Case Summary (G.R. No. 170354)
Pertinent Procedural Facts
On May 28, 1998 respondents alleged that petitioner and Saavedra had unlawfully entered their coconut lands to cut timber and harvest fruits. They sought injunctive relief and damages. Petitioner and Saavedra answered and filed a compulsory counterclaim disputing ownership, asserting ancestral possession since the 1930s, previous ejectment of respondents in 1968, and rejection of respondents’ patent application in 1971.
Counterclaim and Trial Court Proceedings
Defendants prayed for damages totaling ₱2,100,000. By mid-2005 respondents had not presented evidence and the trial was stalled. On October 25, 2004 the RTC dismissed the complaint for failure to prosecute, then reconsidered on June 9, 2005 after assurances from respondents’ counsel. At the July 27, 2005 hearing respondents again failed to appear; the RTC dismissed their complaint for unreasonable delay and allowed defendants to present evidence ex parte.
Reconsideration and Dismissal of Counterclaim
Respondents moved for reconsideration, not to reinstate their complaint but to dismiss the entire action and disallow ex parte evidence by defendants, citing established jurisprudence (e.g., City of Manila v. Ruymann, Domingo v. Santos) that compulsory counterclaims cannot survive the dismissal of the complaint. On August 9, 2005 the RTC granted reconsideration, dismissing the counterclaim for lack of opposition to respondents’ motion. Petitioner’s own motion for reconsideration was denied on October 10, 2005.
Issue and Rule 45 Review
Petitioner elevated the case to the Supreme Court via Rule 45, raising a pure question of law: whether the dismissal of a complaint for failure to prosecute necessarily extinguishes a compulsory counterclaim. The decisive question turned on the effect of Section 3, Rule 17 of the 1997 Rules of Civil Procedure, applicable under the 1987 Constitution.
Applicable Law and Constitutional Basis
Under Article VIII, Section 5(5) of the 1987 Constitution, the Supreme Court may promulgate rules of procedure. Section 3, Rule 17 of the 1997 Rules provides that if a complaint is dismissed for no justifiable cause on the plaintiff’s part, such dismissal is “without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action.” This marks an express qualification absent from the 1964 Rules.
Distinction Between 1964 and 1997 Rules
The 1964 Rules’ Section 3, Rule 17 merely provided for dismissal for failure to prosecute, silent on counterclaims. Dismissals at the instance of the plaintiff were governed by Section 2, which protected only those counterclaims “that can remain pending for independent adjudication.” Under the old regime, cases such as Lim Tanhu v. Ramolete and Dalman v. City Court of Dipolog applied Section 2 to bar dismissal of compensable counterclaims only when independent adjudication was possible.
Jurisprudential Evolution Before 1997
Decisions under Section 3, such as Spouses Sta. Maria v. CA, held that the doctrine protecting counterclaims did not benefit a plaintiff who delayed prosecution. By the early 1990s, Metals Engineering Resources Corp. v. CA and International Container Terminal Services v. CA extended the mandatory dismissal of compulsory counterclaims to instances where the defendant sought dismissal. In BA Finance Corp. v. Co, the Supreme Court held that dismissal of the complaint for failure to appear on pre-trial carried with it the dismissal of a compulsory counterclaim, a ruling sharply criticized in a partial dissent by Justice Regalado.
Amendment of Rule 17 and Committee Deliberations
In October 1993 Justice Regalado, serving on the Rules of Court Revision Committee, successfully proposed an amendment to Section 3, Rule 17 to clarify that dismissal for plaintiff’s fault is without prejudice to the defendant’s counterclaim. The Committee agreed there was no need to distinguish between permiss
...continue readingCase Syllabus (G.R. No. 170354)
Constitutional and Procedural Rule Basis
- The Supreme Court’s constitutional power under Article VIII, Section 5(5) to promulgate and amend rules of practice and procedure includes overturning remedial-law precedents.
- The 1997 Rules of Civil Procedure, Rule 17, Section 3 introduced an express proviso: a dismissal of the complaint for plaintiff’s fault “shall be without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action.”
- This amendment contrasts with pre-1997 jurisprudence which treated the dismissal of a complaint as automatically disposing of compulsory counterclaims.
Facts of the Case
- Respondents (Heirs of German Santiago, represented by Fernando Santiago) filed Civil Case No. 98-012 in the RTC of San Miguel, Zamboanga del Sur (Branch 29) on May 28, 1998, for injunction and damages against petitioner Eduardo Pinga and Vicente Saavedra.
- Complaint alleged unlawful entry by defendants on coco lands, cutting of timber and bamboo, harvesting of coconuts, and prayed for injunction against further depredations and payment of damages.
- Defendants’ Amended Answer with Counterclaim disputed respondents’ title, claiming Edmundo Pinga’s possession since the 1930s, earlier ejectment order against respondents in 1968, and rejection of respondents’ free-patent application in 1971.
- Defendants prayed for damages totaling ₱2,100,000 for forcible re-entry and malicious litigation.
Procedural History in the RTC
- By July 2005, respondents had not presented evidence; trial remained pending.
- October 25, 2004: RTC ordered dismissal of the complaint for failure to prosecute, but later reconsidered on June 9, 2005, upon respondents’ assurance of priority.
- July 27, 2005: Respondents’ counsel failed to appear; RTC dismissed the complaint for unreasonable delay and granted defendants leave to present counterclaim evidence ex-parte.