October 01st, 2021

Blay vs Bana
[G.R. No. 232189, March 7, 2018]

Facts: 
Petitioner Alex Raul Blay filed before the Pasay City RTC a Petition for Declaration of Nullity of Marriage, on the grounds of his psychological incapacity pursuant to Article 36 of the Family Code. Respondent Cynthia B. Bana subsequently filed her Answer with Compulsory Counterclaim dated. 
Later, petitioner filed a Motion to Withdraw the complaint, and in her comment/opposition to the same, respondent invoked Section 2, Rule 17 of the Rules of Court, praying that her counterclaims be declared as remaining for the court's independent adjudication. Petitioner filed his reply, claiming that respondent's counterclaims are barred from being prosecuted in the same action due to her failure to file a manifestation therefor within fifteen (15) days from notice of the Motion to Withdraw; petitioner alleged that respondent had received the Motion on March 11, 2015, but only filed their opposition on March 30 or 19 days later. 
The RTC granted the Motion to Withdraw petition, and granted the respondent’s counterclaim "as remaining for independent adjudication," and later denied the petitioner’s filed motion for reconsideration against the decision to let the counterclaim remain. Petitioner then filed a petition for certiorari before the CA, which denied the said petition and subsequent motion for reconsideration. The CA ruled that it found no grave abuse of discretion on the part of the RTC, holding that under Section 2, Rule 17 of the Rules of Court, if a counterclaim has been filed by the defendant before the service upon him of the petitioner’s motion for dismissal, the dismissal shall be limited to the complaint. Hence the current petition before the SC.

Issue: 
Whether or not the CA erred in upholding the RTC Orders declaring respondent's counterclaim for independent adjudication before the same trial court.

Held: 
Yes. CA ruling reversed and set aside, new ruling entered solely granting petitioner’s Motion to Withdraw Petition for Declaration of Nullity of Marriage.
Under Section 2, Rule 17 of the Rules of Court “if a counterclaim has been pleaded by the defendant prior to the service upon him of the plaintiff's motion for the dismissal - as in this case - the rule is that the dismissal shall be limited to the complaint.” A dismissal of an action is different from a mere dismissal of the complaint. For this reason, since only the complaint and not the action is dismissed, the defendant inspite of said dismissal may still prosecute his counterclaim in the same action. However, the third sentence of Section 2, Rule 17, further adds that “if the defendant desires to prosecute his counterclaim in the same action, he is required to file a manifestation within fifteen (15) days from notice of the motion. Otherwise, his counterclaim may be prosecuted in a separate action” 

In the current case, the CA confined the application of Section 2, Rule 17 to the second sentence which states that "dismissal shall be limited to the complaint." However, the CA ignored the third sentence, require the defendant to manifest his preference to prosecute the counterclaim in the same action within 15 days from the notice of the motion.