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.