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6/25/2018 SUPREME COURT REPORTS ANNOTATED VOLUME 049

556 SUPREME COURT REPORTS ANNOTATED


Dismissal of Actions: With or Without Prejudice

ANNOTATION

DISMISSAL OF ACTIONS: WITH OR WITHOUT


PREJUDICE
By
Atty. JAIME N. SALAZAR,JR.

§ 1. Court Rules on Dismissals of Civil Actions, p.


557.

A. Dismissal by Plaintiff, p. 557


B. Dismissal by Order of the Court, p. 557
C. Other Dismissal, p. 557
D. Dismissal of Counterclaims, Crossclaims and Third­
party Complaints, p. 558

§ 2. Dismissal for Insufficiency or Lack of Cause


of Action, p. 558
§ 3. Dismissal for Lack of Personality to Sue, p.
560
§ 4. Dismissal for Lack of Jurisdiction in Relation
to Prescription, p. 560
§ 5. Dismissal of Actions on Purely Technical
Grounds, p. 561
§ 6. Dismissal in Naturalization Proceedings, p.
562
§ 7. Dismissal for Failure to Prosecute, p. 563

A. Illustrative Cases, p. 563

§ 8. Dismissal Based on Pendency of Another


Action, p. 566
§ 9. Dismissal of Complaint for Forcible Entry
Where Issue of Ownership Raised, p. 567
§ 10. Dismissal of an Action at the Pre­Trial Stage,
p. 567

—–—–—–—–—–—–

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The end­result of the dismissal of a civil suit can either be


with prejudice or without prejudice to the rights in litis
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Dismissal of Actions: With or Without Prejudice

of the plaintiff or the defendant. A number of factors work


into play for either of these results to obtain.

§ 1. Court Rules on Dismissals of Civil Actions.

Under Rule 17 of the Revised Rules of Court, the dismissal


of an action and their corresponding results may be
classified as follows, to wit:

A. Dismissal by Plaintiff.
The Rules authorize the plaintiff to unilaterally dismiss his
complaint by simply filing with the court a notice of
dismissal. This may be done at anytime before the service
of the answer or of a motion for summary judgment.
Dismissal by unilateral action of the plaintiff works no
prejudice to the subsequent filing of the same claim in
court. However, there are two exceptions to this principle,
namely, (1) when it is expressly stated in the notice that
the dismissal shall be with prejudice; and (2) even when
not so stated, if the plaintiff has once dismissed in a
competent court an action based on or including the same
claim. A class suit may not, however, be dismissed or
compromised without the court’s approval. (Section 1, Rule
17).

B. Dismissal by Order of the Court.


Except as stated above, an action cannot be dismissed save
upon orders of the court. However, if a counterclaim had
been pleaded prior to the service upon the defendant of the
plaintiff’s unilateral motion to dismiss, an action may not
be dismissed if the defendant objects, unless the
counterclaim can be tried independently. (Section 2, Rule
17). A dimissal by order of the court is with prejudice
except where the court stated otherwise in the order of
dismissal.

C. Other Dismissals.
If the plaintiff fails to appear at the trial, or to prosecute
his action for an unreasonable length of time, or to
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558 SUPREME COURT REPORTS ANNOTATED


Dismissal of Actions: With or Without Prejudice

comply with the Rules of Court or any order of the court,


the action may also be dismissed either upon motion of the
defendant or upon the court’s own motion.
The dismissal of an action on account of the foregoing
causes has also the effect of an adjudication on the merits,
except where the court’s order stated otherwise. (Section 3,
Rule 17).

D. Dismissal of Counterclaims, Crossclaims and Thirdparty


Complaints.
The foregoing rules apply to counterclaims, crossclaims and
third­party complaints. (Section, 4, Rule 17). Under Section
2, Rule 20 of the Revised Rules of Court, if a party­litigant
or his counsel fails to appear at the pretrial conference, the
action may also be declared non­suited by the court.
Under Rule 35 of the Revised Rules of Court, the
defendant, after the plaintiff has completed the
presentation of his evidence, may also move to dismiss an
action, without waiving his right to offer evidence in the
event the motion is not granted, on the ground that the
plaintiff has shown no right to the relief claimed. If his
motion is granted, but, on appeal, the order of dismissal is
reversed, the defendant will lose the right to present
evidence on his behalf.

§ 2. Dismissal for Insufficiency or Lack of Cause of


Action.

In the case of Licup vs. Manila Railroad Co., Inc. (2 SCRA


271), it appears that in 1956 Licup, who was separated by
the company from the service, filed an action for
mandamus to compel the GSIS and MRR to consider him
as a retiree under the Retirement Act (R.A. 662). The GSIS
filed a motion to dismiss for lack of cause of action
inasmuch as Licup’s separation from the government
service, as appears in his petition, was not due to the
reorganization provided for in R.A. 422 which would have
entitled him to the benefits of the Retirement Law. The
trial court dismissed the petition and Licup did not appeal
the same.
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Dismissal of Actions: With or Without Prejudice

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Two years thereafter, Licup filed another action against the


MRR and GSIS alleging the same cause of action and relief.
Upon motion of the defendants, the trial court dismissed
the complaint on the ground of bar by prior judgment.
On appeal, Licup argued, among others, that as the
dismissal of his earlier petition for mandamus was
rendered on the ground of lack of cause of action, the
merits of the case was never presented for decision and,
consequently, the said order of dismissal was not an
adjudication on the merits which would require the
application of the doctrine of res judicata. The Supreme
Court, however, rebutted said argument stating that while
it is true that where a case is dismissed or goes off on a
preliminary, technical plea or objection, not bearing on the
merits of the case the dismissal order will not operate as an
adjudication on the merits, this rule is not applicable to a
situation where the dismissal was not that the complaint
was formally defective or that it does not sufficiently state
a cause of action, but that—–

“while ‘petitioner alleges that he was separated from the service


of the Manila Railroad Company under Republic Act 422,
otherwise known as the Reorganization Act,’ so that ‘he is entitled
to be retired under the provisions of Section 26 of Republic Act
660,’ Annex ‘B’ of the petition x x x however, ‘shows that the
separation of petitioner from the Manila Railroad was not due to
the reorganization provided for in Republic Act No. 422’;
‘consequently, petitioner is not entitled to the retirement asked
for under Republic Act No. 660 x x x” (See De Guzman vs.
Ramoso, L­10922, Jan. 23, 1958).

The strictures of the above ruling should, perhaps, be


compared with Perez vs. Central Azucarera de Don Pedro
(19 SCRA 743) where the Supreme Court held that while
the trial court correctly dismissed an employee’s complaint
for reinstatement because his employment not being for a
definite period his employer has the right to terminate his
service, it should nonetheless have tried the case with
respect to the separation pay that the employee should
receive even if no such prayer for separation pay was made
in the complaint and reference to it was made only in an
affirma­
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560 SUPREME COURT REPORTS ANNOTATED


Dismissal of Actions: With or Without Prejudice

tive defense of the employer which said that the employee


would be entitled, if at all, only to a termination pay.

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§ 3. Dismissal for Lack of Personality to Sue.

In the case of Tuballa vs. De la Cruz (1 SCRA 742), it


appears that Tuballa filed an action for the annulment of
an original certificate of title issued to De la Cruz over a
parcel of land on the ground of fraud in the certificate’s
procurement by the latter. The action was, however,
dismissed on the ground that Tuballa lacked any legal
personality to file the action. Subsequently, Tuballa filed a
similar action against De la Cruz.
The Supreme Court held that—–

“While the dismissal of Civil Case No. 1430 was not made after
the presentation of the evidence or after trial where the issues
raised are passed upon, it cannot be said that the same is not an
adjudication on the merits. Under Section 4, Rule 30, any
dismissal of the case predicated under Section 3 of said Rule or
under Section 1, Rule 8, operates as an adjudication on the merits
unless the court expressly directs that the dismissal is without
prejudice. The only exception is when the dismissal is based on
lack of jurisdiction [under the old Rules]. Considering that the
former case was dismissed on the ground of lack of personality,
the same operates as an adjudication upon the merits and,
therefore, is a bar to another action between the same parties on
the same subject matter.”

§ 4. Dismissal for Lack of Jurisdiction in Relation to


Prescription.

In F. H. Stevens & Co., Inc. vs. Nordeuscher Lloyd (6 SCRA


180), F. H. Stevens & Co., Inc. filed on April 27, 1960, an
action in the Manila City Court for damages against N.
Lloyd for losses and short delivery of merchandise shipped
thru a vessel owned by the latter. On June 13, 1960 the
action was dismissed for lack of jurisdiction over the
subject­matter as the same involved the exercise of
maritime and admiralty jurisdiction. F. H. Stevens & Co.
then filed a similar complaint with the Court of First
Instance of Manila. The defendant moved to dismiss on the
ground of
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VOL. 49, FEBRUARY 28, 1973 561


Dismissal of Actions: With or Without Prejudice

prescription because the action was filed only on June 24,


1960 or more than the statutory period of one year after
May 21, 1959 when the plaintiff Stevens & Co. was notified
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of the delivery of the merchandise. The trial court


dismissed the complaint, but the dismissal was reversed by
the Supreme Court which held that under Section 49 of Act
No. 190, the period of one year within which the plaintiff
could initiate the second action was renewed for another
year, beginning from June 14, 1960, the day after the first
action in the city court was dismissed.
It should be worthwhile to mention in this connection
that the Supreme Court, interpreting the provisions of
Section 40 of Act 190 relating to the ten­year prescription
for the filing of an action for the recovery of real property,
has held that under said Act, the filing of an action within
the prescriptive period, if the plaintiff desists in its
prosecution or if the action is dismissed, “does not suspend
the running of the statute of limitations and takes no time
out of the period of prescription under Act. 190.” (Ong­siako
vs. Ongsiako, L­7510, March 30, 1957 and Amar vs.
Odianan, L­15179, Sept. 30, 1960). “This is so,” the Court
explained, “because Act 190 does not have any specific or
express provision on the suspension or interruption of the
prescriptive period by the institution of an action that is
subsequently dismissed.” (Quetulio vs. De la Cuesta, 22
SCRA 1958).
It is quite difficult to reconcile the rulings of the
Supreme Court in the foregoing cases. However, it is well
to remember that under Article 1155 of the New Civil
Code, it is provided that—–

“The prescription of actions is interrupted when they are filed


before the court, when there is a written extrajudicial demand by
the creditors, and when there is any written acknowledgment of
the debt by the debtor.” (See Fulton Ins. Co. vs. MRR, 21 SCRA
974 and Cabrera vs. Tiano, 8 SCRA 543).

§ 5. Dismissal of Actions on Purely Technical


Grounds.

In the Licup case, supra, the Supreme Court, in the course


of rebutting the argument of the petitioner therein that
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Dismissal of Actions: With or Without Prejudice

the previous dismissal of his complaint on the ground of


lack of cause of action did not amount to an adjudication on
the merits, took occasion to discuss the effect of the
dismissal of an action on grounds not having any relation
to the merits of the case, as follows: “It is true, as pointed

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out by the appellant, that the above rule does not exclude
other instances where a dismissal not based on lack of
jurisdiction does not operate as an adjudication on the
merits, like a dismissal based on wrong venue. These
exceptions, are, however, grounded on the fact that the
case is dismissed or goes off on a preliminary technical plea
or objection, not bearing on the merits of the case. For
instance, a dismissal on the ground of improper venue,
though not strictly a jurisdictional matter, may be
considered as lack of jurisdiction over the person of the
defendant and hence does not operate as an adjudication on
the merits (Cohen vs. Benguet Comm. Co., 34 Phil. 526; I
Moran, Comments on the Rules of Court, 1957 Ed., p. 433).
Similarly, a dismissal based on want of capacity to sue is
not a bar to another action after the incapacity is removed
(50 C.J.S. 53); a dismissal because the action was
prematurely brought, will not bar another action for the
same cause when the right of action becomes complete (Id.,
p. 54); or a judgment of dismissal on the ground of formal
defects or errors in the complaint which do not touch on the
merits of the controversy is no bar to a second suit wherein
the defects in the previous pleading are cured or obviated
(Id., p. 67; Araneta vs. Diaz, et al., 69 Phil. 390).”

§ 6. Dismissal in Naturalization Proceedings.

In the case of Ao San vs. Republic (20 SCRA 1092), the trial
court after granting Ao San’s petition for citizenship set it
aside on a plea of the government that the applicant’s
petition was defective in several respects, namely, (a) he
failed to state all of his previous places of residence; and (b)
Ao San stated he has five children originally, then in his
amended petition he stated he has eight children and the
birth of two of them had an interval of only five months
and twenty­five days. The dismissal order, however, stated
that it was “without prejudice” to the filing of another
petition as it found the petitioner not suffering from any
disqualification.
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Dismissal of Actions: With or Without Prejudice

The Supreme Court, on certiorari, held that the dismissal


should have been with prejudice as the facts
aforementioned “betrays petitioner’s lack of good moral
character.”

§ 7. Dismissal for Failure to Prosecute.


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Whether or not the dismissal of an action on account of the


plaintiff’s failure to appear at the time of the trial or to
prosecute his action should be with or without prejudice
depends upon the sound discretion of the court to be
exercised according to the circumstances of the case.
(Vernus­Sanciangco vs. Sanciangco, 4 SCRA 1208). If the
order of dismissal, for failure to prosecute, does not state,
however, that the same is without prejudice, then the
dismissal will be deemed an adjudication on the merits.
(Guanzon vs. Mapa, 7 SCRA 459; Abustan vs. Ferrer, 12
SCRA 492). After the order of dismissal with prejudice
becomes final, another action based on or including the
same claim will be barred by res judicata, provided that all
the elements of this principle are present (Garcia vs. Court
of Appeals, 14 SCRA 725). These principles apply to
persons who intervene in a case in the role of plaintiffs and
whose intervention is dismissed for failure to prosecute.
(Malvar vs. Pallingayan, 18 SCRA 122).

A. Illustrative of the cases where the dismissal for


failure to prosecute was upheld are the following:

1. Suñico vs. Villapando (14 Phil. 353).—– Where a


party was given due notice of the date set for the
case but fails to attend the same, either in person or
by counsel, he is not entitled, as of right, to a
written notice of the new date in which the case
may be continued; and, in the event that notice is
forwarded to him, he has no just cause for
complaint if such notice fails to reach him in time to
make it possible for him to attend the trial on the
new date set for the hearing. In this Suñico case,
the plaintiff’s position was further aggravated by
the fact that, in spite of the ample time available to
him, he failed, without any satisfactory
explanation, to secure the appointment of a
representative for the deceased defendant before
the date set for hearing the case.

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Dismissal of Actions: With or Without Prejudice

2. E. E. Elser, Inc. vs. De la Rama Steamship Co., Inc.


(94 Phil. 814).—– Where the plaintiffs never moved
for trial and filed an amended complaint only after
four years, during which they had ample time to
prepare their witnesses or secure their depositions,
it was held that the trial court was justified in
dismissing the case when, on the date set for
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hearing the plaintiffs were not ready to present


their evidence and, instead moved for postponement
on the ground that an important witness could not
be found. Moreover, the plaintiffs failed to present
any affidavit indicating the materiality of the
evidence expected to be obtained or shown to have
exercised due diligence to procure it.
3. Chuan vs. de la Fuente, (90 Phil. 813); Villanueva
vs. Sec. of Public Works (16 SCRA 424); and Inter­
Island Gas Service, Inc. vs. De la Cerna (18 SCRA
890).—– Where a person is not prosecuting an
ordinary action but a provisional remedy of
injunction, his failure to ask the court to set his
petition for hearing after the lapse of one year and
four months, amounts to a failure to prosecute.

There are cases, however, in which while the trial court’s


order of dismissal was upheld, the Supreme Court
nonetheless said that the dismissal should have been
without prejudice. Thus, in Ventura vs. Baysa (4 SCRA
167), it appears that for four years the plaintiff failed to
ask the trial court to schedule the case for trial for which
reason the court moto proprio ordered the case dismissed
on the assumption that the plaintiff already lost interest in
prosecuting the case. On certiorari, the Supreme Court said
that while the trial court correctly dismissed the action, the
dismissal should not have been with prejudice it appearing
that the plaintiff’s claim is meritorious as the lands
involved in the dispute are covered by torrens titles in the
name of the common ancestors of both party litigants. In
this case, the Supreme Court also stated that—–

“While it is true that under the rules it is the duty of the clerk of
court to include a case in the trial calendar after issues are joined,
to fix the date for trial, and to cause notice to be served upon the
parties, this does not relieve the plaintiffs of their own duty to
prosecute the case diligently and to call the attention of the court,
if necessary, to the necessity of putting

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Dismissal of Actions: With or Without Prejudice

the case back to its calendar if that has been neglected by the
court because of the numerous cases it has to attend to. . . .”

In Government vs. Songcuya (20 SCRA 109), it appears


that when the case was called for hearing on October 10,
1955 the defendant asked for a postponement. The court
granted the motion and set the hearing “until further
assignment.” When the case was again called for hearing
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on August 20, 1959 (after the lapse of four years), the


provincial fiscal, as counsel for the government, asked for
postponement on the ground that the postal inspector, a
witness for the government, failed to appear. Said inspector
sent a telegram stating that he could not come due to lack
of transportation. The trial court, however, denied the
motion for postponement and dismissed the case. The
Supreme Court, on certiorari, reversed the trial court as
follows:

“It cannot be denied, of course, that there was failure on the part
of the appellant to show sufficient interest in the prosecution of
its case because it allowed four years to elapse from the first date
of trial before securing another assignment of date. Considering,
however, the possibility that court sessions in the jurisdiction
where the case was pending were not continuous—– for which
reason the Court itself seems to have forgotten the case all
together—– and considering likewise the fact that appellees had
also shown lack of interest in having the case tried and disposed
of, We feel that, in equity, the order of dismissal—– which by its
terms would amount to a dismissal on the merits—– should not be
allowed to stand to the prejudice of the claim of the appellant
entity.”

In Go Lea Chin vs. Gonzales (22 SCRA 770), it appears that


the counsel of Gonzales came about ten minutes late on the
scheduled day of trial. For such tardiness, the trial court
ordered the case dismissed and directed an ex­parte
hearing of the defendant’s counterclaim. The Supreme
court ordered the case dismissed and directed an ex­parte
minutes is not such a contemptuous disregard of his duty
to appear on time and does not warrant the immediate and
absolute purging of his client’s complaint and letting the
opponent’s counterclaim be heard ex­parte. “It could have
been an easy matter for the trial judge to call off the ex­
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parte hearing before his deputy clerk, or if hearing had


started, to have allowed Gonzales’ lawyer to take part
therein if only to cross­examine the witnesses and to
present his client’s own evidence. Because Gonzales was
not declared in default on the counterclaim. She was
entitled to be heard.”
Similar in nature to the Go Lea Chiu case was that of
Gil vs. Taloña (96 Phil. 32) where the High Tribunal
reproached the trial court for dismissing the case definitely
where the plaintiff and his counsel “were only about fifteen
minutes late in arriving at the court.” The same ruling was
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also pursued in Philippine National Bank vs. Philippine


Recording System, Inc. (L­11310, March 30, 1960). In this
case the plaintiff’s witnesses did not arrived within the
extended period of ten minutes, on the day of hearing, but
showed up barely two minutes after the entry of the order
of dismissal. It was held that the trial court should have
recalled its order. (See also Dayo vs. Dayo, L­6428, August
31, 1954). However, in Rabetta vs. Farmacia Central, Inc.
(51 O.G. 125), it was held that where a party was unwilling
to proceed to trial because of the absence of his lawyer, the
dismissal of the action was proper. The trial court,
however, should first give the party a chance within an
hour or two to secure the services of a new lawyer. (Dayo
vs. Dayo, supra).
In Brandt vs. Behn, Meyer & Co. (38 Phil. 355), it was
held that while a court will be justified in ordering the
dismissal of a case where it is shown that no effort had
been made by the parties, as promised, to obtain the
deposition of witnesses to be taken in foreign countries, it
will not be justified in ordering a case dismissed where it
also appears that the delay was caused by arrangements
between the parties looking to a settlement and the facts
disclose that the affairs of the defendant corporation were
in process of liquidation in the courts of a foreign country
the members of which are subjects of an alien and enemy
nation.

§ 8. Dismissal Based on Pendency of Another Action.

Where the defendant moves to dismiss an action on the


ground of the pendency of another action involving the
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Dismissal of Actions: With or Without Prejudice

same subject matter and affecting the rights of the parties


to the action, but then said defendant subsequently
presented evidence in his behalf in the case where his
motion to dismiss was pending and even submitted the
case for decision on the merits, it was held that his motion
to dismiss should be deemed waived. (J.M. Tuason & Co.
vs. Cadam­pog, 7 SCRA 809).

§ 9. Dismissal of Complaint for Forcible Entry Where


Issue of Ownership Raised.

Where an action for forcible entry was dismissed because it


appears that the issue was actual that of ownership, it was
held that the court of first instance to which the case was
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appealed, acted correctly in dismissing the case and


suggesting to the parties that they file the necessary
pleadings so that the dispute can be heard under its
original jurisdiction. (A.M. Raymundo & Co. vs. Symaco, 22
SCRA 315).

§ 10. Dismissal of an Action at the Pre­trial Stage.

Section 1, Rule 20 of the Revised Rules of Court expressly


makes mandatory the holding of a pre­trial conference in
civil cases and section 2 of said Rule 20 authorizes courts to
dismiss a complaint or declare the defendant in default
where either of them fails to appear at the pre­trial
conference.
As construed by the Supreme Court the personal
presence of the party concerned or its duly authorized
representative, in case of juridical persons, and not merely
the party’s counsel is indispensable at the pre­trial
conference. Thus, in Home Insurance Co., Inc. vs. United
States Lines Co. (21 SCRA 865), the Court upheld the trial
court’s dismissal of the case on the ground of non­suit
because the plaintiff failed to attend the pre­trial even
though its lawyer was present and informed the court that
he had a verbal authority from his client to enter into a
settlement. The same ruling was pursued in American
Insurance Co. vs. Republic (21 SCRA 465) and American
Insurance Co. vs. Manila Port Service (22 SCRA 484).
In Saulog vs. Custombuilt Manufacturing Corp. (1 SCRA
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2), it appears that initially both the plaintiff and his


counsel were present at the pre­trial. However, the
plaintiff’s counsel unceremoniously left the room where the
pre­trial conference was being held without informing
anyone in the court about it. Said counsel alleged that he
had to leave post haste as he was advised that his pregnant
wife was having labor pains. The Supreme Court did not
accept this excuse of the plaintiff’s counsel and sustained
the order of dismissal issued by the trial court. The Court
stated that said counsel should have had some presence of
mind to inform those in the court that he was going to
leave. (See also Arcuino vs. Aparis, 22 SCRA 407).
It has also been held that although technically, an
appeal from the decision of a municipal or city court to the
court of first instance operates to vacate the judgment
appealed from, when the case is dismissed by the court of
first instance for failure of the appellant to appear at the
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pre­trial, the judgment of the lower court is revived


pursuant to the provisions of Section 9, Rule 40 of the
Revised Rules of Court. (International Harvester Macleod,
Inc. vs. Co Ban Ling & Sons Co., 25 SCRA 612; American
Insurance Co. vs. Manila Port Service, 22 SCRA 485).

—–—–o0o—–—–

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