2026 Remedial Law, Q8

Eliana, a resident of Quezon City, filed a Complaint for the collection of PHP 1.8 million against Ryan, a resident of Makati City, before the Regional Trial Court (RTC) of Quezon City, arising from an unpaid loan. Before Ryan filed an Answer or any motion for summary judgment, Eliana filed a notice of dismissal, without stating any reason. Several months later, Eliana refiled a complaint against Ryan before the RTC of Makati City, this time seeking PHP 2.3 million, representing the same unpaid
loan plus accrued interest and attorney’s fees. Again, before Ryan filed any responsive pleading, Eliana filed another notice of dismissal, stating that she wanted to give Ryan another chance to amicably settle the obligation. When no payment was made, Eliana filed a third complaint against Ryan, based on the same loan. Ryan moved to dismiss the third complaint, invoking the two-dismissal rule. Rule on Ryan’s motion.

Quick check

Under Rule 17, Section 1 of the Rules of Court, when does a notice of dismissal operate as an adjudication upon the merits?

Which court exercises exclusive original jurisdiction over civil actions for collection of money where the principal demand does not exceed PHP 2 million?

Why was the two-dismissal rule held inapplicable to bar Eliana's third complaint against Ryan?

Before what procedural event may a plaintiff dismiss an action as a matter of right by simply filing a notice of dismissal under Rule 17, Section 1?

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What is the proper ruling on Ryan's motion to dismiss the third complaint filed by Eliana?

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1. Two-Dismissal Rule
Under Section 1, Rule 17 of the Rules of Court, a plaintiff may dismiss an action without court order by filing a notice of dismissal before service of the answer or a motion for summary judgment. Generally, such dismissal is without prejudice. However, under the two-dismissal rule, a notice of dismissal operates as an adjudication upon the merits if filed by a plaintiff who has previously dismissed an action based on or including the same claim in a court of competent jurisdiction. This rule prevents plaintiffs from abusing the court system through repetitive voluntary dismissals of the same claim.

2. Subject Matter Jurisdiction
Jurisdiction over the subject matter is conferred by law and determined by the allegations in the complaint. Under Batas Pambansa Blg. 129, as amended by Republic Act No. 11576, first-level courts exercise exclusive original jurisdiction over civil actions and money claims where the demand does not exceed PHP 2 million, exclusive of interest, damages, and litigation costs. Regional Trial Courts exercise exclusive original jurisdiction over money claims exceeding PHP 2 million. Jurisdiction cannot be conferred by consent or waiver of the parties, and proceedings conducted by a court lacking subject matter jurisdiction are null and void.

3. Res Judicata Requisites
For the two-dismissal rule to operate as res judicata barring subsequent litigation, both prior voluntary dismissals must have occurred in courts possessing competent jurisdiction over the subject matter. When an action is initiated in a court lacking jurisdiction, that court acquires no authority to render a binding judgment, and its proceedings are nullities. Consequently, a notice of dismissal filed in a court without jurisdiction over the claim cannot be counted as a valid first dismissal under Rule 17, preventing the second voluntary dismissal from operating as an adjudication upon the merits.

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