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1. Fixing the amount of P800.00 per square meter as just On June 25, 1998, petitioner Republic of the Philippines,
compensation to be paid by plaintiff to defendants for the represented by the Air Transportation Office, filed with the
taking of the subject property indicated as Lot 6068-A in the Regional Trial Court at Aklan an action for the expropriation
Sketch Plan (Annex B, complaint) containing an area of of the entire Lot 6068, thereat docketed as Civil Case No.
4,901 square meters which is a portion of the bigger parcel 5543.
of land covered by Original Certificate of Title No. P-15596.
The aggregate amount shall earn legal interest of 6% per On August 6, 1999, the trial court appointed three (3)
annum commencing from November 11, 1999 until the commissioners to ascertain the just compensation for the
finality of this Decision, thereafter, 12% interest per annum subject property.
from the finality of the Decision on the remaining unpaid
amount until full payment.
Upon conduct of ocular inspection and hearing, the
commissioners submitted a report to the trial court with the
2. Ordering the defendants to withdraw the amount of following recommendation:
P50,000.00 deposited provisionally with the Land Bank
Kalibo Branch, Kalibo, Aklan, by the Air Transportation
Office under Savings Account No. 0452-1084-45 to be NOW THEREFORE, after a brief discussion and in
deducted therefrom the costs of P10,600.00 and balance consideration of the premises herein above presented, the
shall be deducted from the aggregate amount of the just Commissioners hereby recommends (sic) and fix the value
compensation; and of 4,901 sq. m. at P800.00 pesos per square meter and the
remaining area of 5,567 square meters at P500.00 per
square meter as offered by the defendants.
3. Declaring the plaintiffs lawful right to retain possession of
the subject property and to appropriate it for the public
purpose it was intended for, i.e., the operations of the On pre-trial, petitioner submitted a sketch plan of Lot 6068,
airport control tower, Kalibo crash fire rescue station, airport showing the relative location of the 4,901 square-meter
terminal and headquarters of the PNP Aviation Security, portion it actually occupied.
upon full payment of the just compensation thereat as fixed
in paragraph 1 hereof. During the hearing of September 3, 1999, the trial court
directed petitioner to present evidence to prove that the
Plaintiff is directed to pay the costs of P9,600.00 remaining portion not actually and physically occupied by
representing the Commissioners fees equivalent to the government is still needed for public purpose. However,
P800.00 per session for each commissioner, and P1,000.00 petitioner countered that there is no need to present
to Mr. Remegio M. Bautista as the designated secretary of evidence thereon considering that almost one-half (1/2) of
the commissioners. the entire property subject of the case has already been in
fact occupied and devoted to public purpose.
SO ORDERED.2
The trial court ignored petitioners posturing and issued an The expropriation of real property does not include mere
order3 disposing, as follows: physical entry or occupation of land. The physical entry and
occupation of the property in 1956 should include all the
WHEREFORE, the Court finds and so holds that the rights that may be exercised by an owner of the subject
additional area consisting of 5,567 square meters or Lot property. Plaintiff-appellant failed to show that it intended to
6068-B (unshaded portion in Annex "B"- Complaint) is not acquire physical possession but also the legal right to
needed by the plaintiff for public use or purpose, but only possess and ultimately to own the subject property.
the shaded portion, Lot 6068-A, containing an area of 4,901
square meters. Disconsolately, the assailed decision reveals inaction of
plaintiff-appellant in proving its present claim which should
SO ORDERED. have been done the earliest possible opportunity. It was
stated that:
Eventually, in a decision dated November 26, 1999,4 the
trial court adopted the aforestated commissioners report The plaintiff, despite receipt of copy of aforesaid report and
which fixed the just compensation for the 4,901 square- the expiration of the prescribed period to file any comment
meter portion of Lot 6068 at P800.00 per square meter, the thereto, opted not to file any pleading relative thereto. Upon
current market value of the property in 1999. the other hand, the defendants interposed no objection to
said report.
In so adjudging, the trial court relied on Republic vs.
Honorable Lucerito Tagle, et al.,5 and thus fixed the just Hence, there appears no error in the lower courts ruling
compensation for the 4,901 square-meter portion based on that the "taking" for the purposes of fixing just
the current market value not at the time of the taking which compensation be considered on November 11, 1999, the
was in 1956, but at the time of the issuance of the writ of date of the issuance of the writ of possession, as well as
possession on November 11, 1999. To the trial court, the the lower courts adherence to the recommendation of the
date of the issuance of the writ has to be considered in commissioners.
fixing the just compensation because the same signified
petitioners proper acquisition and taking of the property Petitioner moved for a reconsideration of the appellate
which involves not only physical possession but also the courts decision but its motion was denied by said court in
legal right to possess and own the same. its resolution of April 1, 2003.
Unable to accept the trial courts decision for allegedly Hence, petitioners present recourse.
being contrary to law and established jurisprudence,
petitioner Republic filed a notice of appeal and record on As we see it, the sole question presented herein involves
appeal, which the trial court approved on January 18, 2000. the precise time at which just compensation should be
Hence, the entire records of the case were transmitted to fixed: whether as of the time of actual taking of possession
the Court of Appeals, whereat the Republics appeal was by the expropriating entity, as insisted by petitioner
docketed as CA-G.R. CV No. 66124. Republic, or at the issuance of the writ of possession
pursuant to the expropriation proceedings, as maintained
In the herein assailed decision6 dated November 18, 2002, by the respondents and sustained by both the trial court
the Court of Appeals AFFIRMED the appealed decision of and the Court of Appeals.
the trial court, thus:
Before going any further, however, we take exception to the
WHEREFORE, premises considered, the assailed decision appellate courts finding that evidence is wanting on the fact
dated November 26, 1999 of the Regional Trial Court, of petitioners taking possession of the disputed 4,901
Branch 5, Kalibo, Aklan in Civil Case No. 5543 is hereby square-meter portion in 1956.
AFFIRMED.
Petitioner contends that contrary to what the appellate court
SO ORDERED. found, the taking of the property in 1956 or at least a wide
portion thereof, was adequately established.
In its decision, the appellate court placed emphasis on the
alleged failure of petitioner prove that the "taking" of the We agree with petitioner Republic that sufficient evidence
occupied 4,901 square-meter portion of Lot 6068 occurred exists to prove that the taking occurred sometime in 1956.
in 1956. More specifically, it ruled:
As borne by the records, private respondents Answer and
Granting that indeed plaintiff-appellants possession took Pre-Trial Brief contain irrefutable admissions. Thus, in their
place in 1956, said possession pertained to a "portion" of Answer,7 respondents declared, among others, as follows:
said lot. The admission of plaintiff-appellant that the
encroachment covered a wider and wider area as time 1. That they admit each and every allegation in paragraphs
passed, puts into issue the character of said possession. 1,2,3,4,5 and 6 of the complaint. They admit that the portion
Was it "taking" in the sense of expropriation? of the land sought to be expropriated which is indicated by
the white shaded of the sketch plan which is attached as
ANNEX "B" of the complaint with an area of 4,901 square
meters, more or less, has been in the possession of the practical destruction or a material impairment of the value of
plaintiff since 1956 up to the present. his property; or when he is deprived of the ordinary use
thereof.13 There is a "taking" in this sense when the
Significantly, paragraph 6 of the complaint8 which is among expropriator enters private property not only for a
those admitted by the respondents, reads: momentary period but for a more permanent duration, for
the purpose of devoting the property to a public use in such
a manner as to oust the owner and deprive him of all
6. The subject property has been in possession and control
beneficial enjoyment thereof.14 After all, ownership "is
of ATO since 1956 and was initially devoted to parking nothing without the inherent rights of possession, control
area. At present, several structures, are erected on the and enjoyment". Where, as here, the owner is deprived of
area, to wit: the control tower, Kalibo crash fire rescue the ordinary and beneficial use of his property or of its value
station, the Kalibo airport terminal and the headquarters of by its being diverted to public use, there is taking within the
the Philippine National Police (PNP) Aviation Security constitutional sense.15
Group. Also, a part of the lot is leased to concessionaires
selling local products and souvenir items. The remaining
portion is intended for the expansion and other This brings us to the issue of when the just compensation
improvement of the airport. for the property taken should be reckoned.
Besides, respondents no less averred in their Pre-Trial Petitioner argues, and rightly so, that the just compensation
Brief:9 fixed by the trial court based on the market value of the
property after the commencement of the expropriation
proceedings contradicts established jurisprudence that the
I. BRIEF STATEMENT OF THE RESPONDENTS CLAIM
value of the property as it was when the government took
possession of the land represents its true value.
1. That the defendants are the owners of that certain parcel
of land located at Pook, Kalibo, Aklan, Philippines, which is
In a long line of cases, we have consistently ruled that
covered by Original Certificate Title No. T-1559-6. A portion
compensation for property expropriated must be
of the land has been occupied by the plaintiff for many
determined as of the time the expropriating authority takes
years now which portion of land is indicated on the sketch
possession thereof and not as of the institution of the
plan which is marked Annex "B" of the complaint.
proceedings.16
xxx xxx xxx The value of the property should be fixed as of the date
when it was taken and not the date of the filing of the
2. That this land has been in the possession of the plaintiff proceedings. For where property is taken ahead of the filing
for many years now without paying any rental to the of the condemnation proceedings, the value thereof may be
defendants. (Emphasis supplied) enhanced by the public purpose for which it is taken; the
entry by the plaintiff upon the property may have
xxx xxx xxx depreciated its value thereby; or, there may have been a
natural increase in the value of the property from the time it
is taken to the time the complaint is filed, due to general
Surely, private respondents admissions in their Answer and economic conditions. The owner of private property should
Pre-Trial Brief are judicial admissions which render the be compensated only for what he actually loses; it is not
taking of the lot in 1956 conclusive or even immutable. And intended that his compensation shall extend beyond his
well-settled is the rule that an admission, verbal or written, loss or injury. And what he loses is only the actual value of
made by a party in the course of the proceedings in the his property at the time it is taken. This is the only way the
same case, does not require proof.10 A judicial admission is compensation to be paid can be truly just; i.e., "just" not
an admission made by a party in the course of the only to the individual whose property is taken, "but to the
proceedings in the same case, for purposes of the truth of public, which is to pay for it" xxx.
some alleged fact, which said party cannot thereafter
disprove.11 Indeed, an admission made in the pleading
cannot be controverted by the party making such admission The instant case is akin to that of Jose Ma. Ansaldo vs.
and are conclusive as to him, and that all proofs submitted Francisco S. Tantuico, Jr. and Baltazar Aquino,19 decided
by him contrary thereto or inconsistent therewith should be 1990, where two (2) lots of private ownership were taken by
ignored whether objection is interposed by a party or not.12 the government and used for the widening of a road more
than 40 years without the benefit of any action of eminent
domain or agreement with its owners, albeit without protest
This Court is thus convinced that the taking of the occupied by the latter. In a decision in that case, penned by then
4,901 square-meter portion of Lot 6068 occurred in 1956. Chief Justice Andres Narvasa, this Court, citing the earlier
case of Republic vs. PNB,20 wrote:
In the context of the States inherent power of eminent
domain, there is a "taking" when the owner is actually
deprived or dispossessed of his property; where there is a
Normally, of course, where the institution of an
expropriation action precedes the taking of the property
subject thereof, the just compensation is fixed as of the time
of the filing of the complaint. This is so provided by the
Rules of Court, the assumption of possession by the
expropriator ordinarily being conditioned on its deposits with
the National or Provincial Treasurer of the value of the
property as provisionally ascertained by the court having
jurisdiction of the proceedings.
SO ORDERED.
the spouses Camitan had already been transferred to
respondent upon the sale of the property. Respondent
further accused petitioners of perjury; intentionally
suppressing from the trial court the fact that they were not
in possession of the property; and not serving notice on
respondent despite knowledge that it was in actual
possession of the property.7
G.R. No. 128099 December 20, 2006 The Court of Appeals granted the petition and ordered the
annulment of the impugned Order.8 It found that the
FELIX CAMITAN, FRANCISCO CAMITAN, SEVERO Owners Copy is in the possession of respondent since
CAMITAN and VICTORIA CAMITAN, petitioners, 1967. Thus, petitioners do not own the property, nor do they
vs. have any interest thereon that could have been the subject
THE HONORABLE COURT OF APPEALS and THE of succession. Moreover, the Court of Appeals found that
FIDELITY INVESTMENT CORPORATION, respondents petitioners committed perjury in executing their Joint
Affidavit of Loss in support of their petition before the trial
court as they made it appear that the Owners Copy was
still in the possession of the spouses Camitan, when in fact,
as early as 1967, the same had already been given to
DECISION respondent. Finally, citing Demetriou v. Court of Appeals9
the Court of Appeals concluded that the trial court could not
have acquired jurisdiction over the petition because the
Owners
TINGA, J.:
Copy was never lost in the first place.10 Petitioners sought
On 13 December 1967, the spouses Mateo Camitan and reconsideration of the Resolution, but the motion was
Lorenza Alcazar (spouses Camitan) sold to Fidelity denied for lack of merit.11
Investment Corporation (respondent) a parcel of land
covered by Transfer Certificate of Title (TCT) No. T- Petitioners now claim that they have no knowledge of the
(11982)T-3188 located in Barangay Maunong, Calamba, purported sale and that they were not aware of any claim
Laguna. Upon the execution of the Deed of Absolute Sale, whatsoever over the property in question for over twenty-
the spouses Camitan delivered to respondent corporation seven-(27) years, stressing that property is still registered,
(respondent) the owners duplicate certificate of title declared for taxation, and realty taxes paid thereon in the
(Owners Copy). From then on, respondent has been name of the spouses Camitan.12 They argue that the Court
paying the real estate taxes due on the property and has of Appeals erred in finding that the Owners Copy was not
remained in actual physical possession thereof.1 lost but was in fact in the possession of respondent since
there was no documentary proof to support such
On 29 December 1993, after the death of the spouses conclusion. According to petitioners, respondent was not
Camitan, without the knowledge of respondent, the heirs of able to present even a photocopy of the Owners Copy to
the spouses-petitioners herein - filed a petition for the prove its possession thereof since 1967 and thus the Court
issuance of a new Owners Copy,2 However, it appears that of Appeals did not acquire jurisdiction over the petition for
respondent was not given notice of such proceedings. The annulment.13
trial court issued an order of general default.3 After an ex
parte presentation of evidence by the petitioners, the trial Petitioners add that respondent is guilty of estoppel and
court granted the petition and directed the Register of laches in asserting its alleged rights over the property. The
Deeds of Laguna to issue a new Owners Copy, while at the unexplained concealment for a long time of its possession
same time declaring void the first Owners Copy, per its of the purported deed of absolute sale and Owners Copy,
Order dated 08 March 1995.4 and its non-registration of the deed in its name run counter
to the natural course of things and are devoid of credence.14
When respondent learned of the petition and order for the
first time in March 1995, it caused the annotation of a notice Lastly, petitioners allege that the property in question could
of sale on the title of the property. Thereafter, on 26 April be a portion of the land surrendered to the Presidential
1995, it filed a Notice of Adverse Claim with the Register of Commission on Good Government (PCGG) as part of the
Deeds of Calamba, Laguna.5 ill-gotten wealth of former President Ferdinand Marcos, and
that the sole purpose of respondents concealment of the
In a Petition6 for annulment of judgment and cancellation of deed of absolute sale is to prevent sequestration thereof.15
title before the Court of Appeals, respondent argued that
the Order dated 08 March 1995 is null and void, having On the other hand, respondent argues that its non-
been issued by the trial court without jurisdiction since the registration of title does not affect its ownership of the
Owners Copy of TCT No. T-(11982)T-3188 exists and has property because by the execution of the deed of absolute
been in its possession, and not lost as petitioners alleged. sale, the spouses Camitan had effectively divested
Moreover, it claimed that petitioners have no standing to file themselves of all the rights, title and interest over the
the petition, not being the registered owners of the property, property. Moreover, save for their bare allegations,
nor persons in interest, since all the rights and interest of petitioners have not been able to rebut the presumptive
authenticity of the deed of absolute sale. Lastly, respondent may be filed by the registered owner or other
posits that there is no basis for the allegation that the person in interest and registered.
property in question is part of the former Presidents ill-
gotten wealth.16 Upon the petition of the registered owner or other
person in interest, the court may, after notice and
Anent the claim that it failed to attach even a photocopy of due hearing, direct the issuance of a new duplicate
the Owners Copy, respondent claims that there is no rule certificate, which shall contain a memorandum of
which requires that the such document should be included the fact that it is issued in place of the lost
in a petition for annulment of judgment. Besides, petitioners duplicate certificate, but shall in all respects be
never disputed respondents possession of the title, but in entitled to like faith and credit as the original
fact merely categorized such possession as one in bad duplicate, and shall thereafter be regarded as such
faith. More importantly, the argument that respondents for all purposes of this decree.
should have attached the Owners Copy of the title was
raised for the first time in petitioners motion for Thus, before a duplicate certificate of title can be replaced,
reconsideration of this Courts resolution dated 18 June the petitioner under the foregoing provision must establish
1997 dismissing the instant petition.17 Finally, respondent that the duplicate certificate was lost or destroyed. This
maintains that petitioners are estopped from questioning Court has consistently held that a trial court does not
the jurisdiction of the Court of Appeals since they actively acquire jurisdiction over a petition for the issuance of a new
participated in the proceedings therein.18 owners duplicate certificate of title, if the original is in fact
not lost but is in the possession of an alleged buyer.21 In
In a nutshell, the petition presents a very simple question: other words, the fact of loss of the duplicate certificate is
Whether the Court of Appeals erred when it ordered the jurisdictional.
annulment of the 08 March 1995 Order of the trial court
which directed the Register of Deeds to issue a second Petitioners question the Court of Appeals Resolution,
Owners Copy of the title. claiming that respondent failed to attach to its petition for
annulment of judgment of the Owners Copy itself, or even
The Court of Appeals did not. The petition must be denied. a photocopy thereof. Thus, they argue there was no proof
that respondent has been in possession of the duplicate
Annulment of judgment is a recourse equitable in character, certificate. That being the situation, the trial court validly
allowed only in exceptional cases as where there is no acquired jurisdiction over their petition for issuance of a new
available or other adequate remedy.19 An action for Owners Copy, petitioners conclude.
annulment of judgment is grounded only on two
justifications: (1) extrinsic fraud; and (2) lack of jurisdiction Respondent, so it appears, did not attach to its petition for
or denial of due process. The purpose of such action is to annulment of judgment the Owners Copy of the title. This
have the final and executory judgment set aside so that lapse, however, does not suffice as basis to set aside the
there will be a renewal of litigation.20 questioned resolutions of the Court of Appeals.
The annulment of the Order dated 08 March 1995 was A review of the records of the case shows that petitioners
premised on the lack of jurisdiction of the trial court, never questioned respondents possession of the Owners
apparently brought about by the fact that, as found by the Copy, its actual and physical possession and occupation of
Court of Appeals, the duplicate certificate of the title was the property, as well as its payment of real estate taxes due
not lost nor destroyed, but has remained in the possession on the property.
of respondent which purchased the real property from the
spouses Camitan in 1967. The Court finds no reason to In its petition for annulment before the Court of Appeals,
disturb the finding of the appellate court. respondent alleged that:
The petition for issuance of the new Owners Copy before 4. On December 13, 1967, the spouses Camitan
the trial court was filed pursuant to Presidential Decree No. sold the Property to petitioner, as documented by a
1529, otherwise known as the "Property Registration "Deed of Absolute Sale" dated 13 December 1967,
Decree," Section No. 109 of which provides: a copy of which is attached hereto as annex "C".
Pursuant to the said Deed of Absolute Sale,
SEC. 109. Notice and replacement of lost duplicate petitioner paid the purchase price in full.
certificate.In case of loss or theft of an owners
duplicate certificate of title, due notice under oath 5. Upon the execution of the Deed of Absolute
shall be sent by the owner or by someone in his Sale, the vendors delivered to petitioner the
behalf to the Register of Deeds of the province or owners duplicate copy of the Title, which Title has
city where the land lies as soon as the loss or theft since been in the possession of petitioner. Also,
is discovered. If a duplicate certificate is lost or since 1967 and to this day, petitioner has been in
destroyed, or cannot be produced by a person actual physical possession and continuous
applying for the entry of a new certificate to him or occupation of the above-described Property.
for the registration of any instrument, a sworn Moreover, petitioner has been the one paying the
statement of the fact of such loss or destruction real estate taxes due on the Property.22
While for its part, respondent treated the allegations is ineffective and amounts to an admission pursuant to Rule
perfunctorily in this wise in its Comment: 8, Sec. 11 of the Rules of Court.
The instant petition originated from a complaint for Respondent corporation averred that petitioner Mongao and
rescission and damages filed on February 14, 1995 by Pedro Animas, Jr., the registered owners of the subject
petitioners, Spouses Pesane Animas Mongao (hereafter properties, executed simultaneously the corresponding
referred to as petitioner Mongao) and Benhur Mongao, Deed of Sale and Memorandum of Agreement after
against respondent Pryce Properties Corporation before the respondent corporations representative delivered the
Regional Trial Court (RTC) in General Santos City.3 The checks to the bank as payment for redemption of the
complaint alleged that petitioner Mongao and respondent properties. Controversy arose after respondent corporation
corporation executed a Memorandum of Agreement4 on had allegedly manifested its intent to complete payments
December 20, 1993, wherein the former agreed to sell to but petitioner Mongao demanded that payment be made to
the latter for the total price of Five Million Twenty-Eight her alone to the exclusion of the rest of the Animas family.
Thousand Eight Hundred Pesos (P5,028,800.00) a parcel Respondent corporation admitted issuing a check in the
of land in Polomolok, South Cotabato covered by Transfer amount of Three Million Three Hundred Fifty-Seven Pesos
Certificate of Title (TCT) No. T-221865 registered in the and Eighty-Seven Centavos (P3,353,357.84) payable to the
name of petitioner Mongao only. In accordance with the order of petitioner Mongao and her mother, Nellie Animas,
terms and conditions of the Memorandum of Agreement, which was however refused by petitioner Mongao.
respondent corporation allegedly paid petitioners the sum of
Five Hundred Fifty Thousand Pesos (P550,000.00) as
The answer also admitted that due to the demands of both
earnest money considered as part of the purchase price.
petitioner Mongao and the Animas family, respondent
The complaint further alleged that after considerable delay,
corporation was constrained to deposit the payment with
respondent corporation offered to pay the balance of the
the Clerk of Court of the RTC of Davao City. By way of a
purchase price by issuing a check payable to petitioner
compulsory counterclaim, respondent corporation prayed
Mongao and her mother, Nellie Animas, which the former that petitioners be adjudged liable for attorneys fees for
rejected. Allegedly, respondent corporation continuously their hasty and unjustified institution of the case.
refused to heed petitioners written and oral demands to
pay the balance solely to petitioner Mongao.
Petitioners moved for judgment on the pleadings on the
ground that the answer admitted the material allegations of
The complaint also denied that petitioner Mongao executed
the complaint and, therefore, failed to tender an issue.7 In
a Deed of Absolute Sale dated November 15, 1994 in favor
particular, the answer allegedly admitted the existence of
of respondent corporation, the registration of which caused
the contract of sale and respondent corporations refusal to
the cancellation of TCT No. T-22186 in the name of
satisfy the unpaid balance of the purchase price despite
petitioner Mongao and the issuance of TCT No. T-62944. In
demand. Petitioners contended that respondent corporation
addition to petitioners prayer for the rescission of the
cannot avoid rescission by raising the defense that it
Memorandum of Agreement and the Deed of Absolute Sale contracted with the Animas family and not solely with
and the forfeiture of the earnest money paid by respondent petitioner Mongao. Petitioners belied respondent
corporation, the complaint also asked for the award of corporations claim for consignation by attaching a letter
moral and exemplary damages and attorneys fees.
from the Office of the Clerk of Court of the RTC of Davao
City to the effect that the court could not act on petitioners
Respondent corporation filed an answer and refuted motion to deny consignation because the deposit was
petitioners allegations with a narration of the factual transmitted through a mere letter, hence, the case was not
antecedents leading to the perfection of the contract of raffled to a particular branch of the court.8
sale.6 It claimed that sometime in 1993, a certain Pedro
Animas IV approached Sonito N. Mole, an officer of
Respondent corporation opposed petitioners motion for
respondent corporation, and negotiated the sale of
judgment on the pleadings, arguing that two material
properties belonging to the Animas family which were on allegations in the complaint, namely: that petitioner Mongao
did not execute the Deed of Sale and that petitioner The main issue for this Courts resolution is the propriety of
Mongao was the owner of the subject property, were the trial courts judgment on the pleadings on the ground
disputed in the answer.9 that respondent corporations allegation did not tender an
issue.
The trial court granted petitioners motion for judgment on
the pleadings and considered the case submitted for Judgment on the pleadings is governed by Section 1, Rule
decision. The trial court rendered a Decision10 on November 34 of the 1997 Rules of Civil Procedure, essentially a
13, 1995. The dispositive portion thereof reads: restatement of Section 1, Rule 19 of the 1964 Rules of
Court then applicable to the proceedings before the trial
WHEREFORE, premises considered, the Memorandum of court. Section 1, Rule 19 of the Rules of Court provides that
Agreement dated 20 December 1993, as well as the Deed where an answer "fails to tender an issue, or otherwise
of Absolute Sale entered into between plaintiff Pesane admits the material allegations of the adverse party's
Animas Mongao and defendant Pryce Properties pleading, the court may, on motion of that party, direct
Corporation dated November 15, 1994, are hereby declared judgment on such pleading." The answer would fail to
rescinded. As a consequence thereof, Pryce Properties tender an issue, of course, if it does not comply with the
Corporation is directed to execute a Deed of Reconveyance requirements for a specific denial set out in Section 1014 (or
of the property covered by TCT No. T-62944 in favor of Section 8)15 of Rule 8; and it would admit the material
Pesane Animas and to pay attorneys fees in the amount of allegations of the adverse party's pleadings not only where
P50,000.00 as well as costs of suit, by way of damages. it expressly confesses the truthfulness thereof but also if it
omits to deal with them at all.16
On the other hand plaintiff Pesane Animas Mongao is
likewise directed to return to the defendant Pryce Properties Now, if an answer does in fact specifically deny the material
Corporation, what she had received by virtue of the contract averments of the complaint in the manner indicated by said
in the amount of P1,675,442.16, a portion of which may be Section 10 of Rule 8, and/or asserts affirmative defenses
compensated to the damages herein awarded pursuant to (allegations of new matter which, while admitting the
Article 1278 of the New Civil Code. material allegations of the complaint expressly or impliedly,
would nevertheless prevent or bar recovery by the plaintiff)
in accordance with Sections 417 and 518 of Rule 6, a
SO ORDERED.11
judgment on the pleadings would naturally not be proper.19
On June 18, 1991, respondent Rojas filed with the "5. That after the filling of said complaint, defendants-
Municipal Trial Court, Calasiao, Pangasinan, a complaint6 spouses conspiring together as husband and wife caused
for "Unlawful Detainer and Damages" against petitioner the removal of the sign board infront (sic) of the clinic of
Arenas. Respondent prayed first, that the petitioner be plaintiffs and dumped gravel and sand infront (sic) of their
ordered to vacate the premises in question; second, that stall and fenced off the same preventing the patients and
respondent be allowed to cause the demolition, customers of plaintiffs from coming in;
reconstruction and renovation of the premises; and third,
that petitioner be ordered to indemnify respondent damages "6. That in order to force the ejectment of plaintiffs from
in the form of litigation expenses and attorneys fees. their stall defendants cut off their electric connection;
On June 28, 1991, petitioner Arenas filed his answer7 to the "15. That due to the unlawful and malicious concerted acts
complaint and counterclaim for moral damages amounting of defendant spouses, plaintiffs suffered moral damages
to P50,000.00, exemplary damages totaling P30,000.00 amounting to P200,000.00;
and attorneys fees, stating that the case was maliciously
filed. "16. That likewise plaintiffs suffered a net income loss of
P50,000.00 at the rate of P5,000.00 per month;
"17. That similarly plaintiffs were constrained to engage the plaintiffs-appellees against defendants-appellants is hereby
services of undersigned counsel for a fee of P25,000.00." DISMISSED. With costs against plaintiffs-appellees.
The Issue
On September 26, 1991, the trial court denied the motion to
dismiss for lack of merit.13
The sole issue raised is whether the causes of action
complained of in the Regional Trial Court24 were in the
On October 16, 1991, respondents filed with the trial court
nature of compulsory counterclaims that must be pleaded in
their answer to the complaint with counterclaim,14 reiterating
Civil Case No. 658 of the Municipal Trial Court.
their motion to dismiss with an alternative motion to
suspend the proceedings for the reason that the pending
appeal15 raises a prejudicial question. Petitioners argue that the acts complained of in Civil Case
No. 16890 arose after the filing of the complaint and the
answer in Civil Case No. 658. Thus, damages arising from
On December 23, 1991, the trial court issued a resolution16
such acts could not be raised therein as compulsory
stating that it had jurisdiction to hear, try and decide Civil
counterclaims.25
Case No. 16890.
"(3) Defendants to pay the plaintiffs, attorneys fees of Not Compulsory Counterclaims
P6,500.00 plus expenses of litigation of P3,000.00 and to
pay the costs. Rule 11 of the 1997 Rules of Civil Procedure provides:
On June 10, 1996, the Court of Appeals rendered its A counterclaim is compulsory where: (1) it arises out of, or
decision19 reversing that of the trial court and dismissing is necessary connected with, the transaction or occurrence
petitioners complaint. The Court of Appeals reasoned that that is the subject matter of the opposing partys claim;26 (2)
since petitioners interposed a counterclaim for moral and it does not require the presence of third parties of whom the
exemplary damages in Civil Case No. 658, they were court cannot acquire jurisdiction; and (3) the trial court has
barred from instituting Civil Case No. 16890. The Court of jurisdiction to entertain the claim.27
Appeals dismissed Civil Case No. 16890, as follows:
The following are the tests by which the compulsory nature
"WHEREFORE, the decision appealed from is hereby of a counterclaim can be determined: (1) Are the issues of
REVERSED and SET ASIDE and the complaint filed by fact and law raised by the claim and counterclaim largely
the same? (2) Would res judicata bar a subsequent suit on Here, respondents duty to respect petitioners rights is an
defendants claim absent the compulsory counterclaim obligation sourced not from contract but from quasi-delict.33
rule? (3) Will substantially the same evidence support or
refute plaintiffs claim as well as defendants counterclaim? Second. In de Leon v. Court of Appeals,34 we held that
(4) Is there any logical relation between the claim and "[W]here the issues of the case extend beyond those
counterclaim?28 commonly involved in unlawful detainer suits, the case is
converted from a mere detainer suit to one incapable of
We do not agree with the Court of Appeals that the claims pecuniary estimation thereby placing it under the exclusive
in Civil Case No. 16890 may be pleaded as compulsory jurisdiction of the regional trial courts." Verily, since the
counterclaims in Civil Case No. 658. municipal trial court could not have taken cognizance of the
claims in Civil Case No. 16890, then such claims could not
First. In Civil Case No. 16890, the damages prayed for be considered as compulsory counterclaims in Civil Case
arose not from contract but from quasi-delict.29 They No. 658.
constitute separate and distinct causes of action.
The fact that the rule on summary procedure governs
A cause of action has the following elements: (1) the legal ejectment cases emphasizes the point that an action for
right of plaintiff, (2) the correlative obligation of the damages incapable of pecuniary estimation can not be
defendant, and (3) the act or omission of the defendant in pleaded as counterclaims therein. It cannot be
violation of said legal right.30 overemphasized that the reason for the rule on summary
procedure is to prevent undue delays in the disposition of
cases. To achieve this, the filing of certain pleadings is
Cause of Action in Civil Case No. 658
prohibited and the periods for acting on motions as well as
on the case itself are relatively reduced.35
Civil Case No. 658 involves a complaint for unlawful
detainer and damages. In an unlawful detainer case, the
Third. The acts complained of were committed after the
issue is the right to physical possession of the premises or complaint and the answer were filed.36
possession de facto.31 The basis is a contract of lease.
Trial Court Ruling in Civil Case No. 16890 Erroneous
Causes of Action in Civil Case No. 16890
However, as the Court of Appeals erred, so did the trial
The acts complained of in Civil Case No. 16890 were:
court.
We agree with petitioners that the acts complained of were "(a) the former judgment must be final;
not founded on the contract of lease but could constitute
violations of the Civil Code provisions on Human Relations,
"(b) the court which rendered judgment had
specifically:
jurisdiction over the parties and the subject matter;
"Art. 19. Every person must, in the exercise of his rights and "(c) it must be a judgment on the merits;
in the performance of his duties, act with justice, give
everyone his due, and observe honesty and good faith.
"(d) and there must be between the first and
second actions identity of parties, subject matter,
"Art. 20. Every person who, contrary to law, willfully or and cause of action."37
negligently causes damage to another, shall indemnify the
latter for the same.
The doctrine of res judicata is a rule which pervades every
well regulated system of jurisprudence and is founded upon
"Art. 21. Any person who willfully causes loss or injury to two grounds embodied in various maxims of the common
another in a manner that is contrary to morals, good
law, namely: (1) public policy and necessity which makes it
customs or public policy shall compensate the latter for the
to the interest of the State that there should be an end to
damage."
litigation, interest reipublicae ut sit finis litum, and (2) the
hardship on the individual that he should be vexed twice for
the same cause, memo debet bis vexari et eadem causa.38
The decision of the Regional Trial Court, Branch 39,
Lingayen, Pangasinan in Civil Case No. 16890 touched on
matters already decided. There must be an end to
litigation.39 The issue of whether ejectment was proper was
fully and fairly adjudicated in Civil Case No. 658.
Remand Case
The Fallo
No costs.
SO ORDERED.
G.R. No. 163551 July 18, 2011 possession and ownership of permanent improvements and
other plants on the land in dispute.
DATU KIRAM SAMPACO, substituted by HADJI SORAYA
S. MACABANDO, Petitioner, Petitioner filed a counterclaim for actual and moral
vs. damages, and attorney's fees for the unfounded complaint
HADJI SERAD MINGCA LANTUD, Respondent. and prayed for its dismissal. He also sought the
cancellation of respondents OCT No. P-658 and the
DECISION reconveyance of the subject parcel of land.
PERALTA, J.: During the trial, respondent Hadji Lantud testified that he
acquired the subject lot from his grandmother, Intumo
Pagsidan, a portion thereof from his grandmothers helper,
This is a petition for review on certiorari of the Court of
Totop Malacop, pursuant to a court decision after litigating
Appeals Decision dated August 15, 2003 in CA-G.R. CV
with him.6 Respondent had been residing on the lot for
No. 63801 and its Resolution dated May 13, 2004, denying
more than 30 years, applied for a title thereto and was
petitioners motion for reconsideration.
issued OCT No. P-658.7 He paid the corresponding real
estate taxes for the land.8 He planted assorted trees and
The facts, as stated by the Court of Appeals, are as follows: plants on the lot like bananas, jackfruits, coconuts and
others.9 He testified that he was not aware of the alleged
On September 14, 1984, respondent Hadji Serad Mingca litigation over the lot before Barangay Captain Hadji Hassan
Lantud, the plaintiff in the lower court, filed an action to Abato, although he was furnished a copy of the decision.10
quiet title with damages1 with the Regional Trial Court
(RTC) of Lanao del Sur, Branch 8, Marawi City (trial court), On the other hand, petitioner Datu Kiram Sampaco testified
against petitioner Datu Kiram Sampaco (deceased), the that the land under litigation is only a portion of the 1,800
defendant in the lower court, who has been substituted by square meters of land that he inherited in 1952 from his
his heirs, represented by Hadji Soraya Sampaco- father, Datu Sampaco Gubat.11 Since then, he had been in
Macabando.2 adverse possession and ownership of the subject lot,
cultivating and planting trees and plants through his
Respondent alleged in his Complaint3 that he is the owner caretaker Hadji Mustapha Macawadib.12 In 1962, he
in fee simple of a parcel of residential lot located at mortgaged the land (1,800 square meters) with the
Marinaut, Marawi City, with an area of 897 square meters Development Bank of the Philippines, Ozamis branch.13 He
covered by Original Certificate of Title (OCT) No. P-658. On declared the land (1,800 square meters) for taxation
August 25, 1984, petitioner Datu Kiram Sampaco, through purposes14 and paid real estate taxes, and adduced in
his daughter Soraya Sampaco-Macabando with several evidence the latest Tax Receipt No. 1756386 dated
armed men, forcibly and unlawfully entered his property and September 15, 19[9]3.15 Petitioner presented four
destroyed the nursery buildings, cabbage seedlings and corroborating witnesses as regards his possession of the
other improvements therein worth P10,000.00. On August subject property.
30, 1984, Barangay Captain Hadji Hassan Abato and his
councilmen prepared and issued a decision4 in writing After trial on the merits, the trial court rendered a Decision
stating that petitioner Datu Kiram Sampaco is the owner of on March 31, 1999 in favor of petitioner, the dispositive
the subject parcel of land. Respondent stated that the acts portion of which reads:
of petitioner and the said decision of the Barangay Captain
may cast a cloud over or otherwise prejudice his title.
WHEREFORE, premises considered the court is of the
Respondent stated that he and his predecessors-in-interest
opinion and so holds that the preponderance of evidence is
have been in open, public and exclusive possession of the
in favor of the defendant and against the plaintiff. Judgment
subject property. He prayed that the acts of petitioner and is hereby rendered as follows:
the decision of Barangay Captain Hadji Hassan Abato and
his councilmen be declared invalid, and that petitioner be
ordered to pay respondent damages in the amount of 1. Dismissing plaintiffs complaint for lack of merit;
P10,000.00 and attorneys fees.
2. Declaring Original Certificate of Title No. P-658
In his Answer,5 defendant Datu Kiram Sampaco, petitioner (Exh. A) null and void and of no legal effect;
herein, denied the material allegations of the Complaint.
Petitioner asserted that he and his predecessors-in-interest 3. Declaring the defendant the absolute or true
are the ones who had been in open, public, continuous, and owner and possessor of the land in dispute; and
exclusive possession of the property in dispute. Petitioner
alleged that OCT No. P-658 was secured in violation of 4. Ordering the plaintiff to pay the defendant the
laws and through fraud, deception and misrepresentation, sum of P10,000.00 for attorneys fees plus P500.00
considering that the subject parcel of land is a residential lot per appearance.16
and the title issued is a free patent. Moreover, respondent
and his predecessors-in-interest had never taken actual
The trial court held that the issuance of respondents title,
possession or occupied the land under litigation. On the
OCT No. P-658, was tainted with fraud and irregularities
contrary, petitioner has all the evidence of actual
and the title is, therefore, spurious; hence, it is null and
void, and without any probative value. The finding of fraud
was based on: (1) the Certification issued by Datu Samra The Court of Appeals stated that the Torrens title has three
Andam, A/Adm. Assistant II, Natural Resources District No. attributes: (1) a Torrens title is the best evidence of
XII-3, Marawi City, stating that the data contained in ownership over registered land and, unless annulled in an
respondents title were verified and had no record in the appropriate proceeding, the title is conclusive on the issue
said office; (2) the said Certification was not refuted or of ownership; (2) a Torrens title is incontrovertible and
rebutted by respondent; (3) while free patents are normally indefeasible upon the expiration of one year from the date
issued for agricultural lands, respondents title is a free of the entry of the decree of registration;20 and (3) a Torrens
patent title issued over a residential land as the lot is title is not subject to collateral attack.21
described in the Complaint as a residential lot; and (4)
Yusoph Lumampa, an employee of the local Bureau of The Court of Appeals held that petitioners counterclaim
Lands, to whom respondent allegedly entrusted the filed on October 15, 1984 for cancellation of respondents
paperwork of the land titling, was not presented as a original certificate of title issued on May 22, 1981 was filed
witness. beyond the statutory one-year period; hence, petitioners
title had become indefeasible, and cannot be affected by
Moreover, the trial court stated that respondent failed to the decision made by Barangay Captain Hadji Hassan
establish with competent and credible evidence that he was Abato and his councilmen. Moreover, the appellate court
in prior possession of the subject property. No corroborative held that petitioners prayer for the cancellation of
witness was presented to further prove his prior respondents title, OCT No. P-658, through a counterclaim
possession. included in his Answer is a collateral attack, which the law
does not allow, citing Cimafranca v. Court of Appeals22 and
On the other hand, the trial court stated that petitioner Natalia Realty Corporation v. Valdez.23
offered documentary evidence, consisting of a contract of
real estate mortgage of the subject property, tax The allegation of fraud in securing OCT No. P-658 on the
declarations, an official tax receipt, and testimonial ground that the property in dispute is a residential lot and
evidence to prove that he had been in open, public, not subject of a free patent was not given weight by the
continuous, and lawful possession of the subject property in appellate court as it was supported only by testimonial
the concept of owner. evidence that did not show how (by metes and bounds) and
why the property in dispute could not have been the subject
Respondent appealed the decision of the trial court to the of a free patent. The appellate court stated that a mere
Court of Appeals. preponderance of evidence is not adequate to prove
fraud;24 it must be established by clear and convincing
evidence.
On August 15, 2003, the Court of Appeals rendered a
Decision reversing the decision of the trial court, the
dispositive portion of which reads: The Court of Appeals also noted that petitioner claimed that
the subject property is only part of his larger property.
Although petitioner introduced proof of payment of the real
WHEREFORE:
estate taxes of the said property, as well as a previous
mortgage of the property, petitioner did not show that the
1. The appeal is granted and the appealed disputed property is part of his larger property. Hence, the
judgment is hereby totally REVERSED. appellate court stated that under such circumstances, it
cannot rule that petitioner owned the land under litigation,
2. To quiet his title, plaintiff-appelant Hadji Serad since petitioner failed to show that it is part of his larger
Mingca Lantud is confirmed the owner of the parcel property.
of land covered by Original Certificate of Title No.
P-658; The Court of Appeals did not award actual and moral
damages, because respondent failed to prove the amount
3. The defendant-appellee is ordered to pay of any actual damages sustained, and the instances
P50,000.00 as attorneys fees to the plaintiff- enumerated under Article 2219 of the Civil Code warranting
appellant; and the award of moral damages were not present.
4. Costs against the defendant-appellee.17 However, the Court of Appeals awarded attorney's fees in
the amount of P50,000.00, considering that respondent was
Petitioners motion for reconsideration was denied by the forced to incur expenses to protect his right through the
Court of Appeals in its Resolution18 dated May 13, 2004. action to quiet title.
The Court of Appeals held that there is no controversy that Petitioner filed this petition raising the following issues:
respondent is a holder of a Torrens title; hence, he is the
owner of the subject property. The appellate court stressed I
that Section 4719 of the Land Registration Act (Act No. 496)
provides that the certificate of title covering registered land THE COURT OF APPEALS MISERABLY FAILED
shall be received as evidence in all courts of the Philippines TO CONSIDER THE FACT THAT THE TORRENS
and shall be conclusive as to all matters stated therein. TITLE INVOLVED HEREIN WAS ISSUED
PURSUANT TO A FREE PATENT WHICH COULD
NOT BE VALIDLY ISSUED OVER A PRIVATE which can be litigated and decided in land registration
LAND. proceedings.26 Tax declarations and tax receipts cannot
prevail over a certificate of title which is an incontrovertible
II proof of ownership.27 An original certificate of title issued by
the Register of Deeds under an administrative proceeding
is as indefeasible as a certificate of title issued under
THE COURT OF APPEALS ERRED IN
judicial proceedings.28 However, the Court has ruled that
DISREGARDING THE FACT THAT AS
indefeasibility of title does not attach to titles secured by
CERTIFIED TO BY THE BUREAU OF LANDS fraud and misrepresentation.29
ITSELF NO SUCH FREE PATENT OVER THE
SUBJECT LAND WAS ISSUED BY IT; HENCE,
SAID FREE PATENT IS SPURIOUS. In this case, petitioner alleged in his Answer to
respondents Complaint in the trial court that respondents
title, OCT No. P-658, was secured in violation of the law
III
and through fraud, deception and misrepresentation,
because the subject parcel of land is a residential lot, which
THE COURT OF APPEALS ERRED IN cannot be subject of a free patent, since only agricultural
REVERSING THE DECISION OF THE TRIAL lands are subject of a free patent.
COURT THAT THE SUBJECT LOT HAD LONG
BEEN OWNED, POSSESSED AND CULTIVATED
The trial court found that "[t]he lot under litigation as clearly
BY THE DEFENDANT (PETITIONER HEREIN)
described in the complaint is a residential lot and a free
OR HIS PREDECESSORS-IN-INTEREST SINCE
patent title thereto cannot validly be issued." This finding
TIME IMMEMORIAL IN THE CONCEPT OF AN
was one of the bases for the trial courts declaration that the
OWNER.
issuance of OCT was tainted with fraud and irregularities
and is, therefore, spurious; thus, OCT No. P-658 is null and
IV void.
THE COURT OF APPEALS ERRED IN RULING It should be pointed out that the allegation in the Complaint
THAT THE PETITIONERS COUNTERCLAIM FOR that the land is residential was made only by respondent,
CANCELLATION OF RESPONDENTS TITLE IS but the true classification of the disputed land as residential
BARRED. was not shown to have been made by the President, upon
recommendation by the Secretary of Environment and
V Natural Resources, pursuant to Section 9 of
Commonwealth Act No. 141, otherwise known as The
THE COURT OF APPEALS ERRED IN RULING Public Land Act.30 Hence, the trial court erred in concluding
THAT THE COUNTERCLAIM IN THE INSTANT that there was fraud in the issuance of respondents free
CASE IS A COLLATERAL ATTACK ON patent title on the ground that it covered residential land
RESPONDENT-PLAINTIFFS TITLE. based only on the Complaint which stated that the property
was residential land when it was not shown that it was the
President who classified the disputed property as
VI residential, and OCT No. P-658 itself stated that the free
patent title covered agricultural land. It has been stated that
THE COURT OF APPEALS ERRED IN DENYING at present, not only agricultural lands, but also residential
PETITIONERS MOTION FOR lands, have been made available by recent legislation for
RECONSIDERATION.25 acquisition by free patent by any natural born Filipino
citizen.31 Nevertheless, the fact is that in this case, the free
The main issue is whether or not the Court of Appeals erred patent title was granted over agricultural land as stated in
in sustaining the validity of OCT No. P-658 and confirming OCT No. P-658.
respondent as owner of the property in dispute.
Moreover, petitioner contends in his petition that the
Petitioner contends that the Court of Appeals erred in Certification32 dated July 24, 1987 issued by Datu Samra I.
disregarding the fact that the Torrens title was issued to Andam, A/Adm. Assistant II, Natural Resources District No.
respondent by virtue of a free patent covering a residential XII-3, Bureau of Lands, Marawi City, certifying that the data
lot that is private land as it has been acquired by petitioner contained in OCT No. P-658 in respondents name had no
through open, public, continuous and lawful possession of records in the said office, showed that respondents Torrens
the land in the concept of owner. Petitioner thus prayed for title was spurious.
the cancellation of respondents title and the reconveyance
of the subject property. Hence, the Court of Appeals erred The Court holds that the certification, by itself, is insufficient
in declaring that the subject lot belongs to respondent. to prove the alleged fraud. Fraud and misrepresentation, as
grounds for cancellation of patent and annulment of title,
The contention is without merit. should never be presumed, but must be proved by clear
and convincing evidence, mere preponderance of evidence
not being adequate.33 Fraud is a question of fact which
The Torrens title is conclusive evidence with respect to the
must be proved.34 The signatory of the certification, Datu
ownership of the land described therein, and other matters
Samra Andam, A/Adm. Assistant II, Natural Resources
District No. XII-3, Marawi City, was not presented in court to litigating with him.37 Respondent has OCT No. P-658 to
testify on the due issuance of the certification, and to testify prove his title to the subject property, while petitioner
on the details of his certification, particularly the reason why merely claims that the property is already his private land
the said office had no records of the data contained in OCT by virtue of his open, public, continuous possession of the
No. P-658 or to testify on the fact of fraud, if any. same in the concept of owner.
Thus, the Court holds that the evidence on record is The Court holds that petitioner failed to prove the requisites
insufficient to prove that fraud was committed in the of reconveyance as he failed to prove the identity of his
issuance of respondents Torrens title. Hence, respondents larger property in relation to the disputed property, and his
Torrens title is a valid evidence of his ownership of the land claim of title by virtue of open, public and continuous
in dispute. possession of the disputed property in the concept of owner
is nebulous in the light of a similar claim by respondent who
On the other hand, petitioner claims ownership of the holds a free patent title over the subject property. As stated
subject lot, which is merely a portion of a larger property in Ybaez v. Intermediate Appellate Court,38 it is relatively
(1,800 square meters) that he allegedly inherited from his easy to declare and claim that one owns and possesses
father in 1952, by virtue of open, public and continuous public agricultural land, but it is entirely a different matter to
possession of the land in the concept of owner making it affirmatively declare and to prove before a court of law that
petitioners private property. Hence, petitioner prays for one actually possessed and cultivated the entire area to the
reconveyance of the said property. exclusion of other claimants who stand on equal footing
under the Public Land Act (Commonwealth Act No. 141, as
amended) as any other pioneering claimants.
Article 434 of the Civil Code governs an action for
reconveyance, thus:
Further, petitioner contends that the Court of Appeals erred
in ruling that petitioners counterclaim is time-barred, since
Art. 434. In an action to recover, the property must be
the one-year prescriptive period does not apply when the
identified, and the plaintiff must rely on the strength of his
person seeking annulment of title or reconveyance is in
title and not on the weakness of the defendants claim.
possession of the lot, citing Heirs of Simplicio Santiago v.
Heirs of Mariano E. Santiago.39 Petitioner also contends
Under Article 434 of the Civil Code, to successfully maintain that the Court of Appeals erred in ruling that the
an action to recover the ownership of a real property, the counterclaim in this case is a collateral attack on
person who claims a better right to it must prove two (2) respondents title, citing Cimafranca v. Intermediate
things: first, the identity of the land claimed; and second, his Appellate Court.40 Petitioner cites the case of Heirs of
title thereto.35 Simplicio Santiago v. Heirs of Mariano E. Santiago,41 which
held that a counterclaim can be considered a direct attack
In regard to the first requisite, in an accion reinvindicatoria, on the title.
the person who claims that he has a better right to the
property must first fix the identity of the land he is claiming The Court notes that the case of Cimafranca v.
by describing the location, area and boundaries thereof.36 Intermediate Appellate Court,42 cited by the Court of
Appeals to support its ruling that the prayer for the
In this case, petitioner claims that the property in dispute is cancellation of respondents title through a counterclaim
part of his larger property. However, petitioner failed to included in petitioners Answer is a collateral attack on the
identify his larger property by providing evidence of the said title, is inapplicable to this case. In Cimafranca,
metes and bounds thereof, so that the same may be petitioners therein filed a complaint for Partition and
compared with the technical description contained in the Damages, and respondents therein indirectly attacked the
title of respondent, which would have shown whether the validity of the title involved in their counterclaim. Hence, the
disputed property really formed part of petitioners larger Court ruled that a Torrens title cannot be attacked
property. The appellate court correctly held in its Resolution collaterally, and the issue on its validity can be raised only
dated May 13, 2004 that petitioners claim is solely in an action expressly instituted for that purpose.
supported by testimonial evidence, which did not
conclusively show the metes and bounds of petitioners Here, the case cited by petitioner, Heirs of Simplicio
larger property in relation to the metes and bounds of the Santiago v. Heirs of Mariano E. Santiago, declared that the
disputed property; thus, there is no sufficient evidence on one-year prescriptive period does not apply when the party
record to support petitioners claim that the disputed seeking annulment of title or reconveyance is in possession
property is part of his larger property. of the lot, as well as distinguished a collateral attack under
Section 48 of PD No. 1529 from a direct attack, and held
In regard to the second requisite of title to property, both that a counterclaim may be considered as a complaint or an
petitioner and respondent separately claim that they are independent action and can be considered a direct attack
entitled to ownership of the property by virtue of open, on the title, thus:
public, continuous and exclusive possession of the same in
the concept of owner. Petitioner claims that he inherited the The one-year prescriptive period, however, does not apply
subject property from his father in 1952, while respondent when the person seeking annulment of title or
claims that he acquired the property from his grandmother reconveyance is in possession of the lot. This is because
Intumo Pagsidan, a portion thereof from his grandmothers the action partakes of a suit to quiet title which is
helper Totop Malacop pursuant to a court decision after imprescriptible. In David v. Malay, we held that a person in
actual possession of a piece of land under claim of Resolution dated May 13, 2004 in CA-G.R. CV No. 63801,
ownership may wait until his possession is disturbed or his are hereby AFFIRMED.
title is attacked before taking steps to vindicate his right,
and his undisturbed possession gives him the continuing No costs.
right to seek the aid of a court of equity to ascertain and
determine the nature of the adverse claim of a third party
SO ORDERED.
and its effect on his title.
xxxx
Thus, on March 8, 2004, after nine (9) years of spirited Things turned for the worse when petitioner took up an
advocacy by women's groups, Congress enacted Republic affair with a bank manager of Robinson's Bank, Bacolod
Act (R.A.) No. 9262, entitled "An Act Defining Violence City, who is the godmother of one of their sons. Petitioner
Against Women and Their Children, Providing for Protective admitted to the affair when private respondent confronted
Measures for Victims, Prescribing Penalties Therefor, and him about it in 2004. He even boasted to the household
for Other Purposes." It took effect on March 27, 2004.4 help about his sexual relations with said bank manager.
Petitioner told private respondent, though, that he was just
using the woman because of their accounts with the bank.10
R.A. 9262 is a landmark legislation that defines and
criminalizes acts of violence against women and their
children (VAWC) perpetrated by women's intimate partners, Petitioner's infidelity spawned a series of fights that left
i.e, husband; former husband; or any person who has or private respondent physically and emotionally wounded. In
had a sexual or dating relationship, or with whom the one of their quarrels, petitioner grabbed private respondent
woman has a common child.5 The law provides for on both arms and shook her with such force that caused
protection orders from the barangay and the courts to bruises and hematoma. At another time, petitioner hit
prevent the commission of further acts of VAWC; and private respondent forcefully on the lips that caused some
outlines the duties and responsibilities of barangay officials, bleeding. Petitioner sometimes turned his ire on their
law enforcers, prosecutors and court personnel, social daughter, Jo-Ann, who had seen the text messages he sent
workers, health care providers, and other local government to his paramour and whom he blamed for squealing on him.
officials in responding to complaints of VAWC or requests He beat Jo-Ann on the chest and slapped her many times.
for assistance. When private respondent decided to leave petitioner, Jo-
Ann begged her mother to stay for fear that if the latter
leaves, petitioner would beat her up. Even the small boys
A husband is now before the Court assailing the
are aware of private respondent's sufferings. Their 6-year-
constitutionality of R.A. 9262 as being violative of the equal
old son said that when he grows up, he would beat up his
protection and due process clauses, and an undue father because of his cruelty to private respondent.11
delegation of judicial power to barangay officials.
Private respondent is determined to separate from The Chief of Police shall also give the Petitioner
petitioner but she is afraid that he would take her children police assistance on Sunday, 26 March 2006
from her and deprive her of financial support. Petitioner had because of the danger that the Respondent will
previously warned her that if she goes on a legal battle with attempt to take her children from her when he
him, she would not get a single centavo.14 arrives from Manila and finds out about this suit.
Petitioner controls the family businesses involving mostly b) To stay away from the petitioner and her
the construction of deep wells. He is the President of three children, mother and all her household help and
corporations 326 Realty Holdings, Inc., Negros Rotadrill driver from a distance of 1,000 meters, and shall
Corporation, and J-Bros Trading Corporation of which he not enter the gate of the subdivision where the
and private respondent are both stockholders. In contrast to Petitioner may be temporarily residing.
the absolute control of petitioner over said corporations,
private respondent merely draws a monthly salary of
c) Not to harass, annoy, telephone, contact or
P20,000.00 from one corporation only, the Negros Rotadrill
otherwise communicate with the Petitioner, directly
Corporation. Household expenses amounting to not less
or indirectly, or through other persons, or contact
than P200,000.00 a month are paid for by private
directly or indirectly her children, mother and
respondent through the use of credit cards, which, in turn,
household help, nor send gifts, cards, flowers,
are paid by the same corporation together with the bills for
utilities.15 letters and the like. Visitation rights to the children
may be subject of a modified TPO in the future.
On the other hand, petitioner receives a monthly salary of
d) To surrender all his firearms including a .9MM
P60,000.00 from Negros Rotadrill Corporation, and enjoys
caliber firearm and a Walther PPK and ordering the
unlimited cash advances and other benefits in hundreds of
Philippine National Police Firearms and Explosives
thousands of pesos from the corporations.16 After private
Unit and the Provincial Director of the PNP to
respondent confronted him about the affair, petitioner
cancel all the Respondent's firearm licenses. He
forbade her to hold office at JBTC Building, Mandalagan,
should also be ordered to surrender any
where all the businesses of the corporations are conducted,
unlicensed firearms in his possession or control.
thereby depriving her of access to full information about
said businesses. Until the filing of the petition a quo,
petitioner has not given private respondent an accounting of e) To pay full financial support for the Petitioner
the businesses the value of which she had helped raise to and the children, including rental of a house for
millions of pesos.17 them, and educational and medical expenses.
Action of the RTC of Bacolod City f) Not to dissipate the conjugal business.
Finding reasonable ground to believe that an imminent g) To render an accounting of all advances,
danger of violence against the private respondent and her benefits, bonuses and other cash he received from
children exists or is about to recur, the RTC issued a TPO18 all the corporations from 1 January 2006 up to 31
on March 24, 2006 effective for thirty (30) days, which is March 2006, which himself and as President of the
quoted hereunder: corporations and his Comptroller, must submit to
the Court not later than 2 April 2006. Thereafter, an
accounting of all these funds shall be reported to
Respondent (petitioner herein), Jesus Chua Garcia, is
hereby: the court by the Comptroller, copy furnished to the
Petitioner, every 15 days of the month, under pain
of Indirect Contempt of Court.
a) Ordered to remove all his personal belongings
from the conjugal dwelling or family home within 24
hours from receipt of the Temporary Restraining h) To ensure compliance especially with the order
Order and if he refuses, ordering that he be granting support pendente lite, and considering the
removed by police officers from the conjugal financial resources of the Respondent and his
dwelling; this order is enforceable notwithstanding threat that if the Petitioner sues she will not get a
that the house is under the name of 236 Realty single centavo, the Respondent is ordered to put
Holdings Inc. (Republic Act No. 9262 states up a BOND TO KEEP THE PEACE in the amount
of FIVE MILLION PESOS, in two sufficient
"regardless of ownership"), this is to allow the
sureties.
On April 24, 2006, upon motion19 of private until 48 hours after the petitioners have left, so that
respondent, the trial court issued an amended the petitioner Rosalie and her representatives can
TPO,20 effective for thirty (30) days, which included remove things from the conjugal home and make
the following additional provisions: an inventory of the household furniture, equipment
and other things in the conjugal home, which shall
i) The petitioners (private respondents herein) are be submitted to the Court.
given the continued use of the Nissan Patrol and
the Starex Van which they are using in Negros d) Deliver full financial support of Php200,000.00
Occidental. and Php50,000.00 for rental and Php25,000.00 for
clothes of the three petitioners (sic) children within
j) The petitioners are given the continued use and 24 hours from receipt of the Temporary Protection
occupation of the house in Paraaque, the Order by his counsel, otherwise be declared in
continued use of the Starex van in Metro Manila, indirect contempt of Court;
whenever they go to Manila.
e) That respondent surrender his two firearms and
k) Respondent is ordered to immediately post a all unlicensed firearms to the Clerk of Court within
bond to keep the peace, in two sufficient sureties. 24 hours from receipt of the Temporary Protection
Order by his counsel;
l) To give monthly support to the petitioner
provisionally fixed in the sum of One Hundred Fifty f) That respondent shall pay petitioner educational
Thousand Pesos (Php 150,000.00) per month plus expenses of the children upon presentation of
rental expenses of Fifty Thousand Pesos (Php proof of payment of such expenses.23
50,000.00) per month until the matter of support
could be finally resolved. Claiming that petitioner continued to deprive them of
financial support; failed to faithfully comply with the TPO;
Two days later, or on April 26, 2006, petitioner filed an and committed new acts of harassment against her and
Opposition to the Urgent Ex-Parte Motion for Renewal of their children, private respondent filed another application24
the TPO21 seeking the denial of the renewal of the TPO on for the issuance of a TPO ex parte. She alleged inter
the grounds that it did not (1) comply with the three-day
notice rule, and (2) contain a notice of hearing. He further alia that petitioner contrived a replevin suit against himself
asked that the TPO be modified by (1) removing one by J-Bros Trading, Inc., of which the latter was purportedly
vehicle used by private respondent and returning the same no longer president, with the end in view of recovering the
to its rightful owner, the J-Bros Trading Corporation, and (2) Nissan Patrol and Starex Van used by private respondent
cancelling or reducing the amount of the bond from and the children. A writ of replevin was served upon private
P5,000,000.00 to a more manageable level at P100,000.00. respondent by a group of six or seven policemen with long
firearms that scared the two small boys, Jessie Anthone
Subsequently, on May 23, 2006, petitioner moved22 for the and Joseph Eduard.25
modification of the TPO to allow him visitation rights to his
children. While Joseph Eduard, then three years old, was driven to
school, two men allegedly attempted to kidnap him, which
On May 24, 2006, the TPO was renewed and extended yet incident traumatized the boy resulting in his refusal to go
again, but subject only to the following modifications prayed back to school. On another occasion, petitioner allegedly
for by private respondent: grabbed their daughter, Jo-Ann, by the arm and threatened
her.26 The incident was reported to the police, and Jo-Ann
subsequently filed a criminal complaint against her father
a) That respondent (petitioner herein) return the for violation of R.A. 7610, also known as the "Special
clothes and other personal belongings of Rosalie Protection of Children Against Child Abuse, Exploitation
and her children to Judge Jesus Ramos, co- and Discrimination Act."
counsel for Petitioner, within 24 hours from receipt
of the Temporary Protection Order by his counsel,
otherwise be declared in Indirect Contempt of Aside from the replevin suit, petitioner's lawyers initiated the
Court; filing by the housemaids working at the conjugal home of a
complaint for kidnapping and illegal detention against
private respondent. This came about after private
b) Respondent shall make an accounting or list of
respondent, armed with a TPO, went to said home to get
furniture and equipment in the conjugal house in
her and her children's belongings. Finding some of her
Pitimini St., Capitolville Subdivision, Bacolod City things inside a housemaid's (Sheryl Jamola) bag in the
within 24 hours from receipt of the Temporary maids' room, private respondent filed a case for qualified
Protection Order by his counsel; theft against Jamola.27
1) Prohibited from threatening to commit or 9) Ordered that the Register of Deeds of Bacolod
committing, personally or through another, acts of City and E.B. Magalona shall be served a copy of
violence against the offended party; this TEMPORARY PROTECTION ORDER and are
ordered not to allow the transfer, sale,
2) Prohibited from harassing, annoying, encumbrance or disposition of these above-cited
telephoning, contacting or otherwise properties to any person, entity or corporation
communicating in any form with the offended party, without the personal presence of petitioner Rosalie
either directly or indirectly; J. Garcia, who shall affix her signature in the
presence of the Register of Deeds, due to the fear
of petitioner Rosalie that her signature will be
3) Required to stay away, personally or through his
forged in order to effect the encumbrance or sale of
friends, relatives, employees or agents, from all the
these properties to defraud her or the conjugal
Petitioners Rosalie J. Garcia and her children, partnership of gains.
Rosalie J. Garcia's three brothers, her mother
Primitiva Jaype, cook Novelita Caranzo, driver
Romeo Hontiveros, laundrywoman Mercedita In its Order29 dated September 26, 2006, the trial court
Bornales, security guard Darwin Gayona and the extended the aforequoted TPO for another ten (10) days,
petitioner's other household helpers from a and gave petitioner a period of five (5) days within which to
distance of 1,000 meters, and shall not enter the show cause why the TPO should not be renewed,
gate of the subdivision where the Petitioners are extended, or modified. Upon petitioner's manifestation,30
temporarily residing, as well as from the schools of however, that he has not received a copy of private
the three children; Furthermore, that respondent respondent's motion to modify/renew the TPO, the trial
shall not contact the schools of the children directly court directed in its Order31 dated October 6, 2006 that
or indirectly in any manner including, ostensibly to petitioner be furnished a copy of said motion. Nonetheless,
pay for their tuition or other fees directly, otherwise an Order32 dated a day earlier, October 5, had already been
he will have access to the children through the issued renewing the TPO dated August 23, 2006. The
schools and the TPO will be rendered nugatory; pertinent portion is quoted hereunder:
6) Directed to deliver educational expenses for After having received a copy of the foregoing Order,
2006-2007 the amount of Php75,000.00 and petitioner no longer submitted the required comment to
Php25,000.00; private respondent's motion for renewal of the TPO arguing
that it would only be an "exercise in futility."33
7) Directed to allow the continued use of a Nissan
Patrol with Plate No. FEW 508 and a Starex van Proceedings before the CA
with Plate No. FFD 991 and should the respondent
fail to deliver said vehicles, respondent is ordered During the pendency of Civil Case No. 06-797, petitioner
to provide the petitioner another vehicle which is filed before the Court of Appeals (CA) a petition34 for
the one taken by J Bros Tading; prohibition (CA-G.R. CEB-SP. No. 01698), with prayer for
injunction and temporary restraining order, challenging (1)
8) Ordered not to dissipate, encumber, alienate, the constitutionality of R.A. 9262 for being violative of the
sell, lease or otherwise dispose of the conjugal due process and the equal protection clauses, and (2) the
assets, or those real properties in the name of validity of the modified TPO issued in the civil case for
Jesus Chua Garcia only and those in which the being "an unwanted product of an invalid law."
conjugal partnership of gains of the Petitioner
Rosalie J. Garcia and respondent have an interest On May 26, 2006, the appellate court issued a 60-day
in, especially the conjugal home located in No. 14, Temporary Restraining Order36 (TRO) against the
Pitimini St., Capitolville Subdivision, Bacolod City, enforcement of the TPO, the amended TPOs and other
and other properties which are conjugal assets or orders pursuant thereto.
those in which the conjugal partnership of gains of
Petitioner Rosalie J. Garcia and the respondent Subsequently, however, on January 24, 2007, the appellate
have an interest in and listed in Annexes "I," "I-1," court dismissed36 the petition for failure of petitioner to raise
the constitutional issue in his pleadings before the trial court As a general rule, the question of constitutionality must be
in the civil case, which is clothed with jurisdiction to resolve raised at the earliest opportunity so that if not raised in the
the same. Secondly, the challenge to the validity pleadings, ordinarily it may not be raised in the trial, and if
not raised in the trial court, it will not be considered on
of R.A. 9262 through a petition for prohibition seeking to appeal.39 Courts will not anticipate a question of
annul the protection orders issued by the trial court constitutional law in advance of the necessity of deciding
constituted a collateral attack on said law. it.40
His motion for reconsideration of the foregoing Decision In defending his failure to attack the constitutionality of R.A.
having been denied in the Resolution37 dated August 14, 9262 before the RTC of Bacolod City, petitioner argues that
2007, petitioner is now before us alleging that the Family Court has limited authority and jurisdiction that is
"inadequate to tackle the complex issue of
constitutionality."41
The Issues
We disagree.
I.
Family Courts have authority and jurisdiction to consider the
THE COURT OF APPEALS ERRED IN DISMISSING THE constitutionality of a statute.
PETITION ON THE THEORY THAT THE ISSUE OF
CONSTITUTIONALITY WAS NOT RAISED AT THE
EARLIEST OPPORTUNITY AND THAT, THE PETITION At the outset, it must be stressed that Family Courts are
CONSTITUTES A COLLATERAL ATTACK ON THE special courts, of the same level as Regional Trial Courts.
VALIDITY OF THE LAW. Under R.A. 8369, otherwise known as the "Family Courts
Act of 1997," family courts have exclusive original
jurisdiction to hear and decide cases of domestic violence
II.
against women and children.42 In accordance with said law,
the Supreme Court designated from among the branches of
THE COURT OF APPEALS COMMITTED SERIOUS the Regional Trial Courts at least one Family Court in each
ERROR IN FAILING TO CONCLUDE THAT R.A. 9262 IS of several key cities identified.43 To achieve harmony with
DISCRIMINATORY, UNJUST, AND VIOLATIVE OF THE the first mentioned law, Section 7 of R.A. 9262 now
EQUAL PROTECTION CLAUSE. provides that Regional Trial Courts designated as Family
Courts shall have original and exclusive jurisdiction over
III. cases of VAWC defined under the latter law, viz:
THE COURT OF APPEALS COMMITTED GRAVE SEC. 7. Venue. The Regional Trial Court designated as a
MISTAKE IN NOT FINDING THAT R.A. 9262 RUNS Family Court shall have original and exclusive jurisdiction
COUNTER TO THE DUE PROCESS CLAUSE OF THE over cases of violence against women and their children
CONSTITUTION. under this law. In the absence of such court in the place
where the offense was committed, the case shall be filed in
IV. the Regional Trial Court where the crime or any of its
elements was committed at the option of the complainant.
(Emphasis supplied)
THE COURT OF APPEALS ERRED IN NOT FINDING
THAT THE LAW DOES VIOLENCE TO THE POLICY OF
THE STATE TO PROTECT THE FAMILY AS A BASIC Inspite of its designation as a family court, the RTC of
SOCIAL INSTITUTION. Bacolod City remains possessed of authority as a court of
general original jurisdiction to pass upon all kinds of cases
whether civil, criminal, special proceedings, land
V. registration, guardianship, naturalization, admiralty or
insolvency.44 It is settled that RTCs have jurisdiction to
THE COURT OF APPEALS SERIOUSLY ERRED IN NOT resolve the constitutionality of a statute,45 "this authority
DECLARING R.A. No. 9262 AS INVALID AND being embraced in the general definition of the judicial
UNCONSTITUTIONAL BECAUSE IT ALLOWS AN UNDUE power to determine what are the valid and binding laws by
DELEGATION OF JUDICIAL POWER TO THE the criterion of their conformity to the fundamental law."46
BARANGAY OFFICIALS.38 The Constitution vests the power of judicial review or the
power to declare the constitutionality or validity of a law,
The Ruling of the Court treaty, international or executive agreement, presidential
decree, order, instruction, ordinance, or regulation not only
in this Court, but in all RTCs.47 We said in J.M. Tuason and
Before delving into the arguments propounded by petitioner
Co., Inc. v. CA48 that, "plainly the Constitution contemplates
against the constitutionality of R.A. 9262, we shall first
that the inferior courts should have jurisdiction in cases
tackle the propriety of the dismissal by the appellate court
involving constitutionality of any treaty or law, for it speaks
of the petition for prohibition (CA-G.R. CEB-SP. No. 01698)
of appellate review of final judgments of inferior courts in
filed by petitioner.
cases where such constitutionality happens to be in issue."
Section 5, Article VIII of the 1987 Constitution reads in part
as follows:
SEC. 5. The Supreme Court shall have the following very statute the validity of which is being attacked53 by
powers: petitioner who has sustained, or will sustain, direct injury as
a result of its enforcement. The alleged unconstitutionality
xxx of R.A. 9262 is, for all intents and purposes, a valid cause
for the non-issuance of a protection order.
2. Review, revise, reverse, modify, or affirm on appeal or
certiorari, as the law or the Rules of Court may provide, That the proceedings in Civil Case No. 06-797 are
final judgments and orders of lower courts in: summary in nature should not have deterred petitioner from
raising the same in his Opposition. The question relative to
the constitutionality of a statute is one of law which does not
a. All cases in which the constitutionality or validity of any
need to be supported by evidence.54 Be that as it may,
treaty, international or executive agreement, law,
Section 25 of A.M. No. 04-10-11-SC nonetheless allows the
presidential decree, proclamation, order, instruction,
conduct of a hearing to determine legal issues, among
ordinance, or regulation is in question.
others, viz:
xxxx
SEC. 25. Order for further hearing. - In case the court
determines the need for further hearing, it may issue an
Thus, contrary to the posturing of petitioner, the issue of order containing the following:
constitutionality of R.A. 9262 could have been raised at the
earliest opportunity in his Opposition to the petition for (a) Facts undisputed and admitted;
protection order before the RTC of Bacolod City, which had
jurisdiction to determine the same, subject to the review of
this Court. (b) Factual and legal issues to be resolved;
Section 20 of A.M. No. 04-10-11-SC, the Rule on Violence (c) Evidence, including objects and documents that
Against Women and Their Children, lays down a new kind have been marked and will be presented;
of procedure requiring the respondent to file an opposition
to the petition and not an answer.49 Thus: (d) Names of witnesses who will be ordered to
present their direct testimonies in the form of
SEC. 20. Opposition to petition. (a) The respondent may affidavits; and
file an opposition to the petition which he himself shall
verify. It must be accompanied by the affidavits of (e) Schedule of the presentation of evidence by
witnesses and shall show cause why a temporary or both parties which shall be done in one day, to the
permanent protection order should not be issued. extent possible, within the 30-day period of the
effectivity of the temporary protection order issued.
(b) Respondent shall not include in the opposition any (Emphasis supplied)
counterclaim, cross-claim or third-party complaint, but any
cause of action which could be the subject thereof may be To obviate potential dangers that may arise concomitant to
litigated in a separate civil action. (Emphasis supplied) the conduct of a hearing when necessary, Section 26 (b) of
A.M. No. 04-10-11-SC provides that if a temporary
We cannot subscribe to the theory espoused by petitioner protection order issued is due to expire, the trial court may
that, since a counterclaim, cross-claim and third-party extend or renew the said order for a period of thirty (30)
complaint are to be excluded from the opposition, the issue days each time until final judgment is rendered. It may
of constitutionality cannot likewise be raised therein. A likewise modify the extended or renewed temporary
counterclaim is defined as any claim for money or other protection order as may be necessary to meet the needs of
relief which a defending party may have against an the parties. With the private respondent given ample
opposing party.50 A cross-claim, on the other hand, is any protection, petitioner could proceed to litigate the
claim by one party against a co-party arising out of the constitutional issues, without necessarily running afoul of
transaction or occurrence that is the subject matter either of the very purpose for the adoption of the rules on summary
the original action or of a counterclaim therein.51 Finally, a procedure.
third-party complaint is a claim that a defending party may,
with leave of court, file against a person not a party to the In view of all the foregoing, the appellate court correctly
action for contribution, indemnity, subrogation or any other dismissed the petition for prohibition with prayer for
relief, in respect of his opponent's claim.52 As pointed out by injunction and temporary restraining order (CA-G.R. CEB -
Justice Teresita J. Leonardo-De Castro, the SP. No. 01698). Petitioner may have proceeded upon an
unconstitutionality of a statute is not a cause of action that honest belief that if he finds succor in a superior court, he
could be the subject of a counterclaim, cross-claim or a could be granted an injunctive relief. However, Section 22(j)
third-party complaint. Therefore, it is not prohibited from of A.M. No. 04-10-11-SC expressly disallows the filing of a
being raised in the opposition in view of the familiar maxim petition for certiorari, mandamus or prohibition against any
expressio unius est exclusio alterius. interlocutory order issued by the trial court. Hence, the 60-
day TRO issued by the appellate court in this case against
Moreover, it cannot be denied that this issue affects the the enforcement of the TPO, the amended TPOs and other
resolution of the case a quo because the right of private orders pursuant thereto was improper, and it effectively
respondent to a protection order is founded solely on the
hindered the case from taking its normal course in an protection under the same measure. We quote pertinent
expeditious and summary manner. portions of the deliberations:
As the rules stand, a review of the case by appeal or Wednesday, December 10, 2003
certiorari before judgment is prohibited. Moreover, if the
appeal of a judgment granting permanent protection shall Senator Pangilinan. I just wanted to place this on record,
not stay its enforcement,55 with more reason that a TPO, Mr. President. Some women's groups have expressed
which is valid only for thirty (30) days at a time,56 should not concerns and relayed these concerns to me that if we are to
be enjoined. include domestic violence apart from against women as
well as other members of the household, including children
The mere fact that a statute is alleged to be unconstitutional or the husband, they fear that this would weaken the efforts
or invalid, does not of itself entitle a litigant to have the to address domestic violence of which the main victims or
same enjoined.57 In Younger v. Harris, Jr.,58 the Supreme the bulk of the victims really are the wives, the spouses or
Court of the United States declared, thus: the female partners in a relationship. We would like to place
that on record. How does the good Senator respond to this
Federal injunctions against state criminal statutes, either in kind of observation?
their entirety or with respect to their separate and distinct
prohibitions, are not to be granted as a matter of course, Senator Estrada. Yes, Mr. President, there is this group of
even if such statutes are unconstitutional. No citizen or women who call themselves "WIIR" Women in Intimate
member of the community is immune from prosecution, in Relationship. They do not want to include men in this
good faith, for his alleged criminal acts. The imminence of domestic violence. But plenty of men are also being abused
such a prosecution even though alleged to be unauthorized by women. I am playing safe so I placed here members of
and, hence, unlawful is not alone ground for relief in equity the family, prescribing penalties therefor and providing
which exerts its extraordinary powers only to prevent protective measures for victims. This includes the men,
irreparable injury to the plaintiff who seeks its aid. (Citations children, live-in, common-law wives, and those related with
omitted) the family.65
Intent of Congress in enacting R.A. 9262. Senator Estrada. Yes, Mr. President.
Petitioner claims that since R.A. 9262 is intended to prevent As a matter of fact, that was brought up by Senator
and criminalize spousal and child abuse, which could very Pangilinan during the interpellation period.
well be committed by either the husband or the wife, gender
alone is not enough basis to deprive the husband/father of I think Senator Sotto has something to say to that.
the remedies under the law.60
Senator Legarda. Mr. President, the reason I am in support
A perusal of the deliberations of Congress on Senate Bill of the measure. Do not get me wrong. However, I believe
No. 2723,61 which became R.A. 9262, reveals that while the that there is a need to protect women's rights especially in
sponsor, Senator Luisa Pimentel-Ejercito (better known as the domestic environment.
Senator Loi Estrada), had originally proposed what she
called a "synthesized measure"62 an amalgamation of two As I said earlier, there are nameless, countless, voiceless
measures, namely, the "Anti-Domestic Violence Act" and women who have not had the opportunity to file a case
the "Anti-Abuse of Women in Intimate Relationships Act"63 against their spouses, their live-in partners after years, if not
providing protection to "all family members, leaving no one decade, of battery and abuse. If we broaden the scope to
in isolation" but at the same time giving special attention to include even the men, assuming they can at all be abused
women as the "usual victims" of violence and abuse,64 by the women or their spouses, then it would not equalize
nonetheless, it was eventually agreed that men be denied the already difficult situation for women, Mr. President.
I think that the sponsor, based on our earlier conversations, Senator Sotto. I presume that the effect of the proposed
concurs with this position. I am sure that the men in this amendment of Senator Legarda would be removing the
Chamber who love their women in their lives so dearly will "men and children" in this particular bill and focus
agree with this representation. Whether we like it or not, it is specifically on women alone. That will be the net effect of
an unequal world. Whether we like it or not, no matter how that proposed amendment. Hearing the rationale mentioned
empowered the women are, we are not given equal by the distinguished sponsor, Sen. Luisa "Loi" Ejercito
opportunities especially in the domestic environment where Estrada, I am not sure now whether she is inclined to
the macho Filipino man would always feel that he is accept the proposed amendment of Senator Legarda.
stronger, more superior to the Filipino woman.
I am willing to wait whether she is accepting this or not
xxxx because if she is going to accept this, I will propose an
amendment to the amendment rather than object to the
The President Pro Tempore. What does the sponsor say? amendment, Mr. President.
While I prefer to focus mainly on women, I was compelled Senator Sotto. more than the women, the children are
to include other family members as a critical input arrived at very much abused. As a matter of fact, it is not limited to
after a series of consultations/meetings with various NGOs, minors. The abuse is not limited to seven, six, 5-year-old
experts, sports groups and other affected sectors, Mr. children. I have seen 14, 15-year-old children being abused
President. by their fathers, even by their mothers. And it breaks my
heart to find out about these things.
Senator Sotto. Mr. President.
Because of the inadequate existing law on abuse of
The President Pro Tempore. Yes, with the permission of the children, this particular measure will update that. It will
other senators. enhance and hopefully prevent the abuse of children and
not only women.
Senator Sotto. Yes, with the permission of the two ladies on
the Floor. SOTTO-LEGARDA AMENDMENTS
The President Pro Tempore. Yes, Sen. Vicente C. Sotto III Therefore, may I propose an amendment that, yes, we
is recognized. remove the aspect of the men in the bill but not the children.
Senator Legarda. I agree, Mr. President, with the Minority mere fact of inequality in no manner determines the matter
Leader. of constitutionality. All that is required of a valid
classification is that it be reasonable, which means that the
The President Pro Tempore. Effectively then, it will be classification should be based on substantial distinctions
women AND CHILDREN. which make for real differences; that it must be germane to
the purpose of the law; that it must not be limited to existing
conditions only; and that it must apply equally to each
Senator Sotto. Yes, Mr. President.
member of the class. This Court has held that the standard
is satisfied if the classification or distinction is based on a
Senator Estrada. It is accepted, Mr. President. reasonable foundation or rational basis and is not palpably
arbitrary. (Emphasis supplied)
The President Pro Tempore. Is there any objection?
[Silence] There being none, the amendment, as amended, Measured against the foregoing jurisprudential yardstick,
is approved.66 we find that R.A. 9262 is based on a valid classification as
shall hereinafter be discussed and, as such, did not violate
It is settled that courts are not concerned with the wisdom, the equal protection clause by favoring women over men as
justice, policy, or expediency of a statute.67 Hence, we dare victims of violence and abuse to whom the State extends its
not venture into the real motivations and wisdom of the protection.
members of Congress in limiting the protection against
violence and abuse under R.A. 9262 to women and children I. R.A. 9262 rests on substantial distinctions.
only. No proper challenge on said grounds may be
entertained in this proceeding. Congress has made its
The unequal power relationship between women and men;
choice and it is not our prerogative to supplant this
the fact that women are more likely than men to be victims
judgment. The choice may be perceived as erroneous but
of violence; and the widespread gender bias and prejudice
even then, the remedy against it is to seek its amendment
against women all make for real differences justifying the
or repeal by the legislative. By the principle of separation of
classification under the law. As Justice McIntyre succinctly
powers, it is the legislative that determines the necessity,
states, "the accommodation of differences ... is the essence
adequacy, wisdom and expediency of any law.68 We only of true equality."70
step in when there is a violation of the Constitution.
However, none was sufficiently shown in this case.
A. Unequal power relationship between men and women
R.A. 9262 does not violate the guaranty of equal protection
of the laws. According to the Philippine Commission on Women (the
National Machinery for Gender Equality and Women's
Empowerment), violence against women (VAW) is deemed
Equal protection simply requires that all persons or things to be closely linked with the unequal power relationship
similarly situated should be treated alike, both as to rights between women and men otherwise known as "gender-
conferred and responsibilities imposed. The oft-repeated based violence". Societal norms and traditions dictate
disquisition in the early case of Victoriano v. Elizalde Rope people to think men are the leaders, pursuers, providers,
Workers' Union69 is instructive:
and take on dominant roles in society while women are
nurturers, men's companions and supporters, and take on
The guaranty of equal protection of the laws is not a subordinate roles in society. This perception leads to men
guaranty of equality in the application of the laws upon all gaining more power over women. With power comes the
citizens of the state. It is not, therefore, a requirement, in need to control to retain that power. And VAW is a form of
order to avoid the constitutional prohibition against men's expression of controlling women to retain power.71
inequality, that every man, woman and child should be
affected alike by a statute. Equality of operation of statutes The United Nations, which has long recognized VAW as a
does not mean indiscriminate operation on persons merely human rights issue, passed its Resolution 48/104 on the
as such, but on persons according to the circumstances Declaration on Elimination of Violence Against Women on
surrounding them. It guarantees equality, not identity of December 20, 1993 stating that "violence against women is
rights. The Constitution does not require that things which a manifestation of historically unequal power relations
are different in fact be treated in law as though they were between men and women, which have led to domination
the same. The equal protection clause does not forbid
over and discrimination against women by men and to the
discrimination as to things that are different. It does not
prevention of the full advancement of women, and that
prohibit legislation which is limited either in the object to
violence against women is one of the crucial social
which it is directed or by the territory within which it is to
mechanisms by which women are forced into subordinate
operate.
positions, compared with men."72
The equal protection of the laws clause of the Constitution Then Chief Justice Reynato S. Puno traced the historical
allows classification. Classification in law, as in the other and social context of gender-based violence and
departments of knowledge or practice, is the grouping of developments in advocacies to eradicate VAW, in his
things in speculation or practice because they agree with remarks delivered during the Joint Launching of R.A. 9262
one another in certain particulars. A law is not invalid and its Implementing Rules last October 27, 2004, the
because of simple inequality. The very idea of classification pertinent portions of which are quoted hereunder:
is that of inequality, so that it goes without saying that the
History reveals that most societies sanctioned the use of In an average 12-month period in this country,
violence against women. The patriarch of a family was approximately two million women are the victims of severe
accorded the right to use force on members of the family assaults by their male partners. In a 1985 survey, women
under his control. I quote the early studies: reported that nearly one of every eight husbands had
assaulted their wives during the past year. The [American
Traditions subordinating women have a long history rooted Medical Association] views these figures as "marked
in patriarchy the institutional rule of men. Women were underestimates," because the nature of these incidents
seen in virtually all societies to be naturally inferior both discourages women from reporting them, and because
physically and intellectually. In ancient Western societies, surveys typically exclude the very poor, those who do not
women whether slave, concubine or wife, were under the speak English well, and women who are homeless or in
authority of men. In law, they were treated as property. institutions or hospitals when the survey is conducted.
According to the AMA, "researchers on family violence
agree that the true incidence of partner violence is probably
The Roman concept of patria potestas allowed the husband double the above estimates; or four million severely
to beat, or even kill, his wife if she endangered his property assaulted women per year."
right over her. Judaism, Christianity and other religions
oriented towards the patriarchal family strengthened the
male dominated structure of society. Studies on prevalence suggest that from one-fifth to one-
third of all women will be physically assaulted by a partner
or ex-partner during their lifetime... Thus on an average day
English feudal law reinforced the tradition of male control in the United States, nearly 11,000 women are severely
over women. Even the eminent Blackstone has been assaulted by their male partners. Many of these incidents
quoted in his commentaries as saying husband and wife involve sexual assault... In families where wife beating
were one and that one was the husband. However, in the takes place, moreover, child abuse is often present as well.
late 1500s and through the entire 1600s, English common
law began to limit the right of husbands to chastise their
wives. Thus, common law developed the rule of thumb, Other studies fill in the rest of this troubling picture. Physical
which allowed husbands to beat their wives with a rod or violence is only the most visible form of abuse.
stick no thicker than their thumb. Psychological abuse, particularly forced social and
economic isolation of women, is also common.
In the later part of the 19th century, legal recognition of
these rights to chastise wives or inflict corporeal Many victims of domestic violence remain with their
punishment ceased. Even then, the preservation of the abusers, perhaps because they perceive no superior
family was given more importance than preventing violence alternative...Many abused women who find temporary
to women. refuge in shelters return to their husbands, in large part
because they have no other source of income... Returning
to one's abuser can be dangerous. Recent Federal Bureau
The metamorphosis of the law on violence in the United
of Investigation statistics disclose that 8.8 percent of all
States followed that of the English common law. In 1871,
homicide victims in the United States are killed by their
the Supreme Court of Alabama became the first appellate
spouses...Thirty percent of female homicide victims are
court to strike down the common law right of a husband to killed by their male partners.
beat his wife:
Finally in 1994, the United States Congress enacted the
The privilege, ancient though it may be, to beat one's wife Violence Against Women Act.
with a stick, to pull her hair, choke her, spit in her face or
kick her about the floor, or to inflict upon her like indignities,
is not now acknowledged by our law... In person, the wife is In the International front, the women's struggle for equality
entitled to the same protection of the law that the husband was no less successful. The United States Charter and the
can invoke for himself. Universal Declaration of Human Rights affirmed the equality
of all human beings. In 1979, the UN General Assembly
adopted the landmark Convention on the Elimination of all
As time marched on, the women's advocacy movement
Forms of Discrimination Against Women (CEDAW). In
became more organized. The temperance leagues initiated
1993, the UN General Assembly also adopted the
it. These leagues had a simple focus. They considered the
Declaration on the Elimination of Violence Against Women.
evils of alcoholism as the root cause of wife abuse. Hence,
World conferences on the role and rights of women have
they demonstrated and picketed saloons, bars and their
been regularly held in Mexico City, Copenhagen, Nairobi
husbands' other watering holes. Soon, however, their
and Beijing. The UN itself established a Commission on the
crusade was joined by suffragette movements, expanding Status of Women.
the liberation movement's agenda. They fought for women's
right to vote, to own property, and more. Since then, the
feminist movement was on the roll. The Philippines has been in cadence with the half and full
steps of all these women's movements. No less than
Section 14, Article II of our 1987 Constitution mandates the
The feminist movement exposed the private invisibility of
State to recognize the role of women in nation building and
the domestic violence to the public gaze. They succeeded
to ensure the fundamental equality before the law of women
in transforming the issue into an important public concern.
and men. Our Senate has ratified the CEDAW as well as
No less than the United States Supreme Court, in 1992
the Convention on the Rights of the Child and its two
case Planned Parenthood v. Casey, noted:
protocols. To cap it all, Congress, on March 8, 2004,
enacted Rep. Act No. 9262, entitled "An Act Defining
Violence Against Women and Their Children, Providing for
Physical
Protective Measures for Victims, Prescribing Penalties3,553 2,335 1,892 1,505 1,307 1,498
Injuries
therefor and for other Purposes." (Citations omitted)
C. Gender bias and prejudices II. The classification is germane to the purpose of the law.
R.A. 9262 is not violative of the It should be pointed out that when the TPO is issued ex
due process clause of the Constitution. parte, the court shall likewise order that notice be
immediately given to the respondent directing him to file an
Petitioner bewails the disregard of R.A. 9262, specifically in opposition within five (5) days from service. Moreover, the
the issuance of POs, of all protections afforded by the due court shall order that notice, copies of the petition and TPO
process clause of the Constitution. Says he: "On the basis be served immediately on the respondent by the court
of unsubstantiated allegations, and practically no sheriffs. The TPOs are initially effective for thirty (30) days
opportunity to respond, the husband is stripped of family, from service on the respondent.104
property, guns, money, children, job, future employment
and reputation, all in a matter of seconds, without an inkling Where no TPO is issued ex parte, the court will nonetheless
of what happened."95 order the immediate issuance and service of the notice
upon the respondent requiring him to file an opposition to
A protection order is an order issued to prevent further acts the petition within five (5) days from service. The date of the
of violence against women and their children, their family or preliminary conference and hearing on the merits shall
household members, and to grant other necessary reliefs. likewise be indicated on the notice.105
Its purpose is to safeguard the offended parties from further
harm, minimize any disruption in their daily life and facilitate The opposition to the petition which the respondent himself
the opportunity and ability to regain control of their life.96 shall verify, must be accompanied by the affidavits of
witnesses and shall show cause why a temporary or
"The scope of reliefs in protection orders is broadened to permanent protection order should not be issued.106
ensure that the victim or offended party is afforded all the
remedies necessary to curtail access by a perpetrator to the It is clear from the foregoing rules that the respondent of a
victim. This serves to safeguard the victim from greater risk petition for protection order should be apprised of the
of violence; to accord the victim and any designated family charges imputed to him and afforded an opportunity to
or household member safety in the family residence, and to present his side. Thus, the fear of petitioner of being
prevent the perpetrator from committing acts that jeopardize "stripped of family, property, guns, money, children, job,
the employment and support of the victim. It also enables future employment and reputation, all in a matter of
the court to award temporary custody of minor children to seconds, without an inkling of what happened" is a mere
protect the children from violence, to prevent their product of an overactive imagination. The essence of due
abduction by the perpetrator and to ensure their financial process is to be found in the reasonable opportunity to be
support."97 heard and submit any evidence one may have in support of
one's defense. "To be heard" does not only mean verbal
The rules require that petitions for protection order be in arguments in court; one may be heard also through
writing, signed and verified by the petitioner98 thereby pleadings. Where opportunity to be heard, either through
undertaking full responsibility, criminal or civil, for every oral arguments or pleadings, is accorded, there is no denial
allegation therein. Since "time is of the essence in cases of of procedural due process.107
VAWC if further violence is to be prevented,"99 the court is
authorized to issue ex parte a TPO after raffle but before It should be recalled that petitioner filed on April 26, 2006
notice and hearing when the life, limb or property of the an Opposition to the Urgent Ex-Parte Motion for Renewal of
victim is in jeopardy and there is reasonable ground to the TPO that was granted only two days earlier on April 24,
believe that the order is necessary to protect the victim from 2006. Likewise, on May 23, 2006, petitioner filed a motion
the immediate and imminent danger of VAWC or to prevent for the modification of the TPO to allow him visitation rights
such violence, which is about to recur.100 to his children. Still, the trial court in its Order dated
September 26, 2006, gave him five days (5) within which to This section prohibits a court from ordering or referring
show cause why the TPO should not be renewed or parties to mediation in a proceeding for an order for
extended. Yet, he chose not to file the required comment protection. Mediation is a process by which parties in
arguing that it would just be an "exercise in futility," equivalent bargaining positions voluntarily reach
conveniently forgetting that the renewal of the questioned consensual agreement about the issue at hand. Violence,
TPO was only for a limited period (30 days) each time, and however, is not a subject for compromise. A process which
that he could prevent the continued renewal of said order if involves parties mediating the issue of violence implies that
he can show sufficient cause therefor. Having failed to do the victim is somehow at fault. In addition, mediation of
so, petitioner may not now be heard to complain that he issues in a proceeding for an order of protection is
was denied due process of law. problematic because the petitioner is frequently unable to
participate equally with the person against whom the
Petitioner next laments that the removal and exclusion of protection order has been sought. (Emphasis supplied)
the respondent in the VAWC case from the residence of the
victim, regardless of ownership of the residence, is virtually There is no undue delegation of
a "blank check" issued to the wife to claim any property as judicial power to barangay officials.
her conjugal home.108
Petitioner contends that protection orders involve the
The wording of the pertinent rule, however, does not by any exercise of judicial power which, under the Constitution, is
stretch of the imagination suggest that this is so. It states: placed upon the "Supreme Court and such other lower
courts as may be established by law" and, thus, protests
SEC. 11. Reliefs available to the offended party. -- The the delegation of power to barangay officials to issue
protection order shall include any, some or all of the protection orders.111 The pertinent provision reads, as
following reliefs: follows:
The non-referral of a VAWC case Judicial power includes the duty of the courts of justice to
to a mediator is justified. settle actual controversies involving rights which are legally
demandable and enforceable, and to determine whether or
Petitioner argues that "by criminalizing run-of-the-mill not there has been a grave abuse of discretion amounting
arguments, instead of encouraging mediation and to lack or excess of jurisdiction on the part of any branch or
counseling, the law has done violence to the avowed policy instrumentality of the Government.112 On the other hand,
of the State to "protect and strengthen the family as a basic executive power "is generally defined as the power to
autonomous social institution."109 enforce and administer the laws. It is the power of carrying
the laws into practical operation and enforcing their due
Under Section 23(c) of A.M. No. 04-10-11-SC, the court observance."113
shall not refer the case or any issue thereof to a mediator.
The reason behind this provision is well-explained by the As clearly delimited by the aforequoted provision, the BPO
Commentary on Section 311 of the Model Code on issued by the Punong Barangay or, in his unavailability, by
Domestic and Family Violence as follows:110 any available Barangay Kagawad, merely orders the
perpetrator to desist from (a) causing physical harm to the
woman or her child; and (2) threatening to cause the
woman or her child physical harm. Such function of the
Punong Barangay is, thus, purely executive in nature, in WHEREFORE, the instant petition for review on certiorari is
pursuance of his duty under the Local Government Code to hereby DENIED for lack of merit.
"enforce all laws and ordinances," and to "maintain public
order in the barangay."114 SO ORDERED.
Conclusion
The leased property originally belonged to the spouses In its decision, the Metropolitan Trial Court ordered him to
Arturo Victoria and Maxima Monserrat, a maternal aunt of vacate the premises and pay the plaintiff P2,000 per month
the petitioner. After the spouses emigrated to the U.S. in as reasonable compensation for his use of the premises
1970, they leased their house and lot in San Juan, Metro until he actually vacates, and P5,000 as attorney's fees. It
Manila, to the petitioner for P200 per month in 1970. As the ordered the plaintiff to pay the defendant P158,000 as the
house was old and run down, petitioner proposed to have it value of his improvements and repairs, less his accrued
repaired and renovated subject to reimbursement of his rentals of P64,000 as of December 1985 and the sum of
expenses. The lessors allowed him to do so (Exh. 3) and P12,000 which he had earlier received as partial
requested him to send them pictures of the work reimbursement.
accomplished (Exh. 3-a). He made extensive repairs,
tearing down rotten parts of the house, rebuilding and Both parties appealed to the Regional Trial Court. The
extending it up to the garage which he converted into a Regional Trial Court set aside the inferior court's decision.
dining room. He also moved the bathrooms around. The On May 19, 1987, it dismissed the ejectment complaint, and
remodelling job cost P40,000. His aunt and uncle were ordered Cement Center to pay Maceda P182,000 for as
pleased with the pictures of the remodelled house and necessary and useful improvements (pp. 31-49, Rollo of
made plans to reimburse him for his expenditures. But CA-G.R. No. 12536).
Maceda did not stop there. In what appears to be an orgy of
building, he introduced more improvements. He constructed Cement Center filed a petition for review in the Court of
a new driveway, a basketball court and raised the ground Appeals (CA-G.R. SP No. 12536). On February 17, 1988,
level near the creek, elevated the fence, remodelled the the Court of Appeals rendered a decision, modifying the
gate, and landscaped the lawn. appealed decision, the dispositive part of which leads thus:
In 1972, Arturo Victoria passed away in the United States. PREMISES CONSIDERED, the decision
In 1973, his aunt's attorney-in-fact, Atty. Rustico Zapata, appealed from is hereby AFFIRMED
Sr., promised to sell the property to him for P125,000 after insofar as it dismissed the complaint for
the title should have been transferred to his widowed aunt. ejectment filed by petitioner against private
On February 12, 1974, Atty. Zapata and a Mr. Gomez respondent. However, the, portions of the
visited the place and informed him that his aunt had sold decision declaring petitioner (plaintiff)
the property to Mrs. Gomez so he should vacate it. He under obligation to pay private respondent
refused to leave. As a result, Atty. Zapata filed an ejectment the sum of P182,200.00 corresponding to
case against him on April 4, 1974, in the Municipal Court of the value of the supposed necessary and
San Juan, Rizal (Civil Case No. 3773).lwph1.t It was useful improvement as well as the
dismissed on the plaintiffs own motion. pronouncement therein regarding private
respondent's right of retention hereby SET
ASIDE. With costs against petitioner. (p. as it exceeds P20,000. Correspondingly, the regional trial
35, Rollo.) court did not have appellate jurisdiction over the claim. The
decision of the Municipal Trial Court of San Juan awarding
The reason for the Court of Appeals' denial of Maceda's him P158,000 on his counterclaim, and that of the Regional
claim for reimbursement of the cost of his improvements Trial Court raising the award to P182,200, were invalid for
was that the MTC lacked jurisdiction over the claim which lack of jurisdiction. The jurisdiction of the Metropolitan Trial
exceeds P20,000. The Court of Appeals said: Court in a civil action for sum of money (Maceda's
counterclaim for the value of his improvements is one such
action) is limited to a demand that "does not exceed twenty
The Regional Trial Court, however, erred thousand pesos exclusive of interest and costs but inclusive
in declaring that petitioner is under of damages of whatever kind." (Sec. 33, subpar. 1, B.P.
obligation to pay private respondents the Blg. 129.) A counterclaim in the municipal or city court
sum of P182,200.00 supposedly beyond that jurisdictional limit may be pleaded only by way
corresponding to the value of the of defense to weaken the plaintiffs claim, but not to obtain
necessary and useful improvements he affirmative relief. (Agustin vs. Bacalan, 135 SCRA 340).
had introduced on the leased premises,
with the right of retention until he shall
have been fully reimbursed therefor. The Maceda was not a possessor in good faith, i.e., one who
claim for reimbursement in the total possesses in concept of an owner, hence he had no right to
amount of P240,000.00 was alleged by retain possession of the leased premises pending
private respondent by way of counterclaim reimbursement of his improvements thereon. No mere
in his answer (pp. 40-41, Records). It is lessee can claim to be a possessor in good faith. (Art. 546,
clear that the amount of counterclaim, is Civil Code; Eusebio vs. IAC, 144 SCRA 154; Laureano vs.
beyond the jurisdiction of the Metropolitan Adil, 72 SCRA 148.)
Trial Court. Under Section 33, B.P. Blg.
129, the Metropolitan Trial Court shall The promise of the now deceased spouses Arturo Victoria
have exclusive original jurisdiction over and Maxima Monserrat, to reimburse Maceda for his
civil actions where the amount of the improvements was limited only to the initial remodelling job
demand does not exceed P20,000.00 which cost P40,000, pictures of which he sent to the
exclusive of interest and costs but Victorias and which they approved and promised to
inclusive of damages of whatever kind. It reimburse. No similar promise to pay may be implied with
goes without saying that the Regional Trial regard to the additional improvements which he made
Court has no authority to entertain the without their approval and which were evidently intended to
counterclaim because it took cognizance improve them out of their property.
of the case by virtue of its appellate
jurisdiction. In any event, since the undertaking of the Victorias to
reimburse Maceda for the P40,000 worth of improvements
Considering that the Metropolitan Trial which he introduced on their property was not recorded on
Court did not have jurisdiction to their title, that promise did not encumber the property nor
adjudicate the counterclaim, the decision bind the purchaser thereof or the successor-in-interest of
of the Regional Trial Court on appeal the Victorias (Mun. of Victorias vs. CA, 149 SCRA
giving private respondent the right of 32).lwph1.t
retention is without legal basis. Besides,
the right of retention applies only to a While it is true that under B.P. Blg. 877 a lessee may not be
possessor in good faith under Article 546 ejected on account of the sale or mortgage of the leased
of the Civil Code. In lease, the lessee premises, the new owner's need of the premises for the
knows that his occupancy of the premises construction of dwellings for its employees, coupled with the
continues only during the lifetime of the lessee's failure to pay the rentals since December 1981,
lease contract. If he introduces are, to our mind, a legitimate ground for the judicial
improvements thereon, he does so at his ejectment of the lessee.
own risk (Imperial Insurance vs. Simon, 14
SCRA 855).lwph1.t The rights of a
Maceda's original rental of P200 per month could not be
lessee in good faith, which do not include
increased by the new owner, Cement Center, when it
the right of retention, are defined in Article
1678, . . . (pp. 34-35, Rollo.) acquired the property on December 5, 1981 until B.P. Blg.
25 allowed a cumulative and compounded 10% yearly
increase effective April 15,1982, and a 20% increase
In his petition for review of that decision in this Court, effective April 15, 1985, pursuant to B.P. Blg. 867 and 887
Maceda assails the setting aside of the money judgment or and R.A. 6643. Based on those guidelines, the rentals due
award for his improvements in the sum of P182,200, and from Maceda from December 4, 1981 were as follows:
the rejection of his claim to a right of retention over the
leased premises.
Per Total
Maceda's petition for review (G.R. No. 83545) has no merit. Month
The Court of Appeals correctly ruled that the municipal trial
court did not have original jurisdiction over his counterclaim
81 to April 14, 1982 P 200.00 P 900.00
Per Total
Month
P32,864.36
SO ORDERED.
G.R. No. 155173 November 23, 2004 P117,020,846.84 -- the equivalent of US$2,799,140. This
amount was to be deposited in an interest-bearing account
LAFARGE CEMENT PHILIPPINES, INC., (formerly Lafarge in the First National City Bank of New York (Citibank) for
Philippines, Inc.), LUZON CONTINENTAL LAND payment to APT, the petitioner in GR No. 119712.
CORPORATION, CONTINENTAL OPERATING
CORPORATION and PHILIP ROSEBERG, petitioners, However, petitioners allegedly refused to apply the sum to
vs. the payment to APT, despite the subsequent finality of the
CONTINENTAL CEMENT CORPORATION, GREGORY T. Decision in GR No. 119712 in favor of the latter and the
LIM and ANTHONY A. MARIANO, respondents. repeated instructions of Respondent CCC. Fearful that
nonpayment to APT would result in the foreclosure, not just
of its properties covered by the SPA with Lafarge but of
several other properties as well, CCC filed before the
Regional Trial Court of Quezon City on June 20, 2000, a
DECISION
"Complaint with Application for Preliminary Attachment"
against petitioners. Docketed as Civil Case No. Q-00-
41103, the Complaint prayed, among others, that
petitioners be directed to pay the "APT Retained Amount"
PANGANIBAN, J.: referred to in Clause 2 (c) of the SPA.
May defendants in civil cases implead in their counterclaims Petitioners moved to dismiss the Complaint on the ground
persons who were not parties to the original complaints? that it violated the prohibition on forum-shopping.
This is the main question to be answered in this Respondent CCC had allegedly made the same claim it
controversy. was raising in Civil Case No. Q-00-41103 in another action,
which involved the same parties and which was filed earlier
The Case before the International Chamber of Commerce. After the
trial court denied the Motion to Dismiss in its November 14,
2000 Order, petitioners elevated the matter before the
Before us is a Petition for Review1 under Rule 45 of the Court of Appeals in CA-GR SP No. 68688.
Rules of Court, seeking to nullify the May 22, 20022 and the
September 3, 2002 Orders3 of the Regional Trial Court
(RTC) of Quezon City (Branch 80) in Civil Case No. Q-00- In the meantime, to avoid being in default and without
41103. The decretal portion of the first assailed Order prejudice to the outcome of their appeal, petitioners filed
reads: their Answer and Compulsory Counterclaims ad Cautelam
before the trial court in Civil Case No. Q-00-41103. In their
Answer, they denied the allegations in the Complaint. They
"WHEREFORE, in the light of the foregoing as prayed -- by way of compulsory counterclaims against
earlier stated, the plaintiff's motion to dismiss Respondent CCC, its majority stockholder and president
claims is granted. Accordingly, the defendants' Gregory T. Lim, and its corporate secretary Anthony A.
claims against Mr. Lim and Mr. Mariano captioned Mariano -- for the sums of (a) P2,700,000 each as actual
as their counterclaims are dismissed."4 damages, (b) P100,000,000 each as exemplary damages,
(c) P100,000,000 each as moral damages, and (d)
The second challenged Order denied petitioners' Motion for P5,000,000 each as attorney's fees plus costs of suit.
Reconsideration.
Petitioners alleged that CCC, through Lim and Mariano, had
The Facts filed the "baseless" Complaint in Civil Case No. Q-00-41103
and procured the Writ of Attachment in bad faith. Relying on
Briefly, the origins of the present controversy can be traced this Court's pronouncement in Sapugay v. CA,5 petitioners
to the Letter of Intent (LOI) executed by both parties on prayed that both Lim and Mariano be held "jointly and
August 11, 1998, whereby Petitioner Lafarge Cement solidarily" liable with Respondent CCC.
Philippines, Inc. (Lafarge) -- on behalf of its affiliates and
other qualified entities, including Petitioner Luzon On behalf of Lim and Mariano who had yet to file any
Continental Land Corporation (LCLC) -- agreed to purchase responsive pleading, CCC moved to dismiss petitioners'
the cement business of Respondent Continental Cement compulsory counterclaims on grounds that essentially
Corporation (CCC). On October 21, 1998, both parties constituted the very issues for resolution in the instant
entered into a Sale and Purchase Agreement (SPA). At the Petition.
time of the foregoing transactions, petitioners were well
aware that CCC had a case pending with the Supreme Ruling of the Trial Court
Court. The case was docketed as GR No. 119712, entitled
Asset Privatization Trust (APT) v. Court of Appeals and
Continental Cement Corporation. On May 22, 2002, the Regional Trial Court of Quezon City
(Branch 80) dismissed petitioners' counterclaims for several
reasons, among which were the following: a) the
In anticipation of the liability that the High Tribunal might counterclaims against Respondents Lim and Mariano were
adjudge against CCC, the parties, under Clause 2 (c) of the not compulsory; b) the ruling in Sapugay was not
SPA, allegedly agreed to retain from the purchase price a applicable; and c) petitioners' Answer with Counterclaims
portion of the contract price in the amount of
violated procedural rules on the proper joinder of causes of claim."11 A permissive counterclaim is essentially an
action.6 independent claim that may be filed separately in another
case.
Acting on the Motion for Reconsideration filed by
petitioners, the trial court -- in an Amended Order dated A counterclaim is compulsory when its object "arises out of
September 3, 20027 -- admitted some errors in its May 22, or is necessarily connected with the transaction or
2002 Order, particularly in its pronouncement that their occurrence constituting the subject matter of the opposing
counterclaim had been pleaded against Lim and Mariano party's claim and does not require for its adjudication the
only. However, the RTC clarified that it was dismissing the presence of third parties of whom the court cannot acquire
counterclaim insofar as it impleaded Respondents Lim and jurisdiction."12
Mariano, even if it included CCC.
Unlike permissive counterclaims, compulsory counterclaims
Hence this Petition.8 should be set up in the same action; otherwise, they would
be barred forever. NAMARCO v. Federation of United
Issues Namarco Distributors13 laid down the following criteria to
determine whether a counterclaim is compulsory or
permissive: 1) Are issues of fact and law raised by the claim
In their Memorandum, petitioners raise the following issues
and by the counterclaim largely the same? 2) Would res
for our consideration:
judicata bar a subsequent suit on defendant's claim, absent
the compulsory counterclaim rule? 3) Will substantially the
"[a] Whether or not the RTC gravely erred in same evidence support or refute plaintiff's claim as well as
refusing to rule that Respondent CCC has no defendant's counterclaim? 4) Is there any logical relation
personality to move to dismiss petitioners' between the claim and the counterclaim? A positive answer
compulsory counterclaims on Respondents Lim to all four questions would indicate that the counterclaim is
and Mariano's behalf. compulsory.
"[b] Whether or not the RTC gravely erred in ruling Adopted in Quintanilla v. CA14 and reiterated in Alday v.
that (i) petitioners' counterclaims against FGU Insurance Corporation,15 the "compelling test of
Respondents Lim and Mariano are not compulsory; compulsoriness" characterizes a counterclaim as
(ii) Sapugay v. Court of Appeals is inapplicable compulsory if there should exist a "logical relationship"
here; and (iii) petitioners violated the rule on joinder between the main claim and the counterclaim. There exists
of causes of action."9 such a relationship when conducting separate trials of the
respective claims of the parties would entail substantial
For clarity and coherence, the Court will resolve the duplication of time and effort by the parties and the court;
foregoing in reverse order. when the multiple claims involve the same factual and legal
issues; or when the claims are offshoots of the same basic
The Court's Ruling controversy between the parties.
Petitioners' Counterclaims Compulsory "Gregory T. Lim and Anthony A. Mariano were the
persons responsible for making the bad faith
Counterclaims are defined in Section 6 of Rule 6 of the decisions for, and causing plaintiff to file this
Rules of Civil Procedure as "any claim which a defending baseless suit and to procure an unwarranted writ of
party may have against an opposing party." They are attachment, notwithstanding their knowledge that
generally allowed in order to avoid a multiplicity of suits and plaintiff has no right to bring it or to secure the writ.
to facilitate the disposition of the whole controversy in a In taking such bad faith actions, Gregory T. Lim
single action, such that the defendant's demand may be was motivated by his personal interests as one of
adjudged by a counterclaim rather than by an independent the owners of plaintiff while Anthony A. Mariano
suit. The only limitations to this principle are (1) that the was motivated by his sense of personal loyalty to
court should have jurisdiction over the subject matter of the Gregory T. Lim, for which reason he disregarded
counterclaim, and (2) that it could acquire jurisdiction over the fact that plaintiff is without any valid cause.
third parties whose presence is essential for its
adjudication.10 "Consequently, both Gregory T. Lim and Anthony
A. Mariano are the plaintiff's co-joint tortfeasors in
A counterclaim may either be permissive or compulsory. It the commission of the acts complained of in this
is permissive "if it does not arise out of or is not necessarily answer and in the compulsory counterclaims
connected with the subject matter of the opposing party's pleaded below. As such they should be held jointly
and solidarily liable as plaintiff's co-defendants to Moreover, using the "compelling test of compulsoriness,"
those compulsory counterclaims pursuant to the we find that, clearly, the recovery of petitioners'
Supreme Court's decision in Sapugay v. Mobil. counterclaims is contingent upon the case filed by
respondents; thus, conducting separate trials thereon will
xxx xxx xxx result in a substantial duplication of the time and effort of
the court and the parties.
"The plaintiff's, Gregory T. Lim and Anthony A.
Mariano's bad faith filing of this baseless case has Since the counterclaim for damages is compulsory, it must
compelled the defendants to engage the services be set up in the same action; otherwise, it would be barred
of counsel for a fee and to incur costs of litigation, forever. If it is filed concurrently with the main action but in a
in amounts to be proved at trial, but in no case less different proceeding, it would be abated on the ground of
than P5 million for each of them and for which litis pendentia; if filed subsequently, it would meet the same
plaintiff Gregory T. Lim and Anthony A. Mariano fate on the ground of res judicata.19
should be held jointly and solidarily liable.
Sapugay v. Court of Appeals Applicable to the Case at Bar
"The plaintiff's, Gregory T. Lim's and Anthony A.
Mariano's actions have damaged the reputations of Sapugay v. Court of Appeals finds application in the present
the defendants and they should be held jointly and case. In Sapugay, Respondent Mobil Philippines filed
solidarily liable to them for moral damages of P100 before the trial court of Pasig an action for replevin against
million each. Spouses Marino and Lina Joel Sapugay. The Complaint
arose from the supposed failure of the couple to keep their
"In order to serve as an example for the public end of their Dealership Agreement. In their Answer with
good and to deter similar baseless, bad faith Counterclaim, petitioners alleged that after incurring
litigation, the plaintiff, Gregory T. Lim and Anthony expenses in anticipation of the Dealership Agreement, they
A. Mariano should be held jointly and solidarily requested the plaintiff to allow them to get gas, but that it
liable to the defendants for exemplary damages of had refused. It claimed that they still had to post a surety
P100 million each." 16 bond which, initially fixed at P200,000, was later raised to
P700,000.
The above allegations show that petitioners' counterclaims
for damages were the result of respondents' (Lim and The spouses exerted all efforts to secure a bond, but the
Mariano) act of filing the Complaint and securing the Writ of bonding companies required a copy of the Dealership
Attachment in bad faith. Tiu Po v. Bautista17 involved the Agreement, which respondent continued to withhold from
issue of whether the counterclaim that sought moral, actual them. Later, petitioners discovered that respondent and its
and exemplary damages and attorney's fees against manager, Ricardo P. Cardenas, had intended all along to
respondents on account of their "malicious and unfounded" award the dealership to Island Air Product Corporation.
complaint was compulsory. In that case, we held as follows:
In their Answer, petitioners impleaded in the counterclaim
"Petitioners' counterclaim for damages fulfills the Mobil Philippines and its manager -- Ricardo P. Cardenas --
necessary requisites of a compulsory counterclaim. as defendants. They prayed that judgment be rendered,
They are damages claimed to have been suffered holding both jointly and severally liable for pre-operation
by petitioners as a consequence of the action filed expenses, rental, storage, guarding fees, and unrealized
against them. They have to be pleaded in the same profit including damages. After both Mobil and Cardenas
action; otherwise, petitioners would be precluded failed to respond to their Answer to the Counterclaim,
by the judgment from invoking the same in an petitioners filed a "Motion to Declare Plaintiff and its
independent action. The pronouncement in Papa Manager Ricardo P. Cardenas in Default on Defendant's
vs. Banaag (17 SCRA 1081) (1966) is in point: Counterclaim."
"Compensatory, moral and exemplary damages, Among the issues raised in Sapugay was whether
allegedly suffered by the creditor in consequence Cardenas, who was not a party to the original action, might
of the debtor's action, are also compulsory nevertheless be impleaded in the counterclaim. We
counterclaim barred by the dismissal of the disposed of this issue as follows:
debtor's action. They cannot be claimed in a
subsequent action by the creditor against the "A counterclaim is defined as any claim for money
debtor." or other relief which a defending party may have
against an opposing party. However, the general
"Aside from the fact that petitioners' counterclaim rule that a defendant cannot by a counterclaim
for damages cannot be the subject of an bring into the action any claim against persons
independent action, it is the same evidence that other than the plaintiff admits of an exception under
sustains petitioners' counterclaim that will refute Section 14, Rule 6 which provides that 'when the
private respondent's own claim for damages. This presence of parties other than those to the original
is an additional factor that characterizes petitioners' action is required for the granting of complete relief
counterclaim as compulsory."18 in the determination of a counterclaim or cross-
claim, the court shall order them to be brought in
as defendants, if jurisdiction over them can be Suability and liability are two distinct matters. While the
obtained.' The inclusion, therefore, of Cardenas in Court does rule that the counterclaims against Respondent
petitioners' counterclaim is sanctioned by the CCC's president and manager may be properly filed, the
rules."20 determination of whether both can in fact be held jointly and
severally liable with respondent corporation is entirely
The prerogative of bringing in new parties to the action at another issue that should be ruled upon by the trial court.
any stage before judgment is intended to accord complete
relief to all of them in a single action and to avert a duplicity However, while a compulsory counterclaim may implead
and even a multiplicity of suits thereby. persons not parties to the original complaint, the general
rule -- a defendant in a compulsory counterclaim need not
In insisting on the inapplicability of Sapugay, respondents file any responsive pleading, as it is deemed to have
argue that new parties cannot be included in a adopted the allegations in the complaint as its answer --
counterclaim, except when no complete relief can be had. does not apply. The filing of a responsive pleading is
They add that "[i]n the present case, Messrs. Lim and deemed a voluntary submission to the jurisdiction of the
Mariano are not necessary for petitioners to obtain court; a new party impleaded by the plaintiff in a
complete relief from Respondent CCC as plaintiff in the compulsory counterclaim cannot be considered to have
lower court. This is because Respondent CCC as a automatically and unknowingly submitted to the jurisdiction
corporation with a separate [legal personality] has the of the court. A contrary ruling would result in mischievous
juridical capacity to indemnify petitioners even without consequences whereby a party may be indiscriminately
Messrs. Lim and Mariano."21 impleaded as a defendant in a compulsory counterclaim;
and judgment rendered against it without its knowledge,
much less participation in the proceedings, in blatant
We disagree. The inclusion of a corporate officer or disregard of rudimentary due process requirements.
stockholder -- Cardenas in Sapugay or Lim and Mariano in
the instant case -- is not premised on the assumption that
the plaintiff corporation does not have the financial ability to The correct procedure in instances such as this is for the
answer for damages, such that it has to share its liability trial court, per Section 12 of Rule 6 of the Rules of Court, to
with individual defendants. Rather, such inclusion is based "order [such impleaded parties] to be brought in as
on the allegations of fraud and bad faith on the part of the defendants, if jurisdiction over them can be obtained," by
corporate officer or stockholder. These allegations may directing that summons be served on them. In this manner,
warrant the piercing of the veil of corporate fiction, so that they can be properly appraised of and answer the charges
the said individual may not seek refuge therein, but may be against them. Only upon service of summons can the trial
held individually and personally liable for his or her actions. court obtain jurisdiction over them.
In Tramat Mercantile v. Court of Appeals,22 the Court held In Sapugay, Cardenas was furnished a copy of the Answer
that generally, it should only be the corporation that could with Counterclaim, but he did not file any responsive
properly be held liable. However, circumstances may pleading to the counterclaim leveled against him.
warrant the inclusion of the personal liability of a corporate Nevertheless, the Court gave due consideration to certain
director, trustee, or officer, if the said individual is found factual circumstances, particularly the trial court's treatment
guilty of bad faith or gross negligence in directing corporate of the Complaint as the Answer of Cardenas to the
affairs. compulsory counterclaim and of his seeming acquiescence
thereto, as evidenced by his failure to make any objection
despite his active participation in the proceedings. It was
Remo Jr. v. IAC23 has stressed that while a corporation is held thus:
an entity separate and distinct from its stockholders, the
corporate fiction may be disregarded if "used to defeat
public convenience, justify a wrong, protect fraud, or defend "It is noteworthy that Cardenas did not file a motion
crime." In these instances, "the law will regard the to dismiss the counterclaim against him on the
corporation as an association of persons, or in case of two ground of lack of jurisdiction. While it is a settled
corporations, will merge them into one." Thus, there is no rule that the issue of jurisdiction may be raised
debate on whether, in alleging bad faith on the part of Lim even for the first time on appeal, this does not
and Mariano the counterclaims had in effect made them obtain in the instant case. Although it was only
"indispensable parties" thereto; based on the alleged facts, Mobil which filed an opposition to the motion to
both are clearly parties in interest to the counterclaim.24 declare in default, the fact that the trial court denied
said motion, both as to Mobil and Cardenas on the
ground that Mobil's complaint should be considered
Respondents further assert that "Messrs. Lim and Mariano as the answer to petitioners' compulsory
cannot be held personally liable [because their assailed counterclaim, leads us to the inescapable
acts] are within the powers granted to them by the proper conclusion that the trial court treated the opposition
board resolutions; therefore, it is not a personal decision but as having been filed in behalf of both Mobil and
rather that of the corporation as represented by its board of Cardenas and that the latter had adopted as his
directors."25 The foregoing assertion, however, is a matter
answer the allegations raised in the complaint of
of defense that should be threshed out during the trial;
Mobil. Obviously, it was this ratiocination which led
whether or not "fraud" is extant under the circumstances is
the trial court to deny the motion to declare Mobil
an issue that must be established by convincing evidence.26
and Cardenas in default. Furthermore, Cardenas
was not unaware of said incidents and the
proceedings therein as he testified and was and multiplicity of suits. This objective is negated by
present during trial, not to speak of the fact that as insisting -- as the court a quo has done -- that the
manager of Mobil he would necessarily be compulsory counterclaim for damages be dismissed, only to
interested in the case and could readily have have it possibly re-filed in a separate proceeding. More
access to the records and the pleadings filed important, as we have stated earlier, Respondents Lim and
therein. Mariano are real parties in interest to the compulsory
counterclaim; it is imperative that they be joined therein.
"By adopting as his answer the allegations in the Section 7 of Rule 3 provides:
complaint which seeks affirmative relief, Cardenas
is deemed to have recognized the jurisdiction of "Compulsory joinder of indispensable parties. Parties in
the trial court over his person and submitted interest without whom no final determination can be had of
thereto. He may not now be heard to repudiate or an action shall be joined either as plaintiffs or defendants."
question that jurisdiction."27
Moreover, in joining Lim and Mariano in the compulsory
Such factual circumstances are unavailing in the counterclaim, petitioners are being consistent with the
instant case. The records do not show that solidary nature of the liability alleged therein.
Respondents Lim and Mariano are either aware of
the counterclaims filed against them, or that they Second Issue:
have actively participated in the proceedings
involving them. Further, in dismissing the
CCC's Personality to Move to Dismiss the Compulsory
counterclaims against the individual respondents,
Counterclaims
the court a quo -- unlike in Sapugay -- cannot be
said to have treated Respondent CCC's Motion to
Dismiss as having been filed on their behalf. Characterizing their counterclaim for damages against
Respondents CCC, Lim and Mariano as "joint and solidary,"
petitioners prayed:
Rules on Permissive Joinder of Causes
of Action or Parties Not Applicable
"WHEREFORE, it is respectfully prayed that after
trial judgment be rendered:
Respondent CCC contends that petitioners' counterclaims
violated the rule on joinder of causes of action. It argues
that while the original Complaint was a suit for specific "1. Dismissing the complaint in its entirety;
performance based on a contract, the counterclaim for
damages was based on the tortuous acts of respondents.28 "2. Ordering the plaintiff, Gregory T. Lim and
In its Motion to Dismiss, CCC cites Section 5 of Rule 2 and Anthony A. Mariano jointly and solidarily to pay
Section 6 of Rule 3 of the Rules of Civil Procedure, which defendant actual damages in the sum of at least
we quote: P2,700,000.00;
"Section 5. Joinder of causes of action. A party "3. Ordering the plaintiff, Gregory T. Lim and
may in one pleading assert, in the alternative or Anthony A, Mariano jointly and solidarily to pay the
otherwise, as many causes of action as he may defendants LPI, LCLC, COC and Roseberg:
have against an opposing party, subject to the
following conditions: "a. Exemplary damages of P100 million each;
(a) The party joining the causes of action shall "b. Moral damages of P100 million each; and
comply with the rules on joinder of parties; x x x"
"c. Attorney's fees and costs of suit of at least P5
Section 6. Permissive joinder of parties. All million each.
persons in whom or against whom any right to
relief in respect to or arising out of the same
transaction or series of transactions is alleged to Other reliefs just and equitable are likewise prayed
exist whether jointly, severally, or in the alternative, for."29
may, except as otherwise provided in these Rules,
join as plaintiffs or be joined as defendants in one Obligations may be classified as either joint or solidary.
complaint, where any question of law or fact "Joint" or "jointly" or "conjoint" means mancum or
common to all such plaintiffs or to all such mancomunada or pro rata obligation; on the other hand,
defendants may arise in the action; but the court "solidary obligations" may be used interchangeably with
may make such orders as may be just to prevent "joint and several" or "several." Thus, petitioners' usage of
any plaintiff or defendant from being embarrassed the term "joint and solidary" is confusing and ambiguous.
or put to expense in connection with any
proceedings in which he may have no interest." The ambiguity in petitioners' counterclaims notwithstanding,
respondents' liability, if proven, is solidary. This
The foregoing procedural rules are founded on practicality characterization finds basis in Article 1207 of the Civil
and convenience. They are meant to discourage duplicity Code, which provides that obligations are generally
considered joint, except when otherwise expressly stated or fact that the liability sought against the CCC is for specific
when the law or the nature of the obligation requires performance and tort, while that sought against the
solidarity. However, obligations arising from tort are, by individual respondents is based solely on tort does not
their nature, always solidary. We have assiduously negate the solidary nature of their liability for tortuous acts
maintained this legal principle as early as 1912 in alleged in the counterclaims. Article 1211 of the Civil Code
Worcester v. Ocampo,30 in which we held: is explicit on this point:
"x x x The difficulty in the contention of the "Solidarity may exist although the creditors and the
appellants is that they fail to recognize that the debtors may not be bound in the same manner and
basis of the present action is tort. They fail to by the same periods and conditions."
recognize the universal doctrine that each joint tort
feasor is not only individually liable for the tort in The solidary character of respondents' alleged liability is
which he participates, but is also jointly liable with precisely why credence cannot be given to petitioners'
his tort feasors. x x x assertion. According to such assertion, Respondent CCC
cannot move to dismiss the counterclaims on grounds that
"It may be stated as a general rule that joint tort pertain solely to its individual co-debtors.32 In cases filed by
feasors are all the persons who command, the creditor, a solidary debtor may invoke defenses arising
instigate, promote, encourage, advise, from the nature of the obligation, from circumstances
countenance, cooperate in, aid or abet the personal to it, or even from those personal to its co-debtors.
commission of a tort, or who approve of it after it is Article 1222 of the Civil Code provides:
done, if done for their benefit. They are each liable
as principals, to the same extent and in the same "A solidary debtor may, in actions filed by the
manner as if they had performed the wrongful act creditor, avail itself of all defenses which are
themselves. x x x derived from the nature of the obligation and of
those which are personal to him, or pertain to his
"Joint tort feasors are jointly and severally liable for own share. With respect to those which personally
the tort which they commit. The persons injured belong to the others, he may avail himself thereof
may sue all of them or any number less than all. only as regards that part of the debt for which the
Each is liable for the whole damages caused by all, latter are responsible." (Emphasis supplied).
and all together are jointly liable for the whole
damage. It is no defense for one sued alone, that The act of Respondent CCC as a solidary debtor -- that of
the others who participated in the wrongful act are filing a motion to dismiss the counterclaim on grounds that
not joined with him as defendants; nor is it any pertain only to its individual co-debtors -- is therefore
excuse for him that his participation in the tort was allowed.
insignificant as compared to that of the others. x x
x
However, a perusal of its Motion to Dismiss the
counterclaims shows that Respondent CCC filed it on
"Joint tort feasors are not liable pro rata. The behalf of Co-respondents Lim and Mariano; it did not pray
damages can not be apportioned among them, that the counterclaim against it be dismissed. Be that as it
except among themselves. They cannot insist upon may, Respondent CCC cannot be declared in default.
an apportionment, for the purpose of each paying Jurisprudence teaches that if the issues raised in the
an aliquot part. They are jointly and severally liable compulsory counterclaim are so intertwined with the
for the whole amount. x x x allegations in the complaint, such issues are deemed
automatically joined.33 Counterclaims that are only for
"A payment in full for the damage done, by one of damages and attorney's fees and that arise from the filing of
the joint tort feasors, of course satisfies any claim the complaint shall be considered as special defenses and
which might exist against the others. There can be need not be answered.34
but satisfaction. The release of one of the joint tort
feasors by agreement generally operates to CCC's Motion to Dismiss the Counterclaim on Behalf of
discharge all. x x x Respondents Lim and Mariano Not Allowed
"Of course the court during trial may find that some While Respondent CCC can move to dismiss the
of the alleged tort feasors are liable and that others counterclaims against it by raising grounds that pertain to
are not liable. The courts may release some for individual defendants Lim and Mariano, it cannot file the
lack of evidence while condemning others of the same Motion on their behalf for the simple reason that it
alleged tort feasors. And this is true even though lacks the requisite authority to do so. A corporation has a
they are charged jointly and severally." legal personality entirely separate and distinct from that of
its officers and cannot act for and on their behalf, without
In a "joint" obligation, each obligor answers only for a part being so authorized. Thus, unless expressly adopted by
of the whole liability; in a "solidary" or "joint and several" Lim and Mariano, the Motion to Dismiss the compulsory
obligation, the relationship between the active and the counterclaim filed by Respondent CCC has no force and
passive subjects is so close that each of them must comply effect as to them.
with or demand the fulfillment of the whole obligation.31 The
In summary, we make the following pronouncements:
SO ORDERED.
G.R. No. 83722 August 9, 1991 rentals and the sum of P30.00 a month
from Nov. 1, 1968 until he vacates the said
MARITA CABANGIS and RODOLFO CABANGIS, premises, the further sum of P300.00 as
petitioners, and for attorney's fees, plus costs.
vs.
HON. COURT OF APPEALS and ELVIRA DEVIS SO ORDERED.
NICANDRO, respondents.
On appeal to the then Court of First Instance (now Regional
Roberto M. Cabangis for petitioners. Trial Court) of Manila, Branch VI, the judgment was
affirmed on February 21, 1972. The matter was elevated to
Bugaring, Tugonon & Associates Law Offices for private the Court of Appeals which likewise affirmed the decision of
respondent. the then Court of First Instance of Manila on November 27,
1980.
On appeal, however, the respondent appellate court To us, the crucial issues that are to be resolved in this
reversed the said order of dismissal while affirming the controversy are:
denial of the issuance of a writ of injunction in a decision
dated June 6, 1988. Whether or not the plaintiff in Civil Case No. 175034, the
private respondent herein, has a cause of action to bring a
The respondent court, in its decision, declared: suit for indemnity of improvements with injunction against
the petitioners; and if she has,
xxx xxx xxx
Whether or not her cause of action has been abandoned,
waived, barred by prescription, or barred by failure to
Plaintiffs instant action is "not designed to seasonably set it up as a compulsory counterclaim.
alter the dispositive portion of the decision
that has long become final and executory."
Plaintiff is not contesting the decision in The petition is impressed with merit.
the ejectment case against her father. She
is not claiming prior possession much less The reliance by the respondent Court of Appeals on Articles
ownership of the land as the heir of her 448 and 546 of the Civil Code of the Philippines is
father. She is merely praying in her misplaced. These provisions have no application to a
complaint for the issuance of a cease-and- contract of lease which is the subject matter of this
desist injunctive writ against the controversy. Instead, Article 1678 of the Civil Code applies.
implementation of the decision in the We quote:
ejectment proceedings and the
consequent removal or demolition of her Art. 1678. If the lessee makes, in good
father's house and improvements on the faith, useful improvements which are
lot "until plaintiffs claims for said house suitable to the use for which the lease is
and improvements are paid by the private intended, without altering the form or
defendants" in the principal sum of substance of the property leased, the
lessor upon termination of the lease shall improved its productivity, are useful improvements within
pay the lessee one-half of the value of the the purview of the law. 10
improvements at that time. Should the
lessor refuse to reimburse said amount, But, it must be remembered, as in fact it is not controverted,
the lessee may remove the improvements, that Gaspar Devis was a lessee by virtue of a lease
even though the principal thing may suffer contract between him and the City of Manila. As a mere
damage thereby. He shall not, however, lessee, he knew that the parcel of land in question was not
cause any more impairment upon the his but belonged to the latter. Even the respondent court
property leased than is necessary. conceded this fact when it stated that the private
respondent was "not claiming prior possession, much less
xxx xxx xxx ownership of the land as heir of her father. 11
On the other hand, Article 448 governs the right of Thus, the improvements that the private respondent's father
accession while Article 546 pertains to effects of had introduced in the leased premises were done at his
possession. The very language of these two provisions own risk as lessee. The right to indemnity equivalent to
clearly manifest their inapplicability to lease contracts. They one-half of the value of the said improvements the house,
provide: the filling materials, and the hollow block fence or wall is
governed, as earlier adverted to, by the provisions of Art.
ART. 448. The owner of the land on which 1678, first paragraph of the Civil Code above quoted. But
anything has been built, sown or planted in this right to indemnity exists only if the lessor opts to
good faith, shall have the right to appropriate the improvements. 12 The refusal of the lessor
appropriate as his own the works, sowing to pay the lessee one-half of the value of the useful
or planting, after payment of the indemnity improvements gives rise to the right of removal. On this
provided for in articles 546 and 548, or to score, the commentary of Justice Paras is enlightening.
oblige the one who built or planted to pay
the price of the land, and the one who Note that under the 1st paragraph of Art.
sowed, the proper rent. However, the 1678, the law on the right of REMOVAL
builder or planter cannot be obliged to buy says that "should the lessor refuse to
the land if its value is considerably more reimburse said amount, the lessee may
than that of the building or trees. In such remove the improvements, even though
case, he shall pay reasonable rent, if the the principal thing may suffer thereby."
owner of the land does not choose to While the phrase "even though implies that
appropriate the building or trees after Art. 1678 always applies regardless of
proper indemnity. The parties shall agree whether or not the improvements can be
upon the terms of the lease and in case of removed without injury to the leased
disagreement, the court shall fix the terms premises, it is believed that application of
thereof. the Article cannot always be done. The
rule is evidently intended for cases where
xxx xxx xxx a true accession takes place as when part
of the land leased is, say, converted into a
fishpond; and certainly not where as easily
ART. 546. Necessary expenses shall be removable thing (such as a wooden fence)
refunded to every possessor; but only the has been introduced. There is no doubt
possessor in good faith may retain the that in a case involving such a detachable
thing until he has been reimbursed fence, the lessee can take the same away
therefor.
with him when the lease
expires. 13
Useful expenses shall be refunded only to
the possessor in good faith with the same
Now then, indeed the private respondent would have a
right of retention, the person who has
cause of action against the petitioners for indemnity under
defeated him in the possession having the
Article 1678 of the Civil Code if the latter had chosen to
option of refunding the amount of the
appropriate the said improvements. However, there is
expenses or of paying the increase in nothing in the records to indicate that such choice was
value which the thing may have acquired made. On the other hand, there is no showing either that
by reason thereof.
the private respondent manifested her desire to remove
these improvements absent any payment of the required
The petitioners do not dispute the contention of the private indemnity. She, or her deceased father, should have
respondent that her father, Gaspar Devis, filled the leased removed the improvements at the time when the lease
parcel of land with truck loads of big stones or rocks expired 14 on July 26, 1968 15, there being no true accession
(escumbro), and enclosed or walled the same with hollow (the improvements consisting of the house, escumbro and
blocks before constructing a residential house thereon. All hollow blocks, being removable without really destroying
these, being in the nature of expenses which augmented the land), or at the time of the filing of the unlawful detainer
the value of the land, 9 or increased the income from it, or case which was on October 19, 1968. 16
Her failure to do so, we rule, constitutes a waiver or
abandonment of her right of removal of the improvements.
But even if there was no abandonment or waiver of her right
of removal, still she could not later file a complaint for the
indemnity of the improvements because that cause of
action had long prescribed, accruing as it did when the
petitioners effectively appropriated the improvements when
the lease expired on July 26, 1968, or even when the
ejectment case was filed on October 19, 1968. The
complaint of the private respondent for indemnity was filed
on November 27, 1984, more than sixteen years from the
accrual of the cause of action. Hence, the complaint was
filed six years after the expiration of the prescriptive period
of ten years as provided in Article 1144, paragraph (2) 17 of
the Civil Code. The obligation of the lessor to indemnify the
lessee is created by law, viz., Article 1678, first paragraph,
of the Civil Code earlier quoted.
SO ORDERED.
G.R. No. 170483 April 19, 2010 parties. Atty. Marcos offered P300,000 as financial
settlement per claimant in consideration of the
MANUEL C. BUNGCAYAO, SR., represented in this case improvements introduced, on the condition that they would
by his Attorney-in-fact ROMEL R. BUNGCAYAO, Petitioner, vacate the area identified as respondents property. A
vs. DSierto member made a counter-offer of P400,000, to
FORT ILOCANDIA PROPERTY HOLDINGS, AND which the other DSierto members agreed.
DEVELOPMENT CORPORATION, Respondent.
Petitioner alleged that his son, Manuel Bungcayao, Jr., who
DECISION attended the meeting, manifested that he still had to consult
his parents about the offer but upon the undue pressure
exerted by Atty. Marcos, he accepted the payment and
CARPIO, J.:
signed the Deed of Assignment, Release, Waiver and
Quitclaim6 in favor of respondent.
The Case
Petitioner then filed an action for declaration of nullity of
Before the Court is a petition for review1 assailing the 21 contract before the Regional Trial Court of Laoag, City,
November 2005 Decision2 of the Court of Appeals in CA- Branch 13 (trial court), docketed as Civil Case Nos. 12891-
G.R. CV No. 82415. 13, against respondent. Petitioner alleged that his son had
no authority to represent him and that the deed was void
The Antecedent Facts and not binding upon him.
Manuel C. Bungcayao, Sr. (petitioner) claimed to be one of Respondent countered that the area upon which petitioner
the two entrepreneurs who introduced improvements on the and the other DSierto members constructed their
foreshore area of Calayab Beach in 1978 when Fort improvements was part of its titled property under Transfer
Ilocandia Hotel started its construction in the area. Certificate of Title No. T-31182. Respondent alleged that
Thereafter, other entrepreneurs began setting up their own petitioners sons, Manuel, Jr. and Romel, attended the
stalls in the foreshore area. They later formed themselves luncheon meeting on their own volition and they were able
into the DSierto Beach Resort Owners Association, Inc. to talk to their parents through a cellular phone before they
(DSierto). accepted respondents offer. As a counterclaim, respondent
prayed that petitioner be required to return the amount of
In July 1980, six parcels of land in Barrio Balacad (now P400,000 from respondent, to vacate the portion of the
Calayad) were transferred, ceded, and conveyed to the respondents property he was occupying, and to pay
Philippine Tourism Authority (PTA) pursuant to Presidential damages because his continued refusal to vacate the
Decree No. 1704. Fort Ilocandia Resort Hotel was erected property caused tremendous delay in the planned
on the area. In 1992, petitioner and other DSierto members implementation of Fort Ilocandias expansion projects.
applied for a foreshore lease with the Community
Environment and Natural Resources Office (CENRO) and In an Order7 dated 6 November 2003, the trial court
was granted a provisional permit. On 31 January 2002, Fort confirmed the agreement of the parties to cancel the Deed
Ilocandia Property Holdings and Development Corporation of Assignment, Release, Waiver and Quitclaim and the
(respondent) filed a foreshore application over a 14-hectare return of P400,000 to respondent. Petitioners counsel,
area abutting the Fort Ilocandia Property, including the 5- however, manifested that petitioner was still maintaining its
hectare portion applied for by DSierto members. The claim for damages against respondent.
foreshore applications became the subject matter of a
conflict case, docketed Department of Environment and Petitioner and respondent agreed to consider the case
Natural Resources (DENR) Case No. 5473, between submitted for resolution on summary judgment. Thus, in its
respondent and DSierto members. In an undated Order,3 Order8 dated 28 November 2003, the trial court considered
DENR Regional Executive Director Victor J. Ancheta the case submitted for resolution. Petitioner filed a motion
denied the foreshore lease applications of the DSierto for reconsideration, alleging that he manifested in open
members, including petitioner, on the ground that the court that he was withdrawing his earlier manifestation
subject area applied for fell either within the titled property submitting the case for resolution. Respondent filed a
or within the foreshore areas applied for by respondent. The Motion for Summary Judgment.
DSierto members appealed the denial of their applications.
In a Resolution4 dated 21 August 2003, then DENR
The trial court rendered a Summary Judgment9 dated 13
Secretary Elisea G. Gozun denied the appeal on the ground February 2004.
that the area applied for encroached on the titled property
of respondent based on the final verification plan.
The Decision of the Trial Court
In a letter dated 18 September 2003,5 respondent, through
its Public Relations Manager Arlene de Guzman, invited the The trial court ruled that the only issue raised by petitioner
DSierto members to a luncheon meeting to discuss was his claim for damages while respondents issue was
common details beneficial to all parties concerned. Atty. only his claim for possession of the property occupied by
Liza Marcos (Atty. Marcos), wife of Governor Bongbong petitioner and damages. The trial court noted that the
Marcos, was present as she was asked by Fort Ilocandia parties already stipulated on the issues and admissions had
hotel officials to mediate over the conflict among the
been made by both parties. The trial court ruled that SO ORDERED.11
summary judgment could be rendered on the case.
Thus, the petition before this Court.
The trial court ruled that the alleged pressure on petitioners
sons could not constitute force, violence or intimidation that The Issues
could vitiate consent. As regards respondents
counterclaim, the trial court ruled that based on the
Petitioner raises the following issues in his Memorandum:12
pleadings and admissions made, it was established that the
property occupied by petitioner was within the titled
property of respondent. The dispositive portion of the trial 1. Whether respondents counterclaim is
courts decision reads: compulsory; and
WHEREFORE, the Court hereby renders judgment 2. Whether summary judgment is appropriate in
DISMISSING the claim of plaintiff for damages as it is found this case.
to be without legal basis, and finding the counterclaim of the
defendant for recovery of possession of the lot occupied by The Ruling of this Court
the plaintiff to be meritorious as it is hereby GRANTED.
Consequently, the plaintiff is hereby directed to immediately The petition has merit.
vacate the premises administratively adjudicated by the
executive department of the government in favor of the
defendant and yield its possession unto the defendant. No Compulsory Counterclaim
pronouncement is here made as yet of the damages
claimed by the defendant. A compulsory counterclaim is any claim for money or any
relief, which a defending party may have against an
SO ORDERED.10 opposing party, which at the time of suit arises out of, or is
necessarily connected with, the same transaction or
occurrence that is the subject matter of the plaintiffs
Petitioner appealed from the trial courts decision. complaint.13 It is compulsory in the sense that it is within the
jurisdiction of the court, does not require for its adjudication
The Decision of the Court of Appeals the presence of third parties over whom the court cannot
acquire jurisdiction, and will be barred in the future if not set
In its 21 November 2005 Decision, the Court of Appeals up in the answer to the complaint in the same case.14 Any
affirmed the trial courts decision in toto. other counterclaim is permissive.15
The Court of Appeals sustained the trial court in resorting to The Court has ruled that the compelling test of
summary judgment as a valid procedural device for the compulsoriness characterizes a counterclaim as
prompt disposition of actions in which the pleadings raise compulsory if there should exist a logical relationship
only a legal issue and not a genuine issue as to any between the main claim and the counterclaim.16 The Court
material fact. The Court of Appeals ruled that in this case, further ruled that there exists such a relationship when
the facts are not in dispute and the only issue to be conducting separate trials of the respective claims of the
resolved is whether the subject property was within the parties would entail substantial duplication of time and effort
titled property of respondent. Hence, summary judgment by the parties and the court; when the multiple claims
was properly rendered by the trial court. involve the same factual and legal issues; or when the
claims are offshoots of the same basic controversy between
the parties.17
The Court of Appeals ruled that the counterclaims raised by
respondent were compulsory in nature, as they arose out of
or were connected with the transaction or occurrence The criteria to determine whether the counterclaim is
constituting the subject matter of the opposing partys claim compulsory or permissive are as follows:
and did not require for its adjudication the presence of third
parties of whom the court could not acquire jurisdiction. The (a) Are issues of fact and law raised by the claim
Court of Appeals ruled that respondent was the rightful and by the counterclaim largely the same?
owner of the subject property and as such, it had the right
to recover its possession from any other person to whom (b) Would res judicata bar a subsequent suit on
the owner has not transmitted the property, including defendants claim, absent the compulsory rule?
petitioner.
(c) Will substantially the same evidence support or
The dispositive portion of the Court of Appeals decision refute plaintiffs claim as well as defendants
reads: counterclaim?
WHEREFORE, the assailed decision dated February 13, (d) Is there any logical relations between the claim
2004 of the Regional Trial Court of Laoag City, Branch 13 is and the counterclaim?
hereby AFFIRMED in toto.
A positive answer to all four questions would indicate that Summary judgment has been explained as follows:
the counterclaim is compulsory.18
Summary judgment is a procedural device resorted to in
In this case, the only issue in the complaint is whether order to avoid long drawn out litigations and useless delays.
Manuel, Jr. is authorized to sign the Deed of Assignment, When the pleadings on file show that there are no genuine
Release, Waiver and Quitclaim in favor of respondent issues of fact to be tried, the Rules allow a party to obtain
without petitioners express approval and authority. In an immediate relief by way of summary judgment, that is, when
Order dated 6 November 2003, the trial court confirmed the the facts are not in dispute, the court is allowed to decide
agreement of the parties to cancel the Deed of Assignment, the case summarily by applying the law to the material
Release, Waiver and Quitclaim and the return of P400,000 facts. Conversely, where the pleadings tender a genuine
to respondent. The only claim that remained was the claim issue, summary judgment is not proper. A "genuine issue"
for damages against respondent. The trial court resolved is such issue of fact which requires the presentation of
this issue by holding that any damage suffered by Manuel, evidence as distinguished from a sham, fictitious, contrived
Jr. was personal to him. The trial court ruled that petitioner or false claim. Section 3 of the said rule provides two (2)
could not have suffered any damage even if Manuel, Jr. requisites for summary judgment to be proper: (1) there
entered into an agreement with respondent since the must be no genuine issue as to any material fact, except for
agreement was null and void. the amount of damages; and (2) the party presenting the
motion for summary judgment must be entitled to a
Respondent filed three counterclaims. The first was for judgment as a matter of law. A summary judgment is
recovery of the P400,000 given to Manuel, Jr.; the second permitted only if there is no genuine issue as to any
was for recovery of possession of the subject property; and material fact and a moving party is entitled to a judgment as
the third was for damages. The first counterclaim was a matter of law. A summary judgment is proper if, while the
rendered moot with the issuance of the 6 November 2003 pleadings on their face appear to raise issues, the
Order confirming the agreement of the parties to cancel the affidavits, depositions, and admissions presented by the
Deed of Assignment, Release, Waiver and Quitclaim and to moving party show that such issues are not genuine.23
return the P400,000 to respondent. Respondent waived and
renounced the third counterclaim for damages.19 The only Since we have limited the issues to the damages claimed
counterclaim that remained was for the recovery of by the parties, summary judgment has been properly
possession of the subject property. While this counterclaim rendered in this case.
was an offshoot of the same basic controversy between the
parties, it is very clear that it will not be barred if not set up WHEREFORE, we MODIFY the 21 November 2005
in the answer to the complaint in the same case. Decision of the Court of Appeals in CA-G.R. CV No. 82415
Respondents second counterclaim, contrary to the findings which affirmed the 13 February 2004 Decision of the
of the trial court and the Court of Appeals, is only a Regional Trial Court of Laoag City, Branch 13, insofar as it
permissive counterclaim. It is not a compulsory ruled that respondents counterclaim for recovery of
counterclaim. It is capable of proceeding independently of possession of the subject property is compulsory in nature.
the main case. We DISMISS respondents permissive counterclaim without
prejudice to filing a separate action against petitioner.
The rule in permissive counterclaim is that for the trial court
to acquire jurisdiction, the counterclaimant is bound to pay SO ORDERED.
the prescribed docket fees.20 Any decision rendered without
jurisdiction is a total nullity and may be struck down at any
time, even on appeal before this Court.21 In this case,
respondent did not dispute the non-payment of docket fees.
Respondent only insisted that its claims were all
compulsory counterclaims. As such, the judgment by the
trial court in relation to the second counterclaim is
considered null and void22 without prejudice to a separate
action which respondent may file against
petitioner.1avvphi1
Summary Judgment
On January 23, 1962, plaintiff Calo, assisted by her WHEREFORE, the order of dismissal appealed from
husband, Marcos Calo, filed in the Court of First Instance of is hereby reversed and the case remanded for further
Agusan a complaint against defendant asking (1) that the proceedings. Costs against appellee Ajax International, Inc.
latter either effect complete delivery of Charge Order No. So ordered.
37071 or that she be relieved from paying P855.00 and (2)
that the latter indemnify her for P12,000 as attorney's fees,
damages and expenses of litigation.2 The case was
docketed as Civil Case No. 860.
In other words, Mr. Zulueta was off-loaded, not to protect Similarly, in NWA v. Cuenca, 12 this Court declared that an
the safety of the aircraft and its passengers, but to retaliate award for exemplary damages was justified by the fact that
and punish him for the embarrassment and loss of face the airline's "agent had acted in a wanton, reckless and
thus suffered by defendant's agent. This vindictive motive is oppressive manner" in compelling Cuenca, upon arrival at
made more manifest by the note delivered to Mr. Zulueta by Okinawa, to transfer, over his objection, from the first class,
defendant's airport manager at Wake Island, Mr. Sitton, where he was accommodated from Manila to Okinawa, to
stating that the former's stay therein would be "for a the tourist class, in his trip to Japan, "under threat of
minimum of one week," during which he would be charged otherwise leaving him in Okinawa," despite the fact that he
$13.30 per day. This reference to a "minimum of one week" had paid in full the first class fare and was issued in Manila
revealed the intention to keep him there stranded that long, a first class ticket.
for no other plane, headed for Manila, was expected within
said period of time, although Mr. Zulueta managed to
board, days later, a plane that brought him to Hawaii, Defendant cites Rotea v. Halili, 13 in support of the
whence he flew back to the Philippines, via Japan. proposition that a principal is not liable for exemplary
damages owing to acts of his agent unless the former has
participated in said acts or ratified the same. Said case
involved, however, the subsidiary civil liability of an Capt. Zentner. It should, also, be noted that, although Mr.
employer arising from criminal acts of his employee, and Zulueta was delayed some 20 to 30 minutes, the arrival or
"exemplary damages ... may be imposed when the crime departure of planes is often delayed for much longer
was committed with one or more aggravating periods of time. Followed to its logical conclusion, the
circumstances." 14 Accordingly, the Rotea case is not in argument adduced by the defense suggests that airlines
point, for the case at bar involves a breach of contract, as should be held liable for damages due to the inconvenience
well as a quasi-delict. and anxiety, aside from actual damages, suffered by many
passengers either in their haste to arrive at the airport on
Neither may the case of Palisoc v. Brillantes, 15 invoked by scheduled time just to find that their plane will not take off
the defendant, be equated with the case at bar. The Palisoc until later, or by reason of the late arrival of the aircraft at its
case dealt with the liability of school officials for damages destination.
arising from the death of a student (Palisoc) due to fist
blows given by another student (Daffon), in the course of a PANAM impugns the award of attorney's fees upon the
quarrel between them, while in a laboratory room of the ground that no penalty should be imposed upon the right to
Manila Technical Institute. In an action for damages, the litigate; that, by law, it may be awarded only in exceptional
head thereof and the teacher in charge of said laboratory cases; that the claim for attorney's fees has not been
were held jointly and severally liable with the student who proven; and that said defendant was justified in resisting
caused said death, for failure of the school to provide plaintiff's claim "because it was patently exorbitant."
"adequate supervision over the activities of the students in
the school premises," to protect them "from harm, whether Nothing, however, can be farther from the truth. Indeed
at the hands of fellow students or other parties." Such apart from plaintiff's claim for actual damages, the amount
liability was predicated upon Article 2180 of our Civil Code, of which is not contested, plaintiffs did not ask any specific
the pertinent part of which reads: sum by way of exemplary and moral damages, as well as
attorney's fees, and left the amount thereof to the "sound
ART. 2180. The obligation imposed by discretion" of the lower court. This, precisely, is the reason
Article 2176 is demandable not only for why PANAM, now, alleges without justification that the
one's own acts or omissions, but also for lower court had no jurisdiction over the subject matter of the
those of persons for whom one is present case.
responsible.
Moreover, Article 2208 of our Civil Code expressly
xxx xxx xxx authorizes the award of attorney's fees "when exemplary
damages are awarded," as they are in this case as
Lastly, teachers or heads of well as "in any other case where the court deems it just and
establishments of arts and trades shall be equitable that attorney's fees ... be recovered," and We so
liable for damages caused by their pupils deem it just and equitable in the present case, considering
and students or apprentices, so long as the "exceptional" circumstances obtaining therein,
they remain in their custody. particularly the bad faith with which defendant's agent had
acted, the place where and the conditions under which
Rafael Zulueta was left at Wake Island, the absolute refusal
xxx xxx xxx
of defendant's manager in Manila to take any step
whatsoever to alleviate Mr. Zulueta's predicament at Wake
Obviously, the amount of damages warded in the Palisoc and have him brought to Manila which, under their
case is not and cannot serve as the measure of the contract of carriage, was defendant's obligation to
damages recoverable in the present case, the latter having discharge with "extra-ordinary" or "utmost" diligence and,
been caused directly and intentionally by an employee or the "racial" factor that had, likewise, tainted the decision of
agent of the defendant, whereas the student who killed the defendant's agent, Capt. Zentner, to off-load him at Wake
young Palisoc was in no wise an agent of the school. Island.
Moreover, upon her arrival in the Philippines, Mrs. Zulueta
reported her husband's predicament to defendant's local
As regards the evidence necessary to justify the sum of
manager and asked him to forthwith have him (Mr. Zulueta)
P75,000 awarded as attorney's fees in this case, suffice it to
brought to Manila, which defendant's aforementioned
say that the quantity and quality of the services rendered by
manager refused to do, thereby impliedly ratifying the off-
plaintiffs' counsel appearing on record, apart from the
loading of Mr. Zulueta at Wake Island.
nature of the case and the amount involved therein, as well
as his prestige as one of the most distinguished members
It is next urged that, under the contract of carriage with the of the legal profession in the Philippines, of which judicial
defendant, Mr. Zulueta was bound to be present at the time cognizance may be taken, amply justify said award, which
scheduled for the departure of defendant's plane and that is a little over 10% of the damages (P700,000) collectible by
he had, consequently, violated said contract when he did plaintiffs herein. Indeed, the attorney's fees in this case is
not show up at such time. This argument might have had proportionally much less than that adjudged in Lopez v.
some weight had defendant's plane taken off before Mr. PANAM 16 in which the judgment rendered for attorney's
Zulueta had shown up. But the fact is that he was ready, fees (P50,000) was almost 20% of the damages (P275,000)
willing and able to board the plane about two hours before it recovered by the plaintiffs therein.
actually took off, and that he was deliberately and
maliciously off-loaded on account of his altercation with
The defense assails the last part of the decision sought to for the misunderstanding that had arisen between such
be reconsidered, in which relying upon Article 172 of our spouses during the litigation, and thus rendering more
Civil Code, which provides that "(t)he wife cannot bind the difficult a reconciliation between them.
conjugal partnership without the husband's consent, except
in cases provided by law," and it is not claimed that this is It is urged that there is no proof as to the purpose of the trip
one of such cases We denied a motion, filed by Mrs. of the plaintiffs, that neither is there any evidence that the
Zulueta, for the dismissal of this case, insofar as she is money used to pay the plane tickets came from the
concerned - she having settled all her differences with the conjugal funds and that the award to Mrs. Zulueta was for
defendant, which appears to have paid her the sum of her personal suffering or injuries. There was, however, no
P50,000 therefor - "without prejudice to this sum being individual or specific award in favor of Mrs. Zulueta or any
deducted from the award made in said decision." Defendant of the plaintiffs. The award was made in their favor
now alleges that this is tantamount to holding that said collectively. Again, in the absence of said proof, the
compromise agreement is both effective and ineffective. presumption is that the purpose of the trip was for the
common benefit of the plaintiffs and that the money had
This, of course, is not true. The payment is effective, insofar come from the conjugal funds, for, unless there is proof to
as it is deductible from the award, and, because it is due (or the contrary, it is presumed "(t)hat things have happened
part of the amount due) from the defendant, with or without according to the ordinary course of nature and the ordinary
its compromise agreement with Mrs. Zulueta. What is habits of life." 20 In fact Manresa maintains 21 that they are
ineffective is the compromise agreement, insofar as the deemed conjugal, when the source of the money used
conjugal partnership is concerned. Mrs. Zulueta's motion therefor is not established, even if the purchase had been
was for the dismissal of the case insofar as she was made by the wife. 22 And this is the rule obtaining in the
concerned, and the defense cited in support thereof Article Philippines. Even property registered, under the Torrens
113 of said Code, pursuant to which "(t)he husband must system, in the name of one of the spouses, or in that of the
be joined in all suits by or against the wife except: ... (2) If wife only, if acquired during the marriage, is presumed to
they have in fact been separated for at least one year." This belong to the conjugal partnership, unless there is
provision, We held, however, refers to suits in which the competent proof to the contrary. 23
wife is the principal or real party in interest, not to the case
at bar, "in which the husband is the main party in interest, PANAM maintains that the damages involved in the case at
both as the person principally aggrieved and as bar are not among those forming part of the conjugal
administrator of the conjugal partnership ... he having acted partnership pursuant to Article 153 of the Civil Code,
in this capacity in entering into the contract of carriage with reading:
PANAM and paid the amount due to the latter, under the
contract, with funds of the conjugal partnership," to which
ART. 153. The following are conjugal
the amounts recoverable for breach of said contract,
partnership property:
accordingly, belong. The damages suffered by Mrs. Zulueta
were mainly an in accident of the humiliation to which her
husband had been subjected. The Court ordered that said (1) That which is acquired by onerous title
sum of P50,00 paid by PANAM to Mrs. Zulueta be deducted during the marriage at the expense of the
from the aggregate award in favor of the plaintiffs herein for common fund, whether the acquisition be
the simple reason that upon liquidation of the conjugal for the partnership, or for only one of the
partnership, as provided by law, said amount would have to spouses;
be reckoned with, either as part of her share in the
partnership, or as part of the support which might have (2) That which is obtained by the industry,
been or may be due to her as wife of Rafael Zulueta. It or work, or as salary of the spouses, or of
would surely be inane to sentence the defendant to pay the either of them;
P700,000 due to the plaintiffs and to direct Mrs. Zulueta to
return said P50,000 to the defendant. (3) The fruits, rents or interests received or
due during the marriage, coming from the
In this connection, it is noteworthy that, for obvious reasons common property or from the exclusive
of public policy, she is not allowed by law to waive her property of each spouse.
share in the conjugal partnership, before the dissolution
thereof. 17 She cannot even acquire any property by Considering that the damages in question have arisen from,
gratuitous title, without the husband's consent, except from inter alia, a breach of plaintiffs' contract of carriage with the
her ascendants, descendants, parents-in-law, and collateral defendant, for which plaintiffs paid their fare with funds
relatives within the fourth degree. 18 presumably belonging to the conjugal partnership, We hold
that said damages fall under paragraph (1) of said Article
It is true that the law favors and encourages the settlement 153, the right thereto having been "acquired by onerous title
of litigations by compromise agreement between the during the marriage ... ." This conclusion is bolstered up by
contending parties, but, it certainly does not favor a Article 148 of our Civil Code, according to which:
settlement with one of the spouses, both of whom are
plaintiffs or defendants in a common cause, such as the ART. 148. The following shall be the
defense of the rights of the conjugal partnership, when the exclusive property of each spouse:
effect, even if indirect, of the compromise is to jeopardize
"the solidarity of the family" which the
law 19 seeks to protect by creating an additional cause
(1) That which is brought to the marriage No esta resuelta expresamente en la
as his or her own; legislacion espaola la cuestion de si las
indemnizaciones debidas por accidentes
(2) That which each acquires, during the del trabaho tienen la consideracion de
marriage, by lucrative title; gananciales, o son bienes particulares de
los conyuges.
(3) That which is acquired by right of
redemption or by exchange with other Inclinan a la solucion de que estas
property belonging to only one of the indemnizaciones deben ser consideradas
spouses; como gananciales, el hecho de que la
sociedad pierde la capacidad de
trabajocon el accidente, que a ella le
(4) That which is purchased with exclusive
pertenece, puesto que de la sociedad son
money of the wife or of the husband.
losfrutos de ese trabajo; en cambio, la
consideracion de que igual manera que
The damages involved in the case at bar do not come losbienes que sustituyen a los que cada
under any of these provisions or of the other provisions conyuge lleva al matrimonio como
forming part of Chapter 3, Title VI, of Book I of the Civil propiostienen el caracter de propios, hace
Code, which chapter is entitled "Paraphernal Property." pensar que las indemnizaciones que
What is more, if "(t)hat which is acquired by right of vengana suplir la capacidad de trabajo
redemption or by exchange with other property belonging to aportada por cada conyuge a la sociedad,
only one of the spouses," and "(t)hat which is purchased debenser juridicamente reputadas como
with exclusive money of the wife or of the husband," 24 bienes propios del conyuge que haya
belong exclusively to such wife or husband, it follows sufrido elaccidente. Asi se llega a la
necessarily that that which is acquired with money of the misma solucion aportada por la
conjugal partnership belongs thereto or forms part thereof. jurisprudencia francesca. 28
The rulings in Maramba v. Lozano 25 and Perez v. Lantin, 26
cited in defendant's motion for reconsideration, are, in
This opinion is, however, undecisive, to say the least. It
effect, adverse thereto. In both cases, it was merely held
should be noted that Colin y Capitant were commenting on
that the presumption under Article 160 of our Civil Code
the French Civil Code; that their comment referred to
to the effect that all property of the marriage belong to the indemnities due in consequence of "accidentes del trabajo
conjugal partnership does not apply unless it is shown "resulting in physical injuries sustained by one of the
that it was acquired during marriage. In the present case, spouses (which Mrs. Zulueta has not suffered); and that
the contract of carriage was concededly entered into, and said commentators admit that the question whether or not
the damages claimed by the plaintiffs were incurred, during said damages are paraphernal property or belong to the
marriage. Hence, the rights accruing from said contract, conjugal partnership is not settled under the Spanish law. 29
including those resulting from breach thereof by the Besides, the French law and jurisprudence to which the
defendant, are presumed to belong to the conjugal
comments of Planiol and Ripert, likewise, refer are
partnership of Mr. and Mrs. Zulueta. The fact that such
inapposite to the question under consideration, because
breach of contract was coupled, also, with a quasi-delict
they differ basically from the Spanish law in the treatment of
constitutes an aggravating circumstance and can not
the property relations between husband and wife. Indeed,
possibly have the effect of depriving the conjugal
our Civil Code, like the Spanish Civil Code, favors the
partnership of such property rights.
system of conjugal partnership of gains. Accordingly, the
former provides that, "(i)n the absence of marriage
Defendant insists that the use of conjugal funds to redeem settlements, or when the same are void, the system of
property does not make the property redeemed conjugal if relative community or conjugal partnership of gains ... shall
the right of redemption pertained to the wife. In the govern the property relations between" the spouses. 30
absence, however, of proof that such right of redemption Hence, "(a)ll property of the marriage is presumed to belong
pertains to the wife and there is no proof that the to the conjugal partnership, unless it be proved that it
contract of carriage with PANAM or the money paid therefor pertains exclusively to the husband or to the wife." 31
belongs to Mrs. Zulueta the property involved, or the
rights arising therefrom, must be presumed, therefore, to
No similar rules are found in the French Civil Code. What is
form part of the conjugal partnership.
more, under the provisions thereof, the conjugal partnership
exists only when so stipulated in the "capitulaciones
It is true that in Lilius v. Manila Railroad Co., 27 it was held matrimoniales" or by way of exception. In the language of
that the "patrimonial and moral damages" awarded to a Manresa
young and beautiful woman by reason of a scar in
consequence of an injury resulting from an automobile Prescindimos de los preceptos de los
accident which disfigured her face and fractured her left Condigos de Francia, Italia, Holanda,
leg, as well as caused a permanent deformity, are her
Portugal, Alemania y Suiza, porsue solo
paraphernal property. Defendant cites, also, in support of its
excepcionalmente, o cuando asi se pacta
contention the following passage from Colin y Capitant:
en las capitulaciones, admiten el sistema
de gananciales. 32
Again, Colin y Capitant, as well as the Lilius case, refer to
damages recovered for physical injuries suffered by the
wife. In the case at bar, the party mainly injured, although
not physically, is the husband.
b) P5,000.00 as
GUTIERREZ, JR., J.: exemplary damages;
SO ORDERED.
G.R. No. 170354 June 30, 2006 2004, the RTC already ordered the dismissal of the
complaint after respondents counsel had sought the
EDGARDO PINGA, Petitioner, postponement of the hearing scheduled then.10 However,
vs. the order of dismissal was subsequently reconsidered by
THE HEIRS OF GERMAN, SANTIAGO represented by the RTC in an Order dated 9 June 2005, which took into
FERNANDO SANTIAGO, Respondents. account the assurance of respondents counsel that he
would give priority to that case.11
DECISION
At the hearing of 27 July 2005, plaintiffs counsel on record
failed to appear, sending in his stead a representative who
TINGA, J.:
sought the postponement of the hearing. Counsel for
defendants (who include herein petitioner) opposed the
The constitutional faculty of the Court to promulgate rules of move for postponement and moved instead for the
practice and procedure1 necessarily carries the power to dismissal of the case. The RTC noted that it was obvious
overturn judicial precedents on points of remedial law that respondents had failed to prosecute the case for an
through the amendment of the Rules of Court. One of the unreasonable length of time, in fact not having presented
notable changes introduced in the 1997 Rules of Civil their evidence yet. On that ground, the complaint was
Procedure is the explicit proviso that if a complaint is dismissed. At the same time, the RTC allowed defendants
dismissed due to fault of the plaintiff, such dismissal is "to present their evidence ex-parte."12
"without prejudice to the right of the defendant to prosecute
his counterclaim in the same or in a separate action."2 The
Respondents filed a Motion for Reconsideration13 of the
innovation was instituted in spite of previous jurisprudence
order issued in open court on 27 July 2005, opting however
holding that the fact of the dismissal of the complaint was
not to seek that their complaint be reinstated, but praying
sufficient to justify the dismissal as well of the compulsory
instead that the entire action be dismissed and petitioner be
counterclaim.3
disallowed from presenting evidence ex-parte.
Respondents claimed that the order of the RTC allowing
In granting this petition, the Court recognizes that the petitioner to present evidence ex-parte was not in accord
former jurisprudential rule can no longer stand in light of with established jurisprudence. They cited cases,
Section 3, Rule 17 of the 1997 Rules of Civil Procedure. particularly City of Manila v. Ruymann14 and Domingo v.
Santos,15 which noted those instances in which a
The relevant facts are simple enough. Petitioner Eduardo counterclaim could not remain pending for independent
Pinga was named as one of two defendants in a complaint adjudication.
for injunction4 filed with Branch 29 of the Regional Trial
Court (RTC)5 of San Miguel, Zamboanga del Sur, by On 9 August 2005, the RTC promulgated an order granting
respondent Heirs of German Santiago, represented by respondents Motion for Reconsideration and dismissing the
Fernando Santiago. The Complaint6 dated 28 May 1998 counterclaim, citing as the only ground therefor that "there
alleged in essence that petitioner and co-defendant Vicente is no opposition to the Motion for Reconsideration of the
Saavedra had been unlawfully entering the coco lands of [respondents]."16 Petitioner filed a Motion for
the respondent, cutting wood and bamboos and harvesting Reconsideration, but the same was denied by the RTC in
the fruits of the coconut trees therein. Respondents prayed an Order dated 10 October 2005.17 Notably, respondents
that petitioner and Saavedra be enjoined from committing filed an Opposition to Defendants Urgent Motion for
"acts of depredation" on their properties, and ordered to pay Reconsideration, wherein they argued that the prevailing
damages. jurisprudential rule18 is that "compulsory counterclaims
cannot be adjudicated independently of plaintiffs cause of
In their Amended Answer with Counterclaim,7 petitioner and action," and "a conversu, the dismissal of the complaint
his co-defendant disputed respondents ownership of the carries with it the dismissal of the compulsory
properties in question, asserting that petitioners father, counterclaims."19
Edmundo Pinga, from whom defendants derived their
interest in the properties, had been in possession thereof The matter was elevated to this Court directly by way of a
since the 1930s.8 They alleged that as far back as 1968, Petition for Review under Rule 45 on a pure question of
respondents had already been ordered ejected from the law, the most relevant being whether the dismissal of the
properties after a complaint for forcible entry was filed by complaint necessarily carries the dismissal of the
the heirs of Edmundo Pinga. It was further claimed that compulsory counterclaim.
respondents application for free patent over the properties
was rejected by the Office of the President in 1971.
We hold that under Section 3, Rule 17 of the 1997 Rules of
Defendants in turn prayed that owing to respondents
Civil Procedure, the dismissal of the complaint due to the
forcible re-entry in the properties and the irresponsible and
fault of plaintiff does not necessarily carry with it the
reckless filing of the case, they be awarded various types of
dismissal of the counterclaim, compulsory or otherwise. In
damages instead in amounts totaling P2,100,000 plus costs
fact, the dismissal of the complaint is without prejudice to
of suit.9
the right of defendants to prosecute the counterclaim.
By July of 2005, the trial of the case had not yet been
On a prefatory note, the RTC, in dismissing the
completed. Moreover, respondents, as plaintiffs, had failed
counterclaim, did not expressly adopt respondents
to present their evidence. It appears that on 25 October
argument that the dismissal of their complaint extended as
well to the counterclaim. Instead, the RTC justified the the dismissal of the counterclaim."22 Jurisprudence
dismissal of the counterclaim on the ground that "there is no construing the previous Rules was hardly silent on the
opposition to [plaintiffs] Motion for Reconsideration matter.
[seeking the dismissal of the counterclaim]."20 This
explanation is hollow, considering that there is no In their arguments before the RTC on the dismissal of the
mandatory rule requiring that an opposition be filed to a counterclaim, respondents cited in support City of Manila v.
motion for reconsideration without need for a court order to
that effect; and, as posited by petitioner, the "failure to file
an opposition to the Plaintiffs Motion for Reconsideration is Ruymann,23 Domingo v. Santos,24 Belleza v. Huntington,25
definitely not one among the established grounds for and Froilan v. Pan Oriental Shipping Co.,26 all of which were
dismissal [of the counterclaim]."21 Still, the dismissal of the decided more than five decades ago. Notably though, none
counterclaim by the RTC betrays at very least a tacit of the complaints in these four cases were dismissed either
recognition of respondents argument that the counterclaim due to the fault of the plaintiff or upon the instance of the
defendant.27
did not survive the dismissal of the complaint. At most, the
dismissal of the counterclaim over the objection of the
defendant (herein petitioner) on grounds other than the The distinction is relevant, for under the previous and
merits of the counterclaim, despite the provisions under current incarnations of the Rules of Civil Procedure, it is
Rule 17 of the 1997 Rules of Civil Procedure, constitutes a Section 3, Rule 17 that governs the dismissals due to the
debatable question of law, presently meriting justiciability failure of the plaintiff to prosecute the complaint, as had
through the instant action. Indeed, in reviewing the assailed happened in the case at bar. Otherwise, it is Section 2,
orders of the RTC, it is inevitable that the Court consider Rule 17, which then, and still is now, covered dismissals
whether the dismissal of the complaint, upon motion of the ordered by the trial court upon the instance of the plaintiff.28
defendant, on the ground of the failure to prosecute on Yet, as will be seen in the foregoing discussion, a
plaintiffs part precipitates or carries with it the dismissal of discussion of Section 2 cannot be avoided as the postulate
the pending counterclaims. behind that provision was eventually extended as well in
cases that should have properly been governed by Section
3.
Our core discussion begins with Section 3, Rule 17 of the
1997 Rules of Civil Procedure, which states:
Even though the cases cited by respondents involved
different factual antecedents, there exists more appropriate
SEC. 3. Dismissal due to fault of plaintiff.If, for no
justifiable cause, the plaintiff fails to appear on the date of precedents which they could have cited in support of their
the presentation of his evidence in chief on the complaint, claim that the counterclaim should have been dismissed
or to prosecute his action for an unreasonable length of even if the dismissal of the complaint was upon the
time, or to comply with these Rules or any order of the defendants motion and was predicated on the plaintiffs
court, the complaint may be dismissed upon motion of fault. BA Finance Corp. v. Co29 particularly stands out in
defendant or upon the court's own motion, without prejudice that regard, although that ruling is itself grounded on other
precedents as well. Elucidation of these cases is in order.
to the right of the defendant to prosecute his counterclaim
in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless On the general effect of the dismissal of a complaint,
otherwise declared by the court. regardless of cause, on the pending counterclaims,
previous jurisprudence laid emphasis on whether the
The express qualification in the provision that the dismissal counterclaim was compulsory or permissive in character.
of the complaint due to the plaintiffs fault, as in the case for The necessity of such distinction was provided in the 1964
failure to prosecute, is without prejudice to the right of the Rules itself, particularly Section 2, Rule 17, which stated
defendant to prosecute his counterclaim in the same or that in instances wherein the plaintiff seeks the dismissal of
separate action. This stands in marked contrast to the the complaint, "if a counterclaim has been pleaded by a
provisions under Rule 17 of the 1964 Rules of Court which defendant prior to the service upon him of the plaintiffs
were superseded by the 1997 amendments. In the 1964 motion to dismiss, the action shall not be dismissed against
the defendants objection unless the counterclaim can
Rules, dismissals due to failure to prosecute were governed
by Section 3, Rule 17, to wit: remain pending for independent adjudication by the
court."30 The
SEC. 3. Failure to prosecute. If plaintiff fails to appear at
the time of the trial, or to prosecute his action for an vaunted commentaries of Chief Justice Moran, remarking
unreasonable length of time, or to comply with these rules on Section 2, Rule 17, noted that "[t]here are instances in
or any order of the court, the action may be dismissed upon which a counterclaim cannot remain pending for
motion of the defendant or upon the courts own motion. independent adjudication, as, where it arises out of, or is
This dismissal shall have the effect of an adjudication upon necessarily connected with, the transaction or occurrence
the merits, unless otherwise provided by court. which is the subject matter of the opposing partys claim."31
Section 3, on the other hand, contemplates a dismissal not Justice Feria then suggested that the dismissal be limited to
procured by plaintiff, albeit justified by causes imputable to the complaint[.] Thus, in the 1st line of Sec. 1, the words
him and which, in the present case, was petitioner's failure "An action" will be changed to "a complaint"; in the 2nd line
to appear at the pre-trial. This situation is also covered by of Sec. 2, the words "an action" will be changed to "a
Section 3, as extended by judicial interpretation, and is complaint" and in Sec. 3, the word "action" on the 5th line of
ordered upon motion of defendant or motu proprio by the the draft will be changed to "complaint." The Committee
court. Here, the issue of whether defendant has a pending agreed with Justice Ferias suggested amendments.
counterclaim, permissive or compulsory, is not of
determinative significance. The dismissal of plaintiff's
complaint is evidently a confirmation of the failure of CA Pao believed that there is a need to clarify the
evidence to prove his cause of action outlined therein, counterclaim that the defendant will prosecute, whether it is
permissive or compulsory or all kinds of counterclaims.
hence the dismissal is considered, as a matter of evidence,
an adjudication on the merits. This does not, however,
mean that there is likewise such absence of evidence to Justice Regalado opined that there is no need of making a
prove defendant's counterclaim although the same arises clarification because it is already understood that it covers
out of the subject matter of the complaint which was merely both counterclaims.52
terminated for lack of proof. To hold otherwise would not
only work injustice to defendant but would be reading a It is apparent from these minutes that the survival of the
further provision into Section 3 and wresting a meaning counterclaim despite the dismissal of the complaint under
therefrom although neither exists even by mere implication. Section 3 stood irrespective of whether the counterclaim
Thus understood, the complaint can accordingly be was permissive or compulsory. Moreover, when the Court
dismissed, but relief can nevertheless be granted as a itself approved the revisions now contained in the 1997
matter of course to defendant on his counterclaim as Rules of Civil Procedure, not only did Justice Regalados
alleged and proved, with or without any reservation therefor amendment to Section 3, Rule 17 remain intact, but the
on his part, unless from his conduct, express or implied, he final version likewise eliminated the qualification formerly
has virtually consented to the concomitant dismissal of his offered under Section 2 on "counterclaims that can remain
counterclaim.50 pending for independent adjudication by the court."53 At
present, even Section 2, concerning dismissals on motion
Justice Regalado also adverted to Sta. Maria and noted of the plaintiff, now recognizes the right of the defendant to
that the objections raised and rejected by the Court therein prosecute the counterclaim either in the same or separate
action notwithstanding the dismissal of the complaint, and To be certain, when the Court promulgated the 1997 Rules
without regard as to the permissive or compulsory nature of of Civil Procedure, including the amended Rule 17, those
the counterclaim. previous jural doctrines that were inconsistent with the new
rules incorporated in the 1997 Rules of Civil Procedure
In his commentaries on the 1997 Rules of Civil Procedure, were implicitly abandoned insofar as incidents arising after
Justice Regalado expounds on the effects of the the effectivity of the new procedural rules on 1 July 1997.
amendments to Section 2 and 3 of Rule 17: BA Finance, or even the doctrine that a counterclaim may
be necessarily dismissed along with the complaint, clearly
conflicts with the 1997 Rules of Civil Procedure. The
2. Under this revised section [2], where the plaintiff moves abandonment of BA Finance as doctrine extends as far
for the dismissal of his complaint to which a counterclaim back as 1997, when the Court adopted the new Rules of
has been interposed, the dismissal shall be limited to the Civil Procedure. If, since then, such abandonment has not
complaint. Such dismissal shall be without prejudice to the been affirmed in jurisprudence, it is only because no proper
right of the defendant to either prosecute his counterclaim case has arisen that would warrant express confirmation of
in a separate action or to have the same resolved in the the new rule. That opportunity is here and now, and we thus
same action. Should he opt for the first alternative, the court
rule that the dismissal of a complaint due to fault of the
should render the corresponding order granting and
plaintiff is without prejudice to the right of the defendant to
reserving his right to prosecute his claim in a separate
prosecute any pending counterclaims of whatever nature in
complaint. Should he choose to have his counterclaim
the same or separate action. We confirm that BA Finance
disposed of in the same action wherein the complaint had
and all previous rulings of the Court that are inconsistent
been dismissed, he must manifest such preference to the with this present holding are now abandoned.
trial court within 15 days from notice to him of plaintiffs
motion to dismiss. These alternative remedies of the
defendant are available to him regardless of whether his Accordingly, the RTC clearly erred when it ordered the
counterclaim is compulsory or permissive. A similar dismissal of the counterclaim, since Section 3, Rule 17
alternative procedure, with the same underlying reason mandates that the dismissal of the complaint is without
therefor, is adopted in Sec. 6, Rule 16 and Sec. 3 of this prejudice to the right of the defendant to prosecute the
Rule, wherein the complaint is dismissed on the motion of counterclaim in the same or separate action. If the RTC
the defendant or, in the latter instance, also by the court were to dismiss the counterclaim, it should be on the merits
motu proprio. of such counterclaim. Reversal of the RTC is in order, and a
remand is necessary for trial on the merits of the
counterclaim.
xxxx
It would be perfectly satisfactory for the Court to leave this
2. The second substantial amendment to [Section 3] is with matter at that. Still, an explanation of the reason behind the
respect to the disposition of the defendants counterclaim in new rule is called for, considering that the rationale behind
the event the plaintiffs complaint is dismissed. As already the previous rule was frequently elaborated upon.
observed, he is here granted the choice to prosecute that
counterclaim in either the same or a separate action. x x x x
Under Act No. 190, or the Code of Procedure in Civil
Actions promulgated in 1901, it was recognized in Section
3. With the aforestated amendments in Secs. 2 and 3 laying
127(1) that the plaintiff had the right to seek the dismissal of
down specific rules on the disposition of counterclaims
the complaint at any time before trial, "provided a
involved in the dismissal actions, the controversial doctrine counterclaim has not been made, or affirmative relief
in BA Finance Corporation vs. Co, et al., (G.R. No. 105751, sought by the cross-complaint or answer of the
June 30, 1993) has been abandoned, together with the defendant."59 Note that no qualification was made then as
apparent confusion on the proper application of said Secs. to the nature of the counterclaim, whether it be compulsory
2 and 3. Said sections were distinguished and discussed in or permissive. The protection of the defendants right to
the authors separate opinion in that case, even before they prosecute the counterclaim was indeed unqualified. In City
were clarified by the present amendments x x x.54 of Manila, decided in 1918, the Court explained:
SO ORDERED.
G.R. No. 133119 August 17, 2000 On April 28, 1987, the trial court issued a writ of preliminary
injunction against Forbes Park but the Court of Appeals
FINANCIAL BUILDING CORPORATION, petitioner, nullified it and dismissed the complaint in Civil Case No.
vs. 16540 altogether. We affirmed the said dismissal in our
FORBES PARK ASSOCIATION, INC., respondent. Resolution,8 promulgated on April 6, 1988, in G.R. No.
79319 entitled "Financial Building Corporation, et al. vs.
Forbes Park Association, et al."
DECISION
On June 30, 1986, Forbes Park reminded the USSR of (a) P3,000,000.00 as actual damages by
existing regulations4 authorizing only the construction of a way of demolition expenses;
single-family residential building in each lot within the
village. It also elicited a reassurance from the USSR that
such restriction has been complied with.5 Promptly, the (b) P1,000,000.00 as exemplary damages;
USSR gave its assurance that it has been complying with
all regulations of Forbes Park.6 Despite this, Financial (c) P500,000.00 as attorneys fees;
Building submitted to the Makati City Government a second
building plan for the construction of a multi-level apartment (d) the costs of suit.
building, which was different from the first plan for the
construction of a residential building submitted to Forbes
SO ORDERED."
Park.
I. "THE COURT OF APPEALS GRAVELY ERRED Undoubtedly, the prior Civil Case No. 16540 and the instant
IN NOT DISMISSING THE COMPLAINT FILED BY case arose from the same occurrence the construction
RESPONDENT FPA DESPITE THE FACT THAT work done by Financial Building on the USSRs lot in
ITS ALLEGED CLAIMS AND CAUSES OF Forbes Park Village. The issues of fact and law in both
ACTION THEREIN ARE BARRED BY PRIOR cases are identical. The factual issue is whether the
JUDGMENT AND/OR ARE DEEMED WAIVED structures erected by Financial Building violate Forbes
FOR ITS FAILURE TO INTERPOSE THE SAME Parks rules and regulations, whereas the legal issue is
AS COMPULSORY COUNTERCLAIMS IN CIVIL whether Financial Building, as an independent contractor
CASE NO. 16540; working for the USSR, could be enjoined from continuing
with the construction and be held liable for damages if it is
II. THE COURT OF APPEALS GRAVELY ERRED found to have violated Forbes Parks rules.
IN NOT DISMISSING THE COMPLAINT FILED BY
RESPONDENT FPA AGAINST PETITIONER FBC As a result of the controversy, Financial Building seized the
SINCE RESPONDENT FPA HAS NO CAUSE OF initiative by filing the prior injunction case, which was
ACTION AGAINST PETITIONER FBC; anchored on the contention that Forbes Parks prohibition
on the construction work in the subject premises was
III. THE COURT OF APPEALS GRAVELY ERRED improper. The instant case on the other hand was initiated
IN AWARDING DAMAGES IN FAVOR OF by Forbes Park to compel Financial Building to remove the
RESPONDENT FPA DESPITE THE FACT THAT same structures it has erected in the same premises
ON THE BASIS OF THE EVIDENCE ON involved in the prior case and to claim damages for
RECORD, RESPONDENT FPA IS NOT undertaking the said construction. Thus, the logical relation
ENTITLED THERETO AND PETITIONER FBC IS between the two cases is patent and it is obvious that
NOT LIABLE THEREFOR; substantially the same evidence is involved in the said
cases.
IV. THE COURT OF APPEALS ERRED IN
ORDERING THE DEMOLITION OF THE ILLEGAL Moreover, the two cases involve the same parties. The
STRUCTURES LOCATED AT NO. 10 NARRA aggregate amount of the claims in the instant case is within
PLACE, FORBES PARK, MAKATI CITY, the jurisdiction of the regional trial court, had it been set up
CONSIDERING THAT THE SAME ARE LOCATED as a counterclaim in Civil Case No. 16540. Therefore,
ON DIPLOMATIC PREMISES"14 Forbes Parks claims in the instant case should have been
filed as a counterclaim in Civil Case No. 16540.
We grant the petition.
Second. Since Forbes Park filed a motion to dismiss in Civil
Case No. 16540, its existing compulsory counterclaim at
First. The instant case is barred due to Forbes Parks failure that time is now barred.
to set it up as a compulsory counterclaim in Civil Case No.
16540, the prior injunction suit initiated by Financial Building
against Forbes Park. A compulsory counterclaim is auxiliary to the proceeding in
the original suit and derives its jurisdictional support
therefrom.19 A counterclaim presupposes the existence of a
A compulsory counterclaim is one which arises out of or is
claim against the party filing the counterclaim. Hence,
necessarily connected with the transaction or occurrence
where there is no claim against the counterclaimant, the
that is the subject matter of the opposing partys claim.15 If it
counterclaim is improper and it must dismissed, more so
is within the jurisdiction of the court and it does not require
where the complaint is dismissed at the instance of the
for its adjudication the presence of third parties over whom
counterclaimant.20 In other words, if the dismissal of the
the court cannot acquire jurisdiction, such compulsory
main action results in the dismissal of the counterclaim
counterclaim is barred if it is not set up in the action filed by
already filed, it stands to reason that the filing of a motion to
the opposing party.16
dismiss the complaint is an implied waiver of the
compulsory counterclaim because the grant of the motion
Thus, a compulsory counterclaim cannot be the subject of a ultimately results in the dismissal of the counterclaim.
separate action but it should instead be asserted in the
same suit involving the same transaction or occurrence,
Thus, the filing of a motion to dismiss and the setting up of
which gave rise to it.17 To determine whether a counterclaim
a compulsory counterclaim are incompatible
is compulsory or not, we have devised the following tests:
remedies.1wphi1 In the event that a defending party has a
(1) Are the issues of fact or law raised by the claim and the
ground for dismissal and a compulsory counterclaim at the
counterclaim largely the same? (2) Would res judicata bar a
same time, he must choose only one remedy. If he decides
subsequent suit on defendants claim absent the
to file a motion to dismiss, he will lose his compulsory
compulsory counterclaim rule? (3) Will substantially the
counterclaim. But if he opts to set up his compulsory
same evidence support or refute plaintiffs claim as well as
counterclaim, he may still plead his ground for dismissal as
the defendants counterclaim? and (4) Is there any logical
an affirmative defense in his answer.21 The latter option is
relation between the claim and the counterclaim?
obviously more favorable to the defendant although such
fact was lost on Forbes Park.
The ground for dismissal invoked by Forbes Park in Civil
Case No. 16540 was lack of cause of action. There was no
need to plead such ground in a motion to dismiss or in the
answer since the same was not deemed waived if it was not
pleaded.22 Nonetheless, Forbes Park still filed a motion to
dismiss and thus exercised bad judgment in its choice of
remedies. Thus, it has no one to blame but itself for the
consequent loss of its counterclaim as a result of such
choice.
SO ORDERED.
G.R. No. 95631 October 28, 1991 of the plaintiff to "look for
a place to transfer its
METALS ENGINEERING RESOURCES CORPORATION, offices and plants from
petitioner, the land subject hereof
vs. within One hundred
COURT OF APPEALS and PLARIDEL JOSE, respondents. twenty days" but should
plaintiff "fail to locate a
place to transfer its
King, Capuchino, Tan & Associates for petitioner.
offices and plants from
the land subject hereof
Fortunato M. Lira for private respondent. within the said one
hundred and twenty days
"the agreement is merely
subject to an "extension"
REGALADO, J.:p upon terms and
conditions to be
determined and agreed
Impugned in this petition for review on certiorari is the upon separately and
decision of respondent Court of Appeals, dated August 9, subsequently; and
1990, 1 dismissing the special civil action for certiorari and
prohibition filed therein by petitioner corporation.
b) The payment of the
remaining fifty percent
The appeal herein arose from Civil Case No. 55560 filed by (50%) thereof SHALL BE
petitioner corporation against private respondent Plaridel THE SUBJECT OF A
Jose, for the annulment of an agreement to buy and sell (ANOTHER) SEPARATE
executed between the parties, before the Regional Trial AGREEMENT to be
Court of Pasig, Branch 160, the complaint 2 alleging, inter made between the
alia, that: parties together with the
execution of a Deed of
xxx xxx xxx Absolute Sale.
2. On October 31, 1987, plaintiff and 5. Despite the fact that the subject
defendant executed a document which "agreement" had not yet been perfected
was denominated as an "Agreement to and completed, defendant prematurely
Buy and Sell" in which plaintiff offered to caused the preparation of a subdivision
sell to the defendant and the latter in turn plan of the lands into several sub-lots and
agreed to buy several parcels of land with offered the same for sale to the public
an aggregate area of 6,135 sq. m. . . . through an advertisement published in the
issue of the "Manila Bulletin" on November
xxx xxx xxx 25, 1987 . . .
4. The "Agreement to Buy and Sell", oil its 6. Thus, on December 24, 1987, plaintiff
face, is patently and plainly imperfect and wrote a letter to defendant rescinding
incomplete as there was and could have and/or withdrawing from the uncompleted
been no meeting of the minds of the and imperfect "Agreement" and tendered a
parties in regard to the manner, period and check for the amount of P50,000.00
terms of payment of the purchase price or representing full refund of the earnest
consideration which is undeniably an money previously delivered by defendant
essential element of the contract. pursuant to paragraph 2 of said agreement
Consequently, the subject "Agreement", but defendant refused to accept the same.
not having been perfected and completed,
did not contemplate nor did it result to a xxx xxx xxx
binding and enforceable contract to sell. In
fact, as stipulated in paragraphs 3 and 4 of 8. The refusal of defendant to acnowledge
said "agreement", the terms of sale, the imperfection and non-completion of the
including the payment of the purchase "Agreement" and to accept the refund
price, are uncertain and imperfect as they P50.000.00 as well as his acts of offering
are subject to the following: the land for sale to third person and his
annotation of adverse claims in the title
a) Defendant's obligation covering the lands are unjustifiable and
to pay one half (1/2) of great damage and prejudice to plaintiff.
the total consideration is
conditioned and depends xxx xxx xxx
exclusively on the ability
Private respondent filed his Answer with Counterclaim 3 15. By reason of the present unfounded
alleging a compulsory counterclaim on the following and malicious action filed by the plaintiff,
operative facts: defendant suffered sleepless nights,
serious anxieties, embarrassment and
12. Defendant had already spent a similar injuries due to the indefensible and
considerable amount for the subdivision of destructive posture of the plaintiff for which
the subject properties into smaller parcels he should be awarded P300,000.00 at
of land for resale to a group of buyers, for least in moral damages;
the advertisements and promotion
necessary thereto, and other related 16. Due to the patent, wanton and gross
expenses; bad faith displayed by the plaintiff in its
dealings with the defendant, the latter
13. One of the pertinent provisions of the should be awarded at least P100,000.00 in
AGREEMENT (Annex "A") is the schedule exemplary damages likewise to be
of payments to be paid by the defendant assessed against the plaintiff;
which provides as follows:
17. By reason of the present suit,
3. Within one hundred defendant was furthermore forced to hire
and twenty (120) days the services of counsel to protect his rights
from the execution of this and interest under the premises, in the
agreement, the VENDOR amount of P100,000.00 as and for
shall look for a place to attorney's fees aside from the expenses
transfer its offices and and cost of litigation which shall be proved
plant from the land at the trial hereof.
subject hereof. And once
a place to transfer is WHEREFORE, it is respectfully prayed
found, the VENDOR shall that judgment be rendered in favor of the
inform the VENDEE of defendant dismissing the Complaint and
the same. Within fifteen declaring the AGREEMENT (Annex "A-
(15) days from such Complaint") with the defendant valid for all
notice of the VENDOR to legal intents and purposes and ordering
the VENDEE, the latter the plaintiff to honor its provisions except
shall immediately pay, the term or period of payment of the first
without need of demand one-half (1/2) of the purchase price, which
and further notice, to the should be extended by tacking into the 15-
former one-half (1/2) of day period the length of time mentioned
the total purchase price under paragraph 13 hereof; and for the
of the land . . . damages, plaintiff be ordered to pay
defendant the following:
Due to the adamant and unreasonable
posture of the plaintiff, defendant's a) P300,000.00 in moral damages for the
timetable to generate funds and profits bersmirched reputation, embarrassment,
was severely stalled and placed at a anguish, anxieties, sleepless nights, and
standstill to the damage and prejudice of similar injuries suffered by the defendant
his investment and financial projection, due to the gross and wanton bad faith of
which can only be rectified or the plaintiff;
compensated by way of tacking into, and
thus extending the agreed period to pay b) P100,000.00 in exemplary damages so
the said-one-half (1/2) of the purchase that others who similarly inclined to do as
price, the length of time from plaintiffs what the plaintiff did against the
notice to rescind (Annex "1") until defendant, should properly be forewarned
defendant complies with its part of the and deterred therefrom;
AGREEMENT (Annex "A") whether
voluntarily, by compromise, or by judicial
compulsion; c) P100,000.00 as and for attorney's fees
plus the expenses of litigation proved at
the trial; and
14. Defendant suffered further due to the
fact that his reputation has been tarnished
d) Costs."
at the very least considering that he could
not pursue his legal and business
commitment with those who have already Before the case could be heard on pre-trial, private
transacted with him over the subject respondent filed a Motion to Expunge the Complaint on the
parcels of land; ground that the same did not specify the amount of
damages sought either in the body or in the prayer of the
complaint, citing in support thereof the then ruling case of the payment of docket fees. In reply, petitioner contended
Manchester Development Corporation, et al. vs. Court of that the belated payment of the docket fees for the
Appeals, et al. 4 and Administrative Circular No. 7 issued counterclaim does not have the effect of vesting the trial
by this Court on March 4, 1988. court with jurisdiction over the counterclaim. The motion for
reconsideration was denied by the trial court in its Order 7
In an Order dated December 15, 1988, the trial court dated September 29, 1989.
required petitioner to amend its complaint by specifying the
amount of damages prayed for, otherwise the original From said order, petitioner filed a special civil action for and
complaint shall be dismissed. In compliance therewith, certiorari prohibition with prayer for preliminary injunction
petitioner filed its Amended Complaint specifying the and/or temporary restraining order with respondent Court of
amount of damages it seeks to recover from private Appeals. Its contentions for the allowance thereof may be
respondent. capsulized as follows:
However, private respondent moved for the reconsideration 1. Respondent court acted without or in
of the trial court's aforesaid order with respect to the portion excess of its jurisdiction and gravely
allowing petitioner to file an amended complaint, stating that abused his discretion in granting
the court did not acquire jurisdiction when the wrong docket respondent Jose's motion to present
fee was paid, hence the amendment of the complaint did evidence on his compulsory counterclaim:
not vest jurisdiction upon the court; and that for all legal
intents and purposes, no original complaint was filed which a. The dismissal of the complaint carries
could be the subject of an amendment. with it the dismissal of the compulsory
counterclaim.
Acting thereon, on April 12, 1989, the trial court issued an
Order 5 granting the motion for reconsideration and b. Even assuming that respondent Jose's
ordering that the complaint be expunged from the record on counterclaim may remain pending for
the ground that it did not acquire jurisdiction over the case. adjudication independently of the principal
complaint, it should still be dismissed for
Private respondent then filed a Motion to Set Case for failure on the part of respondent to pay
Presentation of Evidence in support of his counterclaim. In docket fees thereon.
its Opposition, petitioner averred that since private
respondent's counterclaim is compulsory in nature because 2. Great or irreparable injury and injustice
it is necessarily connected with and arose out of the same would result to petitioner if respondent
transaction subject of the complaint, with the dismissal of Jose should be allowed to present
petitioner's complaint the compulsory counterclaim can no evidence ex parte on his counterclaim
longer remain pending for independent adjudication; and pursuant to respondent court's order
considering further that since petitioner had re-filed its September 29, 1989. 8
complaint against private respondent on May 3, 1989
before the Regional Trial Court of Pasig, Branch 168,
Respondent court, in its questioned decision, dismissed the
docketed therein as Civil Case No. 58126, then private
special civil action for certiorari, stating that since the order
respondent could easily set up the same compulsory
counterclaim in said later case. is merely interlocutory in nature and that at most it is merely
an error of judgment, it cannot be corrected by certiorari,
thus:
Thereafter, the court a quo issued an Order, 6 dated June
20, 1989, granting private respondent's motion to present
It is obvious that no jurisdictional error is
evidence and holding that "a) compulsory counterclaim is a
involved in this case. If to allow the
complaint in itself; that it is a complaint against the plaintiff;
respondent to present evidence in support
that it is independent in character. It has to be set up in the
of his counterclaim is a mistake, it is at
answer otherwise it will be waived or barred and it cannot
most an error of judgment that is not
be invoked in another case, for it would be splitting a cause
correctible by certiorari or prohibition.
of action which is not allowed under the rules." It added that
Such an error can be corrected in an
herein private respondent "correctly insisted that the
appeal which may be taken from the
compulsory counterclaim should be prosecuted now,
judgment to be rendered on the
otherwise he cannot invoke his claim in a separate
counterclaim (Fernando vs. Vasquez, 31
proceeding because he will be "barred by the dismissal" of
SCRA 288).
the instant case."
2) However, should different and conflicting decisions be WHEREFORE, the decision appealed from is hereby
handed down in the two cases, which is not an REVERSED and SET ASIDE, and judgment is hereby
impossibility, then this will only serve to complicate the rendered DISMISSING the compulsory counterclaim of
issues that will arise and the remedies that may be private respondent in Civil Case No. 55560, without
necessitated. prejudice to the setting up of the same in Civil Case No.
58126, both of the Regional Trial Court of Pasig, Metro
Verily, practical considerations of consistency and economy Manila.
likewise command a trial of the counterclaim jointly and
concurrently with the principal controversy. At any rate, SO ORDERED
considering that petitioner has re-filed its complaint
involving the same cause of action which is now pending
before another branch of the court, there is nothing to
prevent private respondent from raising the same
counterclaim for adjudication in the subsequent action.
ESTHERLITA CRUZ-AGANA, Petitioner, The trial court found that respondent's counterclaim is
vs. compulsory in nature. The trial court ruled that the filing of a
HON. JUDGE AURORA SANTIAGO-LAGMAN (In her compulsory counterclaim does not require a certificate of
capacity as Presiding Judge of Regional Trial Court, Branch non-forum shopping. On the effect of Santo Tomas on
77, Malolos, Bulacan) and B. SERRANO ENTERPRISES, Administrative Circular No. 04-94, the trial court explained:
INC., Respondents.
It is settled rule that it is one of the inherent powers
DECISION of the court to amend and control its processes and
orders so as to make them conformable to law and
CARPIO, J.: justice. This power includes the right to reverse
itself, specially when in its honest opinion, it has
committed an error or mistake in judgment, and
The Case
that to adhere to its decision will cause injustice to
a party litigant.
This petition for certiorari1 seeks to reverse the Order of the
Regional Trial Court, Branch 77, Malolos, Bulacan ("trial The Issue
court"), dated 4 June 1999, recalling its previous Order
dated 25 May 1999 dismissing B. Serrano Enterprises,
Inc.'s ("respondent") counterclaim upon a motion to dismiss Petitioner raises the following issue:
filed by petitioner Estherlita Cruz-Agana ("petitioner").
WHETHER THE TRIAL COURT COMMITTED
Antecedent Facts GRAVE ABUSE OF DISCRETION IN REFUSING
TO DISMISS RESPONDENT'S COUNTERCLAIM.
On 18 March 1996, petitioner filed a Complaint for
annulment of title with prayer for preliminary mandatory The Ruling of the Court
injunction against respondent. Petitioner claims that as the
sole heir of one Teodorico Cruz, she is the sole owner of a The petition lacks merit.
lot covered by Transfer Certificate of Title No. T-
3907. Petitioner further claims that the lot was fraudulently The issue presented is not novel. This Court has squarely
sold to Eugenio Lopez, Jr. who later on transferred the lot to settled this issue in Santo Tomas University Hospital v.
respondent. The case was raffled to the Regional Trial Surla.3 Writing for the Court, Justice Jose C. Vitug began
Court, Branch 77, Malolos, Bulacan presided by Judge his ponencia thus:
Aurora Santiago-Lagman and docketed as Civil Case No.
210-M-96.
Can a compulsory counterclaim pleaded in an
Answer be dismissed on the ground of a failure to
Respondent seasonably filed its Answer with compulsory accompany it with a certificate of non-forum
counterclaim. Petitioner moved to dismiss respondent's shopping? This question is the core issue
counterclaim for lack of a certificate of non-forum shopping. presented for resolution in the instant petition.
In an Order dated 11 March 1999, the trial court denied Santo Tomas clarified the scope of Administrative Circular
petitioner's motion to dismiss respondent's No. 04-94 with respect to counterclaims. The Court pointed
counterclaim. The trial court reasoned that respondent's out that this circular is intended primarily to cover "an
counterclaim is compulsory and therefore excluded from the initiatory pleading or an incipient application of a party
coverage of Section 5, Rule 7 of the Rules of asserting a claim for relief." The distinction between a
Court. Petitioner moved that the trial court reconsider its compulsory and a permissive counterclaim is vital in the
Order invoking the mandatory nature of a certificate of non- application of the circular. The Court explained:
forum shopping under Supreme Court Administrative
Circular No. 04-94.2 On 25 May 1999, the trial court
reversed its 11 March 1999 Order and dismissed It should not be too difficult, the foregoing rationale
respondent's counterclaim for lack of a certificate of non- of the circular aptly taken, to sustain the view that
forum shopping. the circular in question has not, in fact, been
contemplated to include a kind of claim which, by
its very nature as being auxiliary to the
Respondent seasonably filed a motion for reconsideration proceedings in the suit and as deriving its
arguing that Administrative Circular No. 04-94 does not substantive and jurisdictional support therefrom,
apply to compulsory counterclaims following the ruling in can only be appropriately pleaded in the answer
Santo Tomas University Hospital v. Surla.3 On 4 June and not remain outstanding for independent
1999, the trial court again reversed itself and recalled its resolution except by the court where the main case
Order dismissing respondent's counterclaim. pends. Prescinding from the foregoing, the proviso
in the second paragraph of Section 5, Rule 8 of the
Petitioner now comes before this Court through Rule 65 of 1997 Rules of Civil Procedure, i.e., that the
the 1997 Rules of Civil Procedure. violation of the anti-forum shopping rule "shall not
be curable by mere amendment xxx but shall be Respondent's counterclaim as set up in its answer states:
cause for the dismissal of the case without
prejudice," being predicated on the applicability of 3. That because of the unwarranted, baseless,
the need for a certification against forum-shopping, and unjustified acts of the plaintiff, herein
obviously does not include a claim which cannot be defendant has suffered and continue to suffer
independently set up. actual damages in the sum of at least
P400,000,000.00 which the law, equity, and justice
The Court reiterated this ruling in Ponciano v. Judge require that to be paid by the plaintiff and further to
Parentela, Jr.4 reimburse the attorney's fees of P2,000,000.00;9
Administrative Circular No. 04-94 does not apply to It is clear that the counterclaim set up by respondent arises
compulsory counterclaims. The circular applies to initiatory from the filing of plaintiff's complaint. The counterclaim is
and similar pleadings. A compulsory counterclaim set up in so intertwined with the main case that it is incapable of
the answer is not an "initiatory" or similar pleading. The proceeding independently. The counterclaim will require a
initiatory pleading is the plaintiff's complaint. A respondent re-litigation of the same evidence if the counterclaim is
has no choice but to raise a compulsory counterclaim the allowed to proceed in a separate action. Even petitioner
moment the plaintiff files the complaint. Otherwise, recognizes that respondent's counterclaim is compulsory.10
respondent waives the compulsory counterclaim.5 In short, A compulsory counterclaim does not require a certificate of
the compulsory counterclaim is a reaction or response, non-forum shopping because a compulsory counterclaim is
mandatory upon pain of waiver, to an initiatory pleading not an initiatory pleading.
which is the complaint.
WHEREFORE, the instant petition is DENIED for lack of
Petitioner argues, however, that the Court's rulings in Santo merit. We AFFIRM the Order of the Regional Trial Court,
Tomas and Ponciano are "contrary to the mandate of Branch 77, Malolos Bulacan, dated 4 June 1999 recalling
Administrative Circular No. 04-94" and other procedural the Order dated 25 May 1999 which dismissed the
laws.6 compulsory counterclaim of respondent B. Serrano
Enterprises, Inc.
Petitioner is mistaken.
SO ORDERED.
The Constitution expressly bestows on this Court the power
to promulgate rules concerning the pleading, practice and
procedure in all courts.7 Procedural matters are within the
sole jurisdiction of this Court to prescribe. Administrative
Circular No. 04-94 is an issuance of this Court. It covers a
matter of procedure. Administrative Circular No. 04-94 is
not an enactment of the Legislature. This Court has the
exclusive jurisdiction to interpret, amend or revise the rules
it promulgates, as long as the rules do not diminish,
increase, or modify substantive rights. This is precisely the
purpose of Santo Tomas as far as Administrative Circular
No. 04-94 is concerned.
SO ORDERED.
G.R. No. 102942 April 18, 1997 That in or about and during the period
comprised between September, 1987 and
AMADO F. CABAERO and CARMEN C. PEREZ, October 30, 1987, both dates inclusive, in
petitioners, the City of Manila, Philippines, the said
vs. accused, conspiring and confederating
HON. ALFREDO C. CANTOS in his capacity as Presiding together and mutually helping each other,
Judge of the Regional Trial Court of Manila, Br., VII, and did then and there wilfully, unlawfully and
EPIFANIO CERALDE, respondents. feloniously defraud one EPIFANIO
CERALDE in the following manner, to wit:
the said accused induced and succeeded
in inducing the said EPIFANIO CERALDE
to advance the total amount of
PANGANIBAN, J.: P1,550,000.00 to be paid to M.C. Castro
Construction, Co. representing the
May the accused-petitioners who were charged with estafa, purchase price of six (6) parcels of land
file an answer with counterclaim for moral and exemplary located in Pangasinan which the Aqualand
damages plus attorney's fees and litigation expenses Ventures & Management Corporation, a
against the private complainant in the same criminal action? joint business venture organized by
accused AMADO F. CABAERO and the
This is the main issue raised in this petition 1 filed under said EPIFANIO CERALDE, purchased
Rule 65 of the Rules of Court assailing the Orders dated from the said company, with the
July 1, 1991, 2 and August 21, 1991, 3 of respondent Judge understanding that the said amount would
"for being contrary to law and (for) having been issued by be returned to the said EPIFANIO
the respondent judge in excess of his jurisdiction and with CERALDE as soon as the loan for
grave abuse of discretion tantamount to lack of jurisdiction." P1,500,000.00 applied for by the said
4 Aqualand Ventures & Management
Corporation with Solid Bank, of which said
accused AMADO F. CABAERO is the
The Order of July 1, 1991, reads: Senior Vice-President, is released, but
both accused, once the said loan has (sic)
THE Answer with Counterclaim filed by the been approved by the bank, in furtherance
accused through counsel, dated February of their conspiracy and falsely pretending
12, 1991, as well as the Opposition that accused CARMEN C. PEREZ had
thereto; the Memorandum filed by the been authorized by the said Aqualand
Private Prosecutor, in Support of Motion to Ventures & Management Corporation to
Expunge from the Records And/Or to receive the check for P1,500,000.00 for
Dismiss Answer with Counterclaim; the and in its own behalf, succeeded in
Supplement; and Comment on inducing the cashier of said Solid Bank to
Supplement, are all ordered expunged release the same to accused CARMEN C.
from the Records, considering that this is a PEREZ, thereby enabling her to encash
criminal case wherein the civil liability of the aforesaid check, and instead of turning
the accused (sic) is impliedly instituted over the said amount to the said
therein. EPIFANIO CERALDE, accused failed and
refused, and still fail and refuse, to do so
Petitioners pleaded for reconsideration 5 of said Order but despite repeated demands made to that
respondent judge, in the Order of August 21, 1991, denied effect, and with intent to defraud,
their motion, thus: misappropriated, misapplied and
converted the said amount to their own
personal use and benefit, to the damage
ACTING on the Motion for
and prejudice of the said EPIFANIO
Reconsideration dated July 17, 1991, of
CERALDE in the aforesaid amount of
the accused through counsel, this Court
P1,550,000.00, Philippine currency.
finds no merit therein, such that said
motion is hereby denied.
Contrary to law.
The Facts
Arraigned on January 7, 1991, petitioners entered a plea of
not guilty. On February 5, 1991, Atty. Ambrosio Blanco
This petition emanated from Crim. Case No. 90-18826 of
entered his appearance as private prosecutor. 7
the Regional Trial Court ("RTC") of Manila. Said case
commenced on October 18, 1990, with the filing of an
Information 6 against petitioners charging them with estafa The Presiding Judge of the RTC of Manila, Branch IV, Hon.
for allegedly defrauding private respondent Epifanio Elisa R. Israel, in an Order 8 dated February 11, 1991,
Ceralde of the sum of P1,550,000.00. The accusatory inhibited herself "out of delicadeza" from further hearing the
portion of the Information reads as follows: case pursuant to Section 1 of Rule 137 of the Rules of
Court after "considering that the complainant is a relative by
affinity of a nephew of her husband." Thereafter, the case
was reraffled to Branch VII presided over by respondent counterclaim at any time before judgment. Thus, petitioners
Judge Alfredo Cantos. contended that their filing was within the proper period. 13
On April 2, 1991, petitioners filed an Answer with As previously indicated, respondent Judge Cantos granted
Counterclaims 9 alleging that the money loaned from the prosecution's motion to expunge in an Order dated July
Solidbank mentioned in the Information was duly applied to 1, 1991, and denied the petitioners' motion for
the purchase of the six (6) parcels of land in Pangasinan, reconsideration in an Order dated August 21, 1991.
and that the filing of said Information was unjustified and
malicious. Petitioners included the following prayer: 10 On the theory that there is no plain, speedy and adequate
remedy in the ordinary course of law, the petitioners,
WHEREFORE, it is respectfully prayed through counsel, filed this instant petition.
that after trial judgment be rendered:
The Issue
1. Dismissing, or quashing the information,
and the civil action impliedly instituted in The sole issue raised by petitioners is: 14
the criminal action;
Whether or not the respondent judge
2. Ordering the complaining witness committed grave abuse of discretion,
Ceralde to pay to the accused the amounting to lack or excess of jurisdiction
following amounts: in ordering that the answer with
counterclaim of the petitioners in Criminal
(a) P1,500,000.00 as Case No. 90-88126, together with all
moral damages; pleadings filed in relation thereto, be
expunged from the records.
(b) P500,000.00 as
exemplary damages; Petitioners invoke Section 1, Rule 111 of the Rules on
Criminal Procedure, which provides that unless the
(c) P100,000.00 as offended party waived, reserved or instituted the civil action
attorney's fees; and prior to the criminal action, the civil action for recovery of
civil liability is impliedly instituted with the criminal action.
They contend that it is not only a right but an "outright duty"
(d) P20,000.00, as
of the accused to file an answer with counterclaim since
litigation expenses.
failure to do so shall result in the counterclaim being forever
barred.
Accused pray for such other reliefs, legal
and equitable in the premises.
Petitioners argue that under Rule 136 of the Rules of Court,
particularly Section 8 thereof, clerks of court are instructed
During the initial hearing on April 15, 1991, the prosecution to "keep a general docket, each page of which shall be
verbally moved that the answer with counterclaim be numbered and prepared for receiving all the entries in a
expunged from the records and/or be dismissed. The single case, and shall enter therein all cases . . ." Thus,
respondent judge, after the exchange of arguments respondent Judge Cantos allegedly erred in expunging all
between the prosecution and the defense, gave the records with respect to the Answer with Counterclaim for,
contending parties time to submit a Memorandum and on appeal, "if the records elevated . . . are incomplete and
Comment or Opposition, respectively. inaccurate, there arises a grave danger that the ends of
justice and due process shall not be served and instead
The Memorandum of the private prosecutor justified his frustrated." 15
Motion to Expunge the answer with counterclaim for two
reasons: (1) the trial court had no jurisdiction over the Petitioners further allege that the Order of July 1, 1991,
answer with counterclaim for non-payment of the prescribed failed to resolve the legal issues raised by the parties as it
docket fees and (2) the "compulsory counterclaim against neglected to state the legal basis therefor, as required by
complainant is barred for failure to file it before Section 14, Article VIII of the Constitution, "thereby leaving
arraignment." 11 the petitioners to speculate on why they were being
deprived of their right to plead and prove their defenses and
In their Opposition, petitioners argued that this Court in counter-claim as far as the civil aspect of the case was
Javier vs. Intermediate Appellate Court 12 laid down, for concerned." 16
"procedural soundness," the rule that a counterclaim should
be permitted in a criminal action where the civil aspect is This Court, realizing the significance of the present case,
not reserved. Further, inasmuch as petitioners' counterclaim required on August 3, 1992, the appearance of the Solicitor
was compulsory in nature, they were not required to pay General as counsel for respondent court. The Republic's
docket fees therefor. Additionally, the Rules do not counsel, in his Manifestation dated December 22, 1992,
specifically provide for the period for filing of counterclaims cited Javier and sided with petitioners in maintaining that
in criminal cases, whereas Section 3 of Rule 9 and Section the instant "petition is meritorous."
9 of Rule 6 allow the filing, with leave of court, of a
Preliminary Matters compulsory in nature; thus, it should be filed in the criminal
case upon the implied institution of the civil action.
Litis Pendentia as a Defense
The facts in Javier may be summarized as follows:
In his Memorandum dated September 30, 1992, private
respondent belatedly interposes litis pendentia to defeat the Leon S. Gutierrez, Jr., private respondent therein, was
petition. He alleges that the present petition is barred by the charged with violation of BP Blg. 22 before the Regional
cross-claim of the petitioners against Aqualand Ventures Trial Court of Makati. The civil case had not been expressly
and Management Corporation, of which petitioners are reserved, hence it was impliedly instituted with the criminal
stockholders and officers, in Civil Case No. 90-53035 (filed action.
against both petitioners and the private respondent by
Solidbank on May 14, 1990). Considerations of due process Later, Accused Gutierrez filed a complaint for damages
prevent us from taking up the merits of this argument in against Private Complainants (Petitioners) Javiers before
favor of private respondent. 17 This cross-claim was never the Regional Trial Court of Catarman, Northern Samar,
raised in the trial court certainly not in the Memorandum wherein he alleged that he had been merely inveigled by
dated April 19, 1991, submitted to the court a quo in the Javiers into signing the very check that was the subject
support of respondent Ceralde's motion to expunge the of the criminal case.
answer with counterclaim. The Rules 18 require that "(a)
motion attacking a pleading or a proceeding shall include all
In resolving the question of whether he can raise that claim
objections then available, and all objections not so included
in a separate civil action for damages filed by him against
shall be deemed waived." Consequently and ineluctably,
petitioners therein, this Court, speaking through Mr. Justice
the ground of litis pendentia which was not argued in the
Isagani A. Cruz (Ret.), ruled: 21
court a quo is deemed waived. 19
The Payment of Filing Fees It was before the Makati court that the
private respondent, as defendant in the
criminal charge of violation of B.P. Blg. 22,
Anent filing fees, we agree with petitioners that inasmuch could explain why he had issued the
as the counterclaim is compulsory, there is no necessity to bouncing check. As the civil action based
pay such fees, as the Rules do not require them. This Court on the same act was also deemed filed
already clarified in Sun Insurance Office, Ltd. (SIOL), vs. there, it was also before that same court
Asuncion 20 the instances when docket fees are required to that he could offer evidence to refute the
be paid to enable the court to acquire jurisdiction: claim for damages made by the
petitioners. This he should have done in
1. It is not simply the filing of the complaint the form of a counterclaim for damages for
or appropriate initiatory pleading, but the his alleged deception by the petitioners. In
payment of the prescribed docket fee, that fact, the counterclaim was compulsory and
vests a trial court with jurisdiction over the should have been filed by the private
subject-matter or nature of the action. respondent upon the implied institution of
Where the filing of the initiatory pleading is the civil action for damages in the criminal
not accompanied by payment of the action.
docket fee, the court may allow payment
of the fee within a reasonable time but in A counterclaim is compulsory and is
no case beyond the applicable prescriptive considered barred if not set up where the
or reglementary period. following circumstances are present: (1)
that it arises out of, or is necessarily
2. The same rule applies to permissive connected with the transaction or
counterclaims, third-party claims and occurrence that is the subject matter of the
similar pleadings, which shall not be opposing party's claim; (2) that it does not
considered filed until and unless the filing require for its adjudication the presence of
fee prescribed therefor is paid. The court third parties of whom the court cannot
may also allow payment of said fee within acquire jurisdiction, and (3) that the court
a reasonable time but also in no case has jurisdiction to entertain the claim.
beyond its applicable prescriptive or
reglementary period. (Emphasis supplied) All these circumstances are present in the
case before the Regional Trial Court of
Obviously, no docket fees are required to be paid in Makati.
connection with the filing of a compulsory counterclaim.
This being so, it was improper for the
The Main Issue: Propriety of private respondent to file his civil
Answer with Counterclaim complaint in the Regional Trial Court of
Northern Samar alleging the very defense
In Javier upon which petitioners anchor their thesis, the he should be making in the Regional Trial
Court held that a counterclaim for malicious prosecution is Court of Makati. It is, of course, not
possible for him now to invoke a different emphasized that the civil action for malicious prosecution
defense there because he would be should have been filed as a compulsory counterclaim in the
contradicting his own verified complaint in criminal action. The filing of a separate civil action for
the Regional Trial Court in Northern malicious prosecution would have resulted in the
Samar. In effect, therefore, he is arguing presentation of the same evidence involving similar issues
that both courts have jurisdiction to in two proceedings: the civil action impliedly instituted with
consider the same claim of deception he is the criminal action, and the separate civil action for
making in connection with the same damages for malicious prosecution.
transaction and involving the same parties.
(Emphasis supplied) Some Reservations in
the Application of Javier
In Javier, the accused maintained in his separate action for
damages that he had been inveigled by the private The logic and cogency of Javier notwithstanding, some
complainants into signing what was alleged to be a reservations and concerns were voiced out by members of
bouncing check. In the present case, petitioners claim in the Court during the deliberations on the present case.
their answer with counterclaim that they never personally These were engendered by the obvious lacuna in the Rules
benefited from the allegedly defrauded amount nor did they of Court, which contains no express provision for the
spend the same for a purpose other than that agreed upon adjudication of a counterclaim in a civil action impliedly
with Private Respondent Ceralde. Thus, in both cases, the instituted in a criminal case. The following problems were
accused seek recovery of damages for what they perceive noted:
to be malicious prosecution against them.
1) While the rules on civil procedure 27 expressly recognize
As categorically recognized in the case of Javier, a claim for a defendant's entitlement to plead his counterclaim and
malicious prosecution or "grossly unfounded suit" as a offer evidence in support thereof, 28 the rules on criminal
compulsory counter-claim has no appropriate venue other procedure 29 which authorize the implied institution of a civil
than the same criminal case which is alleged to be a action in a criminal case are, in contrast, silent on this
malicious suit. The counterclaim stands on the same footing point 30 and do not provide specific guidelines on how such
and is to be tested by the same rules as if it were an counterclaim shall be pursued.
independent action. 22 A counterclaim is defined as any
claim for money or other relief which a defending party may
have against an opposing party. 23 Compulsory 2) A judgment in a criminal action is not required to provide
counterclaim is one which at the time of suit arises out of, or for the award of a counterclaim. Thus, Section 2, Rule 120
of the Rules of Court, states:
is necessarily connected with, the same transaction or
occurrence that is the subject matter of plaintiff's complaint.
24
It is compulsory in the sense that if it is within the Sec. 2. Form and contents of judgment.
jurisdiction of the court, and does not require for its
adjudication the presence of third parties over whom the xxx xxx xxx
court cannot acquire jurisdiction, it must be set up therein,
and will be barred in the future if not set If it is for conviction, the judgment shall
up. 25 state (a) the legal qualifications of the
offense constituted by the acts committed
In justifying his Order, Judge Cantos ruled that "this is a by the accused, and the aggravating or
criminal case wherein the civil liability of the accused (sic) is mitigating circumstances attending the
impliedly instituted therein." This justification begs the commission thereof, if there are any; (b)
question. Basically, that is the reason why petitioners herein the participation of the accused in the
filed their answer with counterclaim for, apparently, in hiring commission of the offense whether as
a private prosecutor, Private Respondent Ceralde intended principal, accomplice, or accessory after
to prosecute his civil claim together with the criminal action. the fact; (c) the penalty imposed upon the
Hence, as a protective measure, petitioners filed their accused; and (d) the civil liability or
counterclaim in the same case. Since under Section 1, Rule damages caused by the wrongful act to be
111 26 of the Revised Rules of Court, the civil action which recovered from the accused by the
is deemed impliedly instituted with the criminal action, if not offended party, if there is any, unless the
waived or reserved, includes recovery of indemnity under enforcement of the civil liability by a
the Revised Penal Code, and damages under Article 32, separate action has been reserved or
33, 34 and 2176 of the Civil Code arising from the same act waived. (Emphasis supplied)
or omission of the accused, should not the accused have
the right to file a counterclaim in the criminal case? 3) Allowing and hearing counterclaims (and possibly cross-
Obviously, the answer is in the affirmative, as was held in claims and third-party complaints) in a criminal action will
Javier. surely delay the said action. The primary issue in a criminal
prosecution that is under the control of state prosecutors is
In ruling that an action for damages for malicious the guilt of the accused and his civil liability arising from the
prosecution should have been filed as a compulsory same act or omission. 31 Extending the civil action arising
counterclaim in the criminal action, the Court in Javier from the same act or omission to counterclaims, cross-
sought to avoid multiplicity of suits. The Court there claims and third-party complaints, and allowing the accused
and other parties to submit evidence of their respective start of hearing, because hearing commences only after the
claims will complicate the disposition of the criminal case. issues have been joined, i.e., after the responsive pleadings
have been filed.
4) Adjudication of compulsory counterclaims and/or related
claims or pleadings logically includes the application of 9) Confusion in the application of the rules on civil
other rules which, by their very nature, apply only to civil procedure will certainly encourage litigants to challenge
actions. The following matters may be invoked in before appellate courts interlocutory incidents of the
connection with the filing of an answer with a counterclaim: impliedly instituted civil action. While these challenges are
the genuineness and due execution of an actionable pending, the criminal actions that demand speedy
document which are deemed admitted unless specifically resolution, particularly where the accused is denied bail in
denied under oath; 32 affirmative defenses like res judicata, capital offenses, will stagnate. Witnesses may disappear or
prescription and statute of frauds which are deemed waived lose recollection of their intended testimony, and the
by failure to interpose them as affirmative defenses in an prosecutors may lose momentum and interest in the case.
answer; and the failure of a defendant to file an answer And the accused is effectively deprived of his right to
seasonably may result in his default in the civil aspect but speedy trial.
not in the criminal. As a consequence of these matters, the
entry of plea during arraignment will no longer signal joinder 10) On top of the above procedural difficulties, some
of issues in a criminal action. members of the Court believe that a cause of action for
malicious prosecution may be premature because there is
5) In an impliedly instituted civil action, an accused is not as yet no finding of such wrongful prosecution. This fact is
sufficiently apprised of the specific basis of the claims precisely what the trial court still has to determine.
against him. An accused learns of the implied institution of
a civil action from the contents of an information. An By the foregoing discussion, we do not imply any fault in
information, however, is filed in behalf of the People of the Javier. The real problem lies in the absence of clear-cut
Philippines. Hence, it does not contain the ultimate facts rules governing the prosecution of impliedly instituted civil
relating to the civil liability of the accused. Section 6, Rule actions and the necessary consequences and implications
110 of the Rules of Court, provides: thereof. For this reason, the counter-claim of the accused
cannot be tried together with the criminal case because, as
Sec. 6. Sufficiency of complaint or already discussed, it will unnecessarily complicate and
information. A complaint or information confuse the criminal proceedings. Thus, the trial court
is sufficient if it states the name of the should confine itself to the criminal aspect and the possible
accused; the designation of the offense by civil liability of the accused arising out of the crime. The
the statute; the acts or omissions counter-claim (and cross-claim or third party complaint, if
complained of as constituting the offense; any) should be set aside or refused cognizance without
the name of the offended party; the prejudice to their filing in separate proceedings at the
approximate time of the commission of the proper time. 34
offense; and the place wherein the offense
was committed. At balance, until there are definitive rules of procedure 35 to
govern the institution, prosecution and resolution of the civil
The foregoing section does not mandate the inclusion of the aspect (and the consequences and implications thereof)
ultimate facts which can be specifically admitted or denied impliedly instituted in a criminal case, trial courts should
in an answer. limit their jurisdiction to the civil liability of the accused
arising from the criminal case.
6) Because an accused is not sufficiently apprised of the
specific basis of the civil action against him, he may file a On the other hand, this Court is only too well aware that the
motion for bill of particulars or take advantage of discovery antecedent case was filed in the Respondent Court on
procedures. The end result, in any case, will be delay and October 18, 1990. Although it has dragged on for more than
complication in the criminal action and even confusion six (6) years now, trial has yet to start because of the herein
among the parties. procedural question raised on certiorari. In view of this, it is
to the best interest of the parties that the trial of the criminal
7) The Rules of Court does not specify the reckoning date action should now proceed. The trial has waited too long; it
for the filing of an answer in an impliedly instituted civil is time to continue and finish it with all reasonable dispatch.
action. In an ordinary civil action, an answer should be filed In fairness to the accused, he may file separate
within fifteen (15) days from service of summons. The proceedings to litigate his counterclaim after the criminal
concept of summons, however, is alien to a criminal action. case is terminated and/or in accordance with the new Rules
So, when does the 15-day period begin? which may be promulgated as and when they become
effective.
8) Moreover, an accused can file his answer with
counterclaim only after the initial hearing, because the WHEREFORE, premises considered, the questioned
private complainant may still reserve Orders dated July 1, 1991 and August 21, 1991 are hereby
his civil action at any time before the prosecution MODIFIED. The counter-claim of the accused is hereby set
commences to present evidence. 33 On the other hand, an aside without prejudice. The Respondent Regional Trial
answer in an ordinary civil action should be filed before the Court of Manila is DIRECTED to proceed with the trial of
the criminal action and the civil action arising from the
criminal offense that is impliedly instituted therein, with all
judicious dispatch. No. costs.
SO ORDERED.
G.R. Nos. 158090 October 4, 2010 1989, the Board of Trustees of the GSIS issued Resolution
No. 199 confirming the award of the subject property to
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), CMTC for a total consideration of P450,000.00. Thereafter,
Petitioner, a Deed of Absolute Sale was executed between petitioner
vs. and CMTC on July 27, 1989, transferring the subject
HEIRS OF FERNANDO F. CABALLERO, represented by property to CMTC. Consequently, TCT No. T-45874 in the
his daughter, JOCELYN G. CABALLERO, Respondents. name of GSIS was cancelled, and TCT No. T-76183 was
issued in the name of CMTC.
DECISION
Due to the foregoing, Fernando, represented by his
daughter and attorney-in-fact, Jocelyn Caballero, filed with
PERALTA, J.:
the Regional Trial Court (RTC) of Kabacan, Cotabato a
Complaint3 against CMTC, the GSIS and its responsible
Before this Court is a petition for review on certiorari under officers, and the Register of Deeds of Kidapawan,
Rule 45 of the Rules of Court seeking to set aside the Cotabato. Fernando prayed, among others, that judgment
Decision1 and the Resolution,2 dated December 17, 2002 be rendered: declaring GSIS Board of Trustees Resolution
and April 29, 2003, respectively, of the Court of Appeals No. 199, dated May 16, 1989, null and void; declaring the
(CA) in CA-G.R. CV. No. 49300. Deed of Absolute Sale between petitioner and CMTC null
and void ab initio; declaring TCT No. 76183 of the Register
The antecedents are as follows: of Deeds of Kidapawan, Cotabato, likewise, null and void
ab initio; declaring the bid made by Fernando in the amount
Respondent Fernando C. Caballero (Fernando) was the of P350,000.00 for the repurchase of his property as the
registered owner of a residential lot designated as Lot No. winning bid; and ordering petitioner to execute the
3355, Ts-268, covered by TCT No. T-16035 of the Register corresponding Deed of Sale of the subject property in favor
of Deeds of Cotabato, containing an area of 800 square of Fernando. He also prayed for payment of moral
meters and situated at Rizal Street, Mlang, Cotabato. On damages, exemplary damages, attorney's fees and
the said lot, respondent built a residential/commercial litigation expenses.
building consisting of two (2) stories.
In his complaint, Fernando alleged that there were
On March 7, 1968, Fernando and his wife, Sylvia Caballero, irregularities in the conduct of the bidding. CMTC
secured a loan from petitioner Government Service misrepresented itself to be wholly owned by Filipino
Insurance System (GSIS) in the amount of P20,000.00, as citizens. It misrepresented its working capital. Its
evidenced by a promissory note. Fernando and his wife representative Carmelita Ang Hao had no prior authority
likewise executed a real estate mortgage on the same date, from its board of directors in an appropriate board
mortgaging the afore-stated property as security. resolution to participate in the bidding. The corporation is
not authorized to acquire real estate or invest its funds for
purposes other than its primary purpose. Fernando further
Fernando defaulted on the payment of his loan with the alleged that the GSIS allowed CMTC to bid despite
GSIS. Hence, on January 20, 1973, the mortgage covering knowledge that said corporation has no authority to do so.
the subject property was foreclosed, and on March 26, The GSIS also disregarded Fernando's prior right to buy
1973, the same was sold at a public auction where the back his family home and lot in violation of the laws. The
petitioner was the only bidder in the amount of P36,283.00. Register of Deeds of Cotabato acted with abuse of power
For failure of Fernando to redeem the said property within and authority when it issued the TCT in favor of CMTC
the designated period, petitioner executed an Affidavit of without requiring the CMTC to submit its supporting papers
Consolidation of Ownership on September 5, 1975. as required by the law.
Consequently, TCT No. T-16035 was cancelled and TCT
No. T-45874 was issued in the name of petitioner.
Petitioner and its officers filed their Answer with Affirmative
Defenses and Counterclaim.4 The GSIS alleged that
On November 26, 1975, petitioner wrote a letter to Fernando lost his right of redemption. He was given the
Fernando, informing him of the consolidation of title in its chance to repurchase the property; however, he did not
favor, and requesting payment of monthly rental in view of avail of such option compelling the GSIS to dispose of the
Fernando's continued occupancy of the subject property. In property by public bidding as mandated by law. There is
reply, Fernando requested that he be allowed to repurchase also no "prior right to buy back" that can be exercised by
the same through partial payments. Negotiation as to the Fernando. Further, it averred that the articles of
repurchase by Fernando of the subject property went on for incorporation and other papers of CMTC were all in order.
several years, but no agreement was reached between the In its counterclaim, petitioner alleged that Fernando owed
parties. petitioner the sum of P130,365.81, representing back
rentals, including additional interests from January 1973 to
On January 16, 1989, petitioner scheduled the subject February 1987, and the additional amount of P249,800.00,
property for public bidding. On the scheduled date of excluding applicable interests, representing rentals
bidding, Fernando's daughter, Jocelyn Caballero, submitted Fernando unlawfully collected from Carmelita Ang Hao from
a bid in the amount of P350,000.00, while Carmelita January 1973 to February 1988.
Mercantile Trading Corporation (CMTC) submitted a bid in
the amount of P450,000.00. Since CMTC was the highest
bidder, it was awarded the subject property. On May 16,
After trial, the RTC, in its Decision5 dated September 27, organized in the absence of a corporate board resolution;
1994, ruled in favor of petitioner and dismissed the the bid award, deed of absolute sale and TCT No. T-76183,
complaint. In the same decision, the trial court granted issued in favor of the CMTC, should be nullified; the trial
petitioner's counterclaim and directed Fernando to pay court erred in concluding that GSIS personnel have
petitioner the rentals paid by CMTC in the amount of regularly performed their official duty when they conducted
P249,800.00. The foregoing amount was collected by the public bidding; Fernando, as former owner of the
Fernando from the CMTC and represents payment which subject property and former member of the GSIS, has the
was not turned over to petitioner, which was entitled to preemptive right to repurchase the foreclosed property.
receive the rent from the date of the consolidation of its
ownership over the subject property. These additional averments cannot be taken cognizance by
the Court, because they were substantially respondents
Fernando filed a motion for reconsideration, which was arguments in their petition for review on certiorari earlier
denied by the RTC in an Order dated March 27, 1995. filed before Us and docketed as G.R. No. 156609. Records
show that said petition was denied by the Court in a
Aggrieved by the Decision, respondent filed a Notice of Resolution9 dated April 23, 2003, for petitioners
Appeal.6 The CA, in its Decision dated December 17, 2002, (respondents herein) failure to sufficiently show that the
affirmed the decision of the RTC with the modification that Court of Appeals committed any reversible error in the
the portion of the judgment ordering Fernando to pay challenged decision as to warrant the exercise by this Court
rentals in the amount of P249,800.00, in favor of petitioner, of its discretionary appellate jurisdiction.10 Said resolution
be deleted. Petitioner filed a motion for reconsideration, became final and executory on June 9, 2003.11
which the CA denied in a Resolution dated April 29, 2003. Respondents attempt to re-litigate claims already passed
Hence, the instant petition. upon and resolved with finality by the Court in G.R. No.
156609 cannot be allowed.
An Ex Parte Motion for Substitution of Party,7 dated July 18,
2003, was filed by the surviving heirs of Fernando, who Going now to the first assigned error, petitioner submits that
died on February 12, 2002. They prayed that they be its counterclaim for the rentals collected by Fernando from
allowed to be substituted for the deceased, as respondents the CMTC is in the nature of a compulsory counterclaim in
in this case. the original action of Fernando against petitioner for
annulment of bid award, deed of absolute sale and TCT No.
76183. Respondents, on the other hand, alleged that
Petitioner enumerated the following grounds in support of petitioner's counterclaim is permissive and its failure to pay
its petition:
the prescribed docket fees results into the dismissal of its
claim.
I
To determine whether a counterclaim is compulsory or not,
THE HONORABLE COURT OF APPEALS the Court has devised the following tests: (a) Are the issues
COMMITTED AN ERROR OF LAW IN HOLDING of fact and law raised by the claim and by the counterclaim
THAT GSIS' COUNTERCLAIM, AMONG largely the same? (b) Would res judicata bar a subsequent
OTHERS, OF P249,800.00 REPRESENTING suit on defendants claims, absent the compulsory
RENTALS COLLECTED BY PRIVATE counterclaim rule? (c) Will substantially the same evidence
RESPONDENT FROM CARMELITA support or refute plaintiffs claim as well as the defendants
MERCANTILE TRADING CORPORATION IS IN counterclaim? and (d) Is there any logical relation between
THE NATURE OF A PERMISSIVE the claim and the counterclaim? A positive answer to all
COUNTERCLAIM WHICH REQUIRED THE four questions would indicate that the counterclaim is
PAYMENT BY GSIS OF DOCKET FEES BEFORE compulsory.12
THE TRIAL COURT CAN ACQUIRE
JURISDICTION OVER SAID COUNTERCLAIM.
Tested against the above-mentioned criteria, this Court
agrees with the CA's view that petitioner's counterclaim for
II the recovery of the amount representing rentals collected
by Fernando from the CMTC is permissive. The evidence
THE HONORABLE COURT OF APPEALS needed by Fernando to cause the annulment of the bid
COMMITTED AN ERROR OF LAW IN HOLDING award, deed of absolute sale and TCT is different from that
THAT GSIS' DOCUMENTARY EVIDENCE required to establish petitioner's claim for the recovery of
SUPPORTING ITS CLAIM OF P249,800.00 rentals.
LACKS PROPER IDENTIFICATION.8
The issue in the main action, i.e., the nullity or validity of the
The petition of the GSIS seeks the review of the CA's bid award, deed of absolute sale and TCT in favor of
Decision insofar as it deleted the trial court's award of CMTC, is entirely different from the issue in the
P249,800.00 in its favor representing rentals collected by counterclaim, i.e., whether petitioner is entitled to receive
Fernando from the CMTC. the CMTC's rent payments over the subject property when
petitioner became the owner of the subject property by
In their Memorandum, respondents claim that CMTC virtue of the consolidation of ownership of the property in its
cannot purchase real estate or invest its funds in any favor.
purpose other than its primary purpose for which it was
The rule in permissive counterclaims is that for the trial units will necessarily reduce the JDF and the SAJF.
court to acquire jurisdiction, the counterclaimant is bound to Undoubtedly, such situation is constitutionally infirm for it
pay the prescribed docket fees.13 This, petitioner did not do, impairs the Court's guaranteed fiscal autonomy and erodes
because it asserted that its claim for the collection of rental its independence.
payments was a compulsory counterclaim. Since petitioner
failed to pay the docket fees, the RTC did not acquire Petitioner also invoked our ruling in Sun Insurance Office,
jurisdiction over its permissive counterclaim. The judgment Ltd. v. Judge Asuncion,16 where the Court held that:
rendered by the RTC, insofar as it ordered Fernando to pay
petitioner the rentals which he collected from CMTC, is
xxxx
considered null and void. Any decision rendered without
jurisdiction is a total nullity and may be struck down at any
time, even on appeal before this Court.14 3. Where the trial court acquires jurisdiction over a claim by
the filing of the appropriate pleading and payment of the
prescribed filing fee but, subsequently, the judgment
Petitioner further argues that assuming that its counterclaim
awards a claim not specified in the pleading, or if specified
is permissive, the trial court has jurisdiction to try and
the same has been left for determination by the court, the
decide the same, considering petitioner's exemption from all
kinds of fees. additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court
or his duly authorized deputy to enforce said lien and
In In Re: Petition for Recognition of the Exemption of the assess and collect the additional fee.
Government Service Insurance System from Payment of
Legal Fees,15 the Court ruled that the provision in the
In Ayala Corporation v. Madayag,17 the Court, in interpreting
Charter of the GSIS, i.e., Section 39 of Republic Act No.
the third rule laid down in Sun Insurance Office, Ltd. v.
8291, which exempts it from "all taxes, assessments, fees,
Judge Asuncion regarding awards of claims not specified in
charges or duties of all kinds," cannot operate to exempt it
the pleading, held that the same refers only to damages
from the payment of legal fees. This was because, unlike
arising after the filing of the complaint or similar pleading as
the 1935 and 1973 Constitutions, which empowered
to which the additional filing fee therefor shall constitute a
Congress to repeal, alter or supplement the rules of the
lien on the judgment.
Supreme Court concerning pleading, practice and
procedure, the 1987 Constitution removed this power from
Congress. Hence, the Supreme Court now has the sole The amount of any claim for damages, therefore, arising on
authority to promulgate rules concerning pleading, practice or before the filing of the complaint or any pleading should
and procedure in all courts. be specified. While it is true that the determination of certain
damages as exemplary or corrective damages is left to the
In said case, the Court ruled that: sound discretion of the court, it is the duty of the parties
claiming such damages to specify the amount sought on
the basis of which the court may make a proper
The separation of powers among the three co-equal determination, and for the proper assessment of the
branches of our government has erected an impregnable appropriate docket fees. The exception contemplated as to
wall that keeps the power to promulgate rules of pleading, claims not specified or to claims although specified are left
practice and procedure within the sole province of this for determination of the court is limited only to any damages
Court. The other branches trespass upon this prerogative if that may arise after the filing of the complaint or similar
they enact laws or issue orders that effectively repeal, alter pleading for then it will not be possible for the claimant to
or modify any of the procedural rules promulgated by this specify nor speculate as to the amount thereof. (Emphasis
Court. Viewed from this perspective, the claim of a supplied.)1avvphi1
legislative grant of exemption from the payment of legal
fees under Section 39 of RA 8291 necessarily fails.
Petitioner's claim for payment of rentals collected by
Fernando from the CMTC did not arise after the filing of the
Congress could not have carved out an exemption for the complaint; hence, the rule laid down in Sun Insurance finds
GSIS from the payment of legal fees without transgressing no application in the present case.
another equally important institutional safeguard of the
Court's independence fiscal autonomy. Fiscal autonomy
Due to the non-payment of docket fees on petitioner's
recognizes the power and authority of the Court to levy,
counterclaim, the trial court never acquired jurisdiction over
assess and collect fees, including legal fees. Moreover,
it and, thus, there is no need to discuss the second issue
legal fees under Rule 141 have two basic components, the
raised by petitioner.
Judiciary Development Fund (JDF) and the Special
Allowance for the Judiciary Fund (SAJF). The laws which
established the JDF and the SAJF expressly declare the WHEREFORE, the petition is DENIED. The Decision and
identical purpose of these funds to "guarantee the the Resolution, dated December 17, 2002 and April 29,
independence of the Judiciary as mandated by the 2003, respectively, of the Court of Appeals in CA-G.R. CV.
Constitution and public policy." Legal fees therefore do not No. 49300, are AFFIRMED.
only constitute a vital source of the Court's financial
resources but also comprise an essential element of the SO ORDERED.
Court's fiscal independence. Any exemption from the
payment of legal fees granted by Congress to government-
owned or controlled corporations and local government
G.R. No. 143581 January 7, 2008 KOGIES would be deemed to have completely complied
with the terms and conditions of the March 5, 1997 contract.
KOREA TECHNOLOGIES CO., LTD., petitioner,
vs. For the remaining balance of USD306,000 for the
HON. ALBERTO A. LERMA, in his capacity as Presiding installation and initial operation of the plant, PGSMC issued
Judge of Branch 256 of Regional Trial Court of Muntinlupa two postdated checks: (1) BPI Check No. 0316412 dated
City, and PACIFIC GENERAL STEEL MANUFACTURING January 30, 1998 for PhP 4,500,000; and (2) BPI Check
CORPORATION, respondents. No. 0316413 dated March 30, 1998 for PhP 4,500,000.5
Petitioner Korea Technologies Co., Ltd. (KOGIES) is a On June 1, 1998, PGSMC informed KOGIES that PGSMC
Korean corporation which is engaged in the supply and was canceling their Contract dated March 5, 1997 on the
installation of Liquefied Petroleum Gas (LPG) Cylinder ground that KOGIES had altered the quantity and lowered
manufacturing plants, while private respondent Pacific the quality of the machineries and equipment it delivered to
General Steel Manufacturing Corp. (PGSMC) is a domestic PGSMC, and that PGSMC would dismantle and transfer the
corporation. machineries, equipment, and facilities installed in the
Carmona plant. Five days later, PGSMC filed before the
Office of the Public Prosecutor an Affidavit-Complaint for
On March 5, 1997, PGSMC and KOGIES executed a
Estafa docketed as I.S. No. 98-03813 against Mr. Dae
Contract1 whereby KOGIES would set up an LPG Cylinder Hyun Kang, President of KOGIES.
Manufacturing Plant in Carmona, Cavite. The contract was
executed in the Philippines. On April 7, 1997, the parties
executed, in Korea, an Amendment for Contract No. KLP- On June 15, 1998, KOGIES wrote PGSMC informing the
970301 dated March 5, 19972 amending the terms of latter that PGSMC could not unilaterally rescind their
payment. The contract and its amendment stipulated that contract nor dismantle and transfer the machineries and
KOGIES will ship the machinery and facilities necessary for equipment on mere imagined violations by KOGIES. It also
manufacturing LPG cylinders for which PGSMC would pay insisted that their disputes should be settled by arbitration
USD 1,224,000. KOGIES would install and initiate the as agreed upon in Article 15, the arbitration clause of their
operation of the plant for which PGSMC bound itself to pay contract.
USD 306,000 upon the plants production of the 11-kg. LPG
cylinder samples. Thus, the total contract price amounted to On June 23, 1998, PGSMC again wrote KOGIES reiterating
USD 1,530,000. the contents of its June 1, 1998 letter threatening that the
machineries, equipment, and facilities installed in the plant
On October 14, 1997, PGSMC entered into a Contract of would be dismantled and transferred on July 4, 1998. Thus,
Lease3 with Worth Properties, Inc. (Worth) for use of on July 1, 1998, KOGIES instituted an Application for
Worths 5,079-square meter property with a 4,032-square Arbitration before the Korean Commercial Arbitration Board
meter warehouse building to house the LPG manufacturing (KCAB) in Seoul, Korea pursuant to Art. 15 of the Contract
plant. The monthly rental was PhP 322,560 commencing on as amended.
January 1, 1998 with a 10% annual increment clause.
Subsequently, the machineries, equipment, and facilities for On July 3, 1998, KOGIES filed a Complaint for Specific
the manufacture of LPG cylinders were shipped, delivered, Performance, docketed as Civil Case No. 98-1178 against
and installed in the Carmona plant. PGSMC paid KOGIES PGSMC before the Muntinlupa City Regional Trial Court
USD 1,224,000. (RTC). The RTC granted a temporary restraining order
(TRO) on July 4, 1998, which was subsequently extended
However, gleaned from the Certificate4 executed by the until July 22, 1998. In its complaint, KOGIES alleged that
parties on January 22, 1998, after the installation of the PGSMC had initially admitted that the checks that were
plant, the initial operation could not be conducted as stopped were not funded but later on claimed that it
PGSMC encountered financial difficulties affecting the stopped payment of the checks for the reason that "their
supply of materials, thus forcing the parties to agree that value was not received" as the former allegedly breached
their contract by "altering the quantity and lowering the to lack of funds. KOGIES, relying on Chung Fu Industries
quality of the machinery and equipment" installed in the (Phils.), Inc. v. Court of Appeals,12 insisted that the
plant and failed to make the plant operational although it arbitration clause was without question valid.
earlier certified to the contrary as shown in a January 22,
1998 Certificate. Likewise, KOGIES averred that PGSMC After KOGIES filed a Supplemental Memorandum with
violated Art. 15 of their Contract, as amended, by Motion to Dismiss13 answering PGSMCs memorandum of
unilaterally rescinding the contract without resorting to July 22, 1998 and seeking dismissal of PGSMCs
arbitration. KOGIES also asked that PGSMC be restrained counterclaims, KOGIES, on August 4, 1998, filed its Motion
from dismantling and transferring the machinery and for Reconsideration14 of the July 23, 1998 Order denying its
equipment installed in the plant which the latter threatened application for an injunctive writ claiming that the contract
to do on July 4, 1998. was not merely for machinery and facilities worth USD
1,224,000 but was for the sale of an "LPG manufacturing
On July 9, 1998, PGSMC filed an opposition to the TRO plant" consisting of "supply of all the machinery and
arguing that KOGIES was not entitled to the TRO since Art. facilities" and "transfer of technology" for a total contract
15, the arbitration clause, was null and void for being price of USD 1,530,000 such that the dismantling and
against public policy as it ousts the local courts of transfer of the machinery and facilities would result in the
jurisdiction over the instant controversy. dismantling and transfer of the very plant itself to the great
prejudice of KOGIES as the still unpaid owner/seller of the
On July 17, 1998, PGSMC filed its Answer with Compulsory plant. Moreover, KOGIES points out that the arbitration
Counterclaim9 asserting that it had the full right to dismantle clause under Art. 15 of the Contract as amended was a
and transfer the machineries and equipment because it had valid arbitration stipulation under Art. 2044 of the Civil Code
paid for them in full as stipulated in the contract; that and as held by this Court in Chung Fu Industries (Phils.),
KOGIES was not entitled to the PhP 9,000,000 covered by Inc.15
the checks for failing to completely install and make the
plant operational; and that KOGIES was liable for damages In the meantime, PGSMC filed a Motion for Inspection of
amounting to PhP 4,500,000 for altering the quantity and Things16 to determine whether there was indeed alteration
lowering the quality of the machineries and equipment. of the quantity and lowering of quality of the machineries
Moreover, PGSMC averred that it has already paid PhP and equipment, and whether these were properly installed.
2,257,920 in rent (covering January to July 1998) to Worth KOGIES opposed the motion positing that the queries and
and it was not willing to further shoulder the cost of renting issues raised in the motion for inspection fell under the
the premises of the plant considering that the LPG cylinder coverage of the arbitration clause in their contract.
manufacturing plant never became operational.
On September 21, 1998, the trial court issued an Order (1)
After the parties submitted their Memoranda, on July 23, granting PGSMCs motion for inspection; (2) denying
1998, the RTC issued an Order denying the application for KOGIES motion for reconsideration of the July 23, 1998
a writ of preliminary injunction, reasoning that PGSMC had RTC Order; and (3) denying KOGIES motion to dismiss
paid KOGIES USD 1,224,000, the value of the machineries PGSMCs compulsory counterclaims as these
and equipment as shown in the contract such that KOGIES counterclaims fell within the requisites of compulsory
no longer had proprietary rights over them. And finally, the counterclaims.
RTC held that Art. 15 of the Contract as amended was
invalid as it tended to oust the trial court or any other court On October 2, 1998, KOGIES filed an Urgent Motion for
jurisdiction over any dispute that may arise between the Reconsideration17 of the September 21, 1998 RTC Order
parties. KOGIES prayer for an injunctive writ was denied.10 granting inspection of the plant and denying dismissal of
The dispositive portion of the Order stated: PGSMCs compulsory counterclaims.
WHEREFORE, in view of the foregoing Ten days after, on October 12, 1998, without waiting for the
consideration, this Court believes and so holds that resolution of its October 2, 1998 urgent motion for
no cogent reason exists for this Court to grant the reconsideration, KOGIES filed before the Court of Appeals
writ of preliminary injunction to restrain and refrain (CA) a petition for certiorari18 docketed as CA-G.R. SP No.
defendant from dismantling the machineries and 49249, seeking annulment of the July 23, 1998 and
facilities at the lot and building of Worth Properties, September 21, 1998 RTC Orders and praying for the
Incorporated at Carmona, Cavite and transfer the issuance of writs of prohibition, mandamus, and preliminary
same to another site: and therefore denies injunction to enjoin the RTC and PGSMC from inspecting,
plaintiffs application for a writ of preliminary dismantling, and transferring the machineries and
injunction. equipment in the Carmona plant, and to direct the RTC to
enforce the specific agreement on arbitration to resolve the
On July 29, 1998, KOGIES filed its Reply to Answer and dispute.
Answer to Counterclaim.11 KOGIES denied it had altered
the quantity and lowered the quality of the machinery, In the meantime, on October 19, 1998, the RTC denied
equipment, and facilities it delivered to the plant. It claimed KOGIES urgent motion for reconsideration and directed the
that it had performed all the undertakings under the contract Branch Sheriff to proceed with the inspection of the
and had already produced certified samples of LPG machineries and equipment in the plant on October 28,
cylinders. It averred that whatever was unfinished was 1998.19
PGSMCs fault since it failed to procure raw materials due
Thereafter, KOGIES filed a Supplement to the Petition20 in a. PRONOUNCING THE QUESTION OF
CA-G.R. SP No. 49249 informing the CA about the October OWNERSHIP OVER THE MACHINERY AND
19, 1998 RTC Order. It also reiterated its prayer for the FACILITIES AS "A QUESTION OF FACT"
issuance of the writs of prohibition, mandamus and "BEYOND THE AMBIT OF A PETITION FOR
preliminary injunction which was not acted upon by the CA. CERTIORARI" INTENDED ONLY FOR
KOGIES asserted that the Branch Sheriff did not have the CORRECTION OF ERRORS OF JURISDICTION
technical expertise to ascertain whether or not the OR GRAVE ABUSE OF DISCRETION
machineries and equipment conformed to the specifications AMOUNTING TO LACK OF (SIC) EXCESS OF
in the contract and were properly installed. JURISDICTION, AND CONCLUDING THAT THE
TRIAL COURTS FINDING ON THE SAME
On November 11, 1998, the Branch Sheriff filed his Sheriffs QUESTION WAS IMPROPERLY RAISED IN THE
Report21 finding that the enumerated machineries and PETITION BELOW;
equipment were not fully and properly installed.
b. DECLARING AS NULL AND VOID THE
The Court of Appeals affirmed the trial court and declared ARBITRATION CLAUSE IN ARTICLE 15 OF THE
the arbitration clause against public policy CONTRACT BETWEEN THE PARTIES FOR
BEING "CONTRARY TO PUBLIC POLICY" AND
FOR OUSTING THE COURTS OF
On May 30, 2000, the CA rendered the assailed Decision22 JURISDICTION;
affirming the RTC Orders and dismissing the petition for
certiorari filed by KOGIES. The CA found that the RTC did
not gravely abuse its discretion in issuing the assailed July c. DECREEING PRIVATE RESPONDENTS
23, 1998 and September 21, 1998 Orders. Moreover, the COUNTERCLAIMS TO BE ALL COMPULSORY
CA reasoned that KOGIES contention that the total NOT NECESSITATING PAYMENT OF DOCKET
contract price for USD 1,530,000 was for the whole plant FEES AND CERTIFICATION OF NON-FORUM
and had not been fully paid was contrary to the finding of SHOPPING;
the RTC that PGSMC fully paid the price of USD 1,224,000,
which was for all the machineries and equipment. d. RULING THAT THE PETITION WAS FILED
According to the CA, this determination by the RTC was a PREMATURELY WITHOUT WAITING FOR THE
factual finding beyond the ambit of a petition for certiorari. RESOLUTION OF THE MOTION FOR
RECONSIDERATION OF THE ORDER DATED
On the issue of the validity of the arbitration clause, the CA SEPTEMBER 21, 1998 OR WITHOUT GIVING
agreed with the lower court that an arbitration clause which THE TRIAL COURT AN OPPORTUNITY TO
provided for a final determination of the legal rights of the CORRECT ITSELF;
parties to the contract by arbitration was against public
policy. e. PROCLAIMING THE TWO ORDERS DATED
JULY 23 AND SEPTEMBER 21, 1998 NOT TO BE
On the issue of nonpayment of docket fees and non- PROPER SUBJECTS OF CERTIORARI AND
attachment of a certificate of non-forum shopping by PROHIBITION FOR BEING "INTERLOCUTORY IN
PGSMC, the CA held that the counterclaims of PGSMC NATURE;"
were compulsory ones and payment of docket fees was not
required since the Answer with counterclaim was not an f. NOT GRANTING THE RELIEFS AND
initiatory pleading. For the same reason, the CA said a REMEDIES PRAYED FOR IN HE (SIC) PETITION
certificate of non-forum shopping was also not required. AND, INSTEAD, DISMISSING THE SAME FOR
ALLEGEDLY "WITHOUT MERIT."23
Furthermore, the CA held that the petition for certiorari had
been filed prematurely since KOGIES did not wait for the The Courts Ruling
resolution of its urgent motion for reconsideration of the
September 21, 1998 RTC Order which was the plain, The petition is partly meritorious.
speedy, and adequate remedy available. According to the
CA, the RTC must be given the opportunity to correct any
alleged error it has committed, and that since the assailed Before we delve into the substantive issues, we shall first
tackle the procedural issues.
orders were interlocutory, these cannot be the subject of a
petition for certiorari.
The rules on the payment of docket fees for counterclaims
and cross claims were amended effective August 16, 2004
Hence, we have this Petition for Review on Certiorari under
Rule 45.
KOGIES strongly argues that when PGSMC filed the
The Issues counterclaims, it should have paid docket fees and filed a
certificate of non-forum shopping, and that its failure to do
so was a fatal defect.
Petitioner posits that the appellate court committed the
following errors:
We disagree with KOGIES.
As aptly ruled by the CA, the counterclaims of PGSMC The alleged grave abuse of discretion of the respondent
were incorporated in its Answer with Compulsory court equivalent to lack of jurisdiction in the issuance of the
Counterclaim dated July 17, 1998 in accordance with two assailed orders coupled with the fact that there is no
Section 8 of Rule 11, 1997 Revised Rules of Civil plain, speedy, and adequate remedy in the ordinary course
Procedure, the rule that was effective at the time the of law amply provides the basis for allowing the resort to a
Answer with Counterclaim was filed. Sec. 8 on existing petition for certiorari under Rule 65.
counterclaim or cross-claim states, "A compulsory
counterclaim or a cross-claim that a defending party has at Prematurity of the petition before the CA
the time he files his answer shall be contained therein."
Neither do we think that KOGIES was guilty of forum
On July 17, 1998, at the time PGSMC filed its Answer shopping in filing the petition for certiorari. Note that
incorporating its counterclaims against KOGIES, it was not KOGIES motion for reconsideration of the July 23, 1998
liable to pay filing fees for said counterclaims being RTC Order which denied the issuance of the injunctive writ
compulsory in nature. We stress, however, that effective had already been denied. Thus, KOGIES only remedy was
August 16, 2004 under Sec. 7, Rule 141, as amended by to assail the RTCs interlocutory order via a petition for
A.M. No. 04-2-04-SC, docket fees are now required to be certiorari under Rule 65.
paid in compulsory counterclaim or cross-claims.
While the October 2, 1998 motion for reconsideration of
As to the failure to submit a certificate of forum shopping, KOGIES of the September 21, 1998 RTC Order relating to
PGSMCs Answer is not an initiatory pleading which the inspection of things, and the allowance of the
requires a certification against forum shopping under Sec. compulsory counterclaims has not yet been resolved, the
524 of Rule 7, 1997 Revised Rules of Civil Procedure. It is a circumstances in this case would allow an exception to the
responsive pleading, hence, the courts a quo did not rule that before certiorari may be availed of, the petitioner
commit reversible error in denying KOGIES motion to must have filed a motion for reconsideration and said
dismiss PGSMCs compulsory counterclaims. motion should have been first resolved by the court a quo.
The reason behind the rule is "to enable the lower court, in
Interlocutory orders proper subject of certiorari the first instance, to pass upon and correct its mistakes
without the intervention of the higher court."30
Citing Gamboa v. Cruz,25 the CA also pronounced that
"certiorari and Prohibition are neither the remedies to The September 21, 1998 RTC Order directing the branch
question the propriety of an interlocutory order of the trial sheriff to inspect the plant, equipment, and facilities when
court."26 The CA erred on its reliance on Gamboa. Gamboa he is not competent and knowledgeable on said matters is
involved the denial of a motion to acquit in a criminal case evidently flawed and devoid of any legal support. Moreover,
which was not assailable in an action for certiorari since the there is an urgent necessity to resolve the issue on the
denial of a motion to quash required the accused to plead dismantling of the facilities and any further delay would
and to continue with the trial, and whatever objections the prejudice the interests of KOGIES. Indeed, there is real and
accused had in his motion to quash can then be used as imminent threat of irreparable destruction or substantial
part of his defense and subsequently can be raised as damage to KOGIES equipment and machineries. We find
errors on his appeal if the judgment of the trial court is the resort to certiorari based on the gravely abusive orders
adverse to him. The general rule is that interlocutory orders of the trial court sans the ruling on the October 2, 1998
cannot be challenged by an appeal.27 Thus, in Yamaoka v. motion for reconsideration to be proper.
Pescarich Manufacturing Corporation, we held:
The Core Issue: Article 15 of the Contract
The proper remedy in such cases is an ordinary
appeal from an adverse judgment on the merits, We now go to the core issue of the validity of Art. 15 of the
incorporating in said appeal the grounds for Contract, the arbitration clause. It provides:
assailing the interlocutory orders. Allowing appeals
from interlocutory orders would result in the sorry
Article 15. Arbitration.All disputes, controversies,
spectacle of a case being subject of a
or differences which may arise between the
counterproductive ping-pong to and from the
parties, out of or in relation to or in connection with
appellate court as often as a trial court is perceived
this Contract or for the breach thereof, shall finally
to have made an error in any of its interlocutory
be settled by arbitration in Seoul, Korea in
rulings. However, where the assailed interlocutory
accordance with the Commercial Arbitration Rules
order was issued with grave abuse of discretion or
of the Korean Commercial Arbitration Board. The
patently erroneous and the remedy of appeal
award rendered by the arbitration(s) shall be final
would not afford adequate and expeditious relief,
the Court allows certiorari as a mode of redress.28 and binding upon both parties concerned.
(Emphasis supplied.)
Also, appeals from interlocutory orders would open the
Petitioner claims the RTC and the CA erred in ruling that
floodgates to endless occasions for dilatory motions. Thus,
the arbitration clause is null and void.
where the interlocutory order was issued without or in
excess of jurisdiction or with grave abuse of discretion, the
remedy is certiorari.29 Petitioner is correct.
Established in this jurisdiction is the rule that the law of the calling for arbitration between the parties would be
place where the contract is made governs. Lex loci a step backward.
contractus. The contract in this case was perfected here in
the Philippines. Therefore, our laws ought to govern. Consistent with the above-mentioned policy of
Nonetheless, Art. 2044 of the Civil Code sanctions the encouraging alternative dispute resolution
validity of mutually agreed arbitral clause or the finality and methods, courts should liberally construe
binding effect of an arbitral award. Art. 2044 provides, "Any arbitration clauses. Provided such clause is
stipulation that the arbitrators award or decision shall be susceptible of an interpretation that covers the
final, is valid, without prejudice to Articles 2038, 2039 and asserted dispute, an order to arbitrate should be
2040." (Emphasis supplied.) granted. Any doubt should be resolved in favor of
arbitration.40
Arts. 2038,31 2039,32 and 204033 abovecited refer to
instances where a compromise or an arbitral award, as Having said that the instant arbitration clause is not against
applied to Art. 2044 pursuant to Art. 2043,34 may be voided, public policy, we come to the question on what governs an
rescinded, or annulled, but these would not denigrate the arbitration clause specifying that in case of any dispute
finality of the arbitral award. arising from the contract, an arbitral panel will be
constituted in a foreign country and the arbitration rules of
The arbitration clause was mutually and voluntarily agreed the foreign country would govern and its award shall be
upon by the parties. It has not been shown to be contrary to final and binding.
any law, or against morals, good customs, public order, or
public policy. There has been no showing that the parties RA 9285 incorporated the UNCITRAL Model law
have not dealt with each other on equal footing. We find no to which we are a signatory
reason why the arbitration clause should not be respected
and complied with by both parties. In Gonzales v. Climax
For domestic arbitration proceedings, we have particular
Mining Ltd.,35 we held that submission to arbitration is a
agencies to arbitrate disputes arising from contractual
contract and that a clause in a contract providing that all
relations. In case a foreign arbitral body is chosen by the
matters in dispute between the parties shall be referred to
parties, the arbitration rules of our domestic arbitration
arbitration is a contract.36 Again in Del Monte Corporation-
bodies would not be applied. As signatory to the Arbitration
USA v. Court of Appeals, we likewise ruled that "[t]he
Rules of the UNCITRAL Model Law on International
provision to submit to arbitration any dispute arising
therefrom and the relationship of the parties is part of that Commercial Arbitration41 of the United Nations Commission
contract and is itself a contract."37 on International Trade Law (UNCITRAL) in the New York
Convention on June 21, 1985, the Philippines committed
itself to be bound by the Model Law. We have even
Arbitration clause not contrary to public policy incorporated the Model Law in Republic Act No. (RA) 9285,
otherwise known as the Alternative Dispute Resolution Act
The arbitration clause which stipulates that the arbitration of 2004 entitled An Act to Institutionalize the Use of an
must be done in Seoul, Korea in accordance with the Alternative Dispute Resolution System in the Philippines
Commercial Arbitration Rules of the KCAB, and that the and to Establish the Office for Alternative Dispute
arbitral award is final and binding, is not contrary to public Resolution, and for Other Purposes, promulgated on April
policy. This Court has sanctioned the validity of arbitration 2, 2004. Secs. 19 and 20 of Chapter 4 of the Model Law are
clauses in a catena of cases. In the 1957 case of Eastboard the pertinent provisions:
Navigation Ltd. v. Juan Ysmael and Co., Inc.,38 this Court
had occasion to rule that an arbitration clause to resolve CHAPTER 4 - INTERNATIONAL COMMERCIAL
differences and breaches of mutually agreed contractual ARBITRATION
terms is valid. In BF Corporation v. Court of Appeals, we
held that "[i]n this jurisdiction, arbitration has been held valid
SEC. 19. Adoption of the Model Law on
and constitutional. Even before the approval on June 19,
International Commercial Arbitration.
1953 of Republic Act No. 876, this Court has countenanced
International commercial arbitration shall be
the settlement of disputes through arbitration. Republic Act
governed by the Model Law on International
No. 876 was adopted to supplement the New Civil Codes
Commercial Arbitration (the "Model Law") adopted
provisions on arbitration."39 And in LM Power Engineering
by the United Nations Commission on International
Corporation v. Capitol Industrial Construction Groups, Inc.,
we declared that: Trade Law on June 21, 1985 (United Nations
Document A/40/17) and recommended for
enactment by the General Assembly in Resolution
Being an inexpensive, speedy and amicable No. 40/72 approved on December 11, 1985, copy
method of settling disputes, arbitrationalong with of which is hereto attached as Appendix "A".
mediation, conciliation and negotiationis
encouraged by the Supreme Court. Aside from
SEC. 20. Interpretation of Model Law.In
unclogging judicial dockets, arbitration also
interpreting the Model Law, regard shall be had to
hastens the resolution of disputes, especially of the
its international origin and to the need for uniformity
commercial kind. It is thus regarded as the "wave
in its interpretation and resort may be made to the
of the future" in international civil and commercial
travaux preparatories and the report of the
disputes. Brushing aside a contractual agreement
Secretary General of the United Nations
Commission on International Trade Law dated file with the court the original or authenticated copy
March 25, 1985 entitled, "International Commercial of the award and the arbitration agreement. If the
Arbitration: Analytical Commentary on Draft Trade award or agreement is not made in any of the
identified by reference number A/CN. 9/264." official languages, the party shall supply a duly
certified translation thereof into any of such
While RA 9285 was passed only in 2004, it nonetheless languages.
applies in the instant case since it is a procedural law which
has a retroactive effect. Likewise, KOGIES filed its The applicant shall establish that the country in
application for arbitration before the KCAB on July 1, 1998 which foreign arbitration award was made in party
and it is still pending because no arbitral award has yet to the New York Convention.
been rendered. Thus, RA 9285 is applicable to the instant
case. Well-settled is the rule that procedural laws are xxxx
construed to be applicable to actions pending and
undetermined at the time of their passage, and are deemed
SEC. 43. Recognition and Enforcement of Foreign
retroactive in that sense and to that extent. As a general
Arbitral Awards Not Covered by the New York
rule, the retroactive application of procedural laws does not
Convention.The recognition and enforcement of
violate any personal rights because no vested right has yet
attached nor arisen from them.42 foreign arbitral awards not covered by the New
York Convention shall be done in accordance with
procedural rules to be promulgated by the
Among the pertinent features of RA 9285 applying and Supreme Court. The Court may, on grounds of
incorporating the UNCITRAL Model Law are the following: comity and reciprocity, recognize and enforce a
non-convention award as a convention award.
(1) The RTC must refer to arbitration in proper cases
SEC. 44. Foreign Arbitral Award Not Foreign
Under Sec. 24, the RTC does not have jurisdiction over Judgment.A foreign arbitral award when
disputes that are properly the subject of arbitration pursuant confirmed by a court of a foreign country, shall be
to an arbitration clause, and mandates the referral to recognized and enforced as a foreign arbitral
arbitration in such cases, thus: award and not as a judgment of a foreign court.
SEC. 24. Referral to Arbitration.A court before A foreign arbitral award, when confirmed by the
which an action is brought in a matter which is the Regional Trial Court, shall be enforced in the same
subject matter of an arbitration agreement shall, if manner as final and executory decisions of courts
at least one party so requests not later than the of law of the Philippines
pre-trial conference, or upon the request of both
parties thereafter, refer the parties to arbitration xxxx
unless it finds that the arbitration agreement is null
and void, inoperative or incapable of being
performed. SEC. 47. Venue and Jurisdiction.Proceedings
for recognition and enforcement of an arbitration
agreement or for vacations, setting aside,
(2) Foreign arbitral awards must be confirmed by the RTC correction or modification of an arbitral award, and
any application with a court for arbitration
Foreign arbitral awards while mutually stipulated by the assistance and supervision shall be deemed as
parties in the arbitration clause to be final and binding are special proceedings and shall be filed with the
not immediately enforceable or cannot be implemented Regional Trial Court (i) where arbitration
immediately. Sec. 3543 of the UNCITRAL Model Law proceedings are conducted; (ii) where the asset to
stipulates the requirement for the arbitral award to be be attached or levied upon, or the act to be
recognized by a competent court for enforcement, which enjoined is located; (iii) where any of the parties to
court under Sec. 36 of the UNCITRAL Model Law may the dispute resides or has his place of business; or
refuse recognition or enforcement on the grounds provided (iv) in the National Judicial Capital Region, at the
for. RA 9285 incorporated these provisos to Secs. 42, 43, option of the applicant.
and 44 relative to Secs. 47 and 48, thus:
SEC. 48. Notice of Proceeding to Parties.In a
SEC. 42. Application of the New York Convention. special proceeding for recognition and enforcement
The New York Convention shall govern the of an arbitral award, the Court shall send notice to
recognition and enforcement of arbitral awards the parties at their address of record in the
covered by said Convention. arbitration, or if any part cannot be served notice at
such address, at such partys last known address.
The recognition and enforcement of such arbitral The notice shall be sent al least fifteen (15) days
awards shall be filed with the Regional Trial Court before the date set for the initial hearing of the
in accordance with the rules of procedure to be application.
promulgated by the Supreme Court. Said
procedural rules shall provide that the party relying It is now clear that foreign arbitral awards when confirmed
on the award or applying for its enforcement shall by the RTC are deemed not as a judgment of a foreign
court but as a foreign arbitral award, and when confirmed, Convention. Any other ground raised shall be
are enforced as final and executory decisions of our courts disregarded by the Regional Trial Court.
of law.
Thus, while the RTC does not have jurisdiction over
Thus, it can be gleaned that the concept of a final and disputes governed by arbitration mutually agreed upon by
binding arbitral award is similar to judgments or awards the parties, still the foreign arbitral award is subject to
given by some of our quasi-judicial bodies, like the National judicial review by the RTC which can set aside, reject, or
Labor Relations Commission and Mines Adjudication vacate it. In this sense, what this Court held in Chung Fu
Board, whose final judgments are stipulated to be final and Industries (Phils.), Inc. relied upon by KOGIES is applicable
binding, but not immediately executory in the sense that insofar as the foreign arbitral awards, while final and
they may still be judicially reviewed, upon the instance of binding, do not oust courts of jurisdiction since these arbitral
any party. Therefore, the final foreign arbitral awards are awards are not absolute and without exceptions as they are
similarly situated in that they need first to be confirmed by still judicially reviewable. Chapter 7 of RA 9285 has made it
the RTC. clear that all arbitral awards, whether domestic or foreign,
are subject to judicial review on specific grounds provided
(3) The RTC has jurisdiction to review foreign arbitral for.
awards
(4) Grounds for judicial review different in domestic and
Sec. 42 in relation to Sec. 45 of RA 9285 designated and foreign arbitral awards
vested the RTC with specific authority and jurisdiction to set
aside, reject, or vacate a foreign arbitral award on grounds The differences between a final arbitral award from an
provided under Art. 34(2) of the UNCITRAL Model Law. international or foreign arbitral tribunal and an award given
Secs. 42 and 45 provide: by a local arbitral tribunal are the specific grounds or
conditions that vest jurisdiction over our courts to review the
SEC. 42. Application of the New York Convention. awards.
The New York Convention shall govern the
recognition and enforcement of arbitral awards For foreign or international arbitral awards which must first
covered by said Convention. be confirmed by the RTC, the grounds for setting aside,
rejecting or vacating the award by the RTC are provided
The recognition and enforcement of such arbitral under Art. 34(2) of the UNCITRAL Model Law.
awards shall be filed with the Regional Trial Court
in accordance with the rules of procedure to be For final domestic arbitral awards, which also need
promulgated by the Supreme Court. Said confirmation by the RTC pursuant to Sec. 23 of RA 87644
procedural rules shall provide that the party relying and shall be recognized as final and executory decisions of
on the award or applying for its enforcement shall the RTC,45 they may only be assailed before the RTC and
file with the court the original or authenticated copy vacated on the grounds provided under Sec. 25 of RA
of the award and the arbitration agreement. If the 876.46
award or agreement is not made in any of the
official languages, the party shall supply a duly (5) RTC decision of assailed foreign arbitral award
certified translation thereof into any of such appealable
languages.
Sec. 46 of RA 9285 provides for an appeal before the CA
The applicant shall establish that the country in as the remedy of an aggrieved party in cases where the
which foreign arbitration award was made is party RTC sets aside, rejects, vacates, modifies, or corrects an
to the New York Convention. arbitral award, thus:
If the application for rejection or suspension of SEC. 46. Appeal from Court Decision or Arbitral
enforcement of an award has been made, the Awards.A decision of the Regional Trial Court
Regional Trial Court may, if it considers it proper, confirming, vacating, setting aside, modifying or
vacate its decision and may also, on the correcting an arbitral award may be appealed to
application of the party claiming recognition or the Court of Appeals in accordance with the rules
enforcement of the award, order the party to and procedure to be promulgated by the Supreme
provide appropriate security. Court.
Having ruled that the arbitration clause of the subject It is settled that questions of fact cannot be raised in an
contract is valid and binding on the parties, and not contrary original action for certiorari.49 Whether or not there was full
to public policy; consequently, being bound to the contract payment for the machineries and equipment and installation
of arbitration, a party may not unilaterally rescind or is indeed a factual issue prohibited by Rule 65.
terminate the contract for whatever cause without first
resorting to arbitration.
However, what appears to constitute a grave abuse of
discretion is the order of the RTC in resolving the issue on
What this Court held in University of the Philippines v. De the ownership of the plant when it is the arbitral body
Los Angeles47 and reiterated in succeeding cases,48 that the (KCAB) and not the RTC which has jurisdiction and
act of treating a contract as rescinded on account of authority over the said issue. The RTCs determination of
infractions by the other contracting party is valid albeit such factual issue constitutes grave abuse of discretion and
provisional as it can be judicially assailed, is not applicable must be reversed and set aside.
to the instant case on account of a valid stipulation on
arbitration. Where an arbitration clause in a contract is
RTC has interim jurisdiction to protect the rights of the
availing, neither of the parties can unilaterally treat the
parties
contract as rescinded since whatever infractions or
breaches by a party or differences arising from the contract
must be brought first and resolved by arbitration, and not Anent the July 23, 1998 Order denying the issuance of the
through an extrajudicial rescission or judicial action. injunctive writ paving the way for PGSMC to dismantle and
transfer the equipment and machineries, we find it to be in
order considering the factual milieu of the instant case.
The issues arising from the contract between PGSMC and
KOGIES on whether the equipment and machineries
delivered and installed were properly installed and Firstly, while the issue of the proper installation of the
operational in the plant in Carmona, Cavite; the ownership equipment and machineries might well be under the primary
of equipment and payment of the contract price; and jurisdiction of the arbitral body to decide, yet the RTC under
whether there was substantial compliance by KOGIES in Sec. 28 of RA 9285 has jurisdiction to hear and grant
the production of the samples, given the alleged fact that interim measures to protect vested rights of the parties.
PGSMC could not supply the raw materials required to Sec. 28 pertinently provides:
produce the sample LPG cylinders, are matters proper for
arbitration. Indeed, we note that on July 1, 1998, KOGIES SEC. 28. Grant of interim Measure of Protection.
instituted an Application for Arbitration before the KCAB in (a) It is not incompatible with an arbitration
Seoul, Korea pursuant to Art. 15 of the Contract as agreement for a party to request, before
constitution of the tribunal, from a Court to grant
such measure. After constitution of the arbitral Article 17. Power of arbitral tribunal to order interim
tribunal and during arbitral proceedings, a request measures
for an interim measure of protection, or
modification thereof, may be made with the arbitral xxx xxx xxx
or to the extent that the arbitral tribunal has no
power to act or is unable to act effectivity, the
(2) An interim measure is any temporary measure,
request may be made with the Court. The arbitral
whether in the form of an award or in another form,
tribunal is deemed constituted when the sole
arbitrator or the third arbitrator, who has been by which, at any time prior to the issuance of the
nominated, has accepted the nomination and award by which the dispute is finally decided, the
arbitral tribunal orders a party to:
written communication of said nomination and
acceptance has been received by the party making
the request. (a) Maintain or restore the status quo pending
determination of the dispute;
(b) The following rules on interim or provisional
relief shall be observed: (b) Take action that would prevent, or refrain from
taking action that is likely to cause, current or
imminent harm or prejudice to the arbitral process
Any party may request that provisional relief be
itself;
granted against the adverse party.
Such relief may be granted: (c) Provide a means of preserving assets out of
which a subsequent award may be satisfied; or
(i) to prevent irreparable loss or injury;
(d) Preserve evidence that may be relevant and
material to the resolution of the dispute.
(ii) to provide security for the performance
of any obligation;
Art. 17 J of UNCITRAL Model Law on ICA also grants
courts power and jurisdiction to issue interim measures:
(iii) to produce or preserve any evidence;
or
Article 17 J. Court-ordered interim measures
(iv) to compel any other appropriate act or
omission. A court shall have the same power of issuing an
interim measure in relation to arbitration
proceedings, irrespective of whether their place is
(c) The order granting provisional relief may be in the territory of this State, as it has in relation to
conditioned upon the provision of security or any proceedings in courts. The court shall exercise
act or omission specified in the order. such power in accordance with its own procedures
in consideration of the specific features of
(d) Interim or provisional relief is requested by international arbitration.
written application transmitted by reasonable
means to the Court or arbitral tribunal as the case In the recent 2006 case of Transfield Philippines, Inc. v.
may be and the party against whom the relief is Luzon Hydro Corporation, we were explicit that even "the
sought, describing in appropriate detail the precise pendency of an arbitral proceeding does not foreclose
relief, the party against whom the relief is resort to the courts for provisional reliefs." We explicated
requested, the grounds for the relief, and the this way:
evidence supporting the request.
As a fundamental point, the pendency of arbitral
(e) The order shall be binding upon the parties. proceedings does not foreclose resort to the courts
for provisional reliefs. The Rules of the ICC, which
(f) Either party may apply with the Court for governs the parties arbitral dispute, allows the
assistance in implementing or enforcing an interim application of a party to a judicial authority for
measure ordered by an arbitral tribunal. interim or conservatory measures. Likewise,
Section 14 of Republic Act (R.A.) No. 876 (The
(g) A party who does not comply with the order Arbitration Law) recognizes the rights of any party
shall be liable for all damages resulting from to petition the court to take measures to safeguard
noncompliance, including all expenses, and and/or conserve any matter which is the subject of
reasonable attorney's fees, paid in obtaining the the dispute in arbitration. In addition, R.A. 9285,
orders judicial enforcement. (Emphasis ours.) otherwise known as the "Alternative Dispute
Resolution Act of 2004," allows the filing of
provisional or interim measures with the regular
Art. 17(2) of the UNCITRAL Model Law on ICA defines an
courts whenever the arbitral tribunal has no power
"interim measure" of protection as:
to act or to act effectively.50
It is thus beyond cavil that the RTC has authority and (3) The parties are hereby ORDERED to submit themselves
jurisdiction to grant interim measures of protection. to the arbitration of their dispute and differences arising
from the subject Contract before the KCAB; and
Secondly, considering that the equipment and machineries
are in the possession of PGSMC, it has the right to protect (4) PGSMC is hereby ALLOWED to dismantle and transfer
and preserve the equipment and machineries in the best the equipment and machineries, if it had not done so, and
way it can. Considering that the LPG plant was non- ORDERED to preserve and maintain them until the finality
operational, PGSMC has the right to dismantle and transfer of whatever arbitral award is given in the arbitration
the equipment and machineries either for their protection proceedings.
and preservation or for the better way to make good use of
them which is ineluctably within the management discretion No pronouncement as to costs.
of PGSMC.
SO ORDERED.
Thirdly, and of greater import is the reason that maintaining
the equipment and machineries in Worths property is not to
the best interest of PGSMC due to the prohibitive rent while
the LPG plant as set-up is not operational. PGSMC was
losing PhP322,560 as monthly rentals or PhP3.87M for
1998 alone without considering the 10% annual rent
increment in maintaining the plant.
(2) The September 21, 1998 and October 19, 1998 RTC
Orders in Civil Case No. 98-117 are REVERSED and SET
ASIDE;
RULE 6 SEC 8 CROSS CLAIM R&B Insurance, thereafter, filed a complaint for damages
against both Loadmasters and Glodel before the Regional
G.R. No. 179446 January 10, 2011 Trial Court, Branch 14, Manila (RTC), docketed as Civil
Case No. 02-103040. It sought reimbursement of the
amount it had paid to Columbia for the loss of the subject
LOADMASTERS CUSTOMS SERVICES, INC., Petitioner,
cargo. It claimed that it had been subrogated "to the right of
vs.
the consignee to recover from the party/parties who may be
GLODEL BROKERAGE CORPORATION and R&B held legally liable for the loss."2
INSURANCE CORPORATION, Respondents.
On November 19, 2003, the RTC rendered a decision3
DECISION
holding Glodel liable for damages for the loss of the subject
cargo and dismissing Loadmasters counterclaim for
MENDOZA, J.: damages and attorneys fees against R&B Insurance. The
dispositive portion of the decision reads:
This is a petition for review on certiorari under Rule 45 of
the Revised Rules of Court assailing the August 24, 2007 WHEREFORE, all premises considered, the plaintiff having
Decision1 of the Court of Appeals (CA) in CA-G.R. CV No. established by preponderance of evidence its claims
82822, entitled "R&B Insurance Corporation v. Glodel against defendant Glodel Brokerage Corporation, judgment
Brokerage Corporation and Loadmasters Customs is hereby rendered ordering the latter:
Services, Inc.," which held petitioner Loadmasters Customs
Services, Inc. (Loadmasters) liable to respondent Glodel
1. To pay plaintiff R&B Insurance Corporation the
Brokerage Corporation (Glodel) in the amount of
sum of P1,896,789.62 as actual and compensatory
P1,896,789.62 representing the insurance indemnity which
damages, with interest from the date of complaint
R&B Insurance Corporation (R&B Insurance) paid to the until fully paid;
insured-consignee, Columbia Wire and Cable Corporation
(Columbia).
2. To pay plaintiff R&B Insurance Corporation the
amount equivalent to 10% of the principal amount
THE FACTS:
recovered as and for attorneys fees plus
P1,500.00 per appearance in Court;
On August 28, 2001, R&B Insurance issued Marine Policy
No. MN-00105/2001 in favor of Columbia to insure the
3. To pay plaintiff R&B Insurance Corporation the
shipment of 132 bundles of electric copper cathodes sum of P22,427.18 as litigation expenses.
against All Risks. On August 28, 2001, the cargoes were
shipped on board the vessel "Richard Rey" from Isabela,
Leyte, to Pier 10, North Harbor, Manila. They arrived on the WHEREAS, the defendant Loadmasters Customs Services,
same date. Inc.s counterclaim for damages and attorneys fees against
plaintiff are hereby dismissed.
Columbia engaged the services of Glodel for the release
and withdrawal of the cargoes from the pier and the With costs against defendant Glodel Brokerage
subsequent delivery to its warehouses/plants. Glodel, in Corporation.
turn, engaged the services of Loadmasters for the use of its
delivery trucks to transport the cargoes to Columbias SO ORDERED.4
warehouses/plants in Bulacan and Valenzuela City.
Both R&B Insurance and Glodel appealed the RTC decision
The goods were loaded on board twelve (12) trucks owned to the CA.
by Loadmasters, driven by its employed drivers and
accompanied by its employed truck helpers. Six (6) On August 24, 2007, the CA rendered the assailed decision
truckloads of copper cathodes were to be delivered to which reads in part:
Balagtas, Bulacan, while the other six (6) truckloads were
destined for Lawang Bato, Valenzuela City. The cargoes in
six truckloads for Lawang Bato were duly delivered in Considering that appellee is an agent of appellant Glodel,
Columbias warehouses there. Of the six (6) trucks en route whatever liability the latter owes to appellant R&B
to Balagtas, Bulacan, however, only five (5) reached the Insurance Corporation as insurance indemnity must
destination. One (1) truck, loaded with 11 bundles or 232 likewise be the amount it shall be paid by appellee
pieces of copper cathodes, failed to deliver its cargo. Loadmasters.
2. Under the set of facts established and At the outset, it is well to resolve the issue of whether
undisputed in the case, can petitioner Loadmasters Loadmasters and Glodel are common carriers to determine
be legally considered as an Agent of respondent
their liability for the loss of the subject cargo. Under Article
Glodel?6
1732 of the Civil Code, common carriers are persons,
corporations, firms, or associations engaged in the
To totally exculpate itself from responsibility for the lost business of carrying or transporting passenger or goods, or
goods, Loadmasters argues that it cannot be considered an both by land, water or air for compensation, offering their
agent of Glodel because it never represented the latter in its services to the public.
dealings with the consignee. At any rate, it further contends
that Glodel has no recourse against it for its (Glodels) Based on the aforecited definition, Loadmasters is a
failure to file a cross-claim pursuant to Section 2, Rule 9 of common carrier because it is engaged in the business of
the 1997 Rules of Civil Procedure.
transporting goods by land, through its trucking service. It is
a common carrier as distinguished from a private carrier
Glodel, in its Comment,7 counters that Loadmasters is liable wherein the carriage is generally undertaken by special
to it under its cross-claim because the latter was grossly agreement and it does not hold itself out to carry goods for
negligent in the transportation of the subject cargo. With the general public.10 The distinction is significant in the
respect to Loadmasters claim that it is already estopped sense that "the rights and obligations of the parties to a
from filing a cross-claim, Glodel insists that it can still do so contract of private carriage are governed principally by their
even for the first time on appeal because there is no rule stipulations, not by the law on common carriers."11
that provides otherwise. Finally, Glodel argues that its
relationship with Loadmasters is that of Charter wherein the In the present case, there is no indication that the
transporter (Loadmasters) is only hired for the specific job undertaking in the contract between Loadmasters and
of delivering the merchandise. Thus, the diligence required Glodel was private in character. There is no showing that
in this case is merely ordinary diligence or that of a good Loadmasters solely and exclusively rendered services to
father of the family, not the extraordinary diligence required Glodel.
of common carriers.
In fact, Loadmasters admitted that it is a common carrier.12
R&B Insurance, for its part, claims that Glodel is deemed to
have interposed a cross-claim against Loadmasters
because it was not prevented from presenting evidence to In the same vein, Glodel is also considered a common
prove its position even without amending its Answer. As to carrier within the context of Article 1732. In its
the relationship between Loadmasters and Glodel, it Memorandum,13 it states that it "is a corporation duly
contends that a contract of agency existed between the two organized and existing under the laws of the Republic of the
corporations.8 Philippines and is engaged in the business of customs
brokering." It cannot be considered otherwise because as
held by this Court in Schmitz Transport & Brokerage
Subrogation is the substitution of one person in the place of
Corporation v. Transport Venture, Inc.,14 a customs broker
another with reference to a lawful claim or right, so that he
is also regarded as a common carrier, the transportation of
who is substituted succeeds to the rights of the other in goods being an integral part of its business.
relation to a debt or claim, including its remedies or
securities.9 Doubtless, R&B Insurance is subrogated to the
rights of the insured to the extent of the amount it paid the Loadmasters and Glodel, being both common carriers, are
consignee under the marine insurance, as provided under mandated from the nature of their business and for reasons
Article 2207 of the Civil Code, which reads: of public policy, to observe the extraordinary diligence in the
vigilance over the goods transported by them according to
all the circumstances of such case, as required by Article
ART. 2207. If the plaintiffs property has been insured, and
1733 of the Civil Code. When the Court speaks of
he has received indemnity from the insurance company for
extraordinary diligence, it is that extreme measure of care
the injury or loss arising out of the wrong or breach of
and caution which persons of unusual prudence and
contract complained of, the insurance company shall be
circumspection observe for securing and preserving their alleged negligent manner by which Mindanao Terminal
own property or rights.15 This exacting standard imposed on handled the cargoes belonging to Del Monte Produce.
common carriers in a contract of carriage of goods is Despite the absence of contractual relationship between
intended to tilt the scales in favor of the shipper who is at Del Monte Produce and Mindanao Terminal, the allegation
the mercy of the common carrier once the goods have been of negligence on the part of the defendant should be
lodged for shipment.16 Thus, in case of loss of the goods, sufficient to establish a cause of action arising from quasi-
the common carrier is presumed to have been at fault or to delict. [Emphases supplied]
have acted negligently.17 This presumption of fault or
negligence, however, may be rebutted by proof that the In connection therewith, Article 2180 provides:
common carrier has observed extraordinary diligence over
the goods.
ART. 2180. The obligation imposed by Article 2176 is
demandable not only for ones own acts or omissions, but
With respect to the time frame of this extraordinary also for those of persons for whom one is responsible.
responsibility, the Civil Code provides that the exercise of
extraordinary diligence lasts from the time the goods are
xxxx
unconditionally placed in the possession of, and received
by, the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the Employers shall be liable for the damages caused by their
consignee, or to the person who has a right to receive employees and household helpers acting within the scope
them.18 of their assigned tasks, even though the former are not
engaged in any business or industry.
Premises considered, the Court is of the view that both
Loadmasters and Glodel are jointly and severally liable to R It is not disputed that the subject cargo was lost while in the
& B Insurance for the loss of the subject cargo. Under custody of Loadmasters whose employees (truck driver and
Article 2194 of the New Civil Code, "the responsibility of two helper) were instrumental in the hijacking or robbery of the
or more persons who are liable for a quasi-delict is shipment. As employer, Loadmasters should be made
solidary." answerable for the damages caused by its employees who
acted within the scope of their assigned task of delivering
the goods safely to the warehouse.
Loadmasters claim that it was never privy to the contract
entered into by Glodel with the consignee Columbia or R&B
Insurance as subrogee, is not a valid defense. It may not Whenever an employees negligence causes damage or
have a direct contractual relation with Columbia, but it is injury to another, there instantly arises a presumption juris
liable for tort under the provisions of Article 2176 of the Civil tantum that the employer failed to exercise diligentissimi
Code on quasi-delicts which expressly provide: patris families in the selection (culpa in eligiendo) or
supervision (culpa in vigilando) of its employees.20 To avoid
liability for a quasi-delict committed by its employee, an
ART. 2176. Whoever by act or omission causes damage to
employer must overcome the presumption by presenting
another, there being fault or negligence, is obliged to pay
convincing proof that he exercised the care and diligence of
for the damage done. Such fault or negligence, if there is no
a good father of a family in the selection and supervision of
pre-existing contractual relation between the parties, is
his employee.21 In this regard, Loadmasters failed.
called a quasi-delict and is governed by the provisions of
this Chapter.
Glodel is also liable because of its failure to exercise
extraordinary diligence. It failed to ensure that Loadmasters
Pertinent is the ruling enunciated in the case of Mindanao
would fully comply with the undertaking to safely transport
Terminal and Brokerage Service, Inc. v. Phoenix Assurance
the subject cargo to the designated destination. It should
Company of New York,/McGee & Co., Inc.19 where this
have been more prudent in entrusting the goods to
Court held that a tort may arise despite the absence of a
contractual relationship, to wit: Loadmasters by taking precautionary measures, such as
providing escorts to accompany the trucks in delivering the
cargoes. Glodel should, therefore, be held liable with
We agree with the Court of Appeals that the complaint filed Loadmasters. Its defense of force majeure is unavailing.
by Phoenix and McGee against Mindanao Terminal, from
which the present case has arisen, states a cause of action.
At this juncture, the Court clarifies that there exists no
The present action is based on quasi-delict, arising from the
principal-agent relationship between Glodel and
negligent and careless loading and stowing of the cargoes
Loadmasters, as erroneously found by the CA. Article 1868
belonging to Del Monte Produce. Even assuming that both
of the Civil Code provides: "By the contract of agency a
Phoenix and McGee have only been subrogated in the
person binds himself to render some service or to do
rights of Del Monte Produce, who is not a party to the
something in representation or on behalf of another, with
contract of service between Mindanao Terminal and Del
the consent or authority of the latter." The elements of a
Monte, still the insurance carriers may have a cause of
contract of agency are: (1) consent, express or implied, of
action in light of the Courts consistent ruling that the act
the parties to establish the relationship; (2) the object is the
that breaks the contract may be also a tort. In fine, a liability
execution of a juridical act in relation to a third person; (3)
for tort may arise even under a contract, where tort is that
the agent acts as a representative and not for himself; (4)
which breaches the contract. In the present case, Phoenix
the agent acts within the scope of his authority.22
and McGee are not suing for damages for injuries arising
from the breach of the contract of service but from the
Accordingly, there can be no contract of agency between of R&B Insurance. Under the Rules, a compulsory
the parties. Loadmasters never represented Glodel. Neither counterclaim, or a cross-claim, not set up shall be barred.25
was it ever authorized to make such representation. It is a Thus, a cross-claim cannot be set up for the first time on
settled rule that the basis for agency is representation, that appeal.
is, the agent acts for and on behalf of the principal on
matters within the scope of his authority and said acts have For the consequence, Glodel has no one to blame but itself.
the same legal effect as if they were personally executed by The Court cannot come to its aid on equitable grounds.
the principal. On the part of the principal, there must be an "Equity, which has been aptly described as a justice
actual intention to appoint or an intention naturally inferable outside legality, is applied only in the absence of, and
from his words or actions, while on the part of the agent, never against, statutory law or judicial rules of procedure."26
there must be an intention to accept the appointment and The Court cannot be a lawyer and take the cudgels for a
act on it.23 Such mutual intent is not obtaining in this case. party who has been at fault or negligent.
What then is the extent of the respective liabilities of WHEREFORE, the petition is PARTIALLY GRANTED. The
Loadmasters and Glodel? Each wrongdoer is liable for the August 24, 2007 Decision of the Court of Appeals is
total damage suffered by R&B Insurance. Where there are MODIFIED to read as follows:
several causes for the resulting damages, a party is not
relieved from liability, even partially. It is sufficient that the
WHEREFORE, judgment is rendered declaring petitioner
negligence of a party is an efficient cause without which the
damage would not have resulted. It is no defense to one of Loadmasters Customs Services, Inc. and respondent
the concurrent tortfeasors that the damage would not have Glodel Brokerage Corporation jointly and severally liable to
resulted from his negligence alone, without the negligence respondent R&B Insurance Corporation for the insurance
or wrongful acts of the other concurrent tortfeasor. As indemnity it paid to consignee Columbia Wire & Cable
stated in the case of Far Eastern Shipping v. Court of Corporation and ordering both parties to pay, jointly and
Appeals,24 severally, R&B Insurance Corporation a] the amount of
P1,896,789.62 representing the insurance indemnity; b] the
amount equivalent to ten (10%) percent thereof for
X x x. Where several causes producing an injury are attorneys fees; and c] the amount of P22,427.18 for
concurrent and each is an efficient cause without which the litigation expenses.
injury would not have happened, the injury may be
attributed to all or any of the causes and recovery may be
had against any or all of the responsible persons although The cross-claim belatedly prayed for by respondent Glodel
under the circumstances of the case, it may appear that Brokerage Corporation against petitioner Loadmasters
Customs Services, Inc. is DENIED.
one of them was more culpable, and that the duty owed by
them to the injured person was not the same. No actor's
negligence ceases to be a proximate cause merely SO ORDERED.
because it does not exceed the negligence of other actors.
Each wrongdoer is responsible for the entire result and is
liable as though his acts were the sole cause of the injury.
SO ORDERED.
G.R. No. L-475 August 31, 1946 be no doubt that it was thus intended to make the
impleading of third parties in the Federal practice
ISAAC CAPAYAS, ETC., petitioner, discretionary with the trial court. See 1 Moore, op. cit.,
vs. supra, 741: 'Whether a party to an action shall be allowed to
THE COURT OF FIRST INSTANCE OF ALBAY, ET AL., implead an additional party rests in the discretion of the
respondents. court. This is in accord with the English, New York and
Wisconsin practices.'" (2 Fed. Rules Service, 14a.15, Case
No. 1.)
Ramon C. Fernandez for petitioner.
Victorino P. Abrera for respondents.
Secondly. Because the respondent court would have
committed an error if it had admitted the so-called third-
FERIA, J.:
party complaint filed by the petitioner against Isidora
Lladoc, Fulgencio Lladoc and Gregorio Navera, since the
This is a petition for mandamus to compel the respondent facts alleged therein do not show that the petitioner is
Court of First Instance of Albay to admit the so-called entitled to indemnify against them "in respect to plaintiff's
amended third-party complaint filed by petitioner against claim." The test to determine whether the claim is, whether
several persons named therein, on the ground that the it arises out of the same transaction on which the plaintiff's
refusal of the respondent court to admit the same claim is based, or the third-party's claim, although arising
constitutes an unlawful neglect of the performance of a duty out of another or different contract or transaction, is
specifically enjoined upon it by law, pursuant to Rule 12 of connected with the plaintiff's claim.
the Rules of Court, sections 1 and 2 of which read as
follows:
According to the decision in the case of Crim vs.
Lumberman's Mutual Casualty Co. (26 Fed. Supp., 715 [1
SECTION 1. Claim against one not a party to an Fed. Rules Service, 14a11. Case No. 1]),the test to
action.When a defendant claims to be entitled determine when a third-party defendant may be impleaded
against a person not a party to the action, is whether he could have been joined originally as a
hereinafter called the third-party defendant, to defendant by the plaintiff. But this could be applied only if
contribution, indemnity, subrogation or any other there could be asserted against the defendant as the third-
relief, in respect of the plaintiff's claim, he may file, party defendant, jointly and severally or in the alternatives,
with leave of court, against such person a pleading any right to relief arising out of the same transaction. For
which shall state the nature of his claim and shall example in an action against the surety in a bond, the
be called the third-party complaint. surety may bring in as a third party defendant, the principle
who had agreed to indemnify the surety, because the
SEC. 2. Motion for leave.Before the service of surety's claim arises out of the same transaction (United
his answer a defendant may move ex parte or, States vs. United States Fidelity and Guaranty Co. vs.
after the service of his answer, on notice to the Kolling, U.S. Dist. Ct., D. Minn., February 1, 1940, 2 Fed.
plaintiff, for leave as third-party plaintiff to file a Rules Service 14a.222, Case No. 1). The above test does
complaint against a third-party defendant. not cover all cases in which impleading a third-party may be
and have been allowed, which are also covered by the test
Petitioner's contention is untenable. we have laid down in the previous paragraph. Under Rule
14 of Federal Rules of Civil Procedure, which corresponds
to our Rule 12, the bringing in of a third-party defendant is
First. Because from the said provisions it clearly appears proper if he would be liable to the plaintiff or to the
that it is not a court's duty especially enjoined by law to defendant for all or part of the plaintiff's claim against the
admit a third-party complaint. Were it a ministerial duty, it original defendant, although the third-party defendant's
would not be necessary for the defendant to obtain leave of liability arises out of another transaction. So in the case of
court to file such complaint; because if the court has the Carbola Chemical Co., Inc. vs Trundle Engineering Co. (U.
duty to admit, the defendant has the correlative right to file, S. Dist. Ct., S. D. N. Y., December 26, 1942), it was held
a third-party complaint without necessity of such leave. Of that in an action for breach of contract to render
course, when the law says that a third party complaint may engineering services and to survey a plant, the defendant
be filed with leave of court, it refers to a complaint that was allowed to bring as a third-party defendant, the
alleges facts which prima facie show that the defendant is manufacturer which sold defendant's equipment to the
entitled against the third-party defendant to contribution, plaintiff (7 Fed. Rules Service, 14a.11, Case No. 1). And in
etc., etc. Otherwise the court can not legally grant leave to a negligence action by the purchaser of a confection in
a defendant to file it, because it would not be a third-party which it is alleged that the confection contained a foreign
complaint. object, the defendant may bring in the person who supplied
him with the constituent containing the foreign object, as a
In the case of General Taxicab Assn., Inc. vs. O' Shea, U.S. third-party defendant (Saunders vs. Southern Dairies, Inc.,
Court of Appeals, Dist. Court of Columbia, January 15, U.S. Dist. Ct., District of Columbia, November 6, 1939 [2
1940, the court said: "Against this background of statutes Fed. Rules Service, 14a.226, Case No. 31]).
and decisions, the Supreme Court, in framing Rule 14(a),
chose the language "a defendant may move . . . for leave Another test, provided for by section 4, Rule 12, of our
as a third-party plaintiff to serve a summons and complaint Rules of Court, is whether the third-party defendant may
upon a person not a party to the action, . . .' and the assert any defenses which the third-party plaintiff has or
language 'if the motion is granted. . . .' We think there can may have to the plaintiff's claim. If he may properly assert
such defenses, then he is a proper third-party defendant;
otherwise he is not and the claim against him can not be
considered as a third-party complaint.
The factual background of this case as found by the trial Emerita C. Jumanan, assisted by her husband Ricardo
court is as follows: Jumanan, filed before the CFI of Cavite a complaint for
damages arising from physical injuries suffered by her as a
passenger of the jeepney bearing plate No. PUJ-VY-542 '75
At approximately 6:30 o'clock in the allegedly owned and operated by the four-named
morning of February 7, 1976, plaintiff defendants, spouses Felisa and Tomas Garcia, Emetiquio
Emerita C. Jumanan was riding a M. Jarin and Juanita Madlangbayan, and driven by the last
passenger jeepney on her way from her named defendant, Virgilio Profeta.
residence at Binakayan, Kawit, Cavite to
her place of work at the Department (now
Ministry) of Public Information in In their separate answers, both Jarin and Madlangbayan
Intramuros, Manila, where she was denied liability, claiming they no longer owned the
employed. The said passenger jeepney, passenger jeepney at the time of the incident in question,
which is owned by defendants Felisa and said ownership having been transferred to the spouses
Tomas Garcia, was then being driven by Garcia. While admitting to be the owners of the passenger
defendant Virgilio Profeta and was bound jeepney, the spouses Garcia nonetheless denied liability,
for Manila carrying about twelve alleging that the vehicular collision complained of was
passengers. attributable to the fault and negligence of the owner and
driver of the Saint Raphael Transit passenger bus with plate
No. XGY-297 PUB- Phil. '75. Consequently, a third-party
While the aforesaid passenger jeepney complaint was filed by defendants spouses Garcia and
where Emerita C. Jumanan was riding was Virgilio Profeta against Purificacion Samala and Leonardo
about to make a left turn on the road just Esguerra, owner and driver, respectively, of the Saint
below the bridge at Barrio Mabolo, Bacoor, Raphael Transit Bus. The latter defendants, in turn, filed a
Cavite, a delivery panel of the Luau fourth-party complaint against the insurer of the Saint
restaurant bearing plate No. UH- 41373, Raphael Transit Bus, Imperial Insurance, Inc., which was
driven by Domingo Medina was declared in default for failure to appear at the pre-trial
approaching from the opposite direction conference.
from Manila, followed by the Saint
Raphael Transit passenger bus, owned by
third party defendant Purificacion Samala After trial, respondent Judge rendered a decision in favor of
and being driven by third party defendant the defendants, the dispositive portion of which reads:
Leonardo Esguerra. The Saint Raphael
Transit passenger bus was running fast
PREMISES CONSIDERED, judgment is Appellants argue that since plaintiffs filed a complaint for
hereby rendered - damages against the defendants on a breach of contract of
carriage, they cannot recover from the third-party
1. Absolving defendants Felisa and Tomas defendants on a cause of action based on quasi-delict. The
Garcia, Virgilio Profeta, Juanita third party defendants, they allege, are never parties liable
Madlangbayan and Emetiquio Jarin from with respect to plaintiff s claim although they are with
any liability; respect to the defendants for indemnification, subrogation,
contribution or other reliefs. Consequently, they are not
directly liable to the plaintiffs. Their liability commences only
2. Ordering the third party defendants and when the defendants are adjudged liable and not when they
fourth party plaintiffs, Purificacion Samala are absolved from liability as in the case at bar. 5
and Leonardo Esguerra, and the fourth
party defendant Imperial Insurance, Inc.,
jointly and severally, to pay to plaintiffs Quite apparent from these arguments is the misconception
Emerita C. Jumanan and Ricardo entertained by appellants with respect to the nature and
Jumanan the following-. office of a third party complaint.
(a) Actual or compensatory damages in Section 16, Rule 6 of the Revised Rules of Court defines a
the amount of P 7,958.83; third party complaint as a "claim that a defending party may,
with leave of court, file against a person not a party to the
action, called the third-party defendant, for contribution,
(b) Moral damages in the amount of P
indemnification, subrogation, or any other relief, in respect
5,000.00;
of his opponent's claim." In the case of Viluan vs. Court of
appeals, et al., 16 SCRA 742 [1966], this Court had
(c) Exemplary damages in the amount of P occasion to elucidate on the subjects covered by this Rule,
3,000.00; and thus:
(d) Attorney's fees and expenses of ... As explained in the Atlantic Cost Line R.
litigation in the amount of P 2,000.00. Co. vs. U.S. Fidelity & Guaranty Co., 52 F.
Supp. 177 (1943:)
Plus costs of this suit.
'From the sources of
SO ORDERED. 3 Rule 146 and the
decisions herein cited, it
Third party defendants Purificacion Samala and Leonardo is clear that this rule, like
Esguerra moved to reconsider said decision, but to no avail. the admiralty rule, 'covers
Hence, this appeal by certiorari, therein third party two distinct subjects, the
defendants (petitioners herein) contending that: addition of parties
defendant to the main
cause of action, and the
1. The lower court erred in holding that the bringing in of a third party
third-party defendants and fourth party for a defendant's remedy
plaintiff and the fourth party defendant are over'. ...
jointly and severally liable to pay the claim
of plaintiffs.
'If the third party
complaint alleges facts
2. The third-party defendant and fourth- showing a third party's
party plaintiff should be absolved from any direct liability to plaintiff
liability since the principal defendants have on the claim set out in
been absolved from the claim of plaintiffs, plaintiffs petition, then
a matter not appreciated by the lower third party 'shall' make
court; his defenses as provided
in Rule 12 and his
3. The lower court erred in not holding that counterclaims against
since plaintiffs' cause of action is based on plaintiff as provided in
culpa contractual against the defendants Rule 13. In the case of
only, they cannot recover from the third- alleged direct liability, no
party defendants fourth-party plaintiffs on amendment (to the
a cause of action based on tort or quasi- complaint) is necessary
delict. 4 or required. The subject-
matter of the claim is
At issue in this case is the nature and office of a third-party contained in plaintiff's
complaint. complaint, the ground of
third party's liability on
that claim is alleged in
third party complaint, and The case at bar is one in which the third party defendants
third party's defense to are brought into the action as directly liable to the plaintiffs
set up in his answer to upon the allegation that "the primary and immediate cause
plaintiff's complaint. At as shown by the police investigation of said vehicular
that point and without collision between (sic) the Above-mentioned three vehicles
amendment, the plaintiff was the recklessness and negligence and lack of
and third party are at imprudence (sic) of the third-party defendant Virgilio (should
issue as to their rights be Leonardo) Esguerra y Ledesma then driver of the
respecting the claim. passenger bus." 7 The effects are that "plaintiff and third
party are at issue as to their rights respecting the claim" and
The provision in the rule "the third party is bound by the adjudication as between him
that, 'The third-party and plaintiff." It is not indispensable in the premises that the
defendant may assert defendant be first adjudged liable to plaintiff before the
any defense which the third-party defendant may be held liable to the plaintiff, as
third-party plaintiff may precisely, the theory of defendant is that it is the third party
assert to the plaintiffs defendant, and not he, who is directly liable to plaintiff. The
claim,' applies to the situation contemplated by appellants would properly pertain
other subject, namely, to situation (a) above wherein the third party defendant is
the alleged liability of being sued for contribution, indemnity or subrogation, or
third party defendant. simply stated, for a defendant's "remedy over".
The next sentence in the
rule, 'The third-party Anent appellant's claim that plaintiff who sued on
defendant is bound by contractual breach cannot recover on the basis of quasi-
the adjudication of the delict, suffice it to say that as the primary purpose of this
third party plaintiffs rule is to avoid circuity of action and to dispose of in one
liability to the plaintiff, as litigation, the entire subject matter arising from a particular
well as of his own to the set of fact 8 it is immaterial that the third-party plaintiff
plaintiff or to the third- asserts a cause of action against the third party defendant
party plaintiff applies to on a theory different from that asserted by the plaintiff
both subjects. If third against the defendant. 9 It has likewise been held that "a
party is brought in as defendant in a contract action may join as third-party
liable only to defendant defendants those liable to him in tort for the plaintiff s claim
and judgment is rendered against him or directly to the plaintiff. 10
adjudicating plaintiff's
right to recover against The incident complained of having been found to have been
defendant and caused by the negligence of appellant Leonardo Esguerra,
defendant's rights to driver and employee of co-appellant Purificacion Samala,
recover against third no reversible error was committed by the trial court in
party, he is bound by adjudging the latter liable to plaintiffs-appellees.
both adjudications. That
part of the sentence
WHEREFORE, the instant appeal by certiorari is hereby
refers to the second
DISMISSED with costs against appellants. This decision is
subject. If third party is
immediately executory.
brought in as liable to
plaintiff, then third party is
bound by the adjudication SO ORDERED.
as between him and
plaintiff. That refers to the
first subject. If third party
is brought in as liable to
plaintiff and also over to
defendant, then third
party is bound by both
adjudications. ....