Laws & Jurisprudence
Applicability Of The "Two-Dismissal Rule" Under Rule 17 and Rule On Forum Shopping
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Respondent-plaintiffs
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.
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.".
Sometime after, Lucina Santos filed a motion for intervention and was
allowed to intervene.
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. The Regional Trial Court of Manila, Branch 6, granted
the motion to dismiss. 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.
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 (the second case) and
raffled to Branch 20 of the Regional Trial Court of Manila. 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.
The
Chengs and Lucina Santos filed a motion to dismiss their complaint in
the second case, praying that it be dismissed without prejudice. RTC
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.
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.
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 (the third case) and was
eventually raffled to Branch 6.
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.
RTC
Branch 6 issued an omnibus order resolving both the motion for
reconsideration in the second case and the motion to dismiss in the
third case. The trial court denied the motion for reconsideration and
the motion to dismiss, holding that the dismissal of the second case
was without prejudice and, hence, would not bar the filing of the
third case.
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
which upheld the dismissal of the second case.
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.
The
Court of Appeals rendered the decision 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. Upon
the denial of their motion for reconsideration, Ramon Ching and Po
Wing Properties filed this present petition for review under Rule 45
of the Rules of Civil Procedure.
ISSUES:
I.
Whether the trial court’s dismissal of the second case operated as
a bar to the filing of a third case, as per 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.
III.
Whether or not the third case be dismissed should the respondents
indeed committed forum shopping.
RULING:
I.
NO. 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. Dismissals upon the instance of the defendant are
generally governed by Rule 16, which covers motions to dismiss.
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 were filed 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.
The
purpose of the "two-dismissal rule" is "to avoid
vexatious litigation."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 on the ground of
lack of jurisdiction.
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, 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.
When
respondents filed the third case on substantially the same claim,
there was already one prior dismissal at the instance of the
plaintiffs and one prior dismissal at the instance of the defendants.
While
it is true that there were two previous dismissals on the same claim,
it does not necessarily follow that the re-filing of the claim was
barred by Rule 17, Section 1 of the Rules of Civil Procedure. The
circumstances surrounding each dismissal must first be examined to
determine before the rule may apply, as in this case. Thus, the trial
court's dismissal of the second case is not a bar to the filing of
the third case.
II.
YES. To
determine whether a party violated the rule against forum shopping,
the most important factor to ask is whether the elements of litis
pendentia are present, or whether a final judgment in one case will
amount to res judicata in 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.
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.
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 pendentia and res judicata.
The
requisites of litis pendentia are: (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 of which party is
successful, would amount to res judicata in the other.
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.
III.
NO.
The rule essentially penalizes the forum shopper by dismissing all
pending actions on the same claim filed in any court. However, 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 the Supreme Court
denied the petition.
G.R.
No. 175507,October 8, 2014
RAMON
CHING AND POWING PROPERTIES, INC., Petitioners,
vs. JOSEPH
CHENG, JAIME CHENG, MERCEDES IGNERespondents.
LEONEN,
The author takes no responsibility for the validity, correctness and result of this work. The information provided is not a legal advice and it should not be used as a substitute for a competent legal advice from a licensed lawyer. See the disclaimer
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