Ponciano v. Parentela
REITERATIONFacts
1. The Antecedents: Private respondents filed a complaint for a sum of money and damages against petitioners for unpaid labor and materials for house repairs. Petitioners countered that they had paid the full contract price, but the work was defective and abandoned before completion, seeking P250,000 for completion and damages. 2. Procedural History: The trial court initially denied petitioners' motion to dismiss. Subsequently, it struck off petitioners' compulsory counterclaim for failure to attach a certificate of non-forum shopping, a decision upheld by the Supreme Court in G.R. No. 127701. Petitioners then filed an amended answer with a certificate of non-forum shopping, which the trial court initially admitted but later expunged upon reconsideration, citing the Supreme Court's prior ruling. After the trial court denied their motion for reconsideration, petitioners filed the present special civil action for certiorari. 3. The Petition: Petitioners seek a writ of certiorari under Rule 65 of the 1997 Revised Rules of Civil Procedure, arguing that the trial court erred in expunging their amended compulsory counterclaim. They contend that the Supreme Court's prior decision in G.R. No. 127701 did not rule that the dismissal of their counterclaim was with prejudice, and therefore, they should be allowed to re-file it with the required certification of non-forum shopping, as compulsory counterclaims are not initiatory pleadings subject to Administrative Circular No. 04-94.
Issue(s)
Whether a compulsory counterclaim requires a certificate of non-forum shopping. Whether the dismissal of a compulsory counterclaim for failure to submit a certificate of non-forum shopping is a dismissal with prejudice.
Ruling
The Supreme Court set aside the trial court's orders denying the admission of the amended compulsory counterclaim and ordered the trial court to admit it. The Court ruled that a compulsory counterclaim does not require a certificate of non-forum shopping and its dismissal for non-compliance is not with prejudice.
Ratio Decidendi
On the requirement of a certificate of non-forum shopping for a compulsory counterclaim: The Court held that Administrative Circular No. 04-94, which requires a certificate of non-forum shopping, is intended to curb the malpractice of forum-shopping. The circular explicitly defines "initiatory pleadings" to include counterclaims, cross-claims, third-party complaints, etc., wherein a party asserts a claim for relief. However, the Court, in Santo Tomas University Hospital v. Surla, clarified that the circular was not contemplated to include claims that are auxiliary to the proceedings and derive their substantive and jurisdictional support therefrom, such as a compulsory counterclaim. A compulsory counterclaim is one that arises out of, or is necessarily connected with, the same transaction or occurrence that is the subject matter of the plaintiff's complaint and must be set up in the answer or be barred. The Court reiterated that the rationale of the circular, which is to prevent the filing of multiple actions based on the same cause, does not apply to compulsory counterclaims as they are already within the jurisdiction of the court where the main case is pending and cannot be independently set up. Therefore, petitioners were not required to file a certificate of non-forum shopping with their compulsory counterclaim. On whether the dismissal of a compulsory counterclaim for failure to submit a certificate of non-forum shopping is a dismissal with prejudice: The Court reasoned that since a compulsory counterclaim does not require a certificate of non-forum shopping, its dismissal for failure to submit one cannot be considered a dismissal with prejudice. The Supreme Court's previous denial of the petition for certiorari in G.R. No. 127701 was based on the premise that the circular applied, but this Court, in the present case, clarified its own interpretation of the circular's applicability to compulsory counterclaims. The Court emphasized that the proviso in Section 5, Rule 8 of the 1997 Rules of Civil Procedure, stating that violations of the anti-forum shopping rule are not curable by amendment but shall be cause for dismissal without prejudice, is predicated on the applicability of the need for a certification against forum-shopping. Since this need does not extend to compulsory counterclaims, their dismissal for such a reason does not operate with prejudice, allowing for their re-filing once compliance with procedural rules is met.
Main Doctrine
A compulsory counterclaim, by its nature, is not an initiatory pleading and therefore does not require a certificate of non-forum shopping. Its dismissal for failure to submit such a certificate does not have the effect of a dismissal with prejudice.