SPOUSES MARCELO B. ARENAS and ANITA T. ARENAS, petitioners, vs. THE HON.

COURT OF APPEALS,
SPOUSES CONRADO S. ROJAS and ROSALINA BAUZON ROJAS, respondents.

G.R. No. 126640. November 23, 2000.

FACTS:

There were two cases involved in this matter. First is an ejectment case, Civil Case No. 658, filed against
Arenas by the Rojas. Rojas prayed for as a relief to have the Arenas ejected in their premises and to
enable them to cause the demolition and renovation of their property which was being leased by the
Arenas. Arenas prayed for a counterclaim of moral and exemplary damages. In this case, Rojas won in
the MTC and RTC of Dagupan upon apeal. Second is an action for damages, certiorari and writ of
temporary injunction, Civil Case No. 16890, filed againts Rojas by the Arenas before the RTC of Lingayen.

RTC Lingayen eventually issued a temporary restraining order but the Rojas, through a motion, invoked
the rule on multiplicity of suits which was denied by the RTC Lingayen. The court ruled a decision
favoring the Arenas. But on appeal the CA reversed the RTC’s decision stating that since Arenas
interposed a counterclaim for moral and exemplary damages in Civil Case No. 658, they were barred
from instituting Civil Case No. 16890.

Arenas argued 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 such acts could not be raised as a
compulsory counterclaims.

ISSUE:

Whether or not the causes of action complained of in the Regional Trial Court24 were in the nature of
compulsory counterclaims that must be pleaded in Civil Case No. 658 of the Municipal Trial Court.

RULING:

NO.

A counterclaim is compulsory where: (1) it arises out of, or is necessarily connected with, the transaction
or occurrence that is the subject matter of the opposing party’s claim; (2) it does not require the
presence of third parties of whom the court cannot acquire jurisdiction; and (3) the trial court has
jurisdiction to entertain the claim.

A claim for damages arising from a quasi-delict cannot be pleaded as a compulsory counterclaim in a
case for unlawful detainer and damages.

The Court do not agree with the Court of Appeals that the claims in Civil Case No. 16890 may be pleaded
as compulsory counterclaims in Civil Case No. 658. First. In Civil Case No. 16890, the damages prayed for
arose not from contract but from quasidelict. They constitute separate and distinct causes of action.