Air Ads v. Tagum Agricultural Development
REITERATIONFacts
The Antecedents: Civil Case No. 27802-2000 was an action for damages filed by Elva O. Pormento against Tagum Agricultural Development Corporation (TADECO) and Edwin Yap. TADECO, as defendant, filed an answer with counterclaims and a third-party complaint impleading Air Ads, Inc. and Pioneer Insurance and Surety Corporation (Pioneer) as third-party defendants. TADECO's counsel, ACCRA Law Office, later filed a notice of dismissal without prejudice of the third-party complaint only against Pioneer. TADECO, through new counsel Dominguez Law Office, filed a motion to withdraw this notice, alleging it was made without consent. The RTC initially granted the notice of dismissal but later granted the motion to withdraw, setting aside the dismissal of the third-party complaint against Pioneer. Dominguez Law Office then filed a substitute third-party complaint, which contained allegations pertaining only to Pioneer. Procedural History: Air Ads filed a motion to dismiss the third-party complaint, arguing it was dropped as a defendant. The RTC denied this motion, stating the notice of dismissal was only against Pioneer and Air Ads remained a third-party defendant. Air Ads' motion for reconsideration was also denied. Air Ads filed a petition for certiorari and prohibition (C.A.-G.R. SP No. 73418) in the Court of Appeals (CA), which was dismissed for failure to attach a board resolution authorizing the signatory for the verification and certification against forum shopping. Air Ads filed a new petition (C.A.-G.R. SP No. 74152) with the proper board certificate. While this second petition was pending, the first petition became final. The CA dismissed the second petition, holding that the third-party complaint against Air Ads was never dismissed and TADECO's new counsel's actions did not affect Air Ads' status. Air Ads' motion for reconsideration was denied. Air Ads then filed a petition for review on certiorari with the Supreme Court. The Petition: Air Ads argued that the filing of the substitute third-party complaint had the effect of dropping it as a defendant and that the substitute complaint superseded the original. TADECO countered that the second petition constituted forum shopping and was barred by res judicata, and that Air Ads remained a third-party defendant.
Issue(s)
Whether the filing of a second petition for certiorari and prohibition after the dismissal of the first petition on grounds of defective verification and certification against forum shopping constitutes forum shopping or is barred by res judicata. Whether a substitute third-party complaint has the effect of superseding the original third-party complaint, thereby dropping a party not included in the substitute complaint.
Ruling
The petition for review on certiorari is denied. The resolutions of the Court of Appeals dated February 24, 2003 and November 13, 2003 are affirmed.
Ratio Decidendi
On the issue of forum shopping and res judicata: The Supreme Court held that the refiling of the petition for certiorari and prohibition did not constitute forum shopping or was not barred by res judicata. The Court emphasized that the first petition was dismissed due to a defective verification and certification against forum shopping. According to Section 5, Rule 7 of the Rules of Court, such a dismissal is 'without prejudice' unless otherwise provided. Therefore, Air Ads was not precluded from filing a second petition to rectify the defect. The Court distinguished the present case from Denoso v. Court of Appeals, where the dismissal was considered an adjudication on the merits due to the failure to comply with rules that explicitly stated such consequence. In this case, the dismissal was explicitly without prejudice, allowing for refiling. The Court cited Heirs of Juan Valdez v. Court of Appeals to support the principle that a dismissal without prejudice does not bar a refiled petition. On the issue of the substitute third-party complaint superseding the original: The Supreme Court ruled that the substitute third-party complaint did not supersede the original third-party complaint, and Air Ads remained a third-party defendant. The Court noted that the original third-party complaint impleaded both Air Ads and Pioneer. The subsequent notice of dismissal was expressly limited to Pioneer. The RTC's order granting the motion to withdraw the dismissal and admitting the substitute third-party complaint also pertained specifically to Pioneer. Therefore, the substitute third-party complaint, which only contained allegations against Pioneer, merely replaced the third-party complaint against Pioneer and did not affect the original third-party complaint against Air Ads. The Court clarified that while an amended pleading supersedes the pleading it amends under Rule 10, Section 8, the substitution here was not an amendment of an existing pleading but a replacement of a specific part of the original complaint that had been dismissed and then revived only with respect to one party. The allegations in the substitute complaint were limited to Pioneer because the new counsel represented TADECO only in the third-party complaint against Pioneer.
Main Doctrine
A dismissal of a petition for certiorari and prohibition due to defective verification and certification against forum shopping, when not qualified as 'with prejudice,' is considered a dismissal without prejudice, allowing the refiling of a similar petition. A substitute third-party complaint does not automatically supersede the original third-party complaint if the substitution was specifically limited in scope and did not explicitly withdraw or dismiss the original complaint against all parties.