of their property. The trial court dismissed the complaint,
however on appeal, was reversed by CA.

ISSUE:

Whether or not the respondent’s complaint should be dismissed for failure to


prosecute.

HELD:

Yes. Under Section 3, Rule 17 of the 1997 Rules of Civil Procedure, as amended, the
failure on the part of the plaintiff, 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.
There are three (3) instances when the trial court may dismiss an action motu proprio,
namely: 1) where the plaintiff fails to appear at the time of the trial; 2) where he fails to
prosecute his action for an unreasonable length of time; and, 3) when he fails to comply
with the rules or any order of the court.

Here, respondents changing of lawyers three times and non-filing of the complaint
manifests a tactic to delay the proceeding. True, there is nothing in the Rules that sanctions
the non-filing of an Amended Complaint. But the dismissal of the complaint by the trial
court was not per se due to the non-filing of an amended complaint. A scrutiny of the
records shows that the commitment to file the amended complaint was but a mere ruse to
delay the proceedings. Apart from the failure to file the amended complaint as manifested.
and the numerous changing of counsels, respondents are deemed to have failed to comply
with the order of the court to secure a new counsel within forty-five (45) days. Thus, the
dismissal was proper.

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