Case Digest: BANCO DE ORO UNIVERSAL BANK v.

COURT OF
APPEALS, et al.

Having failed to comply with the Credit Line Agreement (CLA)

obligation, Bancode Oro Universal Bank filed before the Regional Trial Court of
Quezon City (RTC) an application for an extrajudicial foreclosure of the
mortgaged properties against Gabriel and Ma. Geraldine Locsin. Subsequently, the
Locsins filed a complaint against BDO, the RTC Clerk of Court and Ex-Oficio Sheriff
of Quezon City, and Sheriff VI Marino V. Cahero, for Specific Performance, Tort and
Damages with Prayer for the Issuance of a Temporary Restraining Order (TRO) and a
Writ of Preliminary Injunction. The RTC denied the issuance of a TRO.

A Supplemental Complaint was filed by the Locsins. They repleaded in toto the
allegations in their Complaint and additionally alleged that BDO proceeded with the
public auction of the properties covered by the mortgage in the CLA “contrary to
law.”BDO admitted that the public auction took place but it denied that it was contrary
to law

More than eight months after the Locsins filed their Supplemental
Complaint, BDO filed a complaint against them before the Mandaluyong RTC for
Collection of Sum of Money. To such, the Locsins filed a Motion to Dismiss on the
ground that it should have been raised as compulsory counterclaim in their complaint
and by failing to raise it as such, it is now “barred by the rules.” The RTC denied the
same.

The Locsins appealed to the Court of Appeals which reversed the decision of
the Mandaluyong RTC finding that BDO‘s complaint was a compulsory counterclaim
which should have been raised in its Answer to the Locsins‘ complaint, and having
failed to do so, it is now barred.

The lower Court found the motion to dismiss meritorious, and on November 7, 1952 ordered
the dismissal of the complaint. Plaintiffs moved for the reconsideration of the order of
dismissal, and prayed as well for the admission of an amended complaint, wherein they make
specific allegation for the first time that the defendants are claiming ownership of the land in
question in the two registration cases previously mentioned. Defendants opposed the motion
for reconsideration and the admission of an amended complaint, upon the ground that the
amended complaint would convert plaintiffs’ action from one of forcible entry and detainer to
one of recovery of ownership and possession. Again, defendants’ position was sustained by
the Court below; and later, it denied a motion for the reconsideration of the order of
dismissal. Hence, this appeal by the plaintiffs to this Court.

We see no error in the lower Court’s dismissal of appellants’ original complaints. It was filed
on October 16, 1952, barely two weeks from and after the alleged entry into and illegal taking
of possession of the land in question by the defendants. The case pleaded was a clear action
for forcible entry and detainer, where plaintiffs allege prior possession of the premises in
question and to have been deprived thereof within the period of one year, by other person or
persons, who excluded them therefrom and withheld possession without right — a case
falling within the exclusive