EMERENCIANA D. MEDINA, PLAINTIFF-APPELLANT, VS. ALMA D. MALAPAJO, DEFENDANT-APPELLEE.

Medina versus Malapajo

The Case

This is the case of Medina versus Malapajo, an appeal brought by Emerenciana Medina against Alma Malapajo from an order of the Regional Trial Court of Roxas City dismissing her complaint for Declaration of Nullity of Foreclosure and Damages. The trial court dismissed on two grounds: that the action was barred by prior judgment, and that the plaintiff had committed forum shopping. The case matters to every bar candidate because the Supreme Court separates these two grounds with surgical precision. It holds that a dismissal upon the plaintiff's own motion, under the condition she herself attached, is not an adjudication on the merits and therefore cannot be res judicata. Yet it also holds that the same plaintiff, having failed to disclose that earlier dismissal in her certification against forum shopping, must still lose her case. The lesson is that a litigant may escape res judicata and still fall on the certification rule.

Procedural History

The story begins with a first complaint for Specific Performance and Damages, filed by Medina against Malapajo in the Regional Trial Court of Roxas City. No pre-trial was ever held because of repeated postponements at the plaintiff's instance. Medina then moved to archive the case for three months, praying that it be dismissed if no settlement or revival was made within that period. The court granted the motion. Five months later the court retrieved the case and set pre-trial. When pre-trial was called, only counsel for the defendant appeared. The trial court issued an order dismissing the first complaint, upon the defendant's motion, pursuant to the very condition the plaintiff had attached to her motion to archive.

Medina then filed a second complaint, this time for nullity of foreclosure and damages. Malapajo moved to dismiss on grounds of res judicata and forum shopping, and the trial court granted the motion, holding that the two cases shared one cause of action and that the plaintiff was guilty of forum shopping. Medina's motion for reconsideration was denied, and she appealed directly to the Supreme Court, assigning as errors the trial court's findings of identity of causes of action and of res judicata and forum shopping.

Facts

On the third of September 1998, Emerenciana Medina obtained a loan from Alma Malapajo, secured by a real estate mortgage over a parcel of land in Roxas City, covered by a transfer certificate of title. On the eighth of July 2002, Medina filed her first complaint for Specific Performance and Damages with Preliminary Injunction and Temporary Restraining Order, arising from that unpaid loan. The defendant answered, but no pre-trial was ever conducted because of the prolonged series of postponements at the plaintiff's instance.

On the twenty-third of October 2003, Medina moved to archive the case for three months so that she could consolidate her resources and forge an amicable settlement. In that motion she herself prayed that the case be dismissed if, after the period, no settlement or revival was made. The court granted the motion. Five months later, in March 2004, the court ordered the records retrieved and set pre-trial. On the first of June 2004, only counsel for the defendant appeared. The defendant moved for dismissal pursuant to the condition the plaintiff had attached, and the court granted the motion, dismissing the first complaint.

On the twenty-first of July 2004, Medina filed her second complaint, for nullity of foreclosure and damages, alleging that her outstanding obligation of 1,200,000 pesos as of the fourth of April 2003 was inaccurately computed, that the seven percent monthly interest and the penalties were unconscionable and excessive, and that the extrajudicial foreclosure conducted on the first of April 2003 was void. The defendant moved to dismiss on grounds of res judicata and forum shopping, pointing out that the certification against forum shopping in the second complaint failed to state the fact of the dismissal of the first complaint.

Issues

• Whether or not the dismissal of the first complaint for specific performance was a judgment on the merits, such that the second complaint for nullity of foreclosure is barred by res judicata.
• Whether or not the plaintiff committed forum shopping by failing to state in her certification against forum shopping the fact of the dismissal of the first complaint.

Applicable Provisions

Rule 17, Section 2 of the Rules of Court, as amended by the 1997 Rules of Civil Procedure, governs dismissal upon the plaintiff's own motion, and it provides:

Dismissal upon motion of plaintiff. Except as provided in the preceding section, 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 shall be without prejudice.

This is the decisive provision, because the first complaint was dismissed precisely upon the plaintiff's motion, and the order of dismissal specified no prejudice, so the dismissal operates without prejudice and cannot support res judicata.

Section 5 of Rule 7 of the Rules of Court requires the certification against forum shopping, and it provides:

Certification against forum shopping. The plaintiff or principal party shall certify under oath in the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn that the same or similar action or claim has been filed or is pending, he shall report that fact within five days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing.

This provision supplies the sanction that ultimately defeats the plaintiff, because her certification omitted the fact that her first complaint had already been dismissed.

Ruling

On the first issue, the Court held that res judicata did not apply, because not all of its requisites concurred. The Court enumerated them: the former judgment must be final; the court that rendered it had jurisdiction over the subject matter and the parties; it is a judgment on the merits; and there is between the first and second actions an identity of parties, subject matter, and cause of action. The Court acknowledged that the parties, subject matter, and causes of action were substantially the same. But the crucial inquiry was whether the order of the first of June 2004 was a judgment on the merits, and the Court held that it was not. The dismissal flowed from the plaintiff's own motion to archive, in which she prayed for dismissal if no settlement or revival was made within three months. Applying Rule 17, Section 2, the Court ruled that such a dismissal was not the result of an adjudication on the merits and was therefore without prejudice.

On the second issue, however, the Court ruled against the plaintiff. It took due notice that she failed to state, in her certification against forum shopping in the second complaint, the fact of the dismissal of the first complaint. The Court defined forum shopping as arising whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion, other than by appeal or certiorari, in another. It stressed that the requirements of the certification have become so defined and basic that non-compliance can hardly find justification. Quoting its earlier ruling in Melo versus Court of Appeals, the Court held:

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice, unless otherwise provided, upon motion and after hearing.

The Court thus concluded that the trial court correctly dismissed the second complaint, but that the ground should not be res judicata. The proper ground was solely the violation of the rule on forum shopping.

Doctrine

First, a dismissal upon the plaintiff's own motion, under Rule 17, Section 2, is not a judgment on the merits and is without prejudice unless the order specifies otherwise. Being without prejudice, it cannot serve as the basis of res judicata, even if the parties, subject matter, and causes of action are identical.

Second, the test for forum shopping is whether a final judgment in one case will amount to res judicata in the other. But the absence of res judicata does not save a plaintiff who has violated the certification rule.

Third, the certification against forum shopping must disclose any prior action involving the same issues, including one that has already been dismissed, and must state its status. Failure to comply is not curable by mere amendment and is a cause for dismissal without prejudice, upon motion and after hearing.

Disposition

The Supreme Court affirmed the dismissal of Medina's complaint, but modified the ground, holding that the dismissal rests not on res judicata but solely on the violation of the rule on forum shopping.

Remember This

Memorize this line: a dismissal upon the plaintiff's own motion is without prejudice and is not res judicata, yet the omission of that very dismissal from the certification against forum shopping is itself a ground for dismissal. Examiners use this case to test whether you can separate the requisites of res judicata from the independent sanction for a defective certification against forum shopping.