LIM TECK CHUAN, PETITIONER, VS. SERAFIN UY, RESPONDENT.

G.R. NO. 155701, March 11, 2015, REYES, J.

KEY DOCTRINE: The dismissal of the complaint does not necessarily result to the dismissal of the counterclaim.

A piece of land in Lapu lapu City Cebu known as Lot 5357 is owned and registered under
the name of Antonio Lim Tanhu married to Dy Ochay. The said lot was sold by Antonio to Spouses
Cabansag but the latter failed to transfer the title to their names. The Spouses Cabansag later sold the
lot to Serafin. The Spouses Cabansag tried to transfer the property in their names first in order to
transfer title to Serafin but the owners copy of TCT was lost. Serafin then filed a petition before
RTC praying for the issuance of new owners duplicate TCT in his name. Serafins petition was
granted but was recalled and nullified later on the ground that petitioner Chuan filed an Opposition
and/or Motion for Reconsideration with Manifestation for Special Appearance alleging that he is one
of the 6 legitimate descendants of Antonio and that the original owners copy of TCT was not lost
and has always been in his custody.

In the meantime, Henry Lim executed an Affidavit of Sole Adjudication/Settlement of

Estate of Antonio Lim Tanhu with Deed of Sale claiming that he is the only surviving heir of
Antonio and Lot 5357 was sold by Henry to Leopolda.

Serafin then filed a complaint for quieting of title and for the nullity of the affidavit of
adjudication and sale. Leopolda, filed her Answer with counterclaim and cross claim against Henry
asserting that she was a buyer in good faith and for value. Petitioner Chuan averred in his Answer
with counterclaim and cross claims against Leopolda and Henry that lot 5357 was never transferred
no encumbered to any person during Antonios life.

During the pre tiral conference, the parties agreed to the issue of whether or not defendants
Leopolda and Chuan have valid counterclaims against the plaintiff. The initial trial of the case was
reset and then Serafin and Leopolda submitted a Joint Motion to Dismiss where Leopolda has agreed
to waive her counterclaim for damages in the instant case; Serafin has secured already a certificate of
title to lot 5357 in his name and that whatever claim Chuan may have on said lot may be an
appropriate independent action.

Petitioner Chuan filed his Opposition praying for the denial of the Joint Motion to Dismiss
on the ground of bad faith and claiming that he has valid counterclaims against Serafin for moral and
exemplary damages including attorneys fees.

Serafin filed his Reply to petitioner Chuan and averred that by reason of the amicable
settlement between him and Leopolda, the latter waived and abandoned all rights to the lot. Ergo, as
far as Leopolda is concerned, her waiver egated all the legal consequences of Tax Declaration and
Henrys affidavit of self-adjudication. Since the same were the very documents that casrs clouds on
Serafins title, his main causes of action in the case at bench had become moot and academic as the
title to the said lot had been quieted.

The petitioner filed a Motion to Implead Indispensable parties (Spouses Cabansag) and
Supplemental Opposition to Joint Motion to Dismiss. RTC granted only the motion to dismiss and
ordered the case dismissed so with the respective counterclaims of the defendants.
 The Motion for Reconsideration of petitioner was denied so he filed a petition for review on
certiorari under Rule 45, faulting the RTC for dismissing the case in its entirety in spite of his
counterclaim and cross claim. He asserts that within 15days from notice of the filing of the joint
motion to dismiss, he filed his opposition thereto and expressed his preference to have his
counterclaim and cross claim be resolved in the same action. The court should have limited its
action to the dismissal of complaint.

ISSUE: Whether or not the dismissal of the complaint specifically upon motion of the plaintiff
under Sec. 2 of Rule 17 RoC also calls for the dismissal of the defendants counterclaim?

RULING: NO.

The RTC granted the Joint Motion to Dismiss upon the behest of Serafin, on the main
ground that the case had become moot and academic since his title to lot 5357 had been allegedly
quieted and the reliefs prayed for were obtained. The RTC interpreted that what is contemplated
under the Rules authorizing the hearing of defendants counterclaim is when the dismissal is not at
the instance of the plaintiff.

The RTC erred when it dismissed the case when the present rule state that the dismissal
shall be limited only to the complaint. A dismissal of an action is different from a mere
dismissal of the complaint. Since only the complaint and not the action is dismissed, the defendant
in spite of said dismissal may still prosecute his counterclaim in the same action.

In the Opposition to the Joint Motion to Dismiss, petitioner expressed his preference to
have his counterclaim and cross claim prosecuted in the same case. From the cases inception, the
petitioners interest and that of his siblings over the subject property were vigilantly defended as
evidenced by the numerous and exchange of pleadings made by the parties. It cannot therefore be
denied that the petitioner has certainly valid defenses and enforceable claims against the respondents
for being dragged into this case. Thus, petitioners manifestation of his preference to have his
counterclaim prosecuted in the same action is valid and in accordance with Sec. 2 Rule 17 or RoC.