property, a 281 sqm. parcel of land situated along Quezon Ave.
, Poblacion C,
Rule 17: Dismissal of Actions
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
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
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 Certificate of Finality5it eventually issued on August 22,
2008.
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)
1
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:
2
 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 cause of action must necessarily fail mainly in view of the absence of the
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‘
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
3
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,
4
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.
5
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.
6
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.
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
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.
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
7
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.
8
 SECOND DIVISION
[G.R. No. L-55336. May 4, 1989.]
BENJAMIN VALLANGCA, RODOLFO VALLANGCA and
ALFREDO VALLANGCA, Petitioners, v. HON. COURT OF APPEALS
and NAZARIO RABANES, Respondents.
SYLLABUS
1. CIVIL PROCEDURE; JUDGMENT; RES JUDICATA, REQUISITES. —
In an impressive line of cases, 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; (c) 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 re-litigation of the same causes of action.
2. ID.; ID.; ID.; PRELIMINARY INJUNCTION BEING AN ANCILLARY
ACTION, DISMISSAL THEREOF WOULD NOT RESULT IN A GIVEN
JUDGMENT ON THE MERITS. — 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. From the provisions of sections 1 and 3 of Rule 58 of the Rules
of Court 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.
3. ID.; DISMISSAL ORDER: GENERALLY WITHOUT PREJUDICE
UNLESS THE ORDER SO SPECIFIES. — Under Sec. 2, Rule 17 of the
Rules of Court which provides 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.
4. CONTRACTS; PRESUMPTION OF AN EQUITABLE MORTGAGE IN
A CONTRACT. — 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; . . . "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 before the effectivity of the Civil Code.
5. LAND REGISTRATION; PATENTED OR HOMESTEAD LANDS;
RESTRICTIONS ON CONVEYANCE THEREOF. — Restrictions are
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.
DECISION
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 Fortunato Vallangca with
whom she had three (3) children, namely, Benjamin, Rodolfo and Alfredo,
all surnamed Vallangca who are the petitioners herein.
9
According to the petition at bar, the following events led to the present "O R D E R
controversy:chanrob1es virtual 1aw library
"As prayed for, the above-entitled case is hereby dismissed.
Upon Fortunato Vallangca‘s death in 1944, his widow Ana Billena, together
with her eldest son Benjamin, went to Centro, Buguey, Cagayan and "SO ORDERED." 3
mortgaged the land in dispute to her cousin Nazario Rabanes (private
respondent herein) for Eight Hundred Pesos (P800.00) in Japanese war notes, Respondent Nazario Rabanes (later substituted by his heirs) had another
to cover the burial expenses of her deceased husband Fortunato Vallangca. version of the events. According to him, Ana Billena knowingly signed a
There being no notary public in the place at the time, the agreement was not deed of absolute sale in his favor on 2 February 1946 as she had actually sold
reduced to writing. At the time of said mortgage of the land to Nazario and not merely mortgaged the land in controversy for P800.00. Rabanes
Rabanes, the land was already mortgaged to the Philippine National Bank alleged that from then on, his tenants, Serapio dela Cruz and Fernando
(PNB), said first mortgage having been executed on 16 November 1940, and Gagmante, cultivated the land, until they were driven out by the three (3)
annotated on said TCT No. 1005. sons of Ana Billena sometime in 1962.

After the Pacific war, Nazario Rabanes went to the residence of Ana Billena After trial in the second action involving recovery of possession, the Court of
on 2 February 1946 and made the latter sign a document which Rabanes First Instance of Cagayan, on 24 September 1976, rendered judgment
represented to Ana Billena as a mortgage contract written in the Ilocano declaring plaintiff Rabanes (herein respondent) as the rightful owner of the
dialect. Billena, being an illiterate and trusting in her cousin (Rabanes), land and ordered the defendants (herein petitioners) to vacate the same. 4 The
affixed her signature on the document in the space indicated to her. trial court reasoned thus —

In that same year, 1946, Billena was informed by a cousin of Rabanes and ". . . . The only witness of the defendants to prove this vital point is their co-
another witness to the document that the alleged mortgage contract which she defendant Benjamin Vallangca who is a son of Ana Villena [sic]. He testified
had signed was actually a deed of absolute sale to Rabanes of the land that he was only 14 years old when his mother signed the document under
covered by TCT No. 1005. Ana Billena and her son Benjamin, thereupon, the alleged influence of the plaintiff. He also signed it as a witness. With that
went to Rabanes‘ place for the purpose of redeeming the land and actually tender age, we doubt if he understood the meaning or difference between a
tendered to him the loan amount of P800.00, this time, in genuine and legal mortgage and a sale of real property, so how can he say now that his mother
Philippine currency. However, Rabanes told them that the land could no was influenced into signing Exhibit ‗F‘. He did not say how Nazario Rabanes
longer be redeemed and he drove them out of his house. influenced his mother. He merely stated that Nazano Rabanes was his uncle,
being the cousin of his mother. They were not living in the same house and
Since Ana Billena and her three (3) sons were in possession and actual there is no evidence that he was giving them money, food or in any manner
cultivation of the land in question, Rabanes filed against them on 7 July 1971 supporting them so as to exercise influence over her. He did not state the
an injunction suit before the Court of First Instance of Cagayan (Civil Case nature of the influence exerted over his mother, whether it was moral,
No. II-14). 1 At the pre-trial of said injunction suit, plaintiff Rabanes was physical, spiritual or religious. So the court is at a loss to see how this undue
advised by the trial court that injunction was not the proper cause of action, influence over his mother existed.
because injunction was merely an ancillary or provisional remedy to a main x x x
action. On 11 September 1972, another complaint entitled "Recovery of
Possession" (Civil Case No. II-39) 2 was lodged by Rabanes before the same
court against the same defendants in the action for injunction. Two (2) days ". . . . The testimonies of Serapio de la Cruz and Fernando Dagmante are
later, or on 13 September 1972, the action for injunction was ordered stronger and more convincing than the lone testimony of Benjamin
dismissed by the trial court. The order of dismissal reads as Vallangca. . . . ."cralaw virtua1aw library
follows:jgc:chanrobles.com.ph
The decretal part of the judgment reads —
10
"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."cralaw virtua1aw library
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 During this appeal before the Court, Nazario Rabanes died in 1982. An order
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:chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
"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." (Emphasis
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) areas 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.
for his substitution by his legal heirs was issued.chanrobles law library : red
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; (c) 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 re-litigation 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 abovementioned
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
11
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:jgc:chanrobles.com.ph
"Sec. 1. Preliminary Injunction defined; classes. — A preliminary injunction
is an order granted at any stage of an action prior to the final judgment, . . ."
(Emphasis 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:chanrobles law library : red
"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 plaintiff‘s 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."cralaw virtua1aw library
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:jgc:chanrobles.com.ph
"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."cralaw virtua1aw library
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.chanrobles.com.ph : virtual law library
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
12
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:jgc:chanrobles.com.ph
"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;
x x x to amend and compile the laws relative to lands of the public domain) and
"Art. 1604. — The provisions of Art. 1602 shall also apply to a contract
purporting to be an absolute sale."cralaw virtua1aw library
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 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?chanrobles.com.ph : virtual law library
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
Act No. 496 (The Land Registration Act), which govern the said free patent.
Sections 116 and 117 of Act No. 2874 provide:jgc:chanrobles.com.ph
"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 liable 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.
13

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 light 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 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. v. 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.chanrobles virtualawlibrary
chanrobles.com:chanrobles.com.ph
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.
EN BANC
[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
14
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 certiorari and 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.
15
 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 Notice of Withdrawal of
Petition filed by them before filing substantially the same petition in the
Regional Trial Court, the Court understands their situation. They were faced
with a 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 injunction had to be obtained if
respondent Gordon was to remain in office.
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
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 dissipation, loss or wastage
of corporate assets if TMEE were permitted to vote said shares. They wished
their client to exercise that right to vote at the stockholders meeting of
January 10, 1997; 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 Order.
A few days reflection, however, apparently made them doubt that the Court
would act on their motion because in its Resolution of December 3, 1996 it
had said that no further motion for reconsideration or clarification of the
issues treated or, of the dispositions herein made, will be entertained. They
thus decided that relief should properly be sought in the Securities &
Exchange Commission which in their view had jurisdiction to act on the
subject matter (which) refers to the corporate acts of PCIB and its corporate
officers (Garcia Jr. vs. Sandiganbayan 237 SCRA 552) (their cause) not
being directly aimed at the PCGG as an entity, but at a private corporation
(Holiday Inn [Phils.] vs. Sandiganbayan, et al. 186 SCRA 447]. But first they
had 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 done, they filed the corresponding
petition with the Securities & Exchange Commission to stop the PCIB
stockholders meeting scheduled the following day, as above narrated.
16
 This Court considered the parties predicament with understanding and AND TRUST CO., ATTY.
overlooked their lapse: JULIA CECILY COCHING-
SOSITO, and THE Promulgated:
The Court sees no reason to reject this explanation of the TMEE lawyers, or REGISTER OF DEEDS FOR
to doubt their good faith. Their explanation is not on its face implausible; it is MARIKINA CITY,
in truth consistent with the admitted facts on record.Considering that Respondents. February 2, 2010
condemnation for contempt should not be made lightly, and that the power to x-----------------------------------------------------------------------------------------
punish for contempt should be exercised on the preservative and not on the x
vindictive principle, the Court finds no difficulty whatever in reaching the
conclusion that there was no willful disregard or defiance of its orders, or RESOLUTION
forum-shopping, by the TMEE lawyers or, through his permissiveness, by
the SEC Hearing Officer. CARPIO, J.:
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 at the very least for the time of the This is a petition for review[1] of the Court of Appeals
Court which they had taken and made an effort to explain why they have to Decision[2] dated 28 September 2004 and Resolution dated 15 December
refile their case without awaiting the Courts resolution on their notice of 2004 in CA-G.R. SP No. 82114. The Court of Appeals dismissed the petition
withdrawal of the petition. But, exercising restraint lest a contrary action be for certiorari[3] filed by Benedicta M. Samson and Marcial M. Samson
seen as mere peeve or petulance, and considering this case instead with against Hon. Judge Geraldine C. Fiel-Macaraig, the Bank of the Philippine
compassion, bearing in mind that the purpose of contempt is preservative Islands (BPI), the Far East Bank and Trust Co. (FEBTC), Atty. Julia Cecily
rather than punitive, this Court has chosen to overlook respondents lapse. Coching-Sosito, and the Register of Deeds of Marikina City.

WHEREFORE, the petition for contempt is DISMISSED. The factual and procedural antecedents of this case are as follows:
SO ORDERED.
Sometime in 1998, petitioners Benedicta M. Samson and Marcial M. Samson
obtained a loan amounting to P10,000,000 from FEBTC. The loan was
SECOND DIVISION secured by a real estate mortgage over four parcels of land located in
Marikina City and covered by Transfer Certificate of Title (TCT) 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-
BENEDICTA M. SAMSON G.R. No. 166356 judicial foreclosure of the real estate mortgage with the Office of the Clerk of
and MARCIAL M. SAMSON, Court and Ex-Officio Sheriff of the Regional Trial Court (RTC) of Marikina
Petitioners, Present:
City. FEBTCs application was given due course, and a Notice of Sheriffs
Sale was issued, setting the public auction sale of the mortgaged properties
CARPIO, J., Chairperson, on 8 June 2000, at 10:00 in the morning. Prior to the sale, the Notice of
CORONA,* BRION, Sheriffs Sale was duly published in Rizal-Metro Gazette,[4] and was certified
- versus - DEL CASTILLO, by Sheriff IV Edgar Pulan of the RTC of Marikina City to have been duly
and PEREZ, JJ. posted in three public places where the mortgaged real properties were
HON. JUDGE GERALDINE located.[5]
C. FIEL-MACARAIG, BANK
OF THE PHILIPPINE On 8 June 2000, only one bidder, FEBTC, submitted its bid, thereby causing
ISLANDS, FAR EAST BANK the sheriff to postpone the public auction sale to 29 June 2000, in accordance
17
with SC AM No. 99-10-05-0[6] and the Notice of Sheriff's Sale which
states, inter alia:
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 reposting
[of] this notice.[7]
On 29 June 2000, the mortgaged real properties were sold at public auction
to FEBTC as the highest bidder,[8] and a Certificate of Sale was issued in
favor of the bank.
Almost two years later, or on 4 June 2002, petitioners, together with Pepito,
Zenaida, Julieta, Edgardo, Rolando, Rempson, and Rocky, all surnamed
Samson, filed a case for Annulment of Extra-judicial Foreclosure and/or
Nullification of Sale and the Certificates of Title, plus Damages and with
Prayer for a Temporary Restraining Order [TRO] and/or Writ of Preliminary
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, Julia Cecily Coching-Sosito, in
her capacity as Clerk of Court and Ex-Officio Sheriff of the RTC of Marikina
City, and the Register of Deeds of Marikina City. The case was docketed as
Civil Case No. 2002-803-MK and raffled to Branch 192 of the RTC of
Marikina City.
On 19 July 2002, the Registrar of Deeds[10] of Marikina City filed a
Manifestation[11] stating that the certificates of title subject of the case had
already been cancelled and the titles to the mortgaged properties were
consolidated in the name of BPI on 7 March 2002. The Registrar of Deeds
also claimed that the complaint stated no cause of action against him for it
mentioned no wrongful act on his part, whether in his official or personal
capacity; neither was there any allegation of negligence or omission of his
official functions.[12] The Registrar of Deeds likewise mentioned that, at
most, the Registrar and the Register of Deeds of Marikina City were
impleaded only as nominal parties in the case.[13]
A hearing on the application for a TRO and/or Writ of Preliminary Injunction
was held on 2 August 2002.[14] On 9 August 2002, private respondent BPI
filed its Answer with Counterclaim 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.
On 20 December 2002, the RTC of Marikina City, Branch 192, issued an
Order denying 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 unreasonable
length of time.[16]
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 dated 27 January 2004. On 10
February 2004, Benedicta and Marcial Samson filed with the Court of
Appeals a Petition for Certiorari under Rule 65 of the 1997 Revised Rules of
Civil Procedure.
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
18
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 of
discretion in the findings of fact or of law set out in the decision.[21] 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.
Even assuming that certiorari may lie, the Court still cannot grant the instant
petition because the petitioners failed to show that public respondent, in
issuing the assailed Orders, acted without or in excess of jurisdiction, or
gravely abused her discretion amounting to lack or excess of jurisdiction. As
mentioned earlier, the RTC issued the assailed Order in accordance with
Section 3, Rule 17, in relation to Section 1, Rule 18 of the Revised Rules of
Civil Procedure. There is 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 implies such
capricious and whimsical exercise of judgment as is equivalent to lack of
jurisdiction or, in other words, where the power is exercised in an arbitrary
manner by reason of passion, prejudice, or personal hostility,[22] and it must
be so patent or gross as to amount to an evasion of a positive duty or to a
virtual refusal to perform the duty enjoined or to act at all in 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 Answer should not have prevented petitioners from
performing their duty under Section 1 of 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.
19
WHEREFORE, we DENY the petition. We AFFIRM the Court of Appeals
Decision dated 28 September 2004 and Resolution dated 15 December 2004
in CA-G.R. SP No. 82114.
SO ORDERED.
FIRST DIVISION
[G.R. No. 192716 : June 13, 2012]
ELOISA MERCHANDISING, INC. AND TREBEL
INTERNATIONAL, INC., PETITIONERS, VS. BANCO DE ORO
UNIVERSAL BANK AND ENGRACIO M. ESCASINAS, JR., IN HIS
CAPACITY AS EX-OFFICIO SHERIFF OF THE RTC OF MAKATI
CITY, RESPONDENTS.
DECISION
VILLARAMA, JR., J.:
Assailed in this petition for review on certiorari under Rule 45 are the
Decision[1] dated March 30, 2010 and Resolution[2] dated June 15, 2010 of
the Court of Appeals (CA) in CA-G.R. CV No. 89779. The CA affirmed the
trial court‘s dismissal of petitioners‘ complaint on the ground of failure to
prosecute.cralaw
On November 11, 1993, petitioner Eloisa Merchandising, Inc. (EMI)
executed in favor of respondent Banco de Oro Universal Bank (BDO) a real
estate mortgage (REM) over its 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 petitioner‘s affiliate,
Trebel.[3]
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 BDO‘s
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
20
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 EMI‘s 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 principal‘s 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
court‘s 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 BDO‘s 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 EMI‘s 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 ex parte in view of the
absence of BDO which was non-suited. In its motion for reconsideration,
BDO‘s 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 today‘s
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
21
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
defendant‘s 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 Court‘s leniency. Finding no compelling reason to
reconsider the assailed order, motion is hereby DENIED.
SO ORDERED.
A
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 court‘s
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 court‘s 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
22
prosecute their action, citing this Court‘s 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 court‘s 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 court‘s 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 Rules which 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 plaintiff‘s
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 parte that 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
23
the pre-trial stage and it was the failure of petitioners to set the case anew for dormientibus jura subveniunt.[29]
pre-trial conference which prompted the trial court to dismiss their
complaint. 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
In Olave v. Mistas,[27] this Court said that even if the plaintiff fails to admit supplemental complaint. Petitioners did not even file a motion to
promptly move for pre-trial without any justifiable cause for such delay, the resolve the said pending incident which, in any event, could have been
extreme sanction of dismissal of the complaint might not be warranted if no brought to the trial court‘s attention had petitioners acted promptly to have
substantial prejudice would be caused to the defendant, and there are special the case set anew for pre-trial conference soon after or within a reasonable
and compelling reasons which would make the strict application of the rule time from the reinstatement of the case on December 29, 2004.
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 While under the present Rules, it is now the duty of the clerk of court to set
having failed to take the initiative to set the case for pre-trial for almost one the case for pre-trial if the plaintiff fails to do so within the prescribed period,
year from their receipt of the Answer. Although said case was decided prior this does not relieve the plaintiff of his own duty to prosecute the case
to the effectivity of A.M. No. 03-1-09-SC, the Court considered the diligently. This case had been at the pre-trial stage for more than two years
circumstances showing petitioners‘ and their counsel‘s lack of interest and and petitioners have not shown special circumstances or compelling reasons
laxity in prosecuting their case. to convince us that the dismissal of their complaint for failure to prosecute
was unjustified.cralaw
In this case, while there was no substantial prejudice caused to herein
respondent, who has already consolidated the ownership of petitioners‘ WHEREFORE, the petition for review on certiorari is DENIED. The
properties, secured new titles in its name and successfully implemented a Decision dated March 30, 2010 and Resolution dated June 15, 2010 of the
writ of possession issued by another branch, there was neither patent abuse in Court of Appeals in CA-G.R. CV No. 89779 are hereby AFFIRMED and
the trial court‘s dismissal of the complaint for the third time, the earlier two UPHELD.
dismissals having been precipitated by petitioners‘ non-appearance at the
pre-trial conference. Contrary to petitioners‘ assertion, the trial court did not Costs against the petitioners.
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‖ SO ORDERED.
but explicitly warned petitioners to be more circumspect in attending to the Republic of the Philippines
case. SUPREME COURT
Manila
However, despite the trial court‘s leniency and admonition, petitioners SECOND DIVISION
continued to exhibit laxity and inattention in attending to their case. G.R. No. 185922 January 15, 2014
Assuming domestic problems had beset petitioners‘ counsel in HEIRS OF DR. MARIANO FAVIS SR. represented by their co-heirs
the interregnum, with greater reason should he make proper coordination and Attorneys-in-Fact MERCEDES A. FAVIS and NELLY FAVIS-
with the trial court to ensure his availability on the date to be chosen by the VILLAFUERTE, Petitioners,
trial court for the long-delayed conduct of a pre-trial conference. Petitioners vs.
themselves did nothing to get the case moving for nine months and set the JUANA GONZALES, her son MARIANO G. FAVIS, MA. THERESA
case anew for pre-trial even as BDO was already seeking their judicial JOANA D. FAVIS, JAMES MARK D. FAVIS, all minors represented
ejectment with the implementation of the writ of possession issued by Branch herein by their parents SPS. MARIANO FAVIS and LARCELITA D.
143. Such circumstance also belies their pretense that the parties were then FAVIS,Respondents.
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 DECISION
vigilant, not those who slumber on their rights. Vigilantibus sed non
24
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 Donation5 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:
25
 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
26
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
27
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
28
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
29
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.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
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 decision2 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
30
sign an agreement and waiver18 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
31
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 decision44 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
32
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
33
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.
....
34
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
35
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
36
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.
37
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.
SECOND DIVISION
March 7, 2018
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
38
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
39
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
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.

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
40