**Facts:** The case involves two complaints related to a dispute over a parcel of land in Poblacion, Municipality of Butuan, Province of Agusan del Norte. The first complaint for Declaration of Nullity of Deed of Confirmation of Absolute Sale, Reconveyance, Liquidation, Damages, and Attorney’s Fees was filed by Horacio C. Abrantes against the heirs of Bartolome J. Sanchez, Jr. in 2002. However, after Horacio’s death in 2003, his heirs expressed disinterest in pursuing the case, leading to its dismissal in 2004. More than four years later, Horacio’s heirs filed a second complaint for Declaration of Nullity of Sale, Reconveyance, and Damages related to the same property against the heirs of Bartolome J. Sanchez, Jr., but this was dismissed by the RTC and CA on the grounds of res judicata and litis pendentia, respectively.
**Issues:**
1. Whether the CA erred in declaring the first dismissal order a nullity.
2. Whether dismissing the second complaint on the basis of litis pendentia was correct.
**Court’s Decision:**
The SC held that:
1. The CA erred in declaring the first dismissal order a nullity. The initial dismissal, due to the plaintiffs’ (Horacio’s heirs) lack of interest, was seen as final and executory, which means there was no pending case that could cause litis pendentia for the second complaint.
2. The first dismissal order, being final, was not an adjudication on the merits since it did not proceed from any of the conditions that characterize a “failure to prosecute” due to fault of the plaintiff. Therefore, the second complaint is not barred by res judicata.
The decision and resolution of the CA were set aside, and the second complaint was reinstated and remanded to the RTC for continuation of proceedings.
**Doctrine:** This case clarifies the application of the concepts of litis pendentia and res judicata, specifically in the context of the finality and effects of dismissal orders. It reiterates that a dismissal due to the plaintiff’s lack of interest to pursue the case does not equate to a failure to prosecute and that such dismissal, unless stated otherwise, is without prejudice and does not act as an adjudication on the merits.
**Class Notes:**
1. **Litis Pendentia** requires identity of parties, rights asserted, relief prayed for, and such identity in the two cases that judgment in one would amount to res judicata in the other.
2. **Res Judicata** necessitates that the judgment in the previous action be final, rendered by a court having jurisdiction, be a judgment on the merits, and there is between the first and second action identity of parties, subject matter, and causes of action.
3. **Dismissal due to fault of the plaintiff (Section 3, Rule 17, Rules of Court)**: Indicates that if a plaintiff fails to appear, prosecute the action within a reasonable length of time, or comply with rules or orders of the court, the complaint may be dismissed with such dismissal having the effect of an adjudication upon the merits, unless otherwise specified by the court.
4. **Rule on Substitution (Section 16, Rule 3, Rules of Court):** Upon the death of a party, the duty of the counsel is to inform the court and give the names and addresses of the legal representatives. Failure to follow this procedure does not automatically nullify the proceedings but may constitute a denial of due process if the heirs’ rights are affected.
**Historical Background:** This case underscores the importance of formal procedures in legal representation and case dismissal, as well as the principles protecting litigants’ rights in the event of a party’s death. It demonstrates how procedural missteps (such as failing to formally substitute heirs after a party’s death) can significantly impact the trajectory and outcome of legal disputes over property ownership.
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