NATIONAL COCONUT CORPORATION, PLAINTIFF AND APPELLEE, VS. MAXIMO M. KALAW ET AL., DEFENDANTS; MAXIMO M. KALAW, DEFENDANT AND APPELLANT.

On February 3, 1949, the plaintiff, National Coconut Corporation,
hereinafter to be referred to as NACOCO, filed an action in the Court
of First Instance of Manila against the defendants, Maximo M. Kaiaw,
Juan Bocar, Casimiro Garcia and Leonor Moll, civil case No. 7312. The
complaint alleges that defendant Kalaw, as General Manager and Chairman
of the Board of Directors of NACOCO, entered on behalf of said
corporation into the following contracts:

(a) July 30, 1947—contract for the sale of
2,000 long tons of copra to Alexander Adamson & Co., at the price
at $167 per ton, f.o.b., to be delivered during the months of August
and September, 1947;

(b) September 5, 1947—contract
for the sale of 1,000 long tons of copra to Spencer, Kellog & Sons
at the price of $160 per ton, c.i.f., Los Angeles, U. S. A. to be
delivered during November, 1947 from the Philippines;

(c)
September 9, 1947—contract for the sale of 1,500 long tons of copra to
Franklin Baker Division of General Foods Corporation, at the price of
$164 per long ton, c.i.f., New York, to be shipped during November,
1947;

(d) September 12, 1947—contract for the sale
of 3,000 tons of copra to Louis Dreyfus & Co. (Overseas) Ltd. at
the price of $154 per ton, f.o.b. three Philippine ports, to be
delivered during the month of November, 1947;

(e) On
October 27, 1947, he executed a contract for the sale of 1,000 tons of
copra to Fairwood Company at the price of P210 per short ton, c.i.f.
Pacific ports, to be delivered in the months of December, 1947 and
January, 1948;

(f) On October 28, 1947, he executed
a contract for the sale of 1,000 tons of copra to Fairwood Company at
the price of $210 per short ton, c.i.f. Pacific ports, to be delivered
in January, 1948;

(g) On September 13, 1947, he
executed a contract for the sale of 2,000 tons of copra to Juan
Cojuangco at the price of $175 per ton to be delivered in the months of
November and December, 1947; this contract was also assigned by Juan
Cojuangco to the Pacific Vegetable Oil Co.;

(h) He
also executed a contract with the Pacific Vegetable Oil Co. for the
sale of 3,000 tons at the price of $137.50 per ton to be delivered in
September, 1947.

The complaint also avers that the foregoing contracts were executed
by defendant Kalaw without the authority of NACOCO’s Board of Directors
contrary to the charter and by-laws of the corporation and to the
directives of President Roxas that it should not speculate; that at the
time of the execution of said contracts defendant Kalaw knew that
NACOCO had neither the necessary copra nor the money with which to
purchase the same in the open market; that the other defendants, as
members of NACOCO’s Board of Directors, ratified the aforesaid
contracts, with full knowledge that damage would thereby result to the
corporation; that as a consequence NACOCO suffered damages recovered
from the defendants herein.

On February 28, 1949, summons was served on defendant Kalaw, but
before he could file a responsive pleading, NACOCO filed a motion
praying that it be allowed to amend the complaint by excluding
therefrom the following claims:

“(a) Claim for the amount of P270,028 which
represents the damage sustained by the plaintiff as a result of the
unauthorized contract which had been entered into by the defendant
Maximo M. Kalaw on behalf of the NACOCO on July 30, 1947 for the sale
of 2,000 long tons of copra to Alexander Adamson & Co., which
contract was later on assigned to Louis Dreyfus & Co. (Overseas)
Ltd.

“(b) Claim for the amount of P447,908.40 which
represents the damage sustained by the plaintiff as a result of the
unauthorized contract which had been entered into by the defendant
Maximo M. M. Kalaw on behalf of the NACOCO for the sale of 3,000 long
tons of copra to Louis Dreyfus & Co. (Overseas) Ltd.”

This motion to amend was grounded on the allegation that the amount
of plaintiff’s claim under the two contracts was still undetermined and
that an amicable settlement between NACOCO and Louis Dreyfus & Co.
(Overseas) Ltd. was possible. The plaintiff expressly alleged that it
reserved the right to institute a separate action against the
defendants as to said claims. The court granted the motion to amend, at
the bottom of which counsel for defendant Kalaw indeed wrote the
following:

“Defendant Maximo M. Kalaw offers no objection to the admission of the amended complaint.

	“(Sgd.) AMELITO M. MUTUC
	“Counsel for defendant Maximo M. Kalaw”

On February 1, 1951, NACOCO filed a complaint in the Court of First
Instance of Manila against the same defendant (civil case No. 13184),
seeking to recover the very-claims excluded from the original complaint
in civil case No. 7312. On March 3, 1951, defendant Kalaw filed in
civil case No. 13184 a motion to dismiss the complaint, alleging that
there was another action pending between the same parties and for the
same cause, and that the plaintiff had split its cause of action in
civil case No. 7312, to which NACOCO filed an opposition. Pending the
resolution on this motion to dismiss, NACOCO filed a third amended
complaint in civil case No. 7312, the amendment being the inclusion of
plaintiff’s claim dealing with the contracts with Louis Dreyfus &
Co. (Overseas) Ltd. which, it is noteworthy, is involved in civil case
No. 13184 and which was excluded from the original complaint in civil
case No. 7312. The court allowed this amendment “to the end that the
real matter in dispute and all matters in the action in dispute between
the parties may, as far as possible, be completely determined in a
single proceeding.”

On October 2, 1951, NACOCO filed a motion to dismiss civil case No.
13184, without prejudice to the prosecution of plaintiff’s claim in
civil case No. 7312, on the ground that plaintiff’s claim against the
defendants involved in the former, was already reinstated in civil case
No. 7312. Notwithstanding the opposition interposed by defendant Kalaw,
the Court of First Instance of Manila, on October 15, 1951, dismissed
civil case No. 13184 “without prejudice to the action of the same
plaintiff against the same defendants as instituted in civil case No.
7312 also of this court.” Defendant Kalaw has appealed, insofar as the
dismissal was made without prejudice. No appeal was taken by the other
defendants.

Appellant’s main contention is that the court a quo erred in
qualifying the order of dismissal in civil case No. 13184, because,
under section 1, Rule 30, of the Rules of Court, a dismissal operates
as an adjudication upon the merits when obtained by a plaintiff who has
once dismissed in a competent court an action based on or including the
same claim. Specifically, appellant argues that the claim with respect
to the contracts of Louis Dreyfus & Co. (Overseas) Ltd. was in
effect already dismissed when it was excluded by the filing of the
plaintiff’s first motion to amend in civil case No. 7312, which was
allowed by the lower court; and the dismissal sought by the plaintiff
and granted by the lower court in civil case No. 13184 cannot be made
without prejudice, because, by operation of section 1 of Rule 30, said
dismissal should be an adjudication upon the merits, the purpose being
to avoid vexatious litigation. Counsel for appellant had presented the
latter’s case lengthily and comprehensively, and such display of
industry is commendable.

Section 1, Rule 30, of the Rules of Court, invoked by appellant, reads as follows: “Dismissal by the plaintiff.—
An action may be dismissed by the plaintiff without order of court by
filing a notice of dismissal at any time before service of the answer.
Unless otherwise stated in the notice, the dismissal is without
prejudice, except that a notice operates as an adjudication upon the
merits when filed by a plaintiff who has once dismissed in a competent
court an action based on or including the same claim.”

It is unnecessary to refute in detail the various arguments adduced
by appellant’s counsel or to comment on the authorities cited in
support thereof. Suffice it to say that, in our opinion, the situation
under advisement does not come within the purview of the reglementary
provision. Section 1 contemplates a case wherein a first action was
dismissed finally, followed by the dismissal of a second action based
on or including the claim covered by the first action. The rule does
not apply to a situation where, as in the case before us, the first
action (civil case No. 7312) is still pending, and the claim involved
in second action (civil case No. 13184) was merely reinstated in the
pending first action (civil case No. 7312). It is to be recalled that
the re-inclusion of the claim dismissed in civil case No. 13184 was
effected merely by amending the complaint in civil case No. 7312; and
we are not now called upon to decide whether the allowance by the trial
court of the third amended complaint in civil case No. 7312 was
appropriate.

Wherefore, the appealed order is affirmed and it is so ordered with costs against appellant Maximo M. Kalaw.

Pablo, Bengzon, Padilla, Montemayor, Reyes, and Labrador, JJ., concur.