THIRD DIVISION
Certificate of Finality5it eventually issued on August 22, 2008.
G.R. No. 210252 June 16, 2014
VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL I. QUINTOS, JR.;
FLORENCIA I. DANCEL, represented by her Attorney-in-Fact FLOVY I. DANCEL;
and CATALINO L. IBARRA, Petitioners,
vs.
PELAGIA I. NICOLAS, NOLI L. IBARRA, SANTIAGO L. IBARRA, PEDRO L.
IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA, HEIRS OF AUGUSTO L.
IBARRA, namely CONCHITA R., IBARRA, APOLONIO IBARRA, and NARCISO
IBARRA, and the spouses RECTO CANDELARIO and ROSEMARIE
CANDELARIO,Respondents.
DECISION
VELASCO, JR., J.:
The Case
Before the Court is a Petition for Review on Certiorari filed under Rule 45 challenging the
Decision1 and Resolution2of the Court of Appeals (CA) in CA-G.R. CV No. 98919 dated July
8, 2013 and November 22, 2013, respectively. The challenged rulings affirmed the May 7, 2012
Decision3 of the Regional Trial Court (RTC), Branch 68 in Camiling, Tarlac that petitioners and
respondents are co-owners of the subject property, which should be partitioned as per the
subdivision plan submitted by respondent spouses Recto and Rosemarie Candelario.
The Facts
As culled from the records, the facts of the case are as follows:
Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and respondents Pelagia
Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, Gilberto Ibarra, and the late
Augusto Ibarra are siblings. Their parents, Bienvenido and Escolastica Ibarra, were the owners
of the subject property, a 281 sqm. parcel of land situated along Quezon Ave., Poblacion C,
Camiling, Tarlac, covered by Transfer Certificate Title (TCT) No. 318717.
By 1999, both Bienvenido and Escolastica had already passed away, leaving to their ten (10)
children ownership over the subject property. Subsequently, sometime in 2002, respondent
siblings brought an action for partition against petitioners. The case was docketed as Civil Case
No. 02-52 and was raffled to the RTC, Branch 68, Camiling, Tarlac. However, in an
Order4 dated March 22, 2004, the trial court dismissed the case disposing as follows:
For failure of the parties, as well as their counsels, to appear despite due notice, this case is
hereby DISMISSED.
SO ORDERED.
As neither set of parties appealed, the ruling of the trial court became final, as evidenced by a
Having failed to secure a favorable decision for partition, respondent siblings instead resorted
to executing a Deed of Adjudication6 on September 21, 2004 to transfer the property in favor of
the ten (10) siblings. As a result, TCT No. 318717 was canceled and in lieu thereof, TCT No.
390484 was issued in its place by the Registry of Deeds of Tarlac in the names of the ten (10)
heirs of the Ibarra spouses.
Subsequently, respondent siblings sold their 7/10 undivided share over the property in favor of
their co-respondents, the spouses Recto and Rosemarie Candelario. By virtue of a Deed of
Absolute Sale7 dated April 17, 2007 executed in favor of the spouses Candelario and an
Agreement of Subdivision8 purportedly executed by them and petitioners, TCT No. 390484 was
partially canceled and TCT No. 434304 was issued in the name of the Candelarios, covering the
7/10portion.
On June 1, 2009, petitioners filed a complaint for Quieting of Title and Damages against
respondents wherein they alleged that during their parents’ lifetime, the couple distributed their
real and personal properties in favor of their ten (10) children. Upon distribution, petitioners
alleged that they received the subject property and the house constructed thereon as their share.
They likewise averred that they have been in adverse, open, continuous, and uninterrupted
possession of the property for over four (4) decades and are, thus, entitled to equitable title
thereto. They also deny any participation in the execution of the aforementioned Deed of
Adjudication dated September 21, 2004 and the Agreement of Subdivision. Respondents
countered that petitioners’ cause of action was already barred by estoppel when sometime in
2006, one of petitioners offered to buy the 7/10 undivided share of the respondent siblings. They
point out that this is an admission on the part of petitioners that the property is not entirely theirs.
In addition, they claimed that Bienvenido and Escolastica Ibarra mortgaged the property but
because of financial constraints, respondent spouses Candelario had to redeem the property in
their behalf. Not having been repaid by Bienvenido and Escolastica, the Candelarios accepted
from their co-respondents their share in the subject property as payment. Lastly, respondents
sought, by way of counterclaim, the partition of the property.
Docketed as Civil Case No. 09-15 of the RTC of Camiling, Tarlac, the quieting of title case was
eventually raffled to Branch 68 of the court, the same trial court that dismissed Civil Case No.
02-52. During pre-trial, respondents, or defendants a quo, admitted having filed an action for
partition, that petitioners did not participate in the Deed of Adjudication that served as the basis
for the issuance of TCT No. 390484, and that the Agreement of Subdivision that led to the
issuance of TCT No. 434304 in favor of respondent spouses Candelario was falsified. 9 Despite
the admissions of respondents, however, the RTC, through its May 27, 2012 Decision, dismissed
petitioners’ complaint. The court did not find merit in petitioners’ asseverations that they have
acquired title over the property through acquisitive prescription and noted that there was no
document evidencing that their parents bequeathed to them the subject property. Finding that
respondent siblings were entitled to their respective shares in the property as descendants of
Bienvenido and Escolastica Ibarra and as co-heirs of petitioners, the subsequent transfer of their
interest in favor of respondent spouses Candelario was then upheld by the trial court. The
dispositive portion of the Decision reads:
WHEREFORE, premises considered, the above-entitled case is hereby Dismissed.
Also, defendants-spouses Rosemarie Candelario and Recto Candelario are hereby declared as
the absolute owners of the 7/10 portion of the subject lot.
Likewise, the court hereby orders the partition of the subject lots between the herein plaintiffs
and the defendants-spouses Candelarios.
SO ORDERED.
Aggrieved, petitioners appealed the trial court’s Decision to the CA, pleading the same
allegations they averred in their underlying complaint for quieting of title. However, they added
that the partition should no longer be allowed since it is already barred by res judicata,
respondent siblings having already filed a case for partition that was dismissed with finality, as
admitted by respondents themselves during pre-trial.
On July 8, 2013, the CA issued the assailed Decision denying the appeal. The fallo reads:
WHEREFORE, premises considered, the Decision dated May 7, 2012 of the Regional Trial
Court of Camiling, Tarlac, Branch 68, in Civil Case No. 09-15, is hereby AFFIRMED.
SO ORDERED.
Similar to the trial court, the court a quo found no evidence on record to support petitioners’
claim that the subject property was specifically bequeathed by Bienvenido and Escolastica
Ibarra in their favor as their share in their parents’ estate. It also did not consider petitioners’
possession of the property as one that is in the concept of an owner. Ultimately, the appellate
court upheld the finding that petitioners and respondent spouses Candelario co-own the
property, 30-70 in favor of the respondent spouses.
As regards the issue of partition, the CA added:
x x x Since it was conceded that the subject lot is now co-owned by the plaintiffs-appellants,
(with 3/10 undivided interest) and defendants-appellees Spouses Candelarios (with 7/10
undivided interest) and considering that plaintiffs-appellants had already constructed a 3-storey
building at the back portion of the property, then partition, in accordance with the subdivision
plan (records, p. 378) undertaken by defendants-appellants [sic] spouses, is in order.10
On November 22, 2013, petitioners’ Motion for Reconsideration was denied. Hence, the instant
petition.
Issues
In the present petition, the following errors were raised:
I. THE COURT OF APPEALS MANIFESTLY OVERLOOKED RELEVANT AND
UNDISPUTED FACTS WHICH, IF PROPERLY CONSIDERED, WOULD
JUSTIFY PETITIONERS’ CLAIM OF EQUITABLE TITLE.
II. THE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE ORDER OF
PARTITION DESPITE THE FACT THAT THE COUNTERCLAIM FOR
PARTITION, BASED ON THE DEED OF ABSOLUTE SALE EXECUTED IN
2007, IS BARRED BY LACHES.
III. THE COURT OF APPEALS RENDERED A SUBSTANTIALLY FLAWED
JUDGMENT WHEN IT NEGLECTED TO RULE ON PETITIONERS’
CONTENTION THAT THE COUNTERCLAIM FOR PARTITION IS ALSO
BARRED BY PRIOR JUDGMENT, DESPITE ITS HAVING BEEN
SPECIFICALLY ASSIGNED AS ERROR AND PROPERLY ARGUED IN THEIR
BRIEF, AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY THE
DISMISSAL OF THE COUNTERCLAIM.
IV. THE COURT OF APPEALS ERRED WHEN IT ORDERED PARTITION IN
ACCORDANCE WITH THE SUBDIVISION PLAN MENTIONED IN ITS
DECISION, IN CONTRAVENTION OF THE PROCEDURE ESTABLISHED IN
RULE 69 OF THE RULES OF CIVIL PROCEDURE.11
To simplify, the pertinent issues in this case are as follows:
1. Whether or not the petitioners were able to prove ownership over the property;
2. Whether or not the respondents’ counterclaim for partition is already barred by
laches or res judicata; and
3. Whether or not the CA was correct in approving the subdivision agreement as basis
for the partition of the property.
The Court’s Ruling
The petition is meritorious in part.
Petitioners were not able to prove equitable title or ownership over the property
Quieting of title is a common law remedy for the removal of any cloud, doubt, or uncertainty
affecting title to real property.12 For an action to quiet title to prosper, two indispensable
requisites must concur, namely: (1) the plaintiff or complainant has a legal or equitable title to
or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or
proceeding claimed to be casting cloud on the title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or efficacy. 13 In the case at bar, the CA
correctly observed that petitioners’ cause of action must necessarily fail mainly in view of the
absence of the first requisite.
At the outset, it must be emphasized that the determination of whether or not petitioners
sufficiently proved their claim of ownership or equitable title is substantially a factual issue that
is generally improper for Us to delve into. Section 1, Rule 45 of the Rules of Court explicitly
states that the petition for review on certiorari "shall raise only questions of law, which must be
distinctly set forth." In appeals by certiorari, therefore, only questions of law may be raised,
because this Court is not a trier of facts and does not normally undertake the re-examination of
the evidence presented by the contending parties during the trial.14 Although there are
exceptions15 to this general rule as eloquently enunciated in jurisprudence, none of the
circumstances calling for their application obtains in the case at bar. Thus, We are constrained
to respect and uphold the findings of fact arrived at by both the RTC and the CA.
In any event, a perusal of the records would readily show that petitioners, as aptly observed by
the courts below, indeed, failed to substantiate their claim. Their alleged open, continuous,
exclusive, and uninterrupted possession of the subject property is belied by the fact that
respondent siblings, in 2005, entered into a Contract of Lease with the Avico Lending Investor
Co. over the subject lot without any objection from the petitioners. 16 Petitioners’ inability to
offer evidence tending to prove that Bienvenido and Escolastica Ibarra transferred the ownership
over the property in favor of petitioners is likewise fatal to the latter’s claim. On the contrary,
on May 28, 1998, Escolastica Ibarra executed a Deed of Sale covering half of the subject
property in favor of all her 10 children, not in favor of petitioners alone. 17
The cardinal rule is that bare allegation of title does not suffice. The burden of proof is on the
plaintiff to establish his or her case by preponderance of evidence.18 Regrettably, petitioners, as
such plaintiff, in this case failed to discharge the said burden imposed upon them in proving
legal or equitable title over the parcel of land in issue. As such, there is no reason to disturb the
finding of the RTC that all 10 siblings inherited the subject property from Bienvenido and
Escolastica Ibarra, and after the respondent siblings sold their aliquot share to the spouses
Candelario, petitioners and respondent spouses became co-owners of the same.
The counterclaim for partition is not barred by prior judgment
This brings us to the issue of partition as raised by respondents in their counterclaim. In their
answer to the counterclaim, petitioners countered that the action for partition has already been
barred by res judicata.
The doctrine of res judicata provides that the judgment in a first case is final as to the claim or
demand in controversy, between the parties and those privy with them, not only as to every
matter which was offered and received to sustain or defeat the claim or demand, but as to any
other admissible matter which must have been offered for that purpose and all matters that could
have been adjudged in that case.19 It precludes parties from relitigating issues actually litigated
and determined by a prior and final judgment.20 As held in Yusingco v. Ong Hing Lian:21
It is a rule pervading every well-regulated system of jurisprudence, and is put upon two grounds
embodied in various maxims of the common law; the one, public policy and necessity, which
makes it to the interest of the state that there should be an end to litigation — republicae ut sit
finis litium; the other, the hardship on the individual that he should be vexed twice for the same
cause — nemo debet bis vexari et eadem causa. A contrary doctrine would subject the public
peace and quiet to the will and neglect of individuals and prefer the gratitude identification of a
litigious disposition on the part of suitors to the preservation of the public tranquility and
happiness.22
The rationale for this principle is that a party should not be vexed twice concerning the same
cause. Indeed, res judicata is a fundamental concept in the organization of every jural society,
for not only does it ward off endless litigation, it ensures the stability of judgment and guards
against inconsistent decisions on the same set of facts.23
There is res judicata when the following requisites are present: (1) the formal judgment or order
must be final; (2) it must be a judgment or order on the merits, that is, it was rendered after a
consideration of the evidence or stipulations submitted by the parties at the trial of the case; (3)
it must have been rendered by a court having jurisdiction over the subject matter and the parties;
and (4) there must be, between the first and second actions, identity of parties, of subject matter
and of cause of action.24
In the case at bar, respondent siblings admit that they filed an action for partition docketed as
Civil Case No. 02-52, which the RTC dismissed through an Order dated March 22, 2004 for the
failure of the parties to attend the scheduled hearings. Respondents likewise admitted that since
they no longer appealed the dismissal, the ruling attained finality. Moreover, it cannot be
disputed that the subject property in Civil Case No. 02-52 and in the present controversy are one
and the same, and that in both cases, respondents raise the same action for partition. And lastly,
although respondent spouses Candelario were not party-litigants in the earlier case for partition,
there is identity of parties not only when the parties in the case are the same, but also between
those in privity with them, such as between their successors-in-interest.25
With all the other elements present, what is left to be determined now is whether or not the
dismissal of Civil case No. 02-52 operated as a dismissal on the merits that would complete the
requirements of res judicata.
In advancing their claim, petitioners cite Rule 17, Sec. 3 of the Rules of Court, to wit:
Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute
his action for an unreasonable length of time, or to comply with these Rules or any order of the
court, the complaint may be dismissed upon motion of the defendant or upon the court’s own
motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise declared by the court.
The afore-quoted provision enumerates the instances when a complaint may be dismissed due
to the plaintiff's fault: (1) if he fails to appear on the date for the presentation of his evidence in
chief on the complaint; (2) if he fails to prosecute his action for an unreasonable length of time;
or (3) if he fails to comply with the Rules or any order of the court. The dismissal of a case for
failure to prosecute has the effect of adjudication on the merits, and is necessarily understood to
be with prejudice to the filing of another action, unless otherwise provided in the order of
dismissal. Stated differently, the general rule is that dismissal of a case for failure to prosecute
is to be regarded as an adjudication on the merits and with prejudice to the filing of another
action, and the only exception is when the order of dismissal expressly contains a qualification
that the dismissal is without prejudice.26 In the case at bar, petitioners claim that the Order does
not in any language say that the dismissal is without prejudice and, thus, the requirement that
the dismissal be on the merits is present.
Truly, We have had the occasion to rule that dismissal with prejudice under the above-cited rule
amply satisfies one of the elements of res judicata.27 It is, thus, understandable why petitioners
would allege res judicata to bolster their claim. However, dismissal with prejudice under Rule
17, Sec. 3 of the Rules of Court cannot defeat the right of a co-owner to ask for partition at any
time, provided that there is no actual adjudication of ownership of shares yet. Pertinent hereto
is Article 494 of the Civil Code, which reads:
Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may
demand at any time the partition of the thing owned in common, insofar as his share is
concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not
exceeding ten years, shall be valid. This term may be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be any partition when it is prohibited by law. No prescription shall run in
favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership. (emphasis supplied)
From the above-quoted provision, it can be gleaned that the law generally does not favor the
retention of co-ownership as a property relation, and is interested instead in ascertaining the co-
owners’ specific shares so as to prevent the allocation of portions to remain perpetually in limbo.
Thus, the law provides that each co-owner may demand at any time the partition of the thing
owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-owners under
Art. 494 of the Civil Code, the latter must prevail. To construe otherwise would diminish the
substantive right of a co-owner through the promulgation of procedural rules. Such a
construction is not sanctioned by the principle, which is too well settled to require citation, that
a substantive law cannot be amended by a procedural rule. 28 This further finds support in Art.
496 of the New Civil Code, viz:
Article 496.Partition may be made by agreement between the parties or by judicial
proceedings.1âwphi1 Partition shall be governed by the Rules of Court insofar as they are
consistent with this Code.
Thus, for the Rules to be consistent with statutory provisions, We hold that Art. 494, as cited, is
an exception to Rule 17, Sec. 3 of the Rules of Court to the effect that even if the order of
dismissal for failure to prosecute is silent on whether or not it is with prejudice, it shall be
deemed to be without prejudice.
This is not to say, however, that the action for partition will never be barred by res judicata.
There can still be res judicata in partition cases concerning the same parties and the same subject
matter once the respective shares of the co-owners have been determined with finality by a
competent court with jurisdiction or if the court determines that partition is improper for co-
ownership does not or no longer exists.
So it was that in Rizal v. Naredo,29 We ruled in the following wise:
Article 484 of the New Civil Code provides that there is co-ownership whenever the ownership
of an undivided thing or right belongs to different persons. Thus, on the one hand, a co-owner
of an undivided parcel of land is an owner of the whole, and over the whole he exercises the
right of dominion, but he is at the same time the owner of a portion which is truly abstract. On
the other hand, there is no co-ownership when the different portions owned by different people
are already concretely determined and separately identifiable, even if not yet technically
described.
Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the co-ownership,
and his proper remedy is an action for partition under Rule 69 of the Rules of Court, which he
may bring at anytime in so far as his share is concerned. Article 1079 of the Civil Code defines
partition as the separation, division and assignment of a thing held in common among those to
whom it may belong. It has been held that the fact that the agreement of partition lacks the
technical description of the parties’ respective portions or that the subject property was then still
embraced by the same certificate of title could not legally prevent a partition, where the different
portions allotted to each were determined and became separately identifiable.
The partition of Lot No. 252 was the result of the approved Compromise Agreement in Civil
Case No. 36-C, which was immediately final and executory. Absent any showing that said
Compromise Agreement was vitiated by fraud, mistake or duress, the court cannot set aside a
judgment based on compromise. It is axiomatic that a compromise agreement once approved by
the court settles the rights of the parties and has the force of res judicata. It cannot be disturbed
except on the ground of vice of consent or forgery.
Of equal significance is the fact that the compromise judgment in Civil Case No. 36-C settled
as well the question of which specific portions of Lot No. 252 accrued to the parties separately
as their proportionate shares therein. Through their subdivision survey plan, marked as Annex
"A" of the Compromise Agreement and made an integral part thereof, the parties segregated and
separately assigned to themselves distinct portions of Lot No. 252. The partition was
immediately executory, having been accomplished and completed on December 1, 1971 when
judgment was rendered approving the same. The CA was correct when it stated that no co-
ownership exist when the different portions owned by different people are already concretely
determined and separately identifiable, even if not yet technically described. (emphasis
supplied)
In the quoted case, We have held that res judicata applied because after the parties executed a
compromise agreement that was duly approved by the court, the different portions of the owners
have already been ascertained. Thus, there was no longer a co-ownership and there was nothing
left to partition. This is in contrast with the case at bar wherein the co-ownership, as determined
by the trial court, is still subsisting 30-70 in favor of respondent spouses Candelario.
Consequently, there is no legal bar preventing herein respondents from praying for the partition
of the property through counterclaim.
The counterclaim for partition is not barred by laches
We now proceed to petitioners’ second line of attack. According to petitioners, the claim for
partition is already barred by laches since by 1999, both Bienvenido and Escolastica Ibarra had
already died and yet the respondent siblings only belatedly filed the action for partition, Civil
Case No. 02-52, in 2002. And since laches has allegedly already set in against respondent
siblings, so too should respondent spouses Candelario be barred from claiming the same for they
could not have acquired a better right than their predecessors-in-interest.
The argument fails to persuade.
Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that
which––by the exercise of due diligence––could or should have been done earlier. It is the
negligence or omission to assert a right within a reasonable period, warranting the presumption
that the party entitled to assert it has either abandoned or declined to assert it. 30 The principle is
a creation of equity which, as such, is applied not really to penalize neglect or sleeping upon
one’s right, but rather to avoid recognizing a right when to do so would result in a clearly
inequitable situation. As an equitable defense, laches does not concern itself with the character
of the petitioners’ title, but only with whether or not by reason of the respondents’ long inaction
or inexcusable neglect, they should be barred from asserting this claim at all, because to allow
them to do so would be inequitable and unjust to petitioners. 31
As correctly appreciated by the lower courts, respondents cannot be said to have neglected to
assert their right over the subject property. They cannot be considered to have abandoned their
right given that they filed an action for partition sometime in 2002, even though it was later
dismissed. Furthermore, the fact that respondent siblings entered into a Contract of Lease with
Avico Lending Investor Co. over the subject property is evidence that they are exercising rights
of ownership over the same.
The CA erred in approving the Agreement for Subdivision
There is merit, however, in petitioners’ contention that the CA erred in approving the proposal
for partition submitted by respondent spouses. Art. 496, as earlier cited, provides that partition
shall either be by agreement of the parties or in accordance with the Rules of Court. In this case,
the Agreement of Subdivision allegedly executed by respondent spouses Candelario and
petitioners cannot serve as basis for partition, for, as stated in the pre-trial order, herein
respondents admitted that the agreement was a falsity and that petitioners never took part in
preparing the same. The "agreement" was crafted without any consultation whatsoever or any
attempt to arrive at mutually acceptable terms with petitioners. It, therefore, lacked the essential
requisite of consent. Thus, to approve the agreement in spite of this fact would be tantamount to
allowing respondent spouses to divide unilaterally the property among the co-owners based on
their own whims and caprices. Such a result could not be countenanced.
To rectify this with dispatch, the case must be remanded to the court of origin, which shall
proceed to partition the property in accordance with the procedure outlined in Rule 69 of the
Rules of Court.
WHEREFORE, premises considered, the petition is hereby PARTLY GRANTED. The assailed
Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 98919 dated July 8, 2013
and November 22, 2013, respectively, are hereby AFFIRMED with MODIFICATION. The case
is hereby REMANDED to the RTC, Branch 68 in Camiling, Tarlac for purposes of partitioning
the subject property in accordance with Rule 69 of the Rules of Court.
SO ORDERED.
G.R. No. L-58986 April 17, 1989
DANTE Y. GO, petitioner,
vs.
HON. FERNANDO CRUZ, Judge, etc., CITY SHERIFF OF CALOOCAN CITY, and
CALIFORNIA MANUFACTURING CO., INC., respondents.
De Santos, Balgos & Perez for petitioner.
Francisco N. Carreon, Jr. for respondents.
NARVASA, J.:
The dismissal of civil actions is always addressed to the sound judgment and discretion of the
court; this, whether the dismissal is sought after a trial has been completed or otherwise, 1 or
whether it is prayed for by a defending party 2 or by a plaintiff or claimant. 3 There is one
instance however where the dismissal of an action rests exclusively on the will of a plaintiff or
claimant, to prevent which the defending party and even the court itself is powerless, requiring
in fact no action whatever on the part of the court except the acceptance and recording of the
causative document. This is dealt with in Section 1, Rule 17 of the Rules of Court, which reads
as follows:
SECTION 1. Dismissal by the plaintiff. — An action may be dismissed by
the plaintiff without order of court by filing a notice of dismissal at any time
before service of the answer or of a motion for summary judgment. Unless
otherwise stated in the notice, the dismissal is without prejudice, except that
a notice operates as an adjudication upon the merits when filed by a plaintiff
who has once dismissed in a competent court an action based on or
including the same claim. A class suit shall not be dismissed or
compromised without approval of the court.
It is this provision with which the proceedings at bar are chiefly concerned.
On October 26, 1981, California Manufacturing Co., Inc. (hereinafter, simply, California)
brought an action in the Court of First Instance of Manila against Dante Go, accusing him of
unfair competition. 4 The gravamen of California's complaint was that Dante Go, doing
business under the name and style of "Sugarland International Products," and engaged like
California in the manufacture of spaghetti, macaroni, and other pasta was selling his products in
the open market under the brand name, "Great Italian," in packages which were in colorable and
deceitful limitation of California's containers bearing its own brand, "Royal." Its complaint
contained an application for preliminary injunction commanding Dante Go to immediately cease
and desist from the further manufacture, sale and distribution of said products, and to retrieve
those already being offered for sale. 5
About two weeks later, however, or on November 12, 1981, California filed a notice of dismissal
with the Court reading as follows: 6
 COMES NOW the plaintiff in the above-entitled case, through undersigned
counsel, and unto this Honorable Court most respectfully gives notice of
dismissal without prejudice pursuant to Sec. 1, Rule 17 of the Rules of
Court.
WHEREFORE, it is respectfully prayed that the above-entitled case be
considered dismissed without prejudice conformably with Sec. 1, Rule 17
of the Rules of Court.
Four days afterwards, or on November 16, 1981, California received by registered mail a copy
of Dante Go's answer with counterclaim dated November 6, 1981, which had been filed with
the Court on November 9, 1981. 7
On November 19, 1981 a fire broke out at the Manila City Hall destroying among others
the sala of Judge Tengco and the records of cases therein kept, including that filed by California
against Dante Go. 8
On December 1, 1981, California filed another complaint asserting the same cause of action
against Dante Go, this time with the Court of First Instance at Caloocan City. 9 This second suit
was docketed as Civil Case No. C-9702 and was assigned to the branch presided over by Judge
Fernando A. Cruz.
On December 3, 1981, Judge Cruz issued an ex parte restraining order directing "the defendant
... to immediately cease and desist from the further manufacture, sale, promotion and distribution
of spaghetti, macaroni and other pasta products contained in packaging boxes and labels under
the name 'GREAT ITALIAN,' which are similar to or copies of those of the plaintiff, and ...
recall ... all his spaghetti, macaroni and other pasta products using the brand, 'GREAT
ITALIAN.'" 10
On the day following the rendition of the restraining order, Dante Go filed the present petition
for certiorari, etc. with this Court praying for its nullification and perpetual inhibition. On
December 11, 1981, this Court, in turn issued a writ of preliminary injunction restraining
California, Judge Cruz and the City Sheriff from enforcing or implementing the restraining order
of December 3, 1981, and from continuing with the hearing on the application for preliminary
injunction in said Civil Case No. C-9702. The scope of the injunction was subsequently enlarged
by this Court's Resolution of April 14,1982 to include the City Fiscal of Manila, who was
thereby restrained from proceeding with the case of unfair competition filed in his office by
California against Dante Go. 11
Dante Go's thesis is that the case filed against him by California in the Manila Court remained
pending despite California's notice of dismissal. According to him, since he had already filed
his answer to the complaint before California sought dismissal of the action three (3) days
afterwards, such dismissal was no longer a matter of right and could no longer be effected by
mere notice in accordance with Section 1, Rule 17 of the Rules of Court, but only on plaintiff s
motion, and by order of the Court; hence, the Caloocan Court acted without jurisdiction over
the second action based on the same cause. He also accused California of forum shopping, of
selecting a sympathetic court for a relief which it had failed to obtain from another. 12
The petitioner is in error. What marks the loss by a plaintiff of the right to cause dismissal of
the action by mere notice is not the filing of the defendant's answer with the Court (either
personally or by mail) but the service on the plaintiff of said answer or of a motion for summary
judgment. This is the plain and explicit message of the Rules. 13 "The filing of pleadings,
appearances, motions, notices, orders and other papers with the court," according to Section 1,
Rule 13 of the Rules of Court, means the delivery thereof to the clerk of the court either
personally or by registered mail. Service, on the other hand, signifies delivery of the pleading
or other paper to the parties affected thereby through their counsel of record, unless delivery to
the party himself is ordered by the court, 14 by any of the modes set forth in the Rules, i.e., by
personal service, 15 service by mail, 16 or substituted service. 17
Here, California filed its notice of dismissal of its action in the Manila Court after the filing of
Dante Go's answer but before service thereof. Thus having acted well within the letter and
contemplation of the afore-quoted Section 1 of Rule 17 of the Rules of Court, its notice ipso
facto brought about the dismissal of the action then pending in the Manila Court, without need
of any order or other action by the Presiding Judge. The dismissal was effected without regard
to whatever reasons or motives California might have had for bringing it about, and was, as the
same Section 1, Rule 17 points out, "without prejudice," the contrary not being otherwise "stated
in the notice" and it being the first time the action was being so dismissed.
There was therefore no legal obstacle to the institution of the second action in the Caloocan
Court of First Instance based on the same claim. The filing of the complaint invested it with
jurisdiction of the subject matter or nature of the action. In truth, and contrary to what petitioner
Dante Go obviously believes, even if the first action were still pending in the Manila Court, this
circumstance would not affect the jurisdiction of the Caloocan Court over the second suit. The
pendency of the first action would merely give the defendant the right to move to dismiss the
second action on the ground of auter action pendant or litis pendentia. 18
WHEREFORE, the petition is DISMISSED, with costs against petitioner. The temporary
restraining order of December 11, 1981, and the amendatory Resolution of April 14, 1982 are
SET ASIDE.
G.R. No. 55336 May 4, 1989
BENJAMIN VALLANGCA, RODOLFO VALLANGCA and ALFREDO
VALLANGCA, petitioners
vs.
HON. COURT OF APPEALS and NAZARIO RABANES, respondents.
Hernegildo G. Rapanan for petitioners.
Eriberto A. Aricheta for private respondent.
PADILLA, J.:
Involved in this appeal by certiorari from a decision** of the Court of Appeals, is a controversy
over possession of a parcel of land, the proper resolution of which calls for a determination of
the ownership thereof.
The more than eleven (11) hectares of agricultural land in dispute is located in Buguey, Cagayan,
originally registered on 28 December 1936 in the name of "Heirs of Esteban Billena", and
covered by Original Certificate of Title (OCT) No. 1648. In 1940, said certificate of title was
cancelled and, in lieu thereof, Transfer Certificate of Title (TCT) No. 1005 was issued in the
name of Maximiniana Crisostomo and Ana Billena, wife and daughter, respectively of the
deceased Esteban Billena. Each of the then new owners owned an undivided one-half (1/2)
portion of, or interest in the land.
Maximiniana Crisostomo died during the Japanese occupation, leaving behind her only child
Ana Billena, then married to Fortunate Vallangca with whom she had three (3) children, namely,
Benjamin, Rodolfo and Alfredo, all surnamed Vallangca who are the petitioners herein.
According to the petition at bar, the following events led to the present controversy:
Upon Fortunate Vallangca's death in 1944, his widow Ana Billena, together with her eldest son
Benjamin, went to Centro, Buguey, Cagayan and mortgaged the land in dispute to her cousin
Nazario Rabanes (private respondent herein) for Eight Hundred Pesos (P800.00) in Japanese
war notes, to cover the burial expenses of her deceased husband Fortunato Vallangca. There
being no notary public in the place at the time, the agreement was not reduced to writing. At the
time of said mortgage of the land to Nazario Rabanes, the land was already mortgaged to the
Philippine National Bank (PNB), said first mortgage having been executed on 16 November
1940, and annotated on said TCT No. 1005.
After the Pacific war, Nazario Rabanes went to the residence of Ana Billena on 2 February 1946
and made the latter sign a document which Rabanes represented to Ana Billena as a mortgage
contract written in the Ilocano dialect. Billena, being an illiterate and trusting in her cousin
Rabanes affixed her signature on the document in the space indicated to her.
In that same year, 1946, Billena was informed by a cousin of Rabanes and another witness to
the document that the alleged mortgage contract which she had signed was actually a deed of
absolute sale to Rabanes of the land covered by TCT No. 1005. Ana Billena and her son
Benjamin, thereupon, went to Rabanes' place for the purpose of redeeming the land and actually
tendered to him the loan amount of P800.00, this time, in genuine and legal Philippine currency.
However, Rabanes told them that the land could no longer be redeemed and he drove them out
of his house.
Since Ana Billena and her three (3) sons were in possession and actual cultivation of the land in
question, Rabanes filed against them on 7 July 1971 an injunction suit before the Court of First
Instance of Cagayan (Civil Case No. II-14).1 At the pretrial of said injunction suit, plaintiff
Rabanes was advised by the trial court that injunction was not the proper cause of action, because
injunction was merely an ancillary or provisional remedy to a main action. On 11 September
1972, another complaint entitled "Recovery of Possession" (Civil Case No. 1139) 2 was lodged
by Rabanes before the same court against the same defendants in the action for injunction. Two
(2) days later, or on 13 September 1972, the action for injunction was ordered dismissed by the
trial court. The order of dismissal reads as follows:
ORDER
As prayed for, the above-entitled case is hereby dismissed.
SO ORDERED. 3
Respondent Nazario Rabanes (later substituted by his heirs) had another version of the events.
According to him, Ana Billena knowingly signed a deed of absolute sale in his favor on 2
February 1946 as she had actually sold and not merely mortgaged the land in controversy for
P800.00. Rabanes alleged that from then on, his tenants, Serapio dela Cruz and Fernando
Dagmante cultivated the land, until they were driven out by the three (3) sons of Ana Billena
sometime in 1962.
After trial in the second action involving recovery of possession, the Court of First Instance of
Cagayan, on 24 September 1976, rendered judgment declaring plaintiff Rabanes (herein
respondent) as the rightful owner of the land and ordered the defendants (herein petitioners) to
vacate the same .4 The trial court reasoned thus —
. . . . The only witness of the defendants to prove this vital point is their co-
defendant Benjamin Vallangca who is a son of Ana Villena [sic]. He
testified that he was only 14 years old when his mother signed the document
under the alleged influence of the plaintiff. He also signed it as a witness.
With that tender age, we doubt if he understood the meaning or difference
between a mortgage and a sale of real property, so how can he say now that
his mother was influenced into signing Exhibit 'F'. He did not say how
Nazario Rabanes influenced his mother. He merely stated that Nazario
Rabanes was his uncle, being the cousin of his mother. They were not living
in the same house and there is no evidence that he was giving them money,
food or in any manner supporting them so as to exercise influence over her.
He did not state the nature of the influence exerted over his mother, whether
it was moral, physical, spiritual or religious. So the court is at a loss to see
how this undue influence over his mother existed.
xxx
. . . . The testimonies of Serapio de la Cruz and Fernando Dagmante are
stronger and more convincing than the lone testimony of Benjamin
Vallangca. . . . .
The decretal part of the judgment reads--
WHEREFORE. judgment is hereby rendered in favor of the plaintiff and
against the defendants and ordering the defendants to leave the land in
question, referring to the parcel of land described in paragraph 2 of the
complaint and declaring herein the plaintiff as the rightful owner of said
parcel of land; 2) Ordering the defendants to pay the plaintiff the amount of
P640.00 corresponding to the value of the owner's share of the land for four
(4) years and to pay the costs.'
From the above judgment, the defendants appealed to the Court of Appeals 5 where the appeal
was docketed as CA-G.R. No. 61133-R. On 18 September 1980, the appellate court rendered
judgment, affirming in toto the trial court's judgment, after finding no reversible error therein.
Hence this petition.6
Petitioners, invoking the rule on "res judicata contend that the dismissal of the "Injunction" case
filed on 7 July 1971 by Rabanes against them, barred the filing by Rabanes against them of the
second action for "Recovery of Possession." Petitioners maintain that the first suit, although
styled as for "Injunction", had for its actual primary purpose the recovery of the land in dispute
and, therefore, after its dismissal, no other action for recovery of possession of the same land
and against the same parties (herein petitioners) could be pursued by the same complainant
(Rabanes). In this connection, petitioners would stress the fact that the dismissal of the suit for
injunction was not made without prejudice.
It is also petitioners' contention that the respondent's complaint for injunction had already
prescribed, before its filing on 7 July 1971, under Section 40 of Act 190, which provides that:
Sec. 40. Period of Prescription as to real estate — An action for recovery of
title to, or possession of real property, or an interest therein, can only be
brought within 10 years after the cause of such action accrues. (italics
supplied)
According to petitioners, from the date private respondent claims to have bought the land, that
is, 2 February 1946, more than ten (10) years had elapsed when Rabanes filed on 7 July 1971
his action for injunction which, in effect, was an action for recovery of possession of the disputed
land. Hence, the action was barred by prescription.
It is further urged by petitioners that it was not likely that their mother Ana Billena would
consent to sell the land to Rabanes for only Eight Hundred (P800.00) Pesos, for the entire eleven
(11) hectares, forty one (41) area and thirty three (33) centares comprising its total area,
considering that the land was then assessed already at Two Thousand Six Hundred Twenty
(P2,620.00) Pesos as indicated in Tax Declaration No. 7957. 7 And, even
assuming arguendo that there was indeed a sale, petitioners postulate that since the land is
registered in the name of both Maximiniana Crisostomo and Ana Billena, the latter could not
outrightly dispose of the undivided one-half share of the former (Crisostomo), without first
accomplishing an affidavit of adjudication of Crisostomo's interest or share, and registering said
affidavit of adjudication.
During this appeal before the Court, Nazario Rabanes died in 1982. An order for his substitution
by his legal heirs was issued.
The heirs of private respondent Rabanes in turn aver, among others, that the Court of Appeals
was correct in finding petitioners' reliance on res judicata as untenable. We sustain the Rabanes
heirs on this point.
In an impressive line of cases, 8 the requisites for res judicata have long been established. They
are: (a) that there be an earlier final judgment; (b) that the court which rendered it had
jurisdiction over the subject matter and the parties; (e) that it is a judgment on the merits; and
(d) that there is between the first and the second actions, Identity of parties, subject matter and
causes of action.
When the issue of res judicata is raised, at least two (2) actions before a competent court are
necessarily involved; one, still pending and the other, already decided with finality. It is the final
judgment that ends the controversy and precludes a relitigation of the same causes of action.
Coming to the case at bar, it is to be noted that the first action for injunction was filed on 7 July
1971, while the second action for recovery of possession was filed on 11 September 1972. The
order of dismissal of the injunction suit was issued on 13 September 1972. The defense of res
judicata was invoked by herein petitioners (as defendants) in their "Answer" dated 6 November
1972 in the action for Recovery of Possession. 9 Given the above mentioned dates, it is clear
that, while the Injunction suit had not yet been disposed of with finality when the second action
was filed, yet, at the time the defendants interposed res judicata as an affirmative defense in
their "Answer" in the second action, the order of dismissal in the injunction case had already
become final. The dismissal order assumed the character of finality, there being no showing that
there was an appeal of the order when the "Answer" in the second action was filed on 6
November 1972.
The Court of Appeals in holding that the date of the filing of the second complaint determines
whether or not there existed at that time a prior final judgment, overlooked the date
when res judicata was actually set up as a defense in the second action. The latter date may also
be a proper determining point. In other words, when the law says that a prior final judgment is
a requisite for res judicata to validly apply as a defense, it may refer to a judgment that has
become final and executory before the second action is instituted or to a judgment that has
become final and executory only after the second action is filed but before the defense is actually
set up in the Answer.
Despite the above oversight, the ruling of the Court of Appeals is nonetheless correct when it
held that the defense of res judicata was unavailing to the petitioners, because the prior
injunction suit against them, which was dismissed, was merely an ancillary and not a main
action. Sections 1 & 3, Rule 58 of the Rules of Court, provide:
Sec. 1. Preliminary Injunction defined; classes. — A preliminary injunction
is an order granted at any stage of an action prior to the final judgment, . . .
(italics supplied)
Sec. 3. Grounds for issuance of preliminary injunction. — A preliminary
injunction may be granted at any time after the commencement of the action
and before judgment, when it is established: (Emphasis supplied)
"x x x"
From the above provisions, it can be clearly deduced that a writ of injunction presupposes the
pendency of a principal or main action. There being no main action when the 7 July 1971 suit
for injunction was filed, the latter was correctly dismissed. Accordingly, there could be no prior
judgment on the merits to speak of that resulted in res judicata, from such dismissal of the
injunction suit on 13 September 1972.
Petitioners would also like to impress that the dismissal order of 13 September 1972, in the
injunction suit, not having been made without prejudice, bars the second action for recovery of
possession. Under Sec. 2, Rule 17 of the Rules of Court which provides:
Sec. 2. Dismissal by order of the court.--Except as provided in the preceding
section, an action shall not be dismissed at the plaintiffs instance save upon
order of the court and upon such terms and conditions as the court deems
proper. If a counterclaim has been pleaded by a defendant prior to the
service upon him of the plaintiffs motion to dismiss, the action shall not be
dismissed against the defendant's objection unless the counterclaim can
remain pending for independent adjudication by the court. Unless otherwise
specified in the order, a dismissal under this paragraph shall be without
prejudice.
a dismissal order is generally deemed to be without prejudice to the filing of another action. The
only instance when dismissal of an action is with prejudice is, when the order itself so states.
Stated differently, when the court issues, upon the plaintiff's instance, a dismissal order that is
silent as to whether it is with or without prejudice, such as in the case at bar, the presumption is,
that it is without prejudice. The cases cited 10 by petitioners to support their contention cannot
be made to apply here as they deal with dismissal orders issued as a result of plaintiff's failure
to prosecute, and are covered by Section 3, and not Section 2, Rule 17 which provides:
Sec. 3. Failure to prosecute. — If plaintiff fails to appear at the time of the
trial, or to prosecute his action for an unreasonable length of time, or to
comply with these rules or any order of the court, the action may be
dismissed upon motion of the defendant or upon the court's own motion.
This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise provided by court.
Dismissals of actions (under Section 3) which do not expressly state whether they are with or
without prejudice are held to be with prejudice or on the merits.
Next, the respondent Court of Appeals was correct in holding that the action for recovery of
possession of the land in question was timely filed citing Art. 1141 of the Civil Code which
provides that real actions over immovables prescribe after thirty (30) years. Here, the Court of
Appeals found that Rabanes was dispossessed by the petitioners in 1962, and the action for
recovery of possession was filed on 11 September 1972, or more or less ten (10) years after
dispossession. 11
Coming now to the main issue as to who is the rightful owner of the property in question, the
parties to this case have presented two (2) entirely different versions of the antecedents. We will
not weigh all over again the entire evidence, because in a petition for review, such as the case
at bar, generally, this Court's duty is to accept the findings of fact of the Court of Appeals and
pass only on questions of law.
The trial court and the Court of Appeals arrived at the conclusion that the deed of sale of 2
February 1946 was indeed one of sale and not of mortgage. We, however, conclude differently.
Under Art. 1602 and Art. 1604 of the Civil Code, a contract shall be presumed to be an equitable
mortgage in any of the following cases:
Art. 1602
1) When the price of a sale with right to repurchase is unusually inadequate;
2) When the vendor remains in possession as lessee or otherwise;
xxx xxx
Art. 1604. — The provisions of Art. 1602 shall also apply to a contract
purporting to be an absolute sale.
These articles embody decisional rules laid down even before the effectivity of the Civil Code
(30 August 1950) so that it is of no moment that the 2 February 1946 deed of sale was executed
12 before the effectivity of the Civil Code. 12
There was gross inadequacy of price, because the land was sold for P800.00 in Japanese war
notes at that, or for barely thirty percent (30%) of its total assessed value of P2,620.00. The
Court can take judicial notice of the fact that real estate, including agricultural land, usually
commands a market value much higher than assessed value.
The other factor to consider is the continuous physical possession by the petitioners of the
property for almost nine (9) long years, or from 1962 to the filing of the injunction case by
respondent Rabanes in 1971. Even assuming for the sake of argument, as the Court of Appeals
believed, that Rabanes acquired possession of the land thru his tenants in 1946 and continued
such possession till 1962, when they were allegedly dispossessed by the petitioners, one
nevertheless can not ignore the unrefuted fact that, from 1962 until the filing of said injunction
case in 1971, it was the petitioners Vallangcas who were in actual and physical possession of
the property. Why did it take Rabanes nine (9) years more or less to take action to recover
possession of the property he claimed to have been forcibly and unlawfully taken from his
tenants?
Apart from the foregoing considerations is still one fact that the trial court and the Court of
Appeals failed to appreciate. We refer to the fact that the land in dispute was acquired under a
free patent in the year 1936 as shown on Transfer Certificate of Title No. 1005, its covering title,
which states —
It is further certified that said land was originally registered on 28th day of
December, in the year nineteen hundred and thirty-six, in Registration Book
No. 1-7, page 55, of the Province of Cagayan, pursuant to a Free patent
granted by the President of the Philippines, on the 5th day of December in
the year nineteen hundred and thirty-six, under Act Nos. 2874 & 496. 13
Consequently, not to be ignored are the provisions of Act No. 2874 (an Act to amend and
compile the laws relative to lands of the public domain) and Act No. 496 (The Land Registration
Act), which govern the said free patent. Sections 116 and 117 of Act No. 2874 provide:
Section 116. — Lands acquired under the free patent or homestead
provisions shall not be subject to encumbrance or alienation from the date
 of the approval of the application and for a term of five years from and after
the date of issuance of the patent or grant, nor shall they become hable to
the satisfaction of any debt contracted prior to the expiration of said period;
. . . 14
Section 117. — Every conveyance of land acquired under the free patent or
homestead provisions, when proper, shall be subject to repurchase by the
applicant, his widow or legal heirs, for a period of five years from the date
of the conveyance. 15
Restrictions are thus imposed on the conveyance of patented lands within five (5) years from
the date of the issuance of the free patent; the owner of the land is precluded from subjecting the
same to any encumbrance or alienation. After the lapse of five (5) years, such prohibition is
lifted, but the owner-vendor is entitled to repurchase the property from the vendee within five
(5) years from the date of the execution of the deed of sale or conveyance.
Applying the foregoing rules in the instant case, it is to be noted that the free patent was issued
to the heirs of Esteban Billena on 5 December 1936. From this date and until 5 December 1941,
any transfer, conveyance or alienation of the property covered by TCT 1005 was not allowed.
Assuming then that what Ana Billena and Nazario Rabanes actually agreed upon in 1944 was
indeed a sale of the land, which transaction was formally put in writing on 2 February 1946, the
said sale, while valid--because it occurred after the period of five (5) years when sale was
prohibited--yet, the sale was subject to Billena's right to repurchase within five (5) years from 2
February 1946. For, notwithstanding the absence of any stipulation in the deed of sale of the
vendor's right to repurchase the land, Billena or her heirs are granted such right by operation of
law. The restrictions and qualifications attached to every alienation of these lands are
mandatory, with the primordial aim to preserve land grants to the family of the applicant for free
patent. 16
Now, did Ana Billena repurchase in time the land in dispute? It is worth noting that private
respondents did not refute petitioners' averment that Billena, together with her son Benjamin,
went to Rabanes' residence in 1946 to redeem the property and tendered to him (Rabanes) the
amount of P800.00 in Philippine I currency, but the latter made a statement that the land could
no longer be redeemed. By Ana Billena's act of tendering to Rabanes the P800.00, she had in
effect exercised her right to repurchase. In fact, in Peralta, et al. vs. Alipio,17 it was held that
since the Public Land Law is silent as to the form and manner in which the right to repurchase
a homestead or land acquired under a free patent may be exercised, any act which amounts to a
demand for reconveyance should be sufficient.
In effect, if the 2 February 1946 deed was actually intended to evidence a sale of the disputed
land, made by Ana Billena to Nazario Rabanes, as found by the trial court and the Court of
Appeals, it was a sale with pacto de retro wherein title of the vendees Rabanes to the property
was to become absolute and irrevocable only upon the failure of Billena or her heirs to
repurchase the same within five (5) years from 2 February 1946. As earlier stated, Billena
exercised her right to repurchase the land, also in 1946, and her heirs are up to the present time
in actual and physical possession of the land. With these as premises, it can be said that Rabanes'
title to the property remains to this date revocable and unconsolidated.
WHEREFORE, the appealed decision of the Court of Appeals in CA-G.R. No. 61133-R is
REVERSED and SET ASIDE. Petitioners may redeem the property covered by TCT No. 1005
upon the return of the amount of Eight Hundred Pesos (P800.00) to private respondents, with
interest at the rate of twelve percent (12%) per annum from 1 January 1962 until fully paid.
SO ORDERED.
[G.R. No. 134171. November 18, 1998]
THE EXECUTIVE SECRETARY and ARTURO C. LOMIBAO, petitioners,
vs. RICHARD J. GORDON, ANACLETO M. DIAS, and ORLANDO E.
MENDIOLA, respondents.
DECISION
MENDOZA, J.:
This is a petition to declare respondents Richard J. Gordon, Anacleto M. Diaz, and
Orlando E. Mendiola in contempt of court. Respondents Diaz and Mendiola are the counsels of
respondent Gordon in G.R. No. 134071, entitled Richard J. Gordon v. The Hon. Executive
Secretary, Felicito Payumo and Senior Superintendent Arturo C. Lomibao. The petitioners in
this case are the respondents in that case.
The aforesaid case was filed on June 29, 1998 because of respondent Gordons
apprehension that he would be removed and replaced as chairman of the Subic Bay Metropolitan
Authority (SBMA) upon the change of administration from President Fidel V. Ramos to
President Joseph Ejercito Estrada. The petition was for prohibition to prevent Gordons ouster
as chairman of the SBMA on the ground that he had a fixed term of office of six years which
would not expire until February 10, 2004.
As respondent Gordon apprehended, upon assuming office on June 30, 1998, President
Joseph Ejercito Estrada issued Administrative Order No. 1, recalling, withdrawing, and
canceling the appointment of Richard J. Gordon as Chairman of the Subic Bay Metropolitan
Authority for a term of six (6) years, dated February 10, 1998, by former President Fidel
V. Ramos.
On July 1, 1998, instead of pressing his motion for a temporary restraining order,
respondent Gordon filed a Notice of Withdrawal of [his] Petition. This was done at 9:21 in the
morning. At 11:30 A.M. of that same day, he filed a petition for certiorari and prohibition in the
Regional Trial Court of Olongapo City, where it was docketed as Civil Case No. 255-0-98.
The filing of the case in the Olongapo court gave rise to the present petition to declare
respondents in contempt of court filed by Executive Secretary Ronaldo Zamora and Arturo C.
Lomibao. The petition is filed against respondents Richard Gordon and his counsel Anacleto M.
Diaz and Orlando E. Medina, the latter having filed the case in the Olongapo City Regional Trial
Court after filing a notice of withdraw the case pending in this Court. Petitioners charge that,
the act of respondents in filing two (2) petitions involving the same issues before this Court and
the Regional Trial Court at Olongapo City, both pending, constitutes forum-shopping and
contempt of court.
 Petitioners cite the following provision of Rule 7, 5 of the Rules of Civil Procedure as
basis for their action:
Certification against forum shopping. - The plaintiff or principal party shall certify under oath
in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn
certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore
commenced any action or filed any claim involving the same issues in any court, tribunal or
quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending
therein; (b) if there is such other pending action or claim, a complete statement of the present
status thereof; and (c) if he should thereafter learn that the same or similar action or claim has
been filed or is pending, he shall report that fact within five (5) days therefrom to the court
wherein his aforesaid complaint or initiatory pleading has been filed.
Failure to comply with the foregoing requirements shall not be curable by mere amendment of
the complaint or other initiatory pleading but shall be cause for the dismissal of the case without
prejudice, unless otherwise provided, upon motion and after hearing. The submission of a false
certification or non-compliance with any of the undertakings therein shall constitute indirect
contempt of court, without prejudice to the corresponding administrative and criminal actions. If
the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall constitute direct contempt,
as well as a cause for administrative sanctions.
This provision applies to petitions for certiorari and prohibition.
In its resolution of July 7, 1998, this Court granted respondents prayer for leave to
withdraw their petition in G.R. No. 134071, without prejudice to the disposition of the present
petition for contempt.
Respondents deny the charge against them. They contend that they in fact complied
with Rule 7, 5 of the Rules of Court by disclosing, in the certification of non-forum shopping
attached to their petition for certiorariand prohibition before the Regional Trial Court of
Olongapo City, the existence and subsequent withdrawal of their petition for prohibition before
this Court. They argue that, as held in PCGG v. Sandiganbayan,[1] it is neither forum-shopping
nor defiance of a courts authority for a party to file a case in the lower court, even after applying
for a similar relief in the Supreme Court, where such party had first sought the withdrawal of
the case before the Supreme Court in order to seek recourse before the lower court.
We find for respondents.
Forum-shopping consists of filing multiple suits involving the same parties for the same
cause of action, either simultaneously or successively, for the purpose of obtaining a favorable
judgment. Thus, it has been held that there is forum-shopping
(1) whenever as a result of an adverse decision in one forum, a party seeks a
favorable decision (other than by appeal or certiorari) in another,[2] or
(2) if, after he has filed a petition before the Supreme Court, a party files another
before the Court of Appeals since in such case he deliberately splits appeals in
the hope that even as one case in which a particular remedy is sought is
dismissed, another case (offering a similar remedy) would still be open, [3] or
(3) where a party attempts to obtain a preliminary injunction in another court after
failing to obtain the same from the original court.[4]
In Chemphil Export & Import Corp. v. Court of Appeals,[5] the Court, summarizing the
rulings on the issue of what constitutes forum-shopping, stated:
Forum-shopping or the act of a party against whom an adverse judgment has been rendered in
one forum, of seeking another (and possibly favorable) opinion in another forum (other than by
appeal or the special civil action of certiorari), or the institution of two (2) or more actions or
proceedings grounded on the same cause on the supposition that one or the other court would
make a favorable disposition, has been characterized as an act of malpractice that is prohibited
and condemned as trifling with the Courts and abusing their processes. It constitutes improper
conduct which tends to degrade the administration of justice. It has also been aptly described as
deplorable because it adds to the congestion of the already heavily burdened dockets of the
courts.
Conversely, since a party resorts to forum-shopping in order to increase his chances of
obtaining a favorable decision or action, a party cannot be said to have sought to improve his
chances of obtaining a favorable decision or action where no unfavorable decision has ever been
rendered against him in any of the cases he has brought before the courts.[6]
In the case at bar, although respondent Richard J. Gordon filed a petition for prohibition
before this Court and, after two days, filed substantially the same petition before the Regional
Trial Court of Olongapo City, the fact remains that (1) before filing his petition in the Olongapo
court he first filed a notice of withdrawal of his petition which this Court later granted and (2)
he withdrew his petition in this Court for the following reason:
Due, however, to the present policy of the Court requiring parties and their counsel to adhere
strictly to the hierarchy of courts and in order to obviate any technical objection on this ground,
petitioner has deemed it fit to withdraw, as he hereby withdraws, the instant petition so that it
may be filed in the proper court where it can be ventilated on its merits.
No adverse decision had been rendered by this Court against respondent Gordon for which
reason he thought it proper to institute the second action in the trial court. The situation he found
himself in is similar to that in which a party, after filing a suit, realizes he made a mistake
because the court in which he has brought the case has no jurisdiction. He, therefore, withdraws
his action and refiles it in the proper forum. For, indeed, the policy of this Court respecting the
hierarchy of courts and consequently prohibiting the filing of a petition in this Court in view of
the concurrent jurisdiction with the lower courts has been consistently observed in the absence
of any compelling reason for departing from such policy. It is clear from respondents actions
and explanation that they had no intention of disregarding court processes. They in fact complied
with Rule 7, 5 of the Rules of Civil Procedure.
This case is distinguishable from E. Razon, Inc. v. The Philippine Port Authority.[7] In
the E. Razon case, petitioners, after filing a petition for certiorari with prayer for the issuance
of a temporary restraining order in the Supreme Court, filed an hour later a similar petition
before the Regional Trial Court and, having been assured of a favorable action by the latter
court, then sought the withdrawal of the petition in this Court. Petitioners were found guilty of
forum-shopping. The acts of petitioners constitute a clear case of forum-shopping, an act of
malpractice that is proscribed and condemned as trifling with the courts and abusing their
processes, it was held.
In contrast, in the case at bar, respondent Gordon filed a notice of withdrawal of his
petition before this Court prior to the filing of his petition in the Regional Trial Court as the
appropriate forum. While it is true he and his counsels did not wait for this Court to act on the or petulance, and considering this case instead with compassion, bearing in mind that the
Notice of Withdrawal of Petition filed by them before filing substantially the same petition in purpose of contempt is preservative rather than punitive, this Court has chosen to overlook
the Regional Trial Court, the Court understands their situation. They were faced with a respondents lapse.
predicament: Administrative Order 1 ousting respondent Gordon from the chairmanship of the
SMBA had been issued and was in fact about to be enforced hence a writ of preliminary WHEREFORE, the petition for contempt is DISMISSED.
injunction had to be obtained if respondent Gordon was to remain in office. SO ORDERED.
A similar predicament confronted the parties in PCGG v. Sandiganbayan (Minute
Resolution, G.R. Nos. 105808, 105809, and 109592, July 22, 1997), cited by
respondents. There, as found by this Court SECOND DIVISION

As regards TMEEs lawyers, they obviously believed that under this Courts dispositions just
reviewed, it was their client, instead of the PCGG, that had the right to vote the sequestered
shares, prior to the determination by the Sandiganbayan of whether or not there would be BENEDICTA M. SAMSON and G.R. No. 166356
dissipation, loss or wastage of corporate assets if TMEE were permitted to vote said shares. They MARCIAL M. SAMSON,
wished their client to exercise that right to vote at the stockholders meeting of January 10, 1997; Petitioners, Present:
but PCIB was adamant in its position that it should be the PCGG which should be accorded the
right to vote. Time being of the essence, said lawyers betook themselves to this Court; on
December 23, 1996, they filed here an Urgent Motion for Issuance of a Temporary Restraining CARPIO, J., Chairperson,
Order. CORONA,* BRION,
- versus - DEL CASTILLO, and PEREZ, JJ.

A few days reflection, however, apparently made them doubt that the Court would act on their HON. JUDGE GERALDINE C.
motion because in its Resolution of December 3, 1996 it had said that no further motion for FIEL-MACARAIG, BANK OF THE
reconsideration or clarification of the issues treated or, of the dispositions herein made, will be PHILIPPINE ISLANDS, FAR EAST
entertained. They thus decided that relief should properly be sought in the Securities & BANK AND TRUST CO., ATTY.
Exchange Commission which in their view had jurisdiction to act on the subject matter (which) JULIA CECILY COCHING-
refers to the corporate acts of PCIB and its corporate officers (Garcia Jr. vs. Sandiganbayan 237 SOSITO, and THE REGISTER OF
SCRA 552) (their cause) not being directly aimed at the PCGG as an entity, but at a private DEEDS FOR MARIKINA CITY, Promulgated:
corporation (Holiday Inn [Phils.] vs. Sandiganbayan, et al. 186 SCRA 447]. But first they had Respondents. February 2, 2010
to withdraw their motion for TRO before this Court. This they sought to do by filing on January
9, 1997, a Notice of Withdrawal of Urgent Motion for Issuance of a Restraining Order. That x-----------------------------------------------------------------------------------------x
done, they filed the corresponding petition with the Securities & Exchange Commission to stop
the PCIB stockholders meeting scheduled the following day, as above narrated.
RESOLUTION
This Court considered the parties predicament with understanding and overlooked their
lapse:
CARPIO, J.:
The Court sees no reason to reject this explanation of the TMEE lawyers, or to doubt their good
faith. Their explanation is not on its face implausible; it is in truth consistent with the admitted
facts on record. Considering that condemnation for contempt should not be made lightly, and This is a petition for review[1] of the Court of Appeals Decision[2] dated 28 September
that the power to punish for contempt should be exercised on the preservative and not on the
vindictive principle, the Court finds no difficulty whatever in reaching the conclusion that there 2004 and Resolution dated 15 December 2004 in CA-G.R. SP No. 82114. The Court of Appeals
was no willful disregard or defiance of its orders, or forum-shopping, by the TMEE lawyers or,
through his permissiveness, by the SEC Hearing Officer. dismissed the petition for certiorari[3] filed by Benedicta M. Samson and Marcial M. Samson
against Hon. Judge Geraldine C. Fiel-Macaraig, the Bank of the Philippine Islands (BPI), the
By no means does the Court by the present decision wish to convey the impression that it
will tolerate any act of disrespect or discourtesy. To be sure, respondents could have apologized Far East Bank and Trust Co. (FEBTC), Atty. Julia Cecily Coching-Sosito, and the Register of
at the very least for the time of the Court which they had taken and made an effort to explain
why they have to refile their case without awaiting the Courts resolution on their notice of Deeds of Marikina City.
withdrawal of the petition. But, exercising restraint lest a contraryaction be seen as mere peeve
The factual and procedural antecedents of this case are as follows: Injunction. They questioned the validity of the 29 June 2000 auction sale for alleged lack of

posting and publication requirements. Impleaded as defendants in the case were BPI,[9] FEBTC,

Sometime in 1998, petitioners Benedicta M. Samson and Marcial M. Samson obtained a loan Julia Cecily Coching-Sosito, in her capacity as Clerk of Court and Ex-Officio Sheriff of the
amounting to P10,000,000 from FEBTC. The loan was secured by a real estate mortgage over RTC of Marikina City, and the Register of Deeds of Marikina City. The case was docketed as

four parcels of land located in Marikina City and covered by Transfer Certificate of Title (TCT) Civil Case No. 2002-803-MK and raffled to Branch 192 of the RTC of Marikina City.

Nos. N-1521, N-1522, N-1226, and N-1227. When petitioners failed to comply with the terms

of the loan agreement, FEBTC filed an application for extra-judicial foreclosure of the real estate On 19 July 2002, the Registrar of Deeds[10] of Marikina City filed a Manifestation[11] stating that

mortgage with the Office of the Clerk of Court and Ex-Officio Sheriff of the Regional Trial the certificates of title subject of the case had already been cancelled and the titles to the

Court (RTC) of Marikina City. FEBTCs application was given due course, and a Notice of mortgaged properties were consolidated in the name of BPI on 7 March 2002. The Registrar of

Sheriffs Sale was issued, setting the public auction sale of the mortgaged properties on 8 June Deeds also claimed that the complaint stated no cause of action against him for it mentioned no

2000, at 10:00 in the morning. Prior to the sale, the Notice of Sheriffs Sale was duly published wrongful act on his part, whether in his official or personal capacity; neither was there any

in Rizal-Metro Gazette,[4] and was certified by Sheriff IV Edgar Pulan of the RTC of Marikina allegation of negligence or omission of his official functions.[12] The Registrar of Deeds likewise

City to have been duly posted in three public places where the mortgaged real properties were mentioned that, at most, the Registrar and the Register of Deeds of Marikina City were

located.[5] impleaded only as nominal parties in the case.[13]

On 8 June 2000, only one bidder, FEBTC, submitted its bid, thereby causing the sheriff to A hearing on the application for a TRO and/or Writ of Preliminary Injunction was held on 2

postpone the public auction sale to 29 June 2000, in accordance with SC AM No. 99-10-05- August 2002.[14] On 9 August 2002, private respondent BPI filed its Answer with Counterclaim
0[6]and the Notice of Sheriff's Sale which states, inter alia: and Opposition. Public respondent Julia Cecily Coching-Sosito, the Clerk of Court and Ex-

Officio Sheriff of the RTC of Marikina City did not file an answer.
In the event that there are less than two (2) participating bidders in the
original date of auction sale as afore-stated, the same shall be postponed to
June 29, 2000 at the same time and place without need of republication and
On 20 December 2002, the RTC of Marikina City, Branch 192, issued an Order denying
reposting [of] this notice.[7]
plaintiffs application for TRO and/or Writ of Preliminary Injunction. [15] Six months later, or on

20 June 2003, the RTC issued an Order dismissing the complaint for failure to prosecute for an
On 29 June 2000, the mortgaged real properties were sold at public auction to FEBTC as the
unreasonable length of time.[16]
highest bidder,[8] and a Certificate of Sale was issued in favor of the bank.
Plaintiffs filed a Motion for Reconsideration, but this was denied by the RTC in its Order dated

22 December 2003. Plaintiffs, except Benedicta and Marcial Samson, filed a Notice of Appeal
Almost two years later, or on 4 June 2002, petitioners, together with Pepito, Zenaida, Julieta,
dated 27 January 2004. On 10 February 2004, Benedicta and Marcial Samson filed with the
Edgardo, Rolando, Rempson, and Rocky, all surnamed Samson, filed a case for Annulment of
Court of Appeals a Petition for Certiorari under Rule 65 of the 1997 Revised Rules of Civil
Extra-judicial Foreclosure and/or Nullification of Sale and the Certificates of Title, plus
Procedure.
Damages and with Prayer for a Temporary Restraining Order [TRO] and/or Writ of Preliminary
On 28 September 2004, the Court of Appeals rendered judgment dismissing the petition.[17] The
appellate court ruled that a writ of certiorari lies only where there is no appeal or plain, speedy,
and adequate remedy in the ordinary course of law. The availability of the right to appeal
precludes recourse to the special civil action for certiorari. The RTC Order subject of the petition
was a final judgment which disposed of the case on the merits; hence, it was a subject for an
ordinary appeal, not a petition for certiorari. The Court of Appeals added that even assuming
that the petitioners availed of the proper remedy, they failed to show that public respondent
gravely abused her discretion by acting in a despotic or arbitrary manner, or that she was
motivated by passion or personal hostility when she issued the assailed Orders.
Petitioners filed a Motion for Reconsideration, but this was denied by the Court of Appeals in
its Resolution dated 15 December 2004.[18]
On 4 February 2005, petitioners filed the instant petition for review before this Court. Petitioners
claim that the appellate court erred in dismissing the petition for certiorari since public
respondent RTC Judge Geraldine Fiel-Macaraig gravely abused her discretion amounting to
lack of jurisdiction when she dismissed the case (Complaint for Annulment of Extra-judicial
Foreclosure and/or Nullification of Sale and the Certificates of Title, plus Damages and with
Prayer for TRO and/or Writ of Preliminary Injunction) for failure to prosecute despite the fact
that one of the defendants, Ex-Officio Sheriff Julia Cecily Coching-Sosito, had not yet submitted
her responsive pleading; hence, the issues were not yet joined and it was still premature for
petitioners to move for a pre-trial of the case. Petitioners also questioned the validity of the
second public auction for lack of posting and publication.
The petition has no merit.
The appellate court correctly ruled that the petition for certiorari was not the proper remedy. A
writ of certiorari lies only for an error of jurisdiction. It can be availed of only if the lower
tribunal has acted without or in excess of jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction, and if there is no appeal or any other plain, speedy,
and adequate remedy in the ordinary course of law.[19] Where the error is not one of jurisdiction
but an error of law or fact which is a mistake of judgment, certiorari is not available. [20] In such
case, the remedy is appeal.
The assailed RTC Order dated 20 June 2003 was issued when petitioners failed to move for a
pre-trial of the case for annulment of the extra-judicial foreclosure in accordance with Section
1, Rule 18 of the Revised Rules of Civil Procedure which provides:
Section 1. When conducted. After the last pleading has been served and
filed, it shall be the duty of the plaintiff to promptly move ex parte that
the case be set for pre-trial. (Emphasis supplied)
In said Order, the RTC dismissed the case with prejudice for failure to prosecute for an
unreasonable length of time, pursuant to Section 3, Rule 17 of the Rules of Court which states,
thus:
Section 3. Dismissal due to fault of plaintiff. If, for no justifiable cause,
the plaintiff fails to appear on the date of the presentation of his evidence
in chief on the complaint, or to prosecute his action for an unreasonable
length of time, or to comply with these Rules or any order of the court,
the complaint may be dismissed upon motion of the defendant or upon
the courts own motion, without prejudice to the right of the defendant to
prosecute his counterclaim in the same or in a separate action. This dismissal
shall have the effect of an adjudication upon the merits, unless otherwise
declared by the court. (Emphasis supplied)
The RTC Order dated 20 June 2003 was a final judgment which disposed of the case on the
merits. This was even clarified in the subsequent RTC Order of 22 December 2003 (which
denied petitioners motion for reconsideration) wherein the lower court stated that: Therefore,
the dismissal was with prejudice or a dismissal that had the effect of adjudication upon the merits
in accordance with Section 3, Rule 17 of the Rules of Court.
The remedy to obtain reversal or modification of the judgment on the merits is appeal. This is
true even if the error, or one of the errors, ascribed to the court rendering the judgment is its lack
of jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse SO ORDERED.

of discretion in the findings of fact or of law set out in the decision. [21] The availability of the
ELOISA MERCHANDISING, INC. and TREBEL G.R. No. 192716
right to appeal precludes recourse to the special civil action for certiorari. The RTC Order INTERNATIONAL, INC.,Petitioners,
Present:
subject of the petition was a final judgment which disposed of the case on the merits; hence, it

was a subject for an ordinary appeal, not a petition for certiorari. - versus - LEONARDO-DE CASTRO, J.,*
Acting Chairperson,
BERSAMIN,
DEL CASTILLO, VILLARAMA, JR., and
Even assuming that certiorari may lie, the Court still cannot grant the instant petition because PERLAS-BERNABE,** JJ.
BANCO DE ORO UNIVERSAL
the petitioners failed to show that public respondent, in issuing the assailed Orders, acted without BANK and ENGRACIO M. ESCASINAS, JR., in his Promulgated:
or in excess of jurisdiction, or gravely abused her discretion amounting to lack or excess of capacity as Ex-Officio Sheriff of the RTC of Makati
City, June 13, 2012
jurisdiction. As mentioned earlier, the RTC issued the assailed Order in accordance with Section Respondents.
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
3, Rule 17, in relation to Section 1, Rule 18 of the Revised Rules of Civil Procedure. There is
DECISION
no showing that the RTC judge issued the Order in a despotic or arbitrary manner, or that she

was motivated by passion or personal hostility against petitioners. Grave abuse of discretion VILLARAMA, JR., J.:

implies such capricious and whimsical exercise of judgment as is equivalent to lack of

Assailed in this petition for review on certiorari under Rule 45 are the Decision[1] dated March
jurisdiction or, in other words, where the power is exercised in an arbitrary manner by reason of
30, 2010 and Resolution[2] dated June 15, 2010 of the Court of Appeals (CA) in CA-G.R. CV
passion, prejudice, or personal hostility,[22] and it must be so patent or gross as to amount to an
No. 89779. The CA affirmed the trial courts dismissal of petitioners complaint on the ground of
evasion of a positive duty or to a virtual refusal to perform the duty enjoined or to act at all in
failure to prosecute.
contemplation of law.[23] Such is wanting in this case.

We agree with private respondent BPI that the failure of the Ex-Officio Sheriff to file her On November 11, 1993, petitioner Eloisa Merchandising, Inc. (EMI) executed in favor of

Answer should not have prevented petitioners from performing their duty under Section 1 of respondent Banco de Oro Universal Bank (BDO) a real estate mortgage (REM) over its

Rule 18. Petitioners could have availed of other remedies, such as the filing of a motion to
declare Ex-Officio Sheriff in default,[24] to avoid unnecessary delay in court proceedings.
The other issues raised by petitioners involve questions of fact which are not proper subjects of
this case.
WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals Decision dated 28
properties located at No. 129 Neptune St., Bel-Air Village II, Makati City, Metro Manila and
covered by Transfer Certificate of Title Nos. 157092 and 157093. The REM was further
amended on May 16, 1996, December 23, 1996, September 16, 1998 and July 2, 1999 to secure
the principal obligation totalling Twenty-Nine Million Nine Hundred Thousand Pesos
(P29,900,000.00) drawn from the Credit Line Agreement of EMI and Term Loan Agreement of
Trebel International, Inc. (Trebel). EMI likewise executed a Continuing Suretyship in favor of
BDO to secure the credit accommodation extended by BDO to petitioners affiliate, Trebel. [3]

September 2004 and Resolution dated 15 December 2004 in CA-G.R. SP No. 82114. On January 10, 2002, BDO initiated foreclosure proceedings by filing an application for
extrajudicial foreclosure before the Office of the Ex-Officio Sheriff of the Regional Trial Court
(RTC) of Makati City.[4] Accordingly, respondent Engracio M. Escasinas, Jr. issued a notice
setting the auction sale of the mortgaged property on March 7, 2002.
On March 1, 2002, petitioners filed a Complaint[5] for Annulment of Real Estate Mortgage,
Injunction & Damages With Prayer for Issuance of a Writ of Preliminary Injunction and/or
Temporary Restraining Order, docketed as Civil Case No. 02-245 of the RTC of Makati City,
Branch 59. Petitioners alleged the following as grounds for nullity of the REM: (1) the contract
is in the nature of a third-party mortgage to secure the loans of Trebel despite the fact that EMI
is not in the suretyship business; (2) after maturity of the loans, BDO granted Trebel extensions
of time to pay without notice to EMI, thus extinguishing the corporate guaranty or suretyship
and REM, pursuant to Art. 2079 of the Civil Code; (3) under the promissory notes, BDO
unilaterally fixed an adjustable, floating interest rate on each interest period as may be favorable
to it, a potestative condition which is null and void under Art. 1308 of the Civil Code; and (4)
the penalty of 3% per month or 36% per annum is exorbitant and excessive. Petitioners further
claimed that BDO acted with malice and evident bad faith in initiating the extrajudicial
foreclosure proceedings.
BDO filed a motion to dismiss[6] on the ground of lack of cause of action which can be
determined from the facts alleged in the complaint and considering all annexes, motions and
evidence on record.
On May 7, 2002, petitioners filed an amended complaint [7] which impleaded the Register of
Deeds and alleged that the mortgaged property was sold at a public auction on March 7, 2002.
On July 18, 2002, petitioners filed a Motion for Leave to File and to Admit Second Amended
Complaint,[8] which averred that the Register of Deeds of Makati City has consolidated the titles
over the foreclosed properties and issued new titles in the name of BDO.
On November 28, 2002, the trial court issued an order[9] granting the motion to admit second
amended complaint and denying the motion to dismiss. BDO was directed to file a responsive
pleading.
On January 17, 2003, BDO filed its Answer[10] traversing the allegations of the complaint and
asserting that: (1) there was only forbearance on BDOs part before filing the extrajudicial
foreclosure due to insistent request of petitioners who repeatedly promised to settle their
obligations, and for humanitarian reasons; (2) the loan documents clearly stated that no prior
demand is necessary before the entire obligation becomes due and demandable; (3) on June 22,
1999, Trebel obtained a Term Loan Agreement in addition to the previously
granted P5,000,000.00 Credit/Trust Receipts Line granted by BDO, from which Trebel availed
of P19,900,000.00, part of which was used to pay off EMIs loans; in consideration thereof, EMI
executed a Continuing Suretyship and the Fourth Amended REM to the extent
of P29,900,000.00 in favor of BDO; (4) Trebel subsequently made several drawings from its
own credit lines in the total amount of P29,880,000.00 under Promissory Notes (PNs) executed
on various dates; (5) because Trebel failed to satisfy its loan obligations under the aforesaid
PNs, BDO was compelled to file an application for extrajudicial foreclosure of the REM on
January 10, 2002, and BDO won as the highest bidder during the public auction sale; (6) EMI
was not a third-party mortgagor considering that it secured its own obligations and Trebel has
assumed its obligations in full; the veil of corporate fiction maybe pierced in this case, and EMI
is already estopped from raising the issue of ultra vires act after Trebel had defaulted on its
obligations; (7) with the execution of the Continuing Suretyship, EMI bound itself solidarily
with the principal debtor, Trebel, and the right of BDO to proceed against EMI as surety exists
independently of its right to proceed against Trebel; EMI as surety is not even entitled to a notice
of the principals default; (8) the Conforme Letter dated June 14, 1999 sent by BDO to EMI
showed the consent of Mr. Roberto L. Del Rosario (President) and Ms. Emma M. Del Rosario
(Finance Manager) who both signed the said letter which provides for a floating interest rate
based on the 364-day Treasury Bill Rates plus 4% or the BDO Reference Rate plus 7.5%; T-
Bill Rates are one of the most objective and generally used standard for interest rates; and (9)
the liquidated penalty was part of the parties agreement, which will not accrue until Trebel
defaults on its obligations with BDO.
In the Notice of Pre-Trial[11] dated January 22, 2003, the trial court set the pre-trial conference
on February 27, 2003. In compliance with the trial courts directive, the parties submitted their
respective pre-trial briefs.
On March 13, 2003, petitioners filed a Motion to Admit Supplemental Complaint which further
alleged that BDOs petition for issuance of a writ of possession was granted by the RTC of
Makati City, Branch 143 in a Decision dated February 18, 2003. EMI reiterated that its rights as
surety-mortgagor were violated in the railroaded ex parte proceedings implementing the writ of
possession even as EMIs pending motion for reconsideration was still unresolved by Branch
143.[12]
In its Order[13] dated June 19, 2003, the trial court denied the motion to admit supplemental
complaint on the ground that the matters raised in the supplemental complaint were improper as
they pertain to issuances by another branch in a separate petition for writ of possession.
At the scheduled pre-trial conference on June 26, 2003, on motion of petitioners, they
were allowed to present evidence exparte in view of the absence of BDO which was non-suited.
In its motion for reconsideration, BDOs counsel cited extraordinary and non-moving traffic as
reason for his failure to arrive on time for the pre-trial conference. The trial court, in an Order
dated August 27, 2003, granted the said motion, reinstated the case and set the case again for
pre-trial conference on September 26, 2003, later moved to November 10, 2003, and finally
rescheduled to January 12, 2004 by agreement of the parties. [14]
On July 16, 2003, petitioners filed a motion for reconsideration of the June 19, 2003
Order denying their motion to admit supplemental complaint; BDO filed its opposition to the
said motion.
For failure of the petitioners to appear despite due notice at the scheduled pre-trial conference
on January 12, 2004, the case was ordered dismissed.[15] In their motion for reconsideration,
petitioners counsel claimed that his failure to attend was due to his accidental falling on the
stairs of his house in the morning of January 12, 2004, due to which he had to be attended by
a hilot. In an Order dated May 7, 2004, the trial court reconsidered the dismissal and scheduled
anew the pre-trial conference on June 29, 2004, which date was subsequently reset to August 3,
2004 for lack of proof of service upon petitioners counsel.[16]
Since petitioners again failed to appear on the re-scheduled pre-trial conference on August 3,
2004, the trial court issued the following Order:
When this case was called for pre-trial conference, only counsel
for the defendants appeared. There was no appearance on the part of the
plaintiffs, despite the fact that as early as June 29, 2004, they were notified
for todays hearing. The Court, however, is in receipt of a Motion to Reset
filed by counsel for the plaintiff, alleging among others, that he is to appear
at the MTC of San Jose, Batangas, which was set earlier than the hearing of
this case. The Court finds the ground not meritorious because counsel of
plaintiffs in open Court on June 29, 2004 signed the notification for the
hearing of this case. Counsel could have objected to the chosen date if
indeed he was not available. Likewise, the records will show that on January
12, 2004, this case was also dismissed for failure of the plaintiffs to appear
for pre-trial conference. This should have served as a warning to herein
plaintiffs.
In view hereof, upon motion of the herein defendants, the above-
entitled case is hereby ordered dismissed pursuant to Section 5, Rule 18 of
the Rules of Court.
SO ORDERED.[17] (Italics supplied.)
Petitioners moved to reconsider the above order, their counsel alleging that he had
misplaced or lost his calendar book and could not have ascertained the availability of his
schedule. Stressing that he had no intention to ignore the hearing as in fact he filed a motion to
reset the same six days prior to the scheduled hearing, petitioners counsel pleaded for the kind
indulgence of the court.
On December 29, 2004, the trial court issued an Order[18] granting petitioners motion
for reconsideration in the interest of justice and reinstating the case. The trial court, however
directed petitioners to be more circumspect in attending to this case.
In its Order[19] dated September 20, 2005, the trial court dismissed the case for failure of
petitioners to prosecute their case. Citing the two previous dismissals on account of petitioners
non-appearance at the pre-trial conference, the trial court said that [f]rom the date of its second
reconsideration of the order of dismissal on December 29, 2004 until today, plaintiffs did not do
anything to prosecute the instant case.
Petitioners filed a motion for reconsideration in which they averred that:
1. After the reconsideration of the Order of dismissal on
December 29, 2004, the plaintiffs counsel, Atty. Anselmo A. Marqueda, on
several occasion, passed by the court and diligently followed-up the hearing
of this case. He was assured by an officer of the court to just wait for the
notice of hearing that they will issue in the instant case.
2. While waiting for the notice of hearing from this court, the
respective counsels of the parties negotiated in earnest for an amicable
settlement of the case. During the last telephone conversation with Atty.
Roy P.R. Talao, the defendants bank counsel, and the undersigned agree on
some proposals for settlement which are however subject to final
confirmation of their respective clients. The plaintiff believe that the parties
are very close to agree and enter into an amicable settlement of this case.
3. Apart from the reliance of the undersigned counsel on the
statement of the court officer to just wait for the notice of hearing, the
undersigned counsel suffered a handicap in making a personal follow-up of
this case because of his numerous travels and lengthy sojourn in the
province due to family conflict and death of a member of the family.
x x x x[20]
In its Order[21] dated April 10, 2006, the trial court denied petitioners motion for reconsideration,
as follows:
x x x Records show that this case has been dismissed thrice
(January 12, 2004; August 3, 2004 and September 20, 2005). The first two
dismissals were due to the failure of the plaintiffs to appear during the pre-
trial conference despite notice. In both cases plaintiffs were admonished to
be more circumspect in attending to this case. This time the instant case was
dismissed due to inaction of herein plaintiffs for unreasonable length of
time.
The Court has been lenient for quite sometime however, plaintiffs
seemed inclined to abuse the Courts leniency. Finding no compelling reason
to reconsider the assailed order, motion is hereby DENIED.
SO ORDERED.
Aggrieved, petitioners appealed to the CA arguing that the trial court erred in dismissing the
case for failure to prosecute considering that (1) the trial court has not yet resolved petitioners
motion for reconsideration of the order denying their motion to admit supplemental complaint;
(2) petitioners are very much interested to prosecute this case to protect their rights in the
premises; (3) petitioners have valid and meritorious causes of action; (4) petitioners may not be
deprived of their day in court by the negligence of their counsel; and (5) non-suit or default
judgment is not encouraged as it violates due process.[22]
By Decision dated March 30, 2010, the CA affirmed the trial courts dismissal of the case. The
CA said that petitioners cannot justify their prolonged inaction by belatedly raising as issue the
pending motion for reconsideration from the trial courts denial of their motion to admit the
supplemental complaint, when all along they were aware that the case was at the pre-trial stage
as in fact the case was twice dismissed for their failure to attend the pre-trial conference. Under
the circumstances stated in its September 20, 2005 Order, the CA held that the trial court cannot
be faulted for dismissing the case on the ground of petitioners failure to prosecute their action,
citing this Courts ruling in Olave v. Mistas.[23]
The CA also denied the motion for reconsideration filed by the petitioners.
Petitioners contend that the only reason for the trial courts dismissal of the case was
the failure of their counsel to move to set the case for pre-trial. However, Section 1, Rule 18 of
the 1997 Rules of Civil Procedure, as amended, imposing upon the plaintiff the duty to promptly
move to set the case for pre-trial, had been repealed and amended by A.M. No. 03-1-09-SC
which took effect on August 16, 2004. This amendment to the rule on pre-trial now imposes on
the clerk of court the duty to issue a notice of pre-trial if the plaintiff fails to file a motion to set
the case for pre-trial conference.
Petitioners point out that the case was not yet ripe for pre-trial because of the
unresolved pending motion for reconsideration of the trial courts denial of the motion to admit
supplemental complaint. In any event, petitioners assert that they are very much interested to
prosecute the case as they have presented evidence in their application for the issuance of TRO
and writ of preliminary injunction, amended the complaint several times, their representatives
have always been attending as notified by their lawyers, and their counsel was following up the
case but the Clerk of Court could not set the case for pre-trial because of the pending motion. As
to the prior dismissals of the case, these should not be taken as badges of failure to prosecute
because these had been set aside on meritorious grounds. The circumstances that respondent
BDO itself had been declared in default for failure to appear at the pre-trial on June 26, 2003
and has asked repeatedly for extensions of time from the court, the ongoing negotiations with
BDO for amicable settlement even at the appeal stage, and petitioners meritorious causes of
action, justify a liberal application of the rules so that petitioners will be given their day in court.
Respondent BDO, on the other hand, asserts that the failure of petitioners to move for
the setting of the case for pre-trial conference, coupled with their repeated violations of
the Ruleswhich prompted the trial court to dismiss their complaint twice, are sufficient grounds
for the trial court to finally dismiss the complaint. A.M. No. 03-1-09-SC did not remove
plaintiffs obligation to set the case for pre-trial. Petitioners claim that they relied on a supposed
assurance by a court personnel to set the case for pre-trial is doubtful, aside from being
contradictory to the admission of petitioners counsel that he suffered a handicap in making a
personal follow-up of this case because of [his] numerous travels and lengthy sojourn in the
province due to family conflict and death of a member of the family.
As to the alleged negotiations for an amicable settlement, respondent admitted there
were talks during court hearings and telephone calls but these were casual and at best,
exploratory.No serious offer was made by petitioners, much less concretized. At any rate, even
if true, such talks is not a ground to tarry and delay the prosecution of the case which had been
pending with the trial court for more than three years and had not even left the pre-trial stage. If
indeed petitioners were sincere in their desire to settle, they should have promptly moved for
the setting of pre-trial so that the case can be referred for mandatory mediation proceedings.
The petition has no merit.
Under Section 3,[24] 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. The failure of
a plaintiff to prosecute the action without any justifiable cause within a reasonable period of
time will give rise to the presumption that he is no longer interested to obtain from the court the
relief prayed for in his complaint; hence, the court is authorized to order the dismissal of the
complaint on its own motion or on motion of the defendants. The presumption is not, by any
means, conclusive because the plaintiff, on a motion for reconsideration of the order of
dismissal, may allege and establish a justifiable cause for such failure.[25] The burden to show
that there are compelling reasons that would make a dismissal of the case unjustified is on the
petitioners.[26]
Under Section 1, Rule 18 of the 1997 Rules of Civil Procedure, as amended, it is the
duty of the plaintiff, after the last pleading has been served and filed, to promptly move ex
partethat the case be set for pre-trial. On August 16, 2004, A.M. No. 03-1-09-SC (Re: Proposed
Rule on Guidelines to be Observed by Trial Court Judges and Clerks of Court in the Conduct
of Pre-Trial and Use of Deposition-Discovery Measures) took effect, which provides that:
Within five (5) days from date of filing of the reply, the plaintiff
must promptly move ex parte that the case be set for pre-trial conference. If
the plaintiff fails to file said motion within the given period, the Branch
COC shall issue a notice of pre-trial.
We note that when the above guidelines took effect, the case was already at the pre-trial stage
and it was the failure of petitioners to set the case anew for pre-trial conference which prompted
the trial court to dismiss their complaint.
In Olave v. Mistas,[27] this Court said that even if the plaintiff fails to promptly move for pre-
trial without any justifiable cause for such delay, the extreme sanction of dismissal of the
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 the more recent case of Espiritu v. Lazaro,[28] this Court affirmed the
dismissal of a case for failure to prosecute, the plaintiff having failed to take the initiative to set
the case for pre-trial for almost one year from their receipt of the Answer. Although said case
was decided prior to the effectivity of A.M. No. 03-1-09-SC, the Court considered the
circumstances showing petitioners and their counsels lack of interest and laxity in prosecuting
their case.
 In this case, while there was no substantial prejudice caused to herein respondent, who
has already consolidated the ownership of petitioners properties, secured new titles in its name
and successfully implemented a writ of possession issued by another branch, there was neither
patent abuse in the trial courts dismissal of the complaint for the third time, the earlier two
dismissals having been precipitated by petitioners non-appearance at the pre-trial
conference. Contrary to petitioners assertion, the trial court did not find their offered excuses as
meritorious or justifiable; the trial court in the exercise of discretion simply reinstated the case
in the interest of justice but explicitly warned petitioners to be more circumspect in attending to
the case.
However, despite the trial courts leniency and admonition, petitioners continued to
exhibit laxity and inattention in attending to their case. Assuming domestic problems had beset
petitioners counsel in the interregnum, with greater reason should he make proper coordination
with the trial court to ensure his availability on the date to be chosen by the trial court for the
long-delayed conduct of a pre-trial conference. Petitioners themselves did nothing to get the
case moving for nine months and set the case anew for pre-trial even as BDO was already
seeking their judicial ejectment with the implementation of the writ of possession issued by
Branch 143. Such circumstance also belies their pretense that the parties were then still
negotiating for a settlement. We have held that a party cannot blame his counsel when he himself
was guilty of neglect; and that the laws aid the vigilant, not those who slumber on their
rights. Vigilantibus sed non dormientibus jura subveniunt.[29]
We also agree with the CA that petitioners are belatedly raising as issue the unresolved
motion for reconsideration of the denial of petitioners motion to admit supplemental
complaint.Petitioners did not even file a motion to resolve the said pending incident which, in
any event, could have been brought to the trial courts attention had petitioners acted promptly
to have the case set anew for pre-trial conference soon after or within a reasonable time from
the reinstatement of the case on December 29, 2004.
While under the present Rules, it is now the duty of the clerk of court to set the case
for pre-trial if the plaintiff fails to do so within the prescribed period, this does not relieve the
plaintiff of his own duty to prosecute the case diligently. This case had been at the pre-trial stage
for more than two years and petitioners have not shown special circumstances or compelling
reasons to convince us that the dismissal of their complaint for failure to prosecute was
unjustified.
WHEREFORE, the petition for review on certiorari is DENIED. The Decision
dated March 30, 2010 and Resolution dated June 15, 2010 of the Court of Appeals in CA-G.R.
CV No. 89779 are hereby AFFIRMED and UPHELD.
Costs against the petitioners.
SO ORDERED.
G.R. No. 185922 January 15, 2014
HEIRS OF DR. MARIANO FAVIS SR. represented by their co-heirs and Attorneys-in-
Fact MERCEDES A. FAVIS and NELLY FAVIS- VILLAFUERTE, Petitioners,
vs.
JUANA GONZALES, her son MARIANO G. FAVIS, MA. THERESA JOANA D. FAVIS,
JAMES MARK D. FAVIS, all minors represented herein by their parents SPS.
MARIANO FAVIS and LARCELITA D. FAVIS,Respondents.
DECISION
PEREZ, J.:
Before this Court is a petition for review assailing the 10 April 2008 Decision1 and 7 January
2009 Resolution2 of the Court of Appeals in CA-G.R. CV No. 86497 dismissing petitioners’
complaint for annulment of the Deed of Donation for failure to exert earnest efforts towards a
compromise.
Dr. Mariano Favis, Sr. (Dr. Favis) was married to Capitolina Aguilar (Capitolina) with whom
he had seven children named Purita A. Favis, Reynaldo Favis, Consolacion Favis-Queliza,
Mariano A. Favis, Jr., Esther F. Filart, Mercedes A. Favis, and Nelly Favis-Villafuerte. When
Capitolina died in March 1944, Dr. Favis took Juana Gonzales (Juana) as his common-law wife
with whom he sired one child, Mariano G. Favis (Mariano). When Dr. Favis and Juana got
married in 1974, Dr. Favis executed an affidavit acknowledging Mariano as one of his legitimate
children. Mariano is married to Larcelita D. Favis (Larcelita), with whom he has four children,
named Ma. Theresa Joana D. Favis, Ma. Cristina D. Favis, James Mark D. Favis and Ma. Thea
D. Favis.
Dr. Favis died intestate on 29 July 1995 leaving the following properties:
 1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan, Ilocos Sur,
consisting an area of 898 square meters, more or less, bounded on the north by
Salvador Rivero; on the East by Eleutera Pena; on the South by Bonifacio St., and on
the West by Carmen Giron; x x x;
2. A commercial building erected on the aforesaid parcel of land with an assessed
value of ₱126,000.00; x x x;
3. A parcel of residential land located in Brgy. VII, Vigan, Ilocos Sur, containing an
area of 154 sq. ms., more or less, bounded on the North by the High School Site; on
the East by Gomez St., on the South by Domingo [G]o; and on the West by Domingo
Go; x x x;
4. A house with an assessed value of ₱17,600.00 x x x;
5. A parcel of orchard land located in Brgy. VI, Vigan, Ilocos Sur, containing an area
of 2,257 sq. ma. (sic) more or less, bounded on the North by Lot 1208; on the East by
Mestizo River; on the South by Lot 1217 and on the West by Lot 1211-B, 1212 and
1215 x x x.3
Beginning 1992 until his death in 1995, Dr. Favis was beset by various illnesses, such as kidney
trouble, hiatal hernia, congestive heart failure, Parkinson’s disease and pneumonia. He died of
"cardiopulmonary arrest secondary to multi-organ/system failure secondary to sepsis secondary
to pneumonia."4
On 16 October 1994, he allegedly executed a Deed of Donation 5 transferring and conveying
properties described in (1) and (2) in favor of his grandchildren with Juana.
Claiming that said donation prejudiced their legitime, Dr. Favis’ children with Capitolina,
petitioners herein, filed an action for annulment of the Deed of Donation, inventory, liquidation
and partition of property before the Regional Trial Court (RTC) of Vigan, Ilocos Sur, Branch
20 against Juana, Spouses Mariano and Larcelita and their grandchildren as respondents.
In their Answer with Counterclaim, respondents assert that the properties donated do not form
part of the estate of the late Dr. Favis because said donation was made inter vivos, hence
petitioners have no stake over said properties.6
The RTC, in its Pre-Trial Order, limited the issues to the validity of the deed of donation and
whether or not respondent Juana and Mariano are compulsory heirs of Dr. Favis. 7
In a Decision dated 14 November 2005, the RTC nullified the Deed of Donation and cancelled
the corresponding tax declarations. The trial court found that Dr. Favis, at the age of 92 and
plagued with illnesses, could not have had full control of his mental capacities to execute a valid
Deed of Donation. Holding that the subsequent marriage of Dr. Favis and Juana legitimated the
status of Mariano, the trial court also declared Juana and Mariano as compulsory heirs of Dr.
Favis. The dispositive portion reads:WHEREFORE, in view of all the foregoing considerations,
the Deed of Donation dated October 16, 1994 is hereby annulled and the corresponding tax
declarations issued on the basis thereof cancelled. Dr. Mariano Favis, Sr. having died without a
will, his estate would result to intestacy. Consequently, plaintiffs Heirs of Dr. Mariano Favis,
Sr., namely Purita A. Favis, Reynaldo A. Favis, Consolacion F. Queliza, Mariano A. Favis, Jr.,
Esther F. Filart, Mercedes A. Favis, Nelly F. Villafuerte and the defendants Juana Gonzales now
deceased and Mariano G. Favis, Jr. shall inherit in equal shares in the estate of the late Dr.
Mariano Favis, Sr. which consists of the following:
1. A parcel of residential land located at Bonifacio St. Brgy. 1, Vigan City, Ilocos Sur,
consisting an area of 89 sq. meters more or less, bounded on the north by Salvador
Rivero; on the East by Eleutera Pena; on the South by Bonifacio St., and on the West
by Carmen Giron;
2. A commercial building erected on the aforesaid parcel of land with an assessed
value of ₱126,000.00;
3. One-half (1/2) of the house located in Brgy. VI, Vigan City, Ilocos Sur[,] containing
an area of 2,257 sq. meters more or less, bounded on the north by Lot 1208; on the
east by Mestizo River; on the South by Lot 1217 and on the West by Lot 1211-B,
1212 and 1215.
4. The accumulated rentals of the new Vigan Coliseum in the amount of One Hundred
Thirty [Thousand] (₱130,000.00) pesos per annum from the death of Dr. Mariano
Favis, Sr.8
Respondents interposed an appeal before the Court of Appeals challenging the trial court’s
nullification, on the ground of vitiated consent, of the Deed of Donation in favor of herein
respondents. The Court of Appeals ordered the dismissal of the petitioners’ nullification case.
However, it did so not on the grounds invoked by herein respondents as appellant.
The Court of Appeals motu proprio ordered the dismissal of the complaint for failure of
petitioners to make an averment that earnest efforts toward a compromise have been made, as
mandated by Article 151 of the Family Code. The appellate court justified its order of dismissal
by invoking its authority to review rulings of the trial court even if they are not assigned as
errors in the appeal.
Petitioners filed a motion for reconsideration contending that the case is not subject to
compromise as it involves future legitime.
The Court of Appeals rejected petitioners’ contention when it ruled that the prohibited
compromise is that which is entered between the decedent while alive and compulsory heirs. In
the instant case, the appellate court observed that while the present action is between members
of the same family it does not involve a testator and a compulsory heir. Moreover, the appellate
court pointed out that the subject properties cannot be considered as "future legitime" but are in
fact, legitime, as the instant complaint was filed after the death of the decedent.
Undaunted by this legal setback, petitioners filed the instant petition raising the following
arguments:
 1. The Honorable Court of Appeals GRAVELY and SERIOUSLY ERRED in
DISMISSING the COMPLAINT.
2. Contrary to the finding of the Honorable Court of Appeals, the verification of the
complaint or petition is not a mandatory requirement.
3. The Honorable Court of Appeals seriously failed to appreciate that the filing of an
intervention by Edward Favis had placed the case beyond the scope of Article 151 of
the Family Code.
4. Even assuming arguendo without admitting that the filing of intervention by
Edward Favis had no positive effect to the complaint filed by petitioners, it is still a
serious error for the Honorable Court of Appeals to utterly disregard the fact that
petitioners had substantially complied with the requirements of Article 151 of the
Family Code.
5. Assuming arguendo that petitioners cannot be construed as complying substantially
with Article 151 of the Family Code, still, the same should be considered as a non-
issue considering that private respondents are in estoppel.
6. The dismissal of the complaint by the Honorable Court of Appeals amounts to grave
abuse of discretion amounting to lack and excess of jurisdiction and a complete
defiance of the doctrine of primacy of substantive justice over strict application of
technical rules.
7. The Honorable Court of Appeals gravely and seriuosly erred in not affirming the
decision of the Court a quo that the Deed of Donation is void. 9
In their Comment, respondents chose not to touch upon the merits of the case, which is the
validity of the deed of donation. Instead, respondents defended the ruling the Court of Appeals
that the complaint is dismissible for failure of petitioners to allege in their complaint that earnest
efforts towards a compromise have been exerted.
The base issue is whether or not the appellate court may dismiss the order of dismissal of the
complaint for failure to allege therein that earnest efforts towards a compromise have been made.
The appellate court committed egregious error in dismissing the complaint. The appellate
courts’ decision hinged on Article 151 of the Family Code, viz:
Art. 151. No suit between members of the same family shall prosper unless it should appear
from the verified complaint or petition that earnest efforts toward a compromise have been
made, but that the same have failed. If it is shown that no such efforts were in fact made, the
case must be dismissed.
This rule shall not apply to cases which may not be the subject of compromise under the Civil
Code.
The appellate court correlated this provision with Section 1, par. (j), Rule 16 of the 1997 Rules
of Civil Procedure, which provides:
Section 1. Grounds. — Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
xxxx
(j) That a condition precedent for filing the claim has not been complied with.
The appellate court’s reliance on this provision is misplaced. Rule 16 treats of the grounds for a
motion to dismiss the complaint. It must be distinguished from the grounds provided under
Section 1, Rule 9 which specifically deals with dismissal of the claim by the court motu proprio.
Section 1, Rule 9 of the 1997 Rules of Civil Procedure provides:
Section 1. Defenses and objections not pleaded. − Defenses and objections not pleaded either in
a motion to dismiss or in the answer are deemed waived. However, when it appears from the
pleadings or the evidence on record that the court has no jurisdiction over the subject matter,
that there is another action pending between the same parties for the same cause, or that the
action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim.
Section 1, Rule 9 provides for only four instances when the court may motu proprio dismiss the
claim, namely: (a) lack of jurisdiction over the subject matter; (b) litis pendentia ; (c) res judicata
; and (d) prescription of action.10Specifically in Gumabon v. Larin,11 cited in Katon v. Palanca,
Jr.,12 the Court held:
x x x [T]he motu proprio dismissal of a case was traditionally limited to instances when the
court clearly had no jurisdiction over the subject matter and when the plaintiff did not appear
during trial, failed to prosecute his action for an unreasonable length of time or neglected to
comply with the rules or with any order of the court. Outside of these instances, any motu proprio
dismissal would amount to a violation of the right of the plaintiff to be heard. Except for
qualifying and expanding Section 2, Rule 9, and Section 3, Rule 17, of the Revised Rules of
Court, the amendatory 1997 Rules of Civil Procedure brought about no radical change. Under
the new rules, a court may motu proprio dismiss a claim when it appears from the pleadings or
evidence on record that it has no jurisdiction over the subject matter; when there is another cause
of action pending between the same parties for the same cause, or where the action is barred by
a prior judgment or by statute of limitations. x x x.13
The error of the Court of Appeals is evident even if the consideration of the issue is kept within
the confines of the language of Section 1(j) of Rule 16 and Section 1 of Rule 9. That a condition
precedent for filing the claim has not been complied with, a ground for a motion to dismiss
emanating from the law that no suit between members from the same family shall prosper unless
it should appear from the verified complaint that earnest efforts toward a compromise have been
made but had failed, is, as the Rule so words, a ground for a motion to dismiss. Significantly,
the Rule requires that such a motion should be filed "within the time for but before filing the
answer to the complaint or pleading asserting a claim." The time frame indicates that thereafter,
the motion to dismiss based on the absence of the condition precedent is barred. It is so inferable
from the opening sentence of Section 1 of Rule 9 stating that defense and objections not pleaded
either in a motion to dismiss or in the answer are deemed waived. There are, as just noted, only
four exceptions to this Rule, namely, lack of jurisdiction over the subject matter; litis pendentia
; res judicata ; and prescription of action. Failure to allege in the complaint that earnest efforts
at a compromise has been made but had failed is not one of the exceptions. Upon such failure,
the defense is deemed waived.
It was in Heirs of Domingo Valientes v. Ramas14 cited in P.L. Uy Realty Corporation v. ALS
Management and Development Corporation15 where we noted that the second sentence of
Section 1 of Rule 9 does not only supply exceptions to the rule that defenses not pleaded either
in a motion to dismiss or in the answer are deemed waived, it also allows courts to dismiss cases
motu propio on any of the enumerated grounds. The tenor of the second sentence of the Rule is
that the allowance of a motu propio dismissal can proceed only from the exemption from the
rule on waiver; which is but logical because there can be no ruling on a waived ground.
Why the objection of failure to allege a failed attempt at a compromise in a suit among members
of the same family is waivable was earlier explained in the case of Versoza v. Versoza,16 a case
for future support which was dismissed by the trial court upon the ground that there was no such
allegation of infringement of Article 222 of the Civil Code, the origin of Article 151 of the
Family Code. While the Court ruled that a complaint for future support cannot be the subject of
a compromise and as such the absence of the required allegation in the complaint cannot be a
ground for objection against the suit, the decision went on to state thus:
The alleged defect is that the present complaint does not state a cause of action. The proposed
amendment seeks to complete it. An amendment to the effect that the requirements of Article
222 have been complied with does not confer jurisdiction upon the lower court. With or without
this amendment, the subject-matter of the action remains as one for support, custody of children,
and damages, cognizable by the court below.
To illustrate, Tamayo v. San Miguel Brewery, Inc.,17 allowed an amendment which " merely
corrected a defect in the allegation of plaintiff-appellant’s cause of action, because as it then
stood, the original complaint stated no cause of action." We there ruled out as inapplicable the
holding in Campos Rueda Corporation v. Bautista,18 that an amendment cannot be made so as
to confer jurisdiction on the court x x x. (Italics supplied).
Thus was it made clear that a failure to allege earnest but failed efforts at a compromise in a
complaint among members of the same family, is not a jurisdictional defect but merely a defect
in the statement of a cause of action. Versoza was cited in a later case as an instance analogous
to one where the conciliation process at the barangay level was not priorly resorted to. Both
were described as a "condition precedent for the filing of a complaint in Court." 19 In such
instances, the consequence is precisely what is stated in the present Rule. Thus:
x x x The defect may however be waived by failing to make seasonable objection, in a motion
to dismiss or answer, the defect being a mere procedural imperfection which does not affect the
jurisdiction of the court.20 (Underscoring supplied).
In the case at hand, the proceedings before the trial court ran the full course. The complaint of
petitioners was answered by respondents without a prior motion to dismiss having been filed.
The decision in favor of the petitioners was appealed by respondents on the basis of the alleged
error in the ruling on the merits, no mention having been made about any defect in the statement
of a cause of action. In other words, no motion to dismiss the complaint based on the failure to
comply with a condition precedent was filed in the trial court; neither was such failure assigned
as error in the appeal that respondent brought before the Court of Appeals.
Therefore, the rule on deemed waiver of the non-jurisdictional defense or objection is wholly
applicable to respondent.1âwphi1 If the respondents as parties-defendants could not, and did
not, after filing their answer to petitioner’s complaint, invoke the objection of absence of the
required allegation on earnest efforts at a compromise, the appellate court unquestionably did
not have any authority or basis to motu propio order the dismissal of petitioner’s complaint.
Indeed, even if we go by the reason behind Article 151 of the Family Code, which provision as
then Article 222 of the New Civil Code was described as "having been given more teeth"21 by
Section 1(j), Rule 16 of the Rule of Court, it is safe to say that the purpose of making sure that
there is no longer any possibility of a compromise, has been served. As cited in commentaries
on Article 151 of the Family Code –
This rule is introduced because it is difficult to imagine a sudden and more tragic spectacle than
a litigation between members of the same family. It is necessary that every effort should be
made towards a compromise before a litigation is allowed to breed hate and passion in the
family. It is known that a lawsuit between close relatives generates deeper bitterness than
between strangers.22
The facts of the case show that compromise was never an option insofar as the respondents were
concerned. The impossibility of compromise instead of litigation was shown not alone by the
absence of a motion to dismiss but on the respondents’ insistence on the validity of the donation
in their favor of the subject properties. Nor could it have been otherwise because the Pre-trial
Order specifically limited the issues to the validity of the deed and whether or not respondent
Juana and Mariano are compulsory heirs of Dr. Favis. Respondents not only confined their
arguments within the pre-trial order; after losing their case, their appeal was based on the
proposition that it was error for the trial court to have relied on the ground of vitiated consent
on the part of Dr. Favis.
The Court of Appeals ignored the facts of the case that clearly demonstrated the refusal by the
respondents to compromise. Instead it ordered the dismissal of petitioner’s complaint on the
ground that it did not allege what in fact was shown during the trial. The error of the Court of
Appeals is patent.
Unfortunately for respondents, they relied completely on the erroneous ruling of the Court of
Appeals even when petitioners came to us for review not just on the basis of such defective motu
propio action but also on the proposition that the trial court correctly found that the donation in
question is flawed because of vitiated consent. Respondents did not answer this argument. The
trial court stated that the facts are:
x x x To determine the intrinsic validity of the deed of donation subject of the action for
annulment, the mental state/condition of the donor Dr. Mariano Favis, Sr. at the time of its
execution must be taken into account. Factors such as his age, health and environment among
others should be considered. As testified to by Dr. Mercedes Favis, corroborated by Dr. Edgardo
Alday and Dra. Ofelia Adapon, who were all presented as expert witnesses, Dr. Mariano Favis,
Sr. had long been suffering from Hiatal Hernia and Parkinson’s disease and had been taking
medications for years. That a person with Parkinson’s disease for a long time may not have a
good functioning brain because in the later stage of the disease, 1/3 of death develop from this
kind of disease, and or dementia. With respect to Hiatal Hernia, this is a state wherein organs in
the abdominal cavity would go up to the chest cavity, thereby occupying the space for the lungs
causing the lungs to be compromised. Once the lungs are affected, there is less oxygenation to
the brain. The Hernia would cause the heart not to pump enough oxygen to the brain and the
effect would be chronic, meaning, longer lack of oxygenation to the brain will make a person
not in full control of his faculties. Dr. Alday further testified that during his stay with the house
of Dr. Mariano Favis, Sr. (1992-1994), he noticed that the latter when he goes up and down the
stairs will stop after few seconds, and he called this pulmonary cripple – a very advanced stage
wherein the lungs not only one lung, but both lungs are compromised. That at the time he
operated on the deceased, the left and right lung were functioning but the left lung is practically
not even five (5%) percent functioning since it was occupied by abdominal organ. x x x.
Dr. Mariano Favis, Sr. during the execution of the Deed of Donation was already 92 years old;
living with the defendants and those years from 1993 to 1995 were the critical years when he
was sick most of the time. In short, he’s dependent on the care of his housemates particularly
the members of his family. It is the contention of the defendants though that Dr. Mariano Favis,
Sr. had full control of his mind during the execution of the Deed of Donation because at that
time, he could go on with the regular way of life or could perform his daily routine without the
aid of anybody like taking a bath, eating his meals, reading the newspaper, watching television,
go to the church on Sundays, walking down the plaza to exercise and most importantly go to the
cockpit arena and bet. Dr. Ofelia Adapon, a neurology expert however, testified that a person
suffering from Parkinson’s disease when he goes to the cockpit does not necessarily mean that
such person has in full control of his mental faculties because anyone, even a retarded person, a
person who has not studied and have no intellect can go to the cockpit and bet. One can do
everything but do not have control of his mind. x x x That Hiatal Hernia creeps in very
insidiously, one is not sure especially if the person has not complained and no examination was
done. It could be there for the last time and no one will know. x x x.
The Deed of Donation in favor of the defendants Ma. Theresa, Joana D. Favis, Maria Cristina
D. Favis, James Mark D. Favis and Maria Thea D. Favis, all of whom are the children of Mariano
G. Favis, Jr. was executed on [16 October] 1994, seven (7) months after Dra. Mercedes Favis
left the house of Dr. Favis, Sr. at Bonifacio St., Vigan City, Ilocos Sur, where she resided with
the latter and the defendants.
Putting together the circumstances mentioned, that at the time of the execution of the Deed of
Donation, Dr. Mariano Favis, Sr. was already at an advanced age of 92, afflicted with different
illnesses like Hiatal hernia, Parkinsons’ disease and pneumonia, to name few, which illnesses
had the effects of impairing his brain or mental faculties and the deed being executed only when
Dra. Mercedes Favis had already left his father’s residence when Dr. Mariano Favis, Sr. could
have done so earlier or even in the presence of Dra. Mercedes Favis, at the time he executed the
Deed of Donation was not in full control of his mental faculties. That although age of senility
varies from one person to another, to reach the age of 92 with all those medications and treatment
one have received for those illnesses, yet claim that his mind remains unimpaired, would be
unusual. The fact that the Deed of Donation was only executed after Dra. Mercedes Favis left
his father's house necessarily indicates that they don't want the same to be known by the first
family, which is an indicia of bad faith on the part of the defendant, who at that time had
influence over the donor.23
The correctness of the finding was not touched by the Court of Appeals. The respondents opted
to rely only on what the appellate court considered, erroneously though, was a procedural
infirmity. The trial court's factual finding, therefore, stands unreversed; and respondents did not
provide us with any argument to have it reversed.
The issue of the validity of donation was fully litigated and discussed by the trial court. Indeed,
the trial court's findings were placed at issue before the Court of Appeals but the appellate court
chose to confine its review to the procedural aspect. The judgment of the Court of Appeals, even
if it dealt only with procedure, is deemed to have covered all issues including the correctness of
the factual findings of the trial court. Moreover, remanding the case to the Court of Appeals
would only constitute unwarranted delay in the final disposition of the case.
WHEREFORE, the Decision of the Court of Appeals is REVERSED and SET ASIDE and the
Judgment of the Regional Trial Court of Vigan, Ilocos Sur, Branch 20 is AFFIRMED.
SO ORDERED.
G.R. No. 175507 October 8, 2014
RAMON CHING AND POWING PROPERTIES, INC., Petitioners,
vs.
JOSEPH CHENG, JAIME CHENG, MERCEDES IGNE1 AND LUCINA
SANTOS, Respondents.
DECISION
LEONEN, J.:
Rule 17 of the Rules of Civil Procedure governs dismissals of actions at the instance of the
plaintiff. Hence, the "two-dismissal rule" under Rule 17, Section 1 of the Rules of Civil
Procedure will not apply if the prior dismissal was done at the instance of the defendant.
This is a petition for review on certiorari assailing the decision 2 and resolution3 of the Court of
Appeals in CA-G.R. SP. No. 86818, which upheld the (1) order4 dated November 22, 2002
dismissing Civil Case No. 02-103319 without prejudice, and (2) the omnibus order5 dated July
30, 2004, which denied petitioners’ motion for reconsideration. Both orders were issued by the
Regional Trial Court of Manila, Branch 6.6
The issues before this court are procedural. However, the factual antecedents in this case, which
stemmed from a complicated family feud, must be stated to give context to its procedural
development.
It is alleged that Antonio Ching owned several businesses and properties, among which was Po
Wing Properties, Incorporated (Po Wing Properties).7 His total assets are alleged to have been
worth more than 380 million.8 It is also alleged that whilehe was unmarried, he had children
from two women.9
Ramon Ching alleged that he was the only child of Antonio Ching with his common-law wife,
Lucina Santos.10 She, however, disputed this. She maintains that even ifRamon Ching’s birth
certificate indicates that he was Antonio Ching’s illegitimate child, she and Antonio Ching
merely adopted him and treated him like their own.11
Joseph Cheng and Jaime Cheng, on the other hand, claim to be Antonio Ching’s illegitimate
children with his housemaid, Mercedes Igne.12 While Ramon Ching disputed this,13 both
Mercedes and Lucina have not.14
Lucina Santos alleged that when Antonio Ching fell ill sometime in 1996, he entrusted her with
the distribution of his estate to his heirs if something were to happen to him. She alleged that
she handed all the property titles and business documents to Ramon Ching for
safekeeping.15 Fortunately, Antonio Ching recovered from illness and allegedly demanded that
Ramon Ching return all the titles to the properties and business documents. 16
On July 18, 1996, Antonio Ching was murdered.17 Ramon Ching allegedly induced Mercedes
Igne and her children, Joseph Cheng and Jaime Cheng, to sign an agreement and waiver 18 to
Antonio Ching’s estate in consideration of ₱22.5 million. Mercedes Igne’s children alleged that
Ramon Ching never paid them.19 On October 29, 1996, Ramon Ching allegedly executed an
affidavit of settlement of estate,20 naming himself as the sole heir and adjudicating upon himself
the entirety of Antonio Ching’s estate.21
Ramon Ching denied these allegationsand insisted that when Antonio Ching died, the Ching
family association, headed by Vicente Cheng, unduly influenced him to give Mercedes Igne and
her children financial aid considering that they served Antonio Ching for years. It was for this
reason that an agreement and waiver in consideration of 22.5 million was made. He also alleged
that hewas summoned by the family association to execute an affidavit of settlement of estate
declaring him to be Antonio Ching’s sole heir.22
After a year of investigating Antonio Ching’s death, the police found Ramon Ching to be its
primary suspect.23Information24 was filed against him, and a warrant of arrest25 was issued.
On October 7, 1998, Joseph Cheng, Jaime Cheng, and Mercedes Igne (the Chengs) filed a
complaint for declaration of nullity of titles against Ramon Ching before the Regional Trial
Court of Manila. This case was docketed as Civil Case No. 98-91046 (the first case).26
On March 22, 1999, the complaint was amended, with leave of court, to implead additional
defendants, including Po Wing Properties, of which Ramon Ching was a primary
stockholder.The amended complaint was for "Annulment of Agreement, Waiver, Extra-Judicial
Settlement of Estate and the Certificates of Title Issued by Virtue of Said Documents with Prayer
for Temporary Restraining Order and Writ of Preliminary Injunction."27 Sometime after, Lucina
Santos filed a motion for intervention and was allowed to intervene.28
After the responsive pleadings had been filed, Po Wing Properties filed a motion to dismiss on
the ground of lack of jurisdiction of the subject matter.29
On November 13, 2001, the Regional Trial Court of Manila, Branch 6, granted the motion to
dismiss on the ground of lack of jurisdiction over the subject matter.30 Upon motion of the
Chengs’ counsel, however, the Chengs and Lucina Santos were given fifteen (15) days to file
the appropriate pleading. They did not do so.31
On April 19, 2002, the Chengs and Lucina Santos filed a complaint for "Annulment of
Agreement, Waiver, Extra-Judicial Settlement of Estate and the Certificates of Title Issued by
Virtue of Said Documents with Prayer for Temporary Restraining Order and Writ of Preliminary
Injunction" against Ramon Ching and Po Wing Properties.32This case was docketed as Civil
Case No. 02-103319 (the second case) and raffled to Branch 20 of the Regional Trial Court of
Manila.33 When Branch 20 was made aware of the first case, it issued an order transferring the
case to Branch 6, considering that the case before it involved substantially the same parties and
causes of action.34
On November 11, 2002, the Chengs and Lucina Santos filed a motion to dismiss their complaint
in the second case, praying that it be dismissed without prejudice. 35
On November 22, 2002, Branch 6 issued an order granting the motion to dismiss on the basis
that the summons had not yet been served on Ramon Ching and Po Wing Properties, and they
had not yet filed any responsive pleading. The dismissal of the second case was made without
prejudice.36
On December 9, 2002, Ramon Ching and Po Wing Properties filed a motion for reconsideration
of the order dated November 22, 2002. They argue that the dismissal should have been with
prejudice under the "two dismissal rule" of Rule 17, Section 1 of the 1997 Rules of Civil
Procedure, in view of the previous dismissal of the first case.37
During the pendency of the motion for reconsideration, the Chengs and Lucina Santos filed a
complaint for "Disinheritance and Declaration of Nullity of Agreement and Waiver, Affidavit
of Extra judicial Agreement, Deed of Absolute Sale, and Transfer Certificates of Title with
Prayer for TRO and Writ of Preliminary Injunction" against Ramon Ching and Po Wing
Properties. This case was docketed as Civil Case No. 02-105251(the third case) and was
eventually raffled to Branch 6.38
On December 10, 2002, Ramon Ching and Po Wing Properties filed their comment/opposition
to the application for temporary restraining order in the third case. They also filed a motion to
dismiss on the ground of res judicata, litis pendencia, forum-shopping, and failure of the
complaint to state a cause of action. A series of responsive pleadings were filed by both parties.39
On July 30, 2004, Branch 6 issued an omnibus order40 resolving both the motion for
reconsideration in the second case and the motion to dismiss in the third case. The trial court
denied the motion for reconsideration and the motion to dismiss, holding that the dismissal of
the second case was without prejudice and, hence, would not bar the filing of the third case.41 On
October 8, 2004, while their motion for reconsideration in the third case was pending, Ramon
Ching and Po Wing Properties filed a petition for certiorari (the first certiorari case) with the
Court of Appeals, assailing the order dated November 22,2002 and the portion of the omnibus
order dated July 30, 2004, which upheldthe dismissal of the second case. 42
On December 28, 2004, the trial court issued an order denying the motion for reconsideration
in the third case. The denial prompted Ramon Ching and Po Wing Properties to file a petition
for certiorari and prohibition with application for a writ of preliminary injunction or the issuance
of a temporary restraining order (the second certiorari case) with the Court of Appeals. 43
On March 23, 2006, the Court of Appeals rendered the decision 44 in the first certiorari case
dismissing the petition. The appellate court ruled that Ramon Ching and Po Wing Properties’
reliance on the "two-dismissal rule" was misplaced since the rule involves two motions for
dismissals filed by the plaintiff only. In this case, it found that the dismissal of the first case was
upon the motion of the defendants, while the dismissal of the second case was at the instance of
the plaintiffs.45
Upon the denial of their motion for reconsideration,46 Ramon Ching and Po Wing Properties
filed this present petition for review47 under Rule 45 of the Rules of Civil Procedure.
Ramon Ching and Po Wing Properties argue that the dismissal of the second case was with
prejudice since the non-filing of an amended complaint in the first case operated as a dismissal
on the merits.48 They also argue that the second case should be dismissed on the ground of res
judicata since there was a previous final judgment of the first case involving the same parties,
subject matter, and cause of action.49
Lucina Santos was able to file a comment50 on the petition within the period required.51 The
Chengs, however, did not comply.52 Upon the issuance by this court of a show cause order on
September 24, 2007,53 they eventually filed a comment with substantially the same allegations
and arguments as that of Lucina Santos’.54
In their comment, respondents allege that when the trial court granted the motion to dismiss,
Ramon Ching’s counsel was notified in open court that the dismissal was without prejudice.
They argue that the trial court’s order became final and executory whenhe failed to file his
motion for reconsideration within the reglementary period.55
Respondents argue that the petition for review should be dismissed on the ground of forum
shopping and litis pendencia since Ramon Ching and Po Wing Properties are seeking relief
simultaneously in two forums by filing the two petitions for certiorari, which involved the same
omnibus order by the trial court.56 They also argue that the "two-dismissal rule" and res judicata
did not apply since (1) the failure to amend a complaint is not a dismissal, and (2) they only
moved for dismissal once in the second case.57
In their reply,58 petitioners argue that they did not commit forum shopping since the actions they
commenced against respondents stemmed from the complaints filed against them in the trial
courts.59 They reiterate that their petition for review is only about the second case; it just so
happened that the assailed omnibus order resolved both the second and third cases. 60
Upon the filing of the parties’ respective memoranda,61 the case was submitted for decision.62
For this court’s resolution are the following issues:
I. Whether the trial court’s dismissal of the second case operated as a bar to the filing
of a third case, asper the "two-dismissal rule"; and
II. Whether respondents committed forum shopping when they filed the third case
while the motion for reconsideration of the second case was still pending.
The petition is denied.
The "two-dismissal rule" vis-à-vis
the Rules of Civil Procedure
Dismissals of actions are governed by Rule 17 of the 1997 Rules of Civil Procedure. The
pertinent provisions state:
RULE 17
DISMISSAL OF ACTIONS
SEC. 1. Dismissal upon notice by plaintiff. — A complaint may be dismissed by the plaintiff by
filing a notice of dismissal at any time before service of the answer or of a motion for summary
judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal.
Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice
operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in
a competent court an action based on or including the same claim.
SEC. 2. Dismissal upon motion of plaintiff. — Except as provided in the preceding section, a
complaint shall not be dismissed at the plaintiff's instance save upon approval of the court and
upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded
by a defendant prior to the service upon him of the plaintiff’s motion for dismissal, the dismissal
shall be limited to the complaint. The dismissal shall be without prejudice to the right of the
defendant to prosecute his counterclaim in a separate action unless within fifteen (15) days from
notice of the motion he manifests his preference to have his counterclaim resolved in the same
action. Unless otherwise specified in the order, a dismissal under this paragraph shall be without
prejudice. A class suit shall not be dismissed or compromised without the approval of the court.
SEC. 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff fails to
appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute
his action for an unreasonable length of time, or to comply with these Rules or any order of the
court, the complaint may be dismissed upon motion of the defendant or upon the court's own
motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same
or in a separate action. This dismissal shall have the effect of an adjudication upon the merits,
unless otherwise declared by the court. (Emphasis supplied)
The first section of the rule contemplates a situation where a plaintiff requests the dismissal of
the case beforeany responsive pleadings have been filed by the defendant. It is donethrough
notice by the plaintiff and confirmation by the court. The dismissal is without prejudice unless
otherwise declared by the court.
The second section of the rule contemplates a situation where a counterclaim has been pleaded
by the defendant before the service on him or her of the plaintiff’s motion to dismiss. It requires
leave of court, and the dismissal is generally without prejudice unless otherwise declared by the
court.
The third section contemplates dismissals due to the fault of the plaintiff such as the failure to
prosecute. The case is dismissed either upon motion of the defendant or by the court motu
propio. Generally, the dismissal is with prejudice unless otherwise declared by the court.
In all instances, Rule 17 governs dismissals at the instance of the plaintiff, not of the defendant.
Dismissals upon the instance of the defendant are generally governed by Rule 16, which covers
motions to dismiss.63
In Insular Veneer, Inc. v. Hon. Plan,64 Consolidated Logging and Lumber Mills filed a
complaint against Insular Veneer to recover some logs the former had delivered to the latter. It
also filed ex partea motion for issuance of a restraining order. The complaint and motion were
filed in a trial court in Isabela.65
The trial court granted the motion and treated the restraining order as a writ of preliminary
injunction. When Consolidated Logging recovered the logs, it filed a notice of dismissal under
Rule 17, Section 1 of the 1964 Rules of Civil Procedure.66
While the action on its notice for dismissal was pending, Consolidated Logging filed the same
complaint against Insular Veneer, this time in a trial court in Manila. It did not mention any
previous action pending in the Isabela court.67
The Manila court eventually dismissed the complaint due to the nonappearance of Consolidated
Logging’s counsel during pre-trial. Consolidated Logging subsequently returned to the Isabela
court to revive the same complaint. The Isabela court apparently treated the filing of the
amended complaint as a withdrawal of its notice of dismissal. 68
Insular Veneer also filed in the Isabela court a motion to dismiss, arguing that the dismissal by
the Manila court constituted res judicataover the case. The Isabela court, presided over by Judge
Plan, denied the motion to dismiss. The dismissal was the subject of the petition for certiorari
and mandamus with this court.69
This court stated that:
In resolving that issue, we are confronted with the unarguable fact that Consolidated Logging
on its volition dismissed its action for damages and injunction in the Isabela court and refiled
substantially the same action in the Manila court. Then, when the Manila court dismissed its
action for failure to prosecute, it went hack [sic] to the Isabela court and revived its old action
by means of an amended complaint.
Consolidated Logging would liketo forget the Manila case, consign it to oblivion as if it were a
bad dream, and prosecute its amended complaint in the Isabela court as if nothing had transpired
in the Manila court. We hold that it cannot elude the effects of its conduct in junking the Isabela
case and in giving that case a reincarnation in the Manila court.
Consolidated Logging’ [sic] filed a new case in Manila at its own risk. Its lawyer at his peril
failed toappear at the pre-trial.70
This court ruled that the filing of the amended complaint in the Isabela court was barred by the
prior dismissal of the Manila court, stating that:
The provision in section 1(e), Rule 16 of the Rules of Court that an action may be dismissed
because "there is another action pending between the same parties for the same cause"
presupposes that two similar actions are simultaneously pending in two different Courts of First
Instance. Lis pendensas a ground for a motion to dismiss has the same requisites as the plea of
res judicata.
On the other hand, when a pleading is amended, the original pleading is deemed abandoned.
The original ceases to perform any further function as a pleading. The case stands for trial on
the amended pleading only. So, when Consolidated Logging filed its amended complaint dated
March 16, 1970 in Civil Case No. 2158, the prior dismissal order dated January 5, 1970 in the
Manila case could he [sic] interposed in the Isabela court to support the defense of res judicata.71
As a general rule, dismissals under Section 1 of Rule 17 are without prejudice except when it is
the second time that the plaintiff caused its dismissal. Accordingly, for a dismissal to operate as
an adjudication upon the merits, i.e, with prejudice to the re-filing of the same claim, the
following requisites must be present:
(1) There was a previous case that was dismissed by a competent court;
(2) Both cases were based on or include the same claim;
(3) Both notices for dismissal werefiled by the plaintiff; and
(4) When the motion to dismiss filed by the plaintiff was consented to by the defendant
on the ground that the latter paid and satisfied all the claims of the former. 72
The purpose of the "two-dismissal rule" is "to avoid vexatious litigation."73 When a complaint
is dismissed a second time, the plaintiff is now barred from seeking relief on the same claim.
The dismissal of the second case was without prejudice in view of the "two-dismissal rule"
Here, the first case was filed as an ordinary civil action. It was later amended to include not only
new defendants but new causes of action that should have been adjudicated in a special
proceeding. A motion to dismiss was inevitably filed by the defendants onthe ground of lack of
jurisdiction.
The trial court granted that motion to dismiss, stating that:
A careful perusal of the allegations of the Amended Complaint dated February 10, 1999, filed
by Plaintiff Joseph Cheng, show that additional causes of action were incorporated i.e. extra-
judicial settlement of the intestate estate of Antonio Ching and receivership, subject matters,
which should be threshed out in a special proceedings case. This is a clear departure from the
main cause of action in the original complaint which is for declaration of nullity of certificate
of titles with damages. And the rules of procedure which govern special proceedings case are
different and distinct from the rules of procedure applicable in an ordinary civil action.
In view of the afore-going, the court finds the Motion to Dismiss filed by Atty. Maria Lina Nieva
S. Casals to be meritorious and the Court is left with no alternative but to dismiss as it hereby
dismisses the Amended Complaint.
However, on motion of Atty. Mirardo Arroyo Obias, counsel for the plaintiffs, he is given a
period of fifteen (15) days from today, within which to file an appropriate pleading, copy
furnished to all the parties concerned.
....
SO ORDERED.74
Petitioners are of the view that when Atty. Mirardo Arroyo Obias failed to file the appropriate
pleading within fifteen (15) days, he violated the order of the court. This, they argue, made the
original dismissal an adjudication upon the merits, in accordance with Rule 17, Section 3, i.e.,
a dismissal through the default of the plaintiff. Hence, they argue that when respondents filed
the second case and then caused its dismissal, the dismissal should have been with prejudice
according to Rule 17, Section 1, i.e., two dismissals caused by the plaintiff on the same claim.
Unfortunately, petitioners’ theory is erroneous.
The trial court dismissed the first case by granting the motion to dismiss filed by the defendants.
When it allowed Atty. Mirardo Arroyo Obias a period of fifteen (15) days tofile an appropriate
pleading, it was merely acquiescing to a request made bythe plaintiff’s counsel that had no
bearing on the dismissal of the case.
Under Rule 17, Section 3, a defendant may move to dismiss the case if the plaintiff defaults; it
does not contemplate a situation where the dismissal was due to lack of jurisdiction. Since there
was already a dismissal prior to plaintiff’s default, the trial court’s instruction to file the
appropriate pleading will not reverse the dismissal. If the plaintiff fails to file the appropriate
pleading, the trial court does not dismiss the case anew; the order dismissing the case still stands.
The dismissal of the first case was done at the instance of the defendant under Rule 16, Section
1(b) of the Rules of Civil Procedure, which states:
SECTION 1. Grounds.— Within the time for but before filing the answer to the complaint or
pleading asserting a claim, a motion to dismiss may be made on any of the following grounds:
....
(b) That the court has no jurisdiction over the subject matter of the claim;
....
Under Section 5 of the same rule,75 a party may re-file the same action or claim subject to certain
exceptions.
Thus, when respondents filed the second case, they were merely refiling the same claim that had
been previously dismissed on the basis of lack of jurisdiction. When they moved to dismiss the
second case, the motion to dismiss can be considered as the first dismissal at the plaintiff’s
instance.
Petitioners do not deny that the second dismissal was requested by respondents before the
service of any responsive pleadings. Accordingly, the dismissal at this instance is a matter of
right that is not subject to the trial court’s discretion. In O.B. Jovenir Construction and
Development Corporation v. Macamir Realty and Development Corporation: 76
[T]he trial court has no discretion or option to deny the motion, since dismissal by the plaintiff
under Section 1, Rule 17 is guaranteed as a matter of right to the plaintiffs. Even if the motion
cites the most ridiculous of grounds for dismissal, the trial court has no choice but to consider
the complaint as dismissed, since the plaintiff may opt for such dismissal as a matter of right,
regardless of ground.77 (Emphasis supplied)
For this reason, the trial court issued its order dated November 22, 2002 dismissing the case,
without prejudice. The order states:
When this Motion was called for hearing, all the plaintiffs namely, Joseph Cheng, Jaime Cheng,
Mercedes Igne and Lucina Santos appeared without their counsels. That they verbally affirmed
the execution of the Motion to Dismiss, as shown by their signatures over their respective names
reflected thereat. Similarly, none of the defendants appeared, except the counsel for defendant,
Ramon Chang [sic], who manifested that they have not yet filed their Answer as there was a
defect in the address of Ramon Cheng [sic] and the latter has not yet been served with summons.
Under the circumstances, and further considering that the defendants herein have not yet filed
their Answers nor any pleading, the plaintiffs has [sic] the right to out rightly [sic] cause the
dismissal of the Complaint pursuant to Section 2, Rule 17 of the 1997 Rules of Civil Procedure
without prejudice. Thereby, and as prayed for, this case is hereby ordered DISMISSED without
prejudice.
SO ORDERED.78 (Emphasis supplied)
When respondents filed the third case on substantially the same claim, there was already one
prior dismissal at the instance of the plaintiffs and one prior dismissal at the instance of the
defendants. While it is true that there were two previous dismissals on the same claim, it does
not necessarily follow that the re-filing of the claim was barred by Rule 17, Section 1 of the
Rules of Civil Procedure. The circumstances surrounding each dismissal must first be examined
to determine before the rule may apply, as in this case.
Even assuming for the sake of argument that the failure of Atty. Mirardo Arroyo Obias to file
the appropriate pleading in the first case came under the purview of Rule 17, Section 3 of the
Rules of Civil Procedure, the dismissal in the second case is still considered as one without
prejudice. In Gomez v. Alcantara:79
The dismissal of a case for failure to prosecute has the effect of adjudication on the merits, and
is necessarily understood to be with prejudice to the filing of another action, unless otherwise
provided in the order of dismissal. Stated differently, the general rule is that dismissal of a case
for failure to prosecute is to be regarded as an adjudication on the merits and with prejudice to
the filing of another action, and the only exception is when the order of dismissal expressly
contains a qualification that the dismissal is without prejudice.80 (Emphasis supplied)
In granting the dismissal of the second case, the trial court specifically orders the dismissal to
be without prejudice. It is only when the trial court’s order either is silent on the matter, or states
otherwise, that the dismissal will be considered an adjudication on the merits.
However, while the dismissal of the second case was without prejudice, respondents’ act of
filing the third case while petitioners’ motion for reconsideration was still pending constituted
forum shopping.
The rule against forum shopping and the "twin-dismissal rule"
In Yap v. Chua:81
Forum shopping is the institution of two or more actions or proceedings involving the same
parties for the same cause of action, either simultaneously or successively, on the supposition
that one or the other court would make a favorable disposition. Forum shopping may be resorted
to by any party against whom an adverse judgment or order has been issued in one forum, in an
attempt to seek a favorable opinion in another, other than by appeal or a special civil action for
certiorari. Forum shopping trifles with the courts, abuses their processes, degrades the
administration of justice and congest court dockets. What iscritical is the vexation brought upon
the courts and the litigants by a party who asks different courts to rule on the same or related
causes and grant the same or substantially the same reliefs and in the process creates the
possibility of conflicting decisions being renderedby the different fora upon the same issues.
Willful and deliberate violation of the rule against forum shopping is a ground for summary
dismissal of the case; it may also constitute direct contempt.
To determine whether a party violated the rule against forum shopping, the most important factor
toask is whether the elements of litis pendentiaare present, or whether a final judgment in one
case will amount to res judicatain another; otherwise stated, the test for determining forum
shopping is whether in the two (or more) cases pending, there is identity of parties, rights or
causes of action, and reliefs sought.82 (Emphasis supplied)
When respondents filed the third case, petitioners’ motion for reconsideration of the dismissal
of the second case was still pending. Clearly, the order of dismissal was not yet final since it
could still be overturned upon reconsideration, or even on appeal to a higher court.
Moreover, petitioners were not prohibited from filing the motion for reconsideration. This court
has already stated in Narciso v. Garcia83 that a defendant has the right to file a motion for
reconsideration of a trial court’s order denying the motion to dismiss since "[n]o rule prohibits
the filing of such a motion for reconsideration."84 The second case, therefore, was still pending
when the third case was filed.
The prudent thing that respondents could have done was to wait until the final disposition of the
second case before filing the third case. As it stands, the dismissal of the second case was without
prejudice to the re-filing of the same claim, in accordance with the Rules of Civil Procedure. In
their haste to file the third case, however, they unfortunately transgressed certain procedural
safeguards, among which are the rules on litis pendentiaand res judicata.
In Yap:
Litis pendentiaas a ground for the dismissal of a civil action refers to that situation wherein
another action is pending between the same parties for the same cause of action, such that the
second action becomes unnecessary and vexatious. The underlying principle of litis pendentia
is the theory that a party is not allowed to vex another more than once regarding the same subject
matter and for the same cause of action. This theory is founded on the public policy that the
same subject matter should not be the subject of controversy incourts more than once, in order
that possible conflicting judgments may be avoided for the sake of the stability of the rights and
status of persons.
The requisites of litis pendentiaare: (a) the identity of parties, or at least such as representing the
same interests in both actions; (b) the identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and (c) the identity of the two cases such that judgment in one,
regardless ofwhich party is successful, would amount to res judicatain the other. 85 (Emphasis
supplied)
There is no question that there was an identity of parties, rights, and reliefs in the second and
third cases. While it may be true that the trial court already dismissed the second case when the
third case was filed, it failed to take into account that a motion for reconsideration was filed in
the second case and, thus, was still pending. Considering that the dismissal of the second case
was the subject of the first certiorari case and this present petition for review, it can be
reasonably concluded that the second case, to this day, remains pending.
Hence, when respondents filed the third case, they engaged in forum shopping. Any judgment
by this court on the propriety of the dismissal of the second case will inevitably affect the
disposition of the third case.
This, in fact, is the reason why there were two different petitions for certiorari before the
appellate court. The omnibus order dated July 30, 2004 denied two pending motions by
petitioners: (1) the motion for reconsideration in the second case and (2) the motion to dismiss
in the third case. Since petitioners are barred from filing a second motion for reconsideration of
the second case, the first certiorari case was filed before the appellate court and is now the
subject of this review. The denial of petitioners’ motion for reconsideration in the third case,
however, could still be the subject of a separate petition for certiorari. That petition would be
based now on the third case, and not on the second case.
This multiplicity of suits is the veryevil sought to be avoided by the rule on forum shopping. In
Dy v. Mandy Commodities Co., Inc.,86 the rule is that:
Once there is a finding of forum shopping, the penalty is summary dismissal not only of the
petition pending before this Court, but also of the other case that is pending in a lower court.
This is so because twin dismissal is a punitive measure to those who trifle with the orderly
administration of justice.87 (Emphasis supplied)
The rule originated from the 1986 case of Buan v. Lopez, Jr. 88 In Buan, petitioners filed a
petition for prohibition with this court while another petition for prohibition with preliminary
injunction was pending before the Regional Trial Court of Manila involving the same parties
and based on the same set of facts. This court, in dismissing both actions, stated:
Indeed, the petitioners in both actions . . . have incurred not only the sanction of dismissal oftheir
case before this Court in accordance with Rule 16 of the Rules of Court, but also the punitive
measure of dismissal of both their actions, that in this Court and that in the Regional Trial Court
as well. Quite recently, upon substantially identical factual premises, the Court en banchad
occasion to condemn and penalize the act of litigants of filing the same suit in different courts,
aptly described as "forum shopping[.]"89
The rule essentially penalizes the forum shopper by dismissing all pending actions on the same
claim filed in any court. Accordingly, the grant of this petition would inevitably result in the
summary dismissal of the third case. Any action, therefore, which originates from the third case
pending with any court would be barred by res judicata.
Because of the severity of the penalty of the rule, an examination must first be made on the
purpose of the rule.1âwphi1Parties resort to forum shopping when they file several actions of
the same claim in different forums in the hope of obtaining a favorable result. It is prohibited by
the courts as it "trifle[s] with the orderly administration of justice."90
In this case, however, the dismissal of the first case became final and executory upon the failure
of respondents’counsel to file the appropriate pleading. They filed the correct pleading the
second time around but eventually sought its dismissal as they"[suspected] that their counsel is
not amply protecting their interests as the case is not moving for almost three (3) years."91 The
filing of the third case, therefore, was not precisely for the purpose of obtaining a favorable
result butonly to get the case moving, in an attempt to protect their rights.
It appears that the resolution on the merits of the original controversy between the parties has
long beenmired in numerous procedural entanglements. While it might be more judicially
expedient to apply the "twin-dismissal rule" and disallow the proceedings in the third case to
continue, it would not serve the ends of substantial justice. Courts of justice must always
endeavor to resolve cases on their merits, rather than summarily dismiss these on technicalities:
[C]ases should be determined on the merits, after all parties have been given full opportunity to
ventilate their causes and defenses, rather than on technicalities or procedural imperfections. In
that way, the ends of justice would be served better. Rules of procedure are mere tools designed
to expedite the decision or resolution of cases and other matters pending in court. A strict and
rigid application of rules, resulting in technicalities that tend to frustrate rather than promote
substantial justice, must be avoided.In fact, Section 6 of Rule 1 states that the Rules [on Civil
Procedure] shall be liberally construed in order to promote their objective of ensuring the just,
speedy and inexpensive disposition of every action and proceeding.92 (Emphasis supplied)
The rule on forum shopping will not strictly apply when it can be shown that (1) the original
case has been dismissed upon request of the plaintiff for valid procedural reasons; (2) the only
pending matter is a motion for reconsideration; and (3) there are valid procedural reasons that
serve the goal of substantial justice for the fresh new· case to proceed.
The motion for reconsideration filed in the second case has since been dismissed and is now the
subject of a petition for certiorari. The third case filed apparently contains the better cause of
action for the plaintiffs and is now being prosecuted by a counsel they are more comfortable
with. Substantial justice will be better served if respondents do not fall victim to the labyrinth
in the procedures that their travails led them. It is for this reason that we deny the petition.
WHEREFORE, the petition is DENIED. The Regional Trial Court of Manila, Branch 6 is
ordered to proceed with Civil Case No. 02-105251 with due and deliberate dispatch.
SO ORDERED.
G.R. No. 232189
ALEX RAUL B. BLAY, Petitioner
vs.
CYNTHIA B. BANA, Respondent
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 are the Decision2 dated February 23, 2017 and
the Resolution3dated June 6, 2017 of the Court of Appeals (CA) in CA-G.R. SP No. 146138,
which affirmed the Orders dated May 29, 20154 and March 3, 20165 of the Regional Trial Court
of Pasay City, Branch 109 (RTC) in Civil Case No. R-PSY-14-17714-CV that: (a) granted
petitioner Alex Raul B. Blay’s (petitioner) Motion to Withdraw; and (b) declared respondent
Cynthia B. Baña’s (respondent) Counterclaim for independent adjudication.
The Facts
On September 17, 2014, petitioner filed before the RTC a Petition for Declaration of Nullity of
Marriage,6 seeking that his marriage to respondent be declared null and void on account of his
psychological incapacity pursuant to Article 36 of the Family Code. 7 Subsequently, respondent
filed her Answer with Compulsory Counterclaim8 dated December 5, 2014.
However, petitioner later lost interest over the case, and thus, filed a Motion to Withdraw9 his
petition. In her comment/opposition10 thereto, respondent invoked Section 2, Rule 17 of the
Rules of Court (alternatively, Section 2, Rule 1 7), and prayed that her counterclaims be declared
as remaining for the court's independent adjudication.11 In turn, petitioner filed his
reply,12 averring that respondent's counterclaims are barred from being prosecuted in the same
action due to her failure to file a manifestation therefor within fifteen (15) days from notice of
the Motion to Withdraw, which - according to petitioner - was required under the same Rules of
Court provision. In particular, petitioner alleged that respondent filed the required manifestation
only on March 30, 2015. However, respondent's counsel received a copy of petitioner's Motion
to Withdraw on March 11, 2015; hence, respondent had only until March 26, 2015 to manifest
before the trial court her desire to prosecute her counterclaims in the same action.13
The RTC Ruling
In an Order14 dated May 29, 2015, the RTC granted petitioner’s Motion to Withdraw
petition.15 Further, it declared respondent's counterclaim "as remaining for independent
adjudication" and as such, gave petitioner fifteen (15) days to file his answer thereto. 16
Dissatisfied, petitioner filed a motion for reconsideration, 17 which was denied in an
Order18 dated March 3, 2016. Thus, he elevated the matter to the CA via a petition
for certiorari, 19 praying that the RTC Orders be set aside to the extent that they allowed the
counterclaim to remain for independent adjudication before the same trial court. 20
The CA Ruling
In a Decision21 dated February 23, 2017, the CA dismissed the petition for lack of merit. 22 It
found no grave abuse of discretion on the part of the RTC, holding that under Section 2, Rule
17 of the Rules of Court, if a counterclaim has been filed by the defendant before the service
upon him of the petitioner’s motion for dismissal, the dismissal shall be limited to the
complaint.23
Aggrieved, petitioner moved for reconsideration,24 which was denied in a Resolution25 dated
June 6, 2017; hence, this petition.
The Issue Before the Court
The issue for the Court's resolution is whether or not the CA erred in upholding the RTC Orders
declaring respondent's counterclaim for independent adjudication before the same trial court.
The Court’s Ruling
The petition is meritorious.
Section 2, Rule 17 of the Rules of Court provides for the procedure relative to counterclaims in
the event that a complaint is dismissed by the court at the plaintiffs instance, viz. :
Section 2. Dismissal upon motion of plaintiff. - Except as provided in the preceding section, a
complaint shall not be dismissed at the plaintiffs instance save upon approval of the court and
upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded
by a defendant prior to the service upon him of the plaintiff's motion for dismissal, the
dismissal shall be limited to the complaint. The dismissal shall be without prejudice to the
right of the defendant to prosecute his counterclaim in a separate action unless within
fifteen (15) days from notice of the motion he manifests his preference to have his
counterclaim resolved in the same action.Unless otherwise specified in the order, a dismissal
under this paragraph shall be without prejudice. A class suit shall not be dismissed or
compromised without the approval of the court.1âwphi1
As per the second sentence of the provision, if a counterclaim has been pleaded by the defendant
prior to the service upon him of the plaintiff's motion for the dismissal - as in this case - the rule
is that the dismissal shall be limited to the complaint. Commentaries on the subject elucidate
that "[i]nstead of an ‘action’ shall not be dismissed, the present rule uses the term ‘complaint’. A
dismissal of an action is different from a mere dismissal of the complaint. For this reason, since
only the complaint and not the action is dismissed, the defendant inspite of said dismissal may
still prosecute his counterclaim in the same acton."26
However, as stated in the third sentence of Section 2, Rule 17, if the defendant desires to
prosecute his counterclaim in the same action, he is required to file a manifestation within fifteen
(15) days from notice of the motion. Otherwise, his counterclaim may be prosecuted in a
separate action. As explained by renowned remedial law expert, former Associate Justice
Florenz D. Regalado, in his treatise on the matter:
Under this revised section, where the plaintiff moves for the dismissal of the complaint to which
a counterclaim has been interpose, the dismissal shall be limited to the complaint. Such dismissal
shall be without prejudice to the right of the defendant to either prosecute his counterclaim in a
separate action or to have the same resolved in the same action. Should he opt for the first
alternative, the court should render the corresponding order granting and reserving his
right to prosecute his claim in a separate complaint. Should he choose to have his
counterclaim disposed of in the same action wherein the complaint had been dismissed, he
must manifest within 15 days from notice to him of plaintiff's motion to dismiss. x x x27
In this case, the CA confined the application of Section 2, Rule 17 to that portion of its second
sentence which states that the "dismissal shall be limited to the complaint." Evidently, the CA
ignored the same provision's third sentence, which provides for the alternatives available to the
defendant who interposes a counterclaim prior to the service upon him of the plaintiff's motion
for dismissal. As may be clearly inferred therefrom, should the defendant desire to prosecute his
counterclaim, he is required to manifest his preference therefor within fifteen (15) days from
notice of the plaintiff's motion to dismiss. Failing in which, the counterclaim may be prosecuted
only in a separate action.
The rationale behind this rule is not difficult to discern: the passing of the fifteen (15)-day period
triggers the finality of the court's dismissal of the complaint and hence, bars the conduct of
further proceedings, i.e., the prosecution of respondent's counterclaim, in the same action. Thus,
in order to obviate this finality, the defendant is required to file the required manifestation within
the aforesaid period; otherwise, the counterclaim may be prosecuted only in a separate action.
It is hornbook doctrine in statutory construction that "[t]he whole and every part of the statute
must be considered in fixing the meaning of any of its parts and in order to produce a harmonious
whole. A statute must be so construed as to harmonize and give effect to all its provisions
whenever possible. In short, every meaning to be given to each word or phrase must be
ascertained from the context of the body of the statute since a word or phrase in a statute is
always used in association with other words or phrases and its meaning may be modified or
restricted by the latter."28
By narrowly reading Section 2, Rule 1 7 of the Rules of Court, the CA clearly violated the
foregoing principle and in so doing, erroneously sustained the assailed RTC Orders declaring
respondent’s counterclaim "as remaining for independent adjudication" despite the latter's
failure to file the required manifestation within the prescribed fifteen (15)-day period. As
petitioner aptly points out:

[I]f the intention of the framers of the Rules of Court is a blanket dismissal of the complaint
ALONE if a counterclaim has been pleaded prior to the service of the notice of dismissal then
there is NO EVIDENT PURPOSE for the third (3rd) sentence of Sec. 2, Rule 17.

x x x x29

[I]t is clearly an ABSURD conclusion if the said provision will direct the defendant to manifest
within fifteen (15) days from receipt of the notice of dismissal his preference to prosecute his
counterclaim in the SAME ACTION when the same AUTOMATICALLY REMAINS. If the
automatic survival of the counterclaim and the death of the complaint as being ruled by the
Court of Appeals in its questioned Decision is indeed true, then the third sentence should have
required defendant to manifest that he will prosecute his counterclaim in a SEPARATE [and
not - as the provision reads - in the same] ACTION.30(Emphases and underscoring in the
original)

Petitioner's observations are logically on point. Consequently, the CA rulings, which affirmed
the patently erroneous R TC Orders, must be reversed. As it should be, the RTC should have
only granted petitioner's Motion to Withdraw and hence, dismissed his Petition for Declaration
of Nullity of Marriage, without prejudice to, among others, the prosecution of respondent's
counterclaim in a separate action.

WHEREFORE, the petition is GRANTED. The Decision dated February 23, 2017 and the
Resolution dated June 6, 2017 of the Court of Appeals in CA-G.R. SP No. 146138 are
hereby REVERSED and SET ASIDE. A new one is ENTERED solely granting petitioner
Alex Raul B. Blay’s Motion to Withdraw his Petition for Declaration of Nullity of Marriage in
Civil Case No. R-PSY-14-17714-CV. The aforesaid dismissal is, among others, without
prejudice to the prosecution of respondent Cynthia B. Baña's counterclaim in a separate action.

SO ORDERED.