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Pinga vs.

Heirs of German Santiago


Facts:
In 1998, the Heirs of Santiago filed a complaint for injunction against Pinga (Eduardo) and
Saavedra, seeking to enjoin the latter from committing acts of depredation on their
properties.
Pinga and Saavedra filed their Amended Answer with Counterclaim, alleging that Pinga's
father (Edmundo) had been in possession of such properties since the 1930s, that the
Santiagos were previosusly ordered ejected from the properties after a complaint for
forcible entry filed by the Heirs of Pinga's father, and that owing to the Santiagos' forcible
re-entry and the irresponsible and reckless filing of the case, they should be awarded
damages instead.
By 2005, the Santiagos failed to present their evidence upon motion by Pinga and
Saavedra, the RTC dismissed the complaint for failure to prosecute. The RTC also allowed
Pinga and Saavedra to present their evidence ex parte.
Santiagos filed a Motion for Reconsideration, praying that the entire action, including the
counterclaim, be dismissed and that Pinga and Saavedra be disallowed to present their
evidence ex parte. Citing jurisprudence, they claimed that compulsory counterclaims
cannot be adjudicated independently of plaintiff's cause of action, therefore, the dismissal
of the complaint complaint carries with it that of the compulsory counterclaim.
RTC granted the Santiagos' Motion for Reconsideration and dismissed the counterclaim
on the ground that there was no opposition to the MOR .
The matter was elevated directly to the SC by way of Petition for Review under Rule 45 on
a pure question of law.
Issue
Whether the dismissal of the complaint carries with it the dimissal of the compulsory
counterclaim.
Held:
No. The Court said that the former jurisprudential rule can no longer stand in light of the
change introduced in Sec. 3, Rule 17 of the 1997 Rules of Civil Procedure which contains
an explicit proviso that if the complaint is dismissed due to the fault of the plaintiff, such
dismissal is WITHOUT PREJUDICE TO THE RIGHT OF THE DEFENDANT TO
PROSECUTE HIS COUNTERCLAIM IN THE SAME OR IN A SEPARATE ACTION.
In a compulsory counterclaim, the fact that the culpable acts on which it is based are
founded withing the same transaction or occurrence as the complaint, is insufficient
causation to negate the counterclaim together with the complaint. While the dismissal or
withdrawal precludes the pursuit of litigation, either through his own initiative or fault, it
would be unfair to similarly encumber the defendant who did not maintain such initiative
or fault. If the defendant similarly moves or the dismissal of the counterclaim or neglects
to timely pursue such action, the dismissal of the counterclaim should be premised on
such grounds imputable to the defendants and not on the actuations of the plaintiff.
If the RTC were to dismiss the counterclaim, it should be on the merits of such
counterclaim and not because of the survival of the complaint.