BA FINANCE CORPORATION, PETITIONER, VS. RUFINO CO, HIGHLINE MERCANTILE, INC., LUCITA VELOSO YAP, CLOVERLEAF SUPERMARKET, INC., SAN ANDRES COMMERCIAL AND COURT OF APPEALS, RESPON…

SEPARATE OPINION

REGALADO, J.:

I concur in the result, whereby the ponencia sustains the
order of the trial court dismissing herein petitioner’s complaint and
consequently barring private respondents from introducing evidence on their
compulsory counterclaim by reason of such dismissal, but only for this reason
stated therein, to wit:

“It may also be stressed that private respondents moved to set
for hearing the reception of evidence to support their counterclaim more than a
month after the case was dismissed, i.e., they filed their motion after the
lapse of thirty-three (33) days. By
then the order of dismissal had already become final. Thereafter, it was error for the appellate court to set it aside,
there being no ground to warrant it. Only error of judgment, not error of jurisdiction was involved.”

I take exception, however, to so much of the ratio­cinations
therein, although supportive of the same disposition, insofar as they are at
variance with the observations in this separate opinion which I hope may yield
some clarifications applicable to the present controversy.

Involved in this case are the issues on the propriety and effects
of the application of Sections 2 and 3, Rule 17 of the Rules of Court to
Section 2, Rule 20 which provides that “(a) party who fails to appear at a
pre-trial conference may be non-suited or considered as in default.” We
have heretofore held that the provisions of Section 3 of Rule 17, whereby a
plaintiff may be nonsuited and the dismissal of the complaint has the effect of
an adjudication upon the merits unless otherwise provided by the trial court,
shall have the same equivalent effect on a plainfiff who fails to appear at a
pre-trial conference.^[1] We
have perforce to now resolve whether Section 2 of Rule 17 is likewise
applicable to that plaintiff who is nonsuited for non-appearance at such
pre-trial conference.

For referential facility, the aforesaid provisions of Rule 17 are
hereunder reproduced, with pertinent emphases supplied:

“Sec. 2. Dismissal
by order of the court. – Except
as provided in the preceding section, an action shall not be dismissed at
the plaintiff’s instance save upon order of the court and upon such terms
and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service
upon him of the plaintiff’s motion to dismiss, the action shall
not be dismissed against the defendant’s objection unless the counterclaim can
remain pending for independent adjudication by the court. Unless otherwise specified in the order, a
dismissal under this paragraph shall be without prejudice.”

“Sec. 3. Failure to
prosecute. – If plaintiff fails to appear at the time of the
trial, or to prosecute his action for an unreasonable length of time, or to
comply with these rules or any order of the court, the action may be dismissed upon
motion of the defendant or upon the court’s own motion. This dismissal shall have the effect of
an adjudication upon the merits, unless otherwise provided by the
court.”

Also, the concept of nonsuit which we have adopted from American
procedural law^[2]
is that it is a term broadly applied to a variety of terminations of an action
which do not adjudicate issues on the merits.^[3] More specifically, it is the name of
a judgment given against plaintiff when he is unable to prove a case, or when
he refuses or neglects to proceed to trial and leaves the issue undetermined.^[4] In our jurisdiction, a declaration of
nonsuit necessarily involves the rendition of a final order or judgment which
terminates plaintiff’s cause of action or right of recovery under his complaint
which is thereby dismissed.

Turning back to Rule 17, it is readily apparent that Sections 2
and 3 thereof envisage different factual and adjective situations. The dismissal of the complaint under Section
2 is at the instance of plaintiff, for whatever reason he is minded to move for
such dismissal, and, as a matter
of procedure, is without
prejudice unless otherwise stated in the order of the court or, for that
matter, in plaintiff’s motion to dismiss his own complaint.^[5] By
reason thereof, to curb any dubious or frivolous strategy of plaintiff for his
benefit or to obviate possible prejudice to defendant, the former may not
dismiss his complaint over the defendant’s objection if the latter has a
compulsory counterclaim since said counterclaim would necessarily be divested
of juridical basis and defendant would be deprived of possible recovery thereon
in that same judicial proceeding.

Section 3, on the other
hand, contemplates a dismissal not procured by plaintiff, albeit justified by
causes imputable to him and which, in the present case, was petitioner’s
failure to appear at the pre-trial. This situation is also covered by Section 3, as extended by judicial
interpretation, and is ordered upon motion of defendant or motu proprio by the court. Here, the issue of whether defendant has a pending counterclaim,
permissive or compulsory, is not of determinative significance. The dismissal of plaintiff’s complaint is
evidently a confirmation of the failure of evidence to prove his cause of
action outlined therein, hence the dismissal is considered, as a matter of evidence, an
adjudication on the merits. This does
not, however, mean that there is likewise such absence of evidence to prove
defendant’s counterclaim although the same arises out of the subject matter of
the complaint which was merely terminated for lack of proof. To hold otherwise would not only work
injustice to defendant but would be reading a further provision into Section 3
and wresting a meaning therefrom although neither exists even by mere
implication. Thus understood, the
complaint can accordingly be dismissed, but relief can nevertheless be granted
as a matter of course to defendant on his counterclaim as alleged and proved,
with or without any reservation therefor on his part, unless from his conduct,
express or implied, he has virtually consented to the concomitant dismissal of
his counterclaim.

Thus, in Sta. Maria, Jr., et al. vs. Court of Appeals, et al.,^[6]
plaintiff having been declared nonsuited for his failure to appear at the
pre-trial, his complaint was dismissed without prejudice and the deputy clerk
of court was commissioned to receive defendant’s evidence on their compulsory
counterclaim. This action of the trial
court was later reconsidered and the case was reset for hearing but since
neither plaintiffs nor their counsel appeared despite due notice, they were
again nonsuited, the case was dismissed without prejudice, and plaintiffs were
declared in default on the counterclaim. Defendants adopted the evidence they had earlier presented and the trial
court rendered judgment on their counterclaim.

Plaintiffs therein raised virtually the same objections and
arguments as those which herein petitioner now relies upon to impugn the order
of the trial court. That case
eventually reached this Court which, speaking through Justice J.B.L. Reyes,
disposed of plaintiffs’ contentions in this wise:

“Also pointed out as error is the hearing of the counterclaim
after the plaintiffs were nonsuited, the argument being that the issues in the
counterclaim are so inseparable with those in the complaint that the former may
not be heard unless the latter is also heard. Petitioners misapply the doctrine; first, because in the instant case,
the adjudication of the counterclaim does not depend upon the adjudication of
the claims made in the complaint, since they were virtually abandoned by the
non-appearance of the plaintiffs themselves; and, second, the doctrine invoked
is not available to plaintiffs like the petitioners, who prevent or delay the
hearing of their own claims and allegations.

“The doctrine that
the complaint may not be dismissed if the counterclaim cannot be independently
adjudicated is not available to, and was not intended for the benefit of, a
plaintiff who prevents or delays the prosecution or hearing of his own
complaint. Otherwise, the
trial of counterclaims would be made to depend upon the maneuvers of the
plaintiff, and the rule would offer a premium to vexing or delaying tactics to
the prejudice of the counterclaimants. It is in the same spirit that we have ruled
that a complaint may not be withdrawn over the opposition of the defendant
where the counterclaim is one that arises from, or is necessarily connected
with, the plaintiff’s action and cannot remain pending for independent
adjudication [Ynotorio vs. Lira, L-16677, 27 November 1964].”
(Emphasis mine.)

The cases of Dalman
vs. The City Court of Dipolog, etc., et al.^[7] and International Container
Terminal Services, Inc. vs. Court of Appeals, et al.,^[8] relied upon in the main opinion, both
involved the application of the rule in Section 2, not Section 3, of Rule
17. In Dalman, the dismissal of the complaint was at the
instance of therein plaintiff, which dismissal was ordered by the trial court
despite defendant’s compulsory counterclaim therein since, as noted by this
Court on appeal, defendant did not object to such dismissal hence her
counterclaim was also dismissed. In
International Container Terminal Services, Inc., the complaint of private respondent Sharp, Inc. in the court a
quo was dismissed and petitioner
itself, as defendant therein, joined in moving for such dismissal which
likewise resulted in the dismissal of its compulsory counterclaim. In effect, petitioner consented to or, at
least, did not object to the dismissal of its counterclaim for, as stated by
the Court, “(i)f it wanted the counterclaim to subsist, it should have
objected to the dismissal of the complaint or at least reserved its right to prosecute
it, x x x” which it could have done by invoking the provisions of Section
2, Rule 17. As earlier explained, a
different procedure obtains under Section 3 of said Rule which is the provision
applicable to the case at bar.

All told, my concurrence in the dispositive portion of the
judgment in this case is founded only upon the fact that the assailed order of
the trial court was already final and executory, hence petitioner’s present
recourse is indisputably time-barred. However, it is my respectful submission that in determining whether or
not the dismissal of a complaint ipso
jure results in the
dismissal likewise of a compulsory counterclaim thereto, the distinctions
between the situations contemplated in and provided for by Sections 2 and 3 of Rule
17 should be observed, with the
difference in effects as explained
in the foregoing disquisition. Otherwise, we may be indulging in judicial legislation although,
ironically, it is within the power of the Court itself to change or revise the
aforesaid provisions should the same be considered inadequate to meet its
normative perceptions of what the rules should be.

^[1]
Arcuino, et al. vs. Aparis, et al., 22 SCRA 407 (1968); Geralde, et al. vs.
Sabido, etc., et al., 115 SCRA 839 (1982).

^[2]
See Black’s Law Dictionary, 4th Edition (1951), 1208.

^[3]
McColgan vs. Jones, Hubbard & Donnel, 11 Cal. 2d 243, 78 P. 2d 1010,
1011.

^[4]
Carolina Transportation & Distributing Co. vs. American
Alliance Ins. Co., 214 N.C. 596, 200 S.E. 411, 413.

^[5]
See Vergara, et al. vs. Ocumen, et al., 114 SCRA 446 (1982).

^[6]
45 SCRA 596 (1972).

^[7]
134 SCRA 243 (1985).

^[8]
G.R. No. 90530, October 7, 1992.