Title
Air Ads, Inc. vs. Tagum Agricultural Development Corp.
Case
G.R. No. 160736
Decision Date
Mar 23, 2011
A dispute over third-party complaints in a damages case, involving forum shopping claims and the validity of substitute pleadings, ultimately upheld by the Supreme Court.
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Case Summary (G.R. No. 160736)

Background of the Case

  • The case originated from Civil Case No. 27802-2000 in the Regional Trial Court (RTC) of Davao City, involving a claim for damages due to the death of the plaintiff's husband.
  • Tagum Agricultural Development Corporation (TADECO) filed an answer with compulsory counterclaims and a motion to file a third-party complaint against Air Ads, Inc. and Pioneer Insurance and Surety Corporation.
  • The RTC admitted TADECO's third-party complaint on April 14, 2000.
  • On June 16, 2000, TADECO's counsel filed a notice of dismissal without prejudice against Pioneer Insurance, which led to subsequent motions and orders regarding the status of the third-party complaint.

Procedural Developments

  • The RTC granted the notice of dismissal and later allowed TADECO to withdraw it, reinstating the third-party complaint against Pioneer.
  • TADECO then filed a substitute third-party complaint, which only included allegations against Pioneer, to avoid complications with its former counsel.
  • Air Ads filed a motion to dismiss the third-party complaint, arguing that it had been dropped as a defendant due to the filing of the substitute complaint.

RTC's Rulings

  • The RTC denied Air Ads' motion to dismiss, clarifying that the notice of dismissal was limited to Pioneer and did not affect Air Ads' status as a third-party defendant.
  • Air Ads' subsequent motion for reconsideration was also denied, leading to its petition for certiorari and prohibition in the Court of Appeals (CA).

Court of Appeals Proceedings

  • The CA dismissed Air Ads' first petition for failure to attach necessary documents, which led to the filing of a second petition that included the required board resolution.
  • The CA affirmed that the original third-party complaint against Air Ads was never dismissed, and thus, the motion to dismiss was correctly denied by the RTC.

Legal Issues Presented

  • The primary issues were whether the refiling of the petition constituted forum shopping and whether the substitute third-party complaint superseded the original complaint.
  • Air Ads contended that the substitute complaint dropped it as a defendant, while TADECO argued that the original complaint remained valid.

Ruling on Forum Shopping

  • The Supreme Court ruled that the refiling of the petition did not constitute forum shopping or res judicata, as the first petition was dismissed without prejudice.
  • The dismissal for defective verification allowed Air Ads to file a new petition to correct the deficiencies.

Ruling on the Substitute Third-Party Complaint

  • The Court determined that the substitute third-party complaint did not supersede the original complaint against Air Ads.
  • The original complaint remained valid as the substitute complaint was specifically directed at Pioneer and did not affect Ai...continue reading

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