G.R. No. 191874 - ROASTERS PHILIPPINES, INC., DOING BUSINESS UNDER THE NAME OF KENNY ROGERS ROASTERS, VS. GEORGE GAVIOLA, KARLA HELENE GAVIOLA, KASHMEER GEORGIA GAVIOLA, KLAIRE MARLEI GAVIOLA, AND DR. MARIA LEISA M. GAVIOLA.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, the RTC clearly erred when it ordered the dismissal of the counterclaim, since Section 3, Rule 17 mandates that the dismissal of the complaint is without prejudice to the right of the defendant to prosecute the counterclaim in the same or separate action. If the RTC were to dismiss the counterclaim, it should be on the merits of such counterclaim. Reversal of the RTC is in order, and a remand is necessary for trial on the merits of the counterclaim. x x x x The formalistic distinction between a complaint and a counterclaim does not detract from the fact that both of them embody causes of action that have in their end the vindication of rights. While the distinction is necessary as a means to facilitate order and clarity in the rules of procedure, it should be remembered that the primordial purpose of procedural rules is to provide the means for the vindication of rights. A party with a valid cause of action against another party cannot be denied the right to relief simply because the opposing side had the good fortune of filing the case first. Yet this in effect was what had happened under the previous procedural rule and correspondent doctrine, which under their final permutation, prescribed the automatic dismissal of the compulsory counterclaim upon the dismissal of the complaint, whether upon the initiative of the plaintiff or of the defendant. Thus, the present rule embodied in Sections 2 and 3 of Rule 17 ordains a more equitable disposition of the counterclaims by ensuring that any judgment thereon is based on the merit of the counterclaim itself and not on the survival of the main complaint. Certainly, if the counterclaim is palpably without merit or suffers jurisdictional flaws which stand independent of the complaint, the trial court is not precluded from dismissing it under the amended rules, provided that the judgment or order dismissing the counterclaim is premised on those defects. At the same time, if the counterclaim is justified, the amended rules now unequivocally protect such counterclaim from peremptory dismissal by reason of the dismissal of the complaint. [24] Having figured out the incorrectness of the reversal by the Court of Appeals of the dismissal order of the trial court, we must hasten to point out that the trial of the case must nonetheless proceed, not for the sake of the respondents who as we have seen failed to prosecute their complaint, but for the litigation of the counterclaim of the petitioner, in compliance with the Rule. WHEREFORE , the petition is GRANTED . The Decision and Resolution dated 11 December 2009 and 30 March 2010, respectively of the Court of Appeals in CA-G.R. SP No. 106728, are REVERSED and SET ASIDE . The Regional Trial Court of Las Piñas City, Branch 198 Orders dated 19 May 2008, 26 August 2008, 23 October 2008 and 18 November 2008 are REINSTATED . Trial on petitioner's counterclaim shall proceed. SO ORDERED.