Heirs of Bartolome J. Sanchez vs. Abrantes

A dismissal upon the plaintiff's own motion under Section 2, Rule 17 of the Rules of Court is without prejudice and does not amount to an adjudication on the merits unless the court expressly declares otherwise; it therefore cannot bar a subsequent action on the ground of res judicata. Because such a dismissal is final, no pending action remains to support litis pendentia.

The dispute concerns a registered parcel of land in Poblacion, Municipality of Butuan, Province of Agusan del Norte. Horacio C. Abrantes and Bartolome J. Sanchez, Jr. were the original parties in a prior action over that property; after Horacio's death, his heirs (respondents) and Bartolome's heirs (petitioners) became the parties in the subsequent complaints. The Rules of Court provide the procedural backdrop: Section 2 and Section 3 of Rule 17 distinguish dismissals upon the plaintiff's motion from dismissals due to the plaintiff's fault, while Section 16 of Rule 3 governs substitution upon the death of a party.

On March 19, 2002, Horacio C. Abrantes filed a complaint for Declaration of Nullity of Deed of Confirmation of Absolute Sale, Reconveyance, Liquidation, Damages, and Attorney's Fees against the heirs of Bartolome J. Sanchez, Jr. — Edna, Gary, David, and Ernesto Sanchez; Bernadette S. Tan; Christine S. Belanger; and Marissa S. Bensurto — before Branch 5, RTC, Butuan City. The action, docketed as Civil Case No. 5204, concerned a registered parcel of land in Poblacion, Municipality of Butuan, Province of Agusan del Norte. Bartolome's heirs moved to dismiss the complaint, but before Branch 5 could resolve the motion, Horacio died on April 27, 2003.

After Horacio's death, his counsel, Atty. Patrick Battad, moved to dismiss the First Complaint on the ground that Horacio's heirs were no longer interested in pursuing the case. On August 13, 2004, Branch 5 issued the First Dismissal Order, dismissing the case because the plaintiffs were no longer interested to pursue it. The order became final and executory on September 6, 2004, as recorded in an Entry of Judgment dated October 18, 2010.

More than four years after Horacio's death, his heirs — respondents Heldelita, Allen, Alberto, Arthur, and Maria Anita, all surnamed Abrantes — together with Mae Abrantes Rhoades and Maria Louella Abrantes Torres, filed a second complaint for Declaration of Nullity of Sale, Reconveyance, and Damages against petitioners before Branch 3, RTC, Butuan City. Docketed as Civil Case No. 5806, the Second Complaint pertained to the same disputed property. The two complaints involved the same subject matter, substantially the same parties, the same causes of action, and the same underlying objectives or reliefs sought: the nullification of the sale executed by the late Horacio in favor of Bartolome covering the disputed property.

Branch 3 dismissed the Second Complaint on October 20, 2014, on the ground of res judicata relative to the First Dismissal Order, reasoning that the dismissal for lack of interest to pursue the case was analogous to failure to prosecute under Section 3, Rule 17 and therefore an adjudication on the merits. On appeal, the Court of Appeals affirmed the dismissal but on the ground of litis pendentia, not res judicata. It characterized the First Dismissal Order as a patent nullity because Atty. Battad's basis for moving to dismiss was hearsay, he no longer had authority after Horacio's death, and he violated Section 16, Rule 3 by failing to give the names and addresses of Horacio's legal representatives; the Court of Appeals thus considered the First Complaint still pending and barring the Second Complaint.

• Res Judicata: Petitioners argued that the First Dismissal Order was an adjudication on the merits, i.e., failure to prosecute under Section 3, Rule 17, which barred the filing of the Second Complaint on the ground of res judicata.
• Validity of the First Dismissal Order: Petitioners maintained that the Court of Appeals committed reversible error in ruling that the First Dismissal Order was a nullity.
• Litis Pendentia: Petitioners maintained that the Court of Appeals gravely erred in dismissing the Second Complaint on the ground of litis pendentia.

• Validity of the First Dismissal Order: Whether the Court of Appeals committed reversible error in ruling that the First Dismissal Order was a nullity.
• Litis Pendentia: Whether the Court of Appeals gravely erred in dismissing the Second Complaint on the ground of litis pendentia.
• Res Judicata — Adjudication on the Merits: Whether the First Dismissal Order was an adjudication on the merits under Section 3, Rule 17, barring the Second Complaint under res judicata.
• Dismissal Without Prejudice: Whether the First Dismissal Order was one without prejudice under Section 2, Rule 17.

• Validity of the First Dismissal Order: Yes. The Court of Appeals erred in declaring the First Dismissal Order a patent nullity; the substitution rule is not jurisdictional but a due process requirement, and the alleged violation was personal to respondents, who did not assail the order and effectively ratified Atty. Battad's actions.
• Litis Pendentia: No. The First Dismissal Order was final, so no pending action existed to support litis pendentia; the Court of Appeals erred in treating the First Complaint as subsisting.
• Res Judicata — Adjudication on the Merits: No. The First Dismissal Order was not a dismissal for failure to prosecute under Section 3, Rule 17 and did not amount to an adjudication on the merits.
• Dismissal Without Prejudice: Yes. The First Dismissal Order was without prejudice because there was no express declaration to the contrary, and it did not bar refiling.

• Validity of the First Dismissal Order: The rule on substitution by the heirs in case of death of a party is not a matter of jurisdiction but a requirement of due process, designed to preserve the representation of the deceased party through his or her heirs or the duly appointed legal representative of the estate. Noncompliance may result in denial of the right to due process for heirs who, though not duly notified, would be substantially affected by the decision. However, the right may be invoked only by the heirs whose rights have been violated, because the violation is personal to the party asserting the defense. Although Atty. Battad's unauthorized motion after Horacio's death may have warranted nullification of the First Dismissal Order, respondents did not assail the order. Instead, after gaining knowledge of it, they retained Atty. Battad as counsel in filing the Second Complaint, which amounted to implied ratification. The absence of formal substitution was immaterial because no due process right of respondents was violated; their inaction gave the dismissal validity and finality.

• Litis Pendentia: The requisites of litis pendentia are identity of parties or at least such as representing the same interests in both actions; identity of the rights asserted and relief prayed for, the relief being founded on the same facts; and identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other. Section 1(e), Rule 16 of the Rules of Court, which allows dismissal because there is another action pending between the same parties for the same cause, presupposes that two similar actions are simultaneously pending in two courts. Because the First Dismissal Order was a final disposition, there was no pending case to speak of as would constitute litis pendentia to the Second Complaint. The Court of Appeals therefore erred in treating the First Complaint before Branch 5 as subsisting and in barring the Second Complaint on that ground.

• Res Judicata — Adjudication on the Merits: The elements of res judicata are that the judgment sought to bar the new action must be final; the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; the disposition of the case must be a judgment on the merits; and there must be identity of parties, subject matter, and causes of action between the first and second actions. The second and fourth elements were present, but controversy lay in whether the First Dismissal Order was final and whether it was an adjudication on the merits. The First Dismissal Order was final. It was not, however, an adjudication on the merits. Section 3, Rule 17 governs dismissals due to the fault of the plaintiff such as failure to prosecute; the fundamental test for failure to prosecute contemplates want of due diligence attributable to the plaintiff in failing to proceed with reasonable promptitude, manifested by failure to appear at trial, failure to prosecute for an unreasonable length of time, or failure to comply with the Rules of Court or any order of the court. None of these instances attended. Atty. Battad's claim that Horacio's heirs were no longer interested in pursuing the case was based entirely on hearsay; the dismissal was sought not by defendant petitioners but by Atty. Battad, counsel for plaintiff Horacio; and the RTC made no declaration against respondents' supposed lack of diligence. Not being a dismissal under Section 3, Rule 17, the First Dismissal Order did not amount to an adjudication on the merits as would bar the Second Complaint.

• Dismissal Without Prejudice: The First Dismissal Order was one without prejudice because there was no express declaration to the contrary. Under Section 2, Rule 17 of the Rules of Court, a dismissal upon motion of the plaintiff is without prejudice unless otherwise specified in the order. It therefore did not bar the refiling of the action. In fine, the First Dismissal Order was valid and final, so there was no pending action to constitute litis pendentia; but it was not an adjudication on the merits and was without prejudice, thus negating the applicability of res judicata.

• Res judicata — A final judgment on the merits rendered by a court with jurisdiction over the subject matter and the parties bars a subsequent action involving identity of parties, subject matter, and causes of action. Its elements are: (1) the judgment sought to bar the new action must be final; (2) the decision must have been rendered by a court having jurisdiction over the subject matter and the parties; (3) the disposition of the case must be a judgment on the merits; and (4) there must be identity of parties, subject matter, and causes of action between the first and second actions. In this case, although the First Dismissal Order was final and the parties, subject matter, and causes of action were substantially identical, the dismissal was not on the merits, so res judicata did not bar the Second Complaint.

• Litis pendentia — The requisites are: (a) identity of parties, or at least such as representing the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other. The ground presupposes that two similar actions are simultaneously pending in two courts. Here, because the First Dismissal Order had become final, the First Complaint was no longer pending; hence, litis pendentia did not exist.

• Substitution upon death of a party — Under Section 16, Rule 3 of the Rules of Court, whenever a party to a pending action dies and the claim is not extinguished, counsel must inform the court within thirty days of the death and give the name and address of the legal representative or representatives. The rule is not jurisdictional but a requirement of due process, designed to preserve the representation of the deceased party through his or her heirs or the duly appointed legal representative of the estate. Noncompliance may result in denial of due process for affected heirs. In this case, the Court held that the alleged violation was personal to respondents, who did not assail the First Dismissal Order and effectively ratified Atty. Battad's actions, so the order was not a patent nullity.

• Dismissal due to fault of plaintiff under Section 3, Rule 17 — If, for no justifiable cause, the plaintiff fails to appear on the date of presentation of evidence in chief, fails to prosecute the action for an unreasonable length of time, or fails to comply with the Rules of Court or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion. Such dismissal has the effect of an adjudication on the merits unless otherwise declared by the court. The fundamental test for failure to prosecute is want of due diligence attributable to the plaintiff. The First Dismissal Order did not fall under any of these instances, so it was not an adjudication on the merits.

• Dismissal upon motion of plaintiff under Section 2, Rule 17 — Except as provided in Section 3, 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. Unless otherwise specified in the order, a dismissal under this paragraph is without prejudice. The First Dismissal Order was issued upon the plaintiff's counsel's motion and contained no express declaration to the contrary; it was therefore without prejudice and did not bar refiling.

• Due process violation as personal and waivable — The right to due process may be invoked only by the party whose rights have been violated, and the violation is personal to that party. It may be waived or ratified. Respondents did not challenge the First Dismissal Order and retained Atty. Battad as counsel in filing the Second Complaint, so no due process violation could be asserted to nullify the dismissal.

• "The rule on substitution by the heirs in case of death of a party is not a matter of jurisdiction, but a requirement of due process." — This states the Court's characterization of the substitution rule, framing the validity analysis of the First Dismissal Order.
• "The violation of due process being personal to the party asserting the defense, the CA, in this case, erred in declaring the First Dismissal Order a patent nullity sans any adverse action by respondents against it." — This is the ratio for rejecting the Court of Appeals' nullity ruling.
• "The First Dismissal Order being a final disposition, the CA erred in treating the First Complaint before the RTC Branch 5 as subsisting, as would bar the filing of the Second Complaint on the ground of litis pendentia." — This states the ratio for rejecting litis pendentia.
• "Not being a dismissal under Section 3, Rule 17, the First Dismissal Order did not amount to an adjudication on the merits, as would bar the filing of the Second Complaint." — This states the ratio for rejecting res judicata.

• Villarica Pawnshop, Inc. vs. Gernale, 601 Phil. 66, 78 (2009) — Cited for the requisites of litis pendentia.
• Republic vs. Court of Appeals, 381 Phil. 558 (2000) — Cited for the elements of res judicata.
• Spouses De la Cruz vs. Joaquin, 502 Phil. 803, 811 (2005) — Cited for the rule that substitution upon death is not jurisdictional but a requirement of due process.
• Heirs of Bertuldo Hinog vs. Melicor, 495 Phil. 422, 438-439 (2005) — Cited for the purpose of substitution: preserving the deceased party's representation through heirs or legal representative.
• Vda. de Salazar vs. Court of Appeals, 320 Phil. 373, 378 (1995) — Cited for the consequence that noncompliance with substitution results in denial of due process for affected heirs.
• Carandang vs. Heirs of Quirino A. De Guzman, 538 Phil. 319 (2006) — Cited for the principle that a due process violation is personal to the party asserting it.
• Ching vs. Cheng, 745 Phil. 93 (2014) — Cited for the rule that Section 1(e), Rule 16 presupposes two similar actions simultaneously pending.
• Producers Bank of the Philippines vs. Court of Appeals, 396 Phil. 497, 505-506 (2000), citing Perez vs. Perez, 165 Phil. 500 (1976) — Cited for the fundamental test for failure to prosecute.
• De Knecht vs. CA, 352 Phil. 833, 849 (1998) — Cited for the instances manifesting unwillingness to prosecute.

• Section 3, Rule 17, Rules of Court — Dismissal due to fault of plaintiff; if the plaintiff fails to appear, prosecute the action for an unreasonable length of time, or comply with the Rules or any order of the court, the complaint may be dismissed, and the dismissal has the effect of an adjudication on the merits unless otherwise declared. Applied: the First Dismissal Order did not fall under any of these instances, so it was not an adjudication on the merits.
• Section 2, Rule 17, Rules of Court — Dismissal upon motion of plaintiff; a complaint shall not be dismissed at the plaintiff's instance except upon approval of the court and upon such terms and conditions as the court deems proper; unless otherwise specified in the order, the dismissal is without prejudice. Applied: the First Dismissal Order was upon the plaintiff's counsel's motion and without a contrary declaration, so it was without prejudice.
• Section 16, Rule 3, Rules of Court — Death of party; duty of counsel to inform the court within thirty days after the death and to give the name and address of the legal representative or representatives; failure is a ground for disciplinary action. Applied: the Court of Appeals cited its violation, but the Supreme Court held that noncompliance is not jurisdictional and that the due process violation is personal and waivable.
• Section 1(e), Rule 16, Rules of Court — Motion to dismiss on the ground that there is another action pending between the same parties for the same cause; this presupposes that two similar actions are simultaneously pending in two courts. Applied: no litis pendentia existed because the First Dismissal Order had become final.

Perlas-Bernabe, S.A.J. (Chairperson), Hernando, Gaerlan, and Rosario, JJ., concurred. Rosario, J., was designated as an additional member per Special Order No. 2835 dated July 15, 2021.