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Definition

Rule 6, Sec. 1.

Pleadings are the written statements of the respective claims and defenses of the parties
submitted to the court for appropriate judgment

Allowed Pleadings

Rule 6, Sec. 2

The claims of a party are asserted in a complaint, counter-claim, cross-claim, third (fourth, etc.)
party complaint, or complaint – in – intervention.

The defenses of a party are alleged in the answer to the pleading asserting a claim against him.

An answer may be responded to by a reply.

Liberal construction
Gerales v. CA, 218 SCRA 638 (’93)
Facts: Counsel for petitioner: Sir Luigi, este, Camacho pala) A vehicular accident occurred
resulting in respondent filing a case for damage to property. Two cases were filed, criminal &
civil. The crim. case was dismissed beech. the parties entered into an amicable settlement. The
civil case continued but resp. was declared in default for failure to file an answer. What
respondent did was merely to send a letter to the Clerk of Court informing the ct. about the
amicable settlement.
Held: The trial ct. should have considered the letter as a responsive pleading even if it lacks the
formalities required by law. The letter contains an affirmative defense, i.e. mutual settlement
w/c, if proven in preliminary hearing would constitute a meritorious defense barring pet. fr.
recovery. Pleadings as well as remedial laws should be liberally construed in order that the
litigant may have ample opportunity to prove their respective claims & to prevent possible denial
of substantive due process. Litigations should be decided on the merits not merely on
technicality.

How allegations made


In General

Rule 8, Sec. 1
Every pleading shall contain in a methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his claim or defense, as the
case may be, omitting the statement of mere evidentiary facts.

If a defense relied on is based on law, the pertinent provisions thereof and their applicability to
him shall be clearly and concisely stated.

Capacity

Rule 8, Sec. 4

Facts showing the capacity of a party to sue or be sued or the authority of a prty to sue or be sued
in a representative capacity or the legal existence of an organized association of persons that is
made a party, must be averred. A prty desiring to raise an issue as to the legal existence of any
party or the capacity of any party to sue or be sued in a representative capacity, shall do so by
specific denial, which shall include such supporting particulars as are peculiarly within the
pleader’s knowledge.

Alternative claims and defenses

Rule 8, Sec. 2

A party may set forth two or more statements of a claim or defense alternatively or
hypothetically, either in one cause of action or defense or in separate causes of action or
defenses. When two or more statements are made in the alternative and one of them if made
independently would be sufficient, the pleading is not made insufficient by the insufficiency of
one or more of the alternative statements.

Conditions precedent

Rule 8, Sec. 3

In any pleading a general averment of the performance or occurrence of all conditions precedent
shall be sufficient.

Fraud and Mistake

Rule 8, Sec. 5
In all averments of fraud or mistake, the circumstances constituting the fraud or mistake must be
stated with particularity. Malice, intent, knowledge or other condition of the mind of a person
may be averred generally.

Condition of mind

Rule 8, Sec. 5 supra.

Judgments

Rule 8, Sec. 6

In pleading a judgment or decision of a domestic or foreign court, judicial or quasi-judicial


tribunal, or of a board or officer, it is sufficient to aver the judgment or decision without setting
forth the matter showing jurisdiction to render it.

Official Documents

Rule 8, Sec. 9

In pleading an official document or official act, it is sufficient to aver that the document was
issued or the act done in compliance with law.

Complaint
Defined and in general

Rule 6, Sec. 3

The complaint is the pleading alleging the plaintiff’s cause or causes of action. The names and
residences of the plaintiff and defendant must be stated in the complaint.

Tantuico v. Republic, 204 SCRA 428 (’91)


Facts: A case was filed by the PCGG vs. the Marcoses & Tantuico, the latter on the theory that he
collaborated & aided the Marcoses in concealing the ill-gotten wealth. Tantuico filed a motion for
a bill of particulars. The SolGen opposed the motion saying that the matters sought by Tantuico
are evidentiary in nature & that the complaint was sufficient as it contains the essential elements
of a cause of action.
Held: A complaint is defined as a concise statement of the ultimate facts constituting the
plaintiff’s cause or causes of action. Its office or purpose is to inform the defendant clearly &
definitely of the claims made vs. him so that he may be prepared to meet the issues at trial. The
complaint should inform the defendant all the material facts on w/c the plaintiffs rely to support
his demand The complaint should inform the defendant of all the material facts on w/c the
plaintiff relies to support his demand; it should state the theory of a cause of action w/c forms
the bases of the plaintiffs claim of liability. The rules on pleading speak of two (2) kinds of facts:
the first, the “ultimate facts”, & the second, the “evidentiary facts.” The term “ultimate facts”
as used in Sec. 3, Rule 3 of the Rules of Court, means the essential facts constituting the plaintiffs
cause of action.

TEST: A fact is essential if it cannot be stricken out w/o leaving the statement of the cause of
action insufficient….

Ultimate facts are important & substantial facts w/c either directly form the basis of the primary
right & duty, or w/c directly make up the wrongful acts or omissions of the defendant. The term
does not refer to the details of probative matter or particulars of evidence by w/c these material
elements are to be established. It refers to principal, determinate, constitutive facts, upon the
existence of w/c, the entire cause of action rests. “Evidentiary facts” are those facts w/c are
necessary for determination of the ultimate facts; they are the premises upon w/c conclusions of
ultimate facts are based.

Where the complaint states ultimate facts that constitute the three (3) essential elements of a
cause of action, namely: (1) the legal right of the plaintiff, (2) the correlative obligation of the
defendant, & (3) the act or omission of the defendant in violation of said legal right, the
complaint states a cause of action, otherwise, the complaint must succumb to a motion to dismiss
on that ground of failure to state a cause of action. However, where the allegations of the
complaint are vague, indefinite, or in the form of conclusions, the proper recourse would be, not
a motion to dismiss, but a motion for a bill of particulars.

Allegations
In general

Rule 8, Sec. 1

Every pleading shall contain in a methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his claim or defense, as the
case may be, omitting the statement of mere evidentiary facts.
If a defense relied on is based on law, the pertinent provisions thereof and their applicability to
him shall be clearly and concisely stated.

Metropolitan Bank v. Quilts, 222 SCRA 486 (’93)


Facts: The property of Quilts was mortgaged to Metrobank to secure a personal loan of its pres.
Dizon. Quilts asked for the cancellation of the mortgage on the ground that Dizon had no
authority to mortgage the property. Metrobank refused. Quilts filed an action vs. Metrobank for
the annulment & cancellation of the mortgage. Metrobank moved to dismiss the complaint for
failure to state a cause of action as the complaint merely contained a single par. alleging that
Metrobank committed illegal acts vs. Quilts.
Held: The complaint filed vs. Metrobank does not contain sufficient COA. The complaint
expresses legal conclusions & not averments or allegations of ultimate facts. The ultimate facts
upon w/c such conclusions rest must be alleged. In CAB, the bare allegations neither establishes
any right or COA on part of the plaintiff.

Mathay v. Consolidated Bank, 58 SCRA


Facts: This is the classic case of the class suit filed by Mathay vs. Consolidated Bank. Mathay &
Co. averred in the complaint that they were denied the right to subscribe shares in the Bank. All
in all, the complaint filed by Mathay contained 6 COA’s .
Held: Bare allegations that one is entitled to something is an allegation of a conclusion. Such
kind of allegation adds nothing to the complaint it being necessary to plead specifically the facts
upon w/c such conclusion is founded. In CAB, the pet. did not show their qualifications to being
stockholders nor their right to subscribe the shares. Did not show how they acquired the right, the
extent of its exercise & amount of shareholdings that they are entitled to.

Capacity of parties

Rule 8, Sec. 4

Facts showing the capacity of a party to sue or be sued or the authority of a prty to sue or be sued
in a representative capacity or the legal existence of an organized association of persons that is
made a party, must be averred. A prty desiring to raise an issue as to the legal existence of any
party or the capacity of any party to sue or be sued in a representative capacity, shall do so by
specific denial, which shall include such supporting particulars as are peculiarly within the
pleader’s knowledge.
Actions based upon a document

Rule 8, Sec. 7

Whenever an action or defense is based upon a written instrument or document, the substance of
such instrument or document shall be set forth in the pleading and the original or a copy thereof
shall be attached to the pleading as an exhibit, which shall be deemed to be a part of the
pleading, or said copy may with like effect be set forth in the pleading.

Answer
Defined and in general

Rule 6, Sec. 4

An answer is a pleading in which a defending party sets forth his defenses.

Types of Defenses
Negative

Rule 6, Sec. 5(a)

Defenses may either be negative or affirmative.

(a) A negative defense is the specific denial of the material fact or facts alleged in the pleading of
the claimant essential to his cause or causes of action.

How alleged, generally

Rule 8, Sec. 10

A defendant must specify each material allegation of fact the truth of which he does not admit
and, whenever practicable, shall set forth that substance of the matters upon which he relies to
support his denial. Where a defendant desires to deny only a part of an averment, he shall specify
so much of it as is true and material and shall deny only the remainder. Where a defendant is
without knowledge or information sufficient to form a belief as to the truth of a material
averment made in the complaint, he shall so state, and this shall have the effect of a denial.
Capacity of parties

Rule 8, Sec. 4

Facts showing the capacity of a party to sue or be sued or the authority of a party to sue or be
sued in a representative capacity or the legal existence of an organized association of persons that
is made a party, must be averred. A prty desiring to raise an issue as to the legal existence of any
party or the capacity of any party to sue or be sued in a representative capacity, shall do so by
specific denial, which shall include such supporting particulars as are peculiarly within the
pleader’s knowledge.

Genuineness of document

Rule 8, Sec. 8

When an action or defense is founded upon a written instrument, copied in or attached t o the
corresponding pleading as provided in the preceding section, the genuineness and due execution
of the instrument shall be deemed unless the adverse party, under oath specifically denies them,
and sets forth what he claims to be the facts; but the requirement of an oath does not apply when
the adverse party does not appear to be party to the instrument or when compliance with an
order for an inspection of the original instrument is refused.

Donato v. CA

Controversy over a parcel of land allegedly sold to defendants by Rarang by virtue of special
power of attorney executed the by the mother (deceased) of plaintiffs. Trial court held in favor
of plaintiffs on the ground that defendants failed to present evidence to prove genuineness of the
power of attorney. CA Affirmed.

Supreme Court held that while R.8, Sec. 8 provides for rule on implied admission of the
genuineness and due execution of a document subject of an action/defense, one exception is
when the adverse party does not appear to be a party to the instrument. In this case, their
plaintiffs were mere witnesses to the power of attorney in question. Besides, the document
should not be afforded presumption of genuineness and due execution in view of the discrepancies
in its execution.

Negative pregnant
PHILAMGEN v. Sweet Lines
Controversy over several shipments of chemicals aboard the vessel owned by Sweet Lines which
were delivered damaged and lacking in number to plaintiff PHILAMGEN. Sweet Lines argued that
the action has prescribed since the claim for damages were not presented within the period
stipulated in the bills of lading. PHILAMGEN contended that the bills of lading were not presented
in evidence, therefore, since the tenor and existence of the stipulations were not established, it
was inconceivable how they can comply therewith. Trial court held in favor of PHILAMGEN but CA
reversed.

Supreme Court held that the action has already prescribed. Besides, plaintiff’s failure to
specifically deny the existence, genuineness and due execution of the instruments amounted too
an admission.

PHILAMGEN’s denial has procedural earmarks of a “negative pregnant” which is a denial pregnant
with the admission of the substantial facts in the pleading responded to which are not squarely
denied. Such defense is in effect an admission of the averment. Thus, while they objected to the
stipulation in the bills of lading as being contrary to policy, existence of the bills were
nevertheless impliedly admitted.

Affirmative

Rule 6, Sec. 5(b)

(b) An affirmative defense is an allegation of a new matter which, while hypothetically admitting
the material allegations in the pleading of the claimant, would nevertheless prevent or bar
recovery by him. The affirmative defenses include fraud, statute of limitations, release,
payment, illegality, statute of frauds, estoppel, former recovery, discharge in bankruptcy, and
any other matter by way of confession and avoidance.

Periods to plead

Rule 11, Sec. 1

The defendant shall file his answer to the complaint within 15 days after service of summons,
unless a different period is fixed by the court.

Rule 11, Sec. 2

Where the defendant is a foreign private juridical entity and service of summons is made on the
government official designated by law to receive the same, the answer shall be filed within 30
days after receipt of summons by such entity.
Rule 11, Sec. 3

Where the plaintiff files an amended complaint as a matter of right, the defendant shall answer
the same within 15 days after being served with a copy thereof.

Where its filing is not a matter of right, the defendant shall answer the amended complaint within
10 days from notice of the order admitting the same. An answer earlier filed may serve as the
answer to the amended complaint if no new answer is filed.

This Rule shall apply to the answer to an amended counterclaim, amended cross-claim, amended
third (fourth, etc) party complaint, and amended complaint-in-intervention.

Waiver of defenses

Rule 9, Sec. 2

A compulsory counterclaim, or a cross-claim, not set up shall be barred.

Director of Lands v. CA, 106 SCRA 426 (’81)


Facts: Resp. filed an application for confirmation of imperfect title. The Dir. of Lands
opposed. The trial ct. ruled in favor of resp. On appeal, the Dir. raised the argument that the
award to resp. is erroneous on ground of res judicata. The lots were already declared public lots
in a cadastral proceeding, it cannot be awarded to the private resp.
Held: The failure of the Dir. to raise in the proceedings before the trial ct. to interpose his
objection nor set up the defense of res judicata constitutes procedural infirmity w/c cannot be
cured on appeal. All defenses not interposed in a motion to dismiss or in an answer are deemed
waived. It cannot be pleaded for the first time or on appeal.

Counterclaims
LECTURE ON CLAIMS AND COUNTERCLAIMS:

L: are all counterclaims that are not compulsory permissive?

A: No; permissive counterclaims need not arise from same transaction or occurrence constituting
the subject matter of the opposing party’s claim

Compulsory counterclaim: need not pay docket fees since ancillary to main case

Permissive counterclaim: need to pay docket fees since has lfe independent of transaction in
main case
Apply Logical Relationship Test: arising out of same transaction

If there is duplication of effort and time, then compulsory counterclaim

ROC: if counterclaim only for sum of money less juridical limit, within RTC jurisdiction via
compulsory/permissive counterclaim

Crossclaims always compulsory since arise from same transaction or occurrence that is the subject
matter of the complaint. Mandatory to raise it or else barred forever

GO V CA

L: Go did not sue Lim since business partners or didn’t want to spend more, etc.

SC wanted Go to sue Lim, wondered why?

L: see that SC not acquainted with business practices

Test: if P chose to sue only one P, then the other P can be joined as party

Lim could have been necessary party thus Clover v Go

Go can file 3rd party complaint v. Lim

L: Do all 3rd party complaints arise from the same transaction or question of law?

A: No eg. Insurance and torts

Test: if 3rd party D can be subrogated for D and D can raise same defense (Rule 14)

PASCUAL V BAUTISTA

L: SC did not rule on W/N 3rd party complaint propert since not put in issue. Here, 3rd-party
complaint, since ancillary, then left behind, not carried with main cause of action on appeal
(Differentiate from REPUBLIC V CENTRAL SURETY where CA acquired jurisdiction since Central
Surety appealed) Since Flores did not appeal, CA did not acquire appellate jurisdiction over him

Defined and in general


Rule 6, Sec. 6

A counterclaim is any claim which a defending party may have against an opposing party.

Rule 6, Sec. 7

A compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises
out of or is connected with the transaction or occurrence constituting the subject matter of the
opposing party’s claim and does not require for its adjudication the presence of third parties of
whom the court cannot acquire jurisdiction. Such a counterclaim must be within the jurisdiction
of the court both as the amount and the nature thereof, except that in an original action before
the RTC, the counterclaim may be considered compulsory regardless of the amount.

BA Finance v. Co, 224 SCRA 163 (’93)


Facts: Does the dismissal of the complaint for non-appearance of plaintiff at pre-trial upon
motion of the defendant carry w/ it the dismissal of compulsory counterclaim? In CAB, the
plaintiff did not appear at pre-trial, the defendant moved for the dismissal of the complaint. The
same was granted. Now, the defendant moves for an adjudication of his compulsory
counterclaim.

Held: YES. Compulsory counterclaim is also dismissed. There are several requirements of a
compulsory counterclaim:
 It arises out or is necessarily. connected w/ the transaction or occurrence that is the subj.
matter of the opposing parties claim.
 It does not require the presence of third parties of whom the ct. cannot acquire jurisdiction.
 The trial ct. has jurisdiction to entertain the same. The test of compulsoriness is : WON the
same evidence to sustain it would refute the plaintiff’s cause of action.

In CAB, the compulsory counterclaim cannot remain pending for independent adjudication. The
CC is auxiliary to the proceeding in the original suit & merely derives its jurisdictional support fr.
the orig. case. If the ct. has no or loses jurisdiction over the main case, it has no jurisdxn over
the comp. counterclaim. In CAB, the ct. has lost jurisdxn. over the main case by virtue of its
dismissal upon motion by the defendant.

Reyes v. CA, 38 SCRA 138 (’71)


Facts: Reyes were lessees of a bldg. owned by Kalaw. Kalaw sought the ejectment of
Reyes. Reyes filed an action w/ City Court for prel. injunction & Kalaw filed a counterclaim for
damages. The CA ultimately awarded temperate damages in favor of Kalaw.

Held: The award of temp. damages is in error. the damages contemplated in a forcible entry &
detainer cases like the one at bar means rents & reasonable compensation or for use of the
property excluding profits w/c might be received. The issue in this kind of suit is merely
possession. In CAB, while the damages arose out of the same transaction, these are not CC’s bec.
they exceed the jurisdiction of the inferior ct.. The rule on bars to cc, meaning the counterclaim
cannot be set up in a difference. case if not set up in the main case, applies only when the
inferior ct. involved has jurisdiction over the claim.

The reason for barring cc not set up in an orig. case is to avoid multiplicity of suits & to dispose of
the whole matter in controversy in one action & adjustments of defendants demand by
counterclaim.

Maceda v. CA, 176 SCRA 440 (’89)


Facts: Three ejectment cases were filed in the MTC vs. Maceda. Maceda set up a counterclaim
amounting to 240,000. The RTC granted Maceda’s counterclaim. The CA denied the grant on
appeal.
Held: The CA correctly ruled that the MTC did not have original jurisdiction over the counterclaim
as it exceeds 20,000, correspondingly, the RTC could not have appellate jurisdiction over the
claim. Thus, the award to Maceda is invalid for lack of jurisdiction. The jurisdiction of the MTC in
a civil action is limited to a demand that does not exceed 20,000 exclusive of interests & costs
but inclusive of damages of whatever kind. A counterclaim in a municipal or city ct. beyond that
jurisdictional limit may be pleaded only by way defense to weaken the plaintiff’s claim but not to
obtain affirmative relief.

How raised
Included in answer

Rule 6, Sec. 9

A counterclaim may be asserted against an original counterclaimant.

A cross-claim may also be filed against an original cross-claimant.

Rule 11, Sec. 8

A compulsory counterclaim or a cross-claim that a defending party has at the time he filed his
answer shall be contained therein.

After answer

Rule 6, Sec. 9 supra.

Rule 11, sec. 9


A counterclaim or a cross-claim which either matured or was acquired by a party after serving his
pleading may, with the permission of the court, be presented as a counterclaim or a cross-claim
by supplemental pleading before judgment.

Rule 11, Sec. 10

When a pleader fails to set up a counterclaim or a cross-claim through oversight, inadvertence, or


excusable neglect, or when justice requires, he may, by leave of court, set up the counterclaim or
cross-claim by amendment before judgment.

In criminal actions

Rule 111, Sec. 1

Rule 119, Sec. 3

Shafer v. RTC Judge, 167 SCRA 386 (’88)


Facts: Shafer is the owner of a car involved in an accident. A case was filed vs. him for reckless
imprudence. Shafer filed a third party complaint impleading his insurer. The TPC was dismissed
upon motion by the ins. co. on the ground that Shafer has to pay first & found liable before the
insurer could be made to pay the claim. Shafer alleges that the dismissal of the TPC amounts to
a denial or curtailment of his right to defend himself in the civil aspect of the case.
Held: The lower ct. erred in dismissing the TPC on the ground that there is no COA vs. the ins.
co. There is no need on the part of the insured to wait for the decision of the trial ct. finding him
guilty of reckless imprudence. The occurrence of the injury to third party immediately gave rise
to the liability of the insurer. A third party complaint is a device allowed by the ROC by w/c the
defendant can bring into the original suit a party vs. whom he will have a claim for indemnity or
remuneration as a result of a liability established vs. him in an original suit. TPC’s are
allowed to minimize the number of lawsuits established vs. him to avoid the necessity. of two or
more lawsuits involving the same subj. matter.
Javier v. IAC, 171 SCRA 605 (’89)
Facts: A case for violation of BP 22 was filed vs. resp. Resp. on his part filed a separate civil
action in another ct. for damages alleging that the check was issued through fraud & deception
practiced upon him by the pet. the pet. filed a motion to dismiss the second case on grounds of
lack of jurisdiction & litis pendentia. The same was denied.

Held: The lower ct. should dismiss the second case for damages. As the civil action was not
reserved by the pet. in the orig. case, it is deemed impliedly instituted w/ the crim. case in the
RTC in accordance. w/ Rule 111 Sec. 1. It was before the RTC where resp. could have explained
why he had issued the check. The civil action filed by resp. based on the same act should be
deemed filed in the same RTC too. He could have done this by way of a counterclaim for damages
for the alleged deception of the pet. In fact, the counterclaim is compulsory & could have been
also set up as an affirmative defense.

Kinds of counterclaims
Compulsory

Rule 6, Sec. 7, supra.

Rule 9, Sec. 2, supra.

Meliton v. CA, 216 SCRA 485 (’92)


Facts: Ziga filed a complaint adjacent Meliton for rescission of a contract of lease. Meliton
answered w/ counterclaims. Ziga filed an MTD & the same was granted. The CC of Meliton was
dismissed w/o prejudice on the ground that the docket fees were not paid, the ct. did not acquire
jurisdiction over the counterclaim. Meliton instituted a separate. civil action for his counterclaim
but the same was dismissed on the ground that his claims are compulsory & should have been set
up in the case filed vs. him by Ziga. Meliton’s failure to do so amounted to a bar to a filing of a
subsequent case based on the same ground.

Held: While it is true that the counterclaim of Meliton satisfies the requisites of a compulsory
counterclaim, in CAB, the SC allowed Meliton to file a separate. civil action on the
counterclaim. The SC held that Sec. 4 of Rule 9 is not applicable beech. 1) Meliton set up the CC
in the prior case but the same was dismissed. 2) The prior case was adjudicated not on the merits
so that res judicata would not lie. 3) the first counterclaim was dismissed by the RTC on the
ground of LOJ. 4) In the RTC order, there was a reservation for the filing of a separate. case
based on the counterclaim.

The lower ct. in the prior case erred in dismissing the counterclaim for non-payment of docket
fees. The lesson of Manchester provides that payment of docket fees for purposes of assuming
jurisdiction over the claim is necessary only for permissive counterclaims & does not apply for
compulsory counterclaims like the one at bar.

TEST OF COMPULSORINESS:

Existence of a logical relationship between the claim in the complaint & the counterclaim. Where
conducting separate trials of the respective claims would entail substantial duplication of effort &
time & involves many of the same factual & legal issues.

Lim Tanhu v. Ramolete, 66 SCRA 425 (’75)


Facts: This is the 30++ page case w/c was so diligently digested by Miss Secretary Lourie but was
not discussed in class (Ang bitter!). Upon motion of the plaintiff, 4 of the 6 defendants were
declared in default while the case vs. the remaining two were dismissed upon motion by the
plaintiff.
Held: The respondent judge erred in dismissing the 2 defendants fr. the case. The respondent
judge disregarded the existence of a counterclaim w/c the judge earlier declared to be
compulsory in nature. A counterclaim is compulsory nature if it arose out of or is necessarily
connected w/ the occurrence that is the subject matter of the plaintiff’s claim. It is compulsory
not only bec. the same evidence to sustain it will also refute the cause of action alleged in
plaintiff’s complaint but also bec. fr. its very nature it is obvious that the counterclaim cannot
remain pending for independent adjudication of the ct.. ( see Rule 17 Sec. 2 )
Permissive
Remedies

For failure to raise

Rule 9, Sec. 2, supra.

Visayan Packing v. Reparations Commission, 155 SCRA 542 (’87)


Facts: REPACOM sought to collect vs. Visayan. Visayan instituted an action for declaratory relief
alleging that the contract bet. them is ambiguous w/ respect to its failure to define clearly the
terms of payment. REPACOM then filed an ordinary civil action for collection. Visayan moved to
dismiss the collection suit on the ground of LCOA.

Held: The separate. collection suit should have been dismissed & set up as a CC in the
declaratory relief suit filed by Visayan packing by way of an amended answer. In CAB, the actions
proceeded independently & were decided on the merits. However, under the circ. where the
length of time the case has been pending, it would be violative to subs. justice to pronounce the
proceedings in the collection suit totally defective for breach of the rule on compulsory
counterclaim. Rules of Procedure are after all laid down to attain justice & technicalities cannot
prevail over substance.

Oversight, inadvertence, excusable neglect, et al

Rule 11, Sec. 10, supra.

BA Finance v. Co, 224 SCRA 163 (’93)


Facts: Does the dismissal of the complaint for non-appearance of plaintiff at pre-trial upon
motion of the defendant carry w/ it the dismissal of compulsory counterclaim? In CAB, the
plaintiff did not appear at pre-trial, the defendant moved for the dismissal of the complaint. The
same was granted. Now, the defendant moves for an adjudication of his compulsory
counterclaim.
Held: YES. Compulsory counterclaim is also dismissed. There are several requirements of a
compulsory counterclaim:
 It arises out or is necessarily. connected w/ the transaction or occurrence that is the subj.
matter of the opposing parties claim.
 It does not require the presence of third parties of whom the ct. cannot acquire jurisdiction.
 The trial ct. has jurisdiction to entertain the same. The test of compulsoriness is : WON the
same evidence to sustain it would refute the plaintiff’s cause of action.

In CAB, the compulsory counterclaim cannot remain pending for independent adjudication. The
CC is auxiliary to the proceeding in the original suit & merely derives its jurisdictional support fr.
the orig. case. If the ct. has no or loses jurisdiction over the main case, it has no jurisdxn over
the comp. counterclaim. In CAB, the ct. has lost jurisdxn. over the main case by virtue of its
dismissal upon motion by the defendant.

In case main action fails

For failure to raise permissive counterclaims

Answer to counterclaim
In general

Rule 6, Sec. 4, supra.

Period to plead

Rule 11, Sec. 4

An counterclaim or cross-claim must be answered within 10 days from service.

Reply
Defined and in general

Rule 6, Sec. 10

A reply is a pleading, the office of which is to deny, or allege facts in denial or avoidance of new
matters alleged by way of defense in the answer and thereby join or make issue as to such new
matters. If a party does not file such reply, all the new matters alleged in the answer are deemed
controverted.

If a plaintiff wishes to interpose any claims arising out of the new matters so alleged, such claims
shall be set forth in an amended or supplemental complaint.

When required
Rule 6, sec. 10, supra.

Challenge due authenticity of documents

Rule 8, Sec. 8, supra.

Usury

Rule 9, sec. 1

Period to plead

Rule 11, Sec. 6

A reply may be filed within 10 days from service of the pleading responded to.

Third/Fourth Party Complaint


Defined

Rule 6, sec. 11

A third (fourth,etc.)-party complaint is a claim that a defending party may, with leave of court,
file against a person not a party to the action, called the third (fourth, etc)-party defendant, for
contribution, indemnity, subrogation or any other relief, in respect of his opponent’s claim.

Go v. CA, 224 SCRA 143 (’93)


Facts: Clover delivered denim garments to Go but the latter refused to pay on the ground that
he received the goods fr. Lim to whom he already made payments. Lim was made a witness for
Go instead of being impleaded as a third party def.
Held: Lim should have been impleaded as a third party def. Go should still pay. A third party
complaint is a claim that a def. may w/ leave of ct. file vs. a third person not party to the action
called third party def. for cont. indemnity, subrogation or any other relief in respect to
opponent’s claim. In CAB, if payments to Lim were true, then Go could have impleaded him as a
TPD for relief vs. Clover’s claim vs. him.
Pascual v. Bautista, 33 SCRA 301 (’70)
Facts: The issue involved in this case is the nature of a third party complaint. Is a third party
complaint arising fr. the same transaction or occurrence a separate action fr. the main complaint?
Held: A TPC is similar to a cross-claim in that a TPC plaintiff seeks to recover fr. another person
some relief w/ respect to the opposing party’s claim but it differs fr. a cross-claim in that in
cross-claims, the third party is already impleaded in the main action while in TPC, the def. seeks
to implead a third party not yet include in the main action. A counterclaim does not depend upon
the main claim but rests on WON the claim is based or related to the same transaction. A TPC,
the relation must be to the claim, to the COA & not to the transaction fr. w/c the claim arises.
Balbastro v. CA, 48 SCRA 232 (’72)
Facts: There are two persons contesting the right to receive rental payments of Balbastro. the
Latter filed an action for interpleader & consignation vs. the two claimants. One claimant,
Fernandez then filed a third [party complaint vs. Balbastro for refusing to pay the rents to
him. Balbastro moved to dismiss the TPC but the RTC & CA denied the motion.

Held: A TPC has the following requisites.


 The complaint should assert a derivative/ secondary claim for relief fr. the third party
defendant.
 The third party should not be a party to the action, otherwise, the claim should be a
counterclaim or cross-claim
 Claim vs. the third party def. must be based on the pltf. claim vs. the orig. def.

Thus, citing the case of Capayas, “ the test to determine WON to allow a TPC is WON it arises out
of the same transaction on w/c pltf’s claim is based o retired party’s claim, though arising out of
a different transaction or contract is connected w/ pltf’s claim. Absent a nexus between third
party def. & third party pltf. showing strong evidence of a secondary or derivative liability of
former in favor of the latter, no third party complaint may be allowed.

However, in the CAB, in lieu w/ the policy of avoiding multiplicity of suits, the SC allowed the TPC
of Fernandez.

Republic v. Central Surety, 25 SCRA 641 (’68)


Facts: Rep. filed an action vs. Central Surety for forfeiture of the bond it issued when Po Kee
Kam, a def. in CID proceedings failed to appear . The Surety filed a TPC vs. Po Kee Kam on
ground that the latter executed an indemnity agreement in favor of the surety. The TC dismissed
the TPC on the ground that the 3rd party claim is only 6,000.

Held: A TPC is an ancillary suit w/c depends on the jurisdiction of the ct. over the main
action. Jurisdiction over the main action embraces all the incidental matters arising therefr. or
connected therew/, otherwise there would be split jurisdiction. The TPC is a continuation of the
main action the purpose of w/c is to seek contribution or any other relief in resp. to opponents
claim. Thus, regardless of LOJ over the amount in TPC, when ct. has jurisdxn. over main action,
it has jurisdxn. over the TPC.

In TPC, the defendant sue in capacity he is being sued w/ resp. to pltf. claim in the main
action. the def. cannot compel the pltf. to implead the third party def. There must also be
privity of contract in relation to the property in litigation.

TEST: there must be a showing that such third party is or might be liable to the def. or pltf. for
all or part of the claim vs. the def.
– WON it arises out of the same transaction on w/c pltf’s claim is based. ( CAVEAT)

The ct. must wait before the 3rd party def. files his answer before proceeding to trial since before
the answer, the case is not yet ready for trials as issues have not yet been joined.

Remedies when denied

Appeal, De Dios v. Balagot, 20 SCRA 950


Facts: This is an action for recovery of possession of land filed by De Dios v. Balagot. the latter
filed a third party complaint fr. his alleged seller of the lot. The TPC was denied.
Held: The remedy for an order denying motion to file TPC is APPEAL. An order disallowing TPC is
appealable to enforce the vendor’s warranty vs. eviction since it leaves no other alternative to
enforce such warranty. Remember Sales, where the vendee must file an action vs. the vendor to
make him liable for breach of warranty vs. eviction. ( Art. 1559 CC- the vendee may do this in two
ways. 1) As a co-defendant. 2) As a third party def.)

The appeal would finally dispose of Balagot’s rights to enforce the warranty.

Answer to third/fourth party complaint


In general

Rule 6, Sec. 13

A third (fourth, etc.)-party defendant may allege in his answer his defenses, counterclaims or
cross-claims, including such defenses that the third (fourth, etc)-party plaintiff may have against
the original plaintiff’s claim. In proper cases, he may also assert a counterclaim against the
original plaintiff in respect of the latter’s claim against the third-party plaintiff.

Time to plead

Rule 11, Sec. 5

The time to answer a third (fourth, etc.)-party complaint shall be governed by the same rule as
the answer to the complaint.

Extension of time to plead

Rule 11, Sec. 11

Upon motion and on such terms as may be just, the court may extend the time to plead as
provided in these Rules.

The court may also, upon like terms, allow an answer or other pleading to be filed after the time
fixed by these Rules.