Gold Loop v CA Facts: -Petition for review on certiorari of decision of CA (reversed dismissal order of RTC) -RTC dismissed mmotu

proprio due to failure to prosecute -Roberto and Alicia Robles filed a complaint for reformation of instrument plus damages against Gold Loop Properties in the RTC. According to them, they entered a mortgage contract and not an absolute sale (commercial lot in San Juan). +Preliminary injunction to stop Gold from selling/encumbering land. -During hearing for prelim, the parties manifested possibility of amicable statement however, the parties never submitted, which led to the dismissal of the case. -MR: Filed 14 days after receiving notice of dismissal saying the negotiations were still ongoing BUT failed to include notice of hearing. DENIED -Filed notice of appeal: initially RTC gave due course and elevated to CA but RTC recalled upon motion by Gold. -MR again in RTC denied (dismissal final and executor) -CA: filed extension of time for petition for review but failed to allege date of receipt of dismissal order for failure to prosecute and the filing of the corresponding MR. DENIED -Eventually the spouses reached the CA and asked for a mandamus seeking to set aside the order of dismissal which the CA considered as certiorari and then reversed the RTC based on equitable grounds. Issues: W/N the dismissal of the RTC was proper (NO) Held: WHEREFORE, for lack of merit, the Petition for Review on Certiorari is DENIED. Ratio: -Equitable grounds: Although the MR was late and was a mere scrap of paper due to lack of notice of hearing, justice requires the relaxation of the rules. (The spouses were to lose property worth 4,000,000) -Sec. 3, Rule 17 contemplates three instances where the court may dismiss an action motu proprio: (1) plaintiff fails to appear at time of trial, (2) fails to prosecute for unreasonable length of time (3) fails to comply with rules and order of court. RTC based dismissal on last 2 for failure to submit the compromise in 15 days. -However, in reading the order, the submission did not seem to be mandatory nor was there any warning that failure to submit the compromise would warrant a dismissal. More importantly, the RoC does not provide for a dismissal for failure to submit a compromise agreement. -The court should have suspended the proceedings according to Sec 1 Rule 21 Any party to an action may, at any time before the date set for pre-trial, file a petition with the court for the suspension of the proceedings with a view of securing a possible compromise if (1) it appears that any one or both of the parties have expressed at any time willingness to discuss a possible compromise -Upon failure to compromise, the Court should have continued to hear the case instead of dismissing it: Sec 4 Rule 21: No suspension for a period longer than sixty (60) days from notice of the order of suspension shall be allowed except upon justifiable grounds. If no compromise is arrived at within the period provided, the case shall continue as if no suspension of the proceeding had taken place.

-The RTC only gave the parties 15 days when the rule gives the parties 60 days to compromise. -The acts of the court discouraged compromise when it should be encouraged by the courts.