TOPIC: COMPULSORY COUNTERCLAIM – TEST OF
COMPULSORINESS
NATURE OF THE CASE: In
elevating this case to the SC, Tan prays for the SC to reverse and set aside
the decision of the CA against him, which, among others, is the admission of Kaakbay’s
Answer with Counterclaims and consequently declaring such as a compulsory
counterclaim.
FACTS: Carlo
Tan obtained a loan of P4 million from Kaakbay Finance Corporation as
represented by its president, Dennis Lazaro. To secure the loan, Tan mortgaged
his land with the improvements therein which is located at Laguna. The loan was
released to him in 2 installments.
TAN: He alleged that the
stipulated interest rate of 12 % per annum until fully paid was not stated in
the mortgage he signed it on, and that he was not furnished copy of the
mortgage contract.
The following year, Tan failed to
pay his obligation. He claimed that Kaakbay informed him that his obligation
had reached P5,570,000 because the actual interest was 0.3925% for a period of less than one
year instead of the agreed-upon interest of 12% per annum. Tan was also
allegedly made to issue two postdated checks to guarantee his obligation; the
first one was valued at P5,570,000.00, while the second is worth P6,175,000.00.
Moreover, he claims that he negotiated with Kaakbay
for a further extension of time to pay his obligation, which the latter agreed
to. It was agreed that petitioner and
Kaakbay would sign, execute, and acknowledge a Deed of Sale under Pacto de Retro upon the expiration of a
two-year period. He was then given a
blank Deed of Sale Under Pacto de Retro
which he signed. His suspicions that Kaakbay was charging him usurious rates of
interest were confirmed when he obtained a Statement of Account stating that
his obligation had now reached P13,333,750.00.
Later, he learned of the existence of an
accomplished Deed of Sale Under Pacto de
Retro, which appeared that the same was signed by him and his wife Maria
Rosario Delmo Tan, on one hand, and private respondent Lazaro on the other, and
was allegedly notarized by private respondent Atty. Roldan M. Noynay. But, he
asserts that he, his wife, and their witness Charito Morales did not sign it on
the alleged date, nor did they execute it before Atty. Noynay or any other
notary public.
So, he filed a complaint against Kaakbay, et.al.
praying for his obligation to Kaakbay Finance Corporation be subject to
interest of only 12% per annum from November 23, 1995; that the promissory
notes attached to his Real Estate Mortgage be declared void; that the Deed of
Sale Under Pacto de Retro be declared
unenforceable; and that respondents pay moral and exemplary damages as well as
attorney’s fees. Additionally, Tan also filed a Notice of Lis Pendens which was annotated on the title of the mortgaged lot.
KAAKBAY,
ET.AL.: Filed a ‘Consolidated Answer With Compulsory Counterclaim And
Opposition To Temporary Restraining Order (TRO) and Preliminary Injunction.’
RTC: It
issued an order granting an agreement by the parties that Tan would withdraw
his TRO, and in turn, Kaakbay will hold in abeyance the registration of the
Deed of Sale Under Pacto de Retro
until the case was terminated.
Kaakbay: Later,
another law firm handled their case and they moved for an extension of time to
file an Answer, and also moved for the withdrawal of the ‘Consolidated Answer’ filed by
Atty. Noynay insofar as respondents Kaakbay and Lazaro are concerned. Further,
they also filed a ‘Supplemental Opposition To The Prayer For Preliminary
Injunction Or To Temporary Injunction.’
Then, they filed their Answer with Counterclaim, praying
that petitioner pay them P4 million pesos representing the principal amount of
the loan, P9,333,750.00 representing the ‘compounded monthly interest
and annual penalty interest’, P250,000.00 as litigation expenses, and P500,000.00
as attorney’s fees.
In addition, they filed a Motion for Admission of
Counterclaim Without Payment of Fees, on the ground that their counterclaim is
compulsory in nature, hence it may be admitted without payment of fees.
TAN: He filed
an urgent motion to expunge Kaakbay’s Answer with Counterclaim and Motion for
Admission of Counterclaim on the ground that while Kaakbay is being represented
by a new law firm, it didn’t state if said law firm is in collaboration with or
in substitution of their previous counsel, respondent Atty. Roldan M.
Noynay. Thus, he is pointing out that
the rules concerning the change or substitution of counsel of a party litigant
had not been properly complied with by Kaakbay, et.al. and thus the motions
filed by the said law firm should be expunged.
Further, the Answer with Counterclaim should not be
admitted, as it partook of the nature of a permissive counterclaim, which
required the payment of the prescribed filing fees; and since the fees were not
paid, the lower court did not acquire jurisdiction over said Answer.
RTC: Through
an order, it granted Kaakbay’s motion for admission of counterclaim without
payment of fees.
TAN: Filed a
“Supplemental Motion by Way of Motion for Reconsideration” but this was denied.
So, he filed an appeal to the CA questioning the admission of the answer with
counterclaim alleging that it is permissive; hence, it needs the correct filing
fees. Since Kaakbay did not pay the necessary filing fees, then, the RTC did
not acquire jurisdiction over the answer with counterclaim.
CA: Denied
the appeal.
ISSUE: WON the
counterclaims of Kaakbay are compulsory in nature.
TAN: Since
Kaakbay demand the payment of the loan and the interests pursuant to the
contract of loan, it is completely inconsistent with his claim that subject
documents were a nullity. Thus, the counterclaim cannot be deemed compulsory.
KAAKBAY: They
contend that their counterclaims are for payment of the unpaid loan of Tan in
the amount of P4,000,000.00, the compounded interest with annual penalty
equivalent to P9,333,750.00, litigation expenses of P250,000 and
attorney’s fees of P500,000.Thus, they are all compulsory counterclaims.
Tan
admitted in his complaint his indebtedness to respondent Kaakbay Finance
Corporation in the amount of P4,000,000.00 and his liability for
interest at the rate of 12% per annum only.
These admissions arise out of, or are necessarily connected with, or
have a logical relation to the transaction or occurrence forming the subject
matter of the Tan’s claim. Consequently,
Kaakbay concludes that the trial court did not err in ruling that payment of
the docket fees is no longer necessary as their counterclaims are compulsory in
nature.
HELD: Yes, the counterclaim is a compulsory one.
The
test for compulsoriness was provided for in Intestate Estate of Dalisay v.
Hon. Marasigan: 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.
To determine whether a counterclaim is compulsory
or not, the SC had devised the following tests: (1) Are the issues of fact or
law raised by the claim and the counterclaim largely the same? (2) Would res
judicata bar a subsequent suit on defendant’s claims absent the compulsory
counterclaim rule? (3) Will substantially the same evidence support or refute
plaintiff’s claim as well as the defendant’s counterclaim? and (4) Is there any
logical relation between the claim and the counterclaim?
Such was again clarified in Quintanilla v. Court
of Appeals: a “compelling test of compulsoriness” is whether there is “a
logical relationship between the claim and counterclaim, that is, where
conducting separate trials of the respective claims of the parties would entail
a substantial duplication of effort and time by the parties and the court.”
Tested against the abovementioned standards, Kaakbay’s
counterclaims are compulsory in nature.
Tan’s complaint was for declaration of nullity, invalidity or annulment
of the promissory notes purportedly attached to the Real Estate Mortgage and
the usurious and void interest rates appearing therein and the Deed of Sale
Under Pacto De Retro. Kaakbay’s
counterclaim was for the payment of the principal amount of the loan,
compounded monthly interest and annual penalty interest arising out of the
non-payment of the principal loan, litigation expenses and attorney’s
fees.
There is no dispute as to the principal obligation
of P4,000,000, but there is a dispute as to the rate and amount of
interest. Tan insists that the amount of
interest is only 12% yearly until fully paid, while Kaakbay insist on 3.5%
monthly. Also, Kaakbay allege that Tan owes
them P9,333,750.00 representing the compounded monthly interest and
annual penalty, which is disputed by Tan.
Tan further seeks the nullification of the Deed of Sale Under Pacto de Retro for being falsified,
while Kaakbay aver the deed is valid.
It thus appears that the evidence required to prove
Tan’s claims are similar or identical to that needed to establish Kaakbay,
et.al’s demands for the payment of unpaid loan from Tan such as amount of
interest rates. Clearly, Tan’s claim is
so related logically to Kaakbay’s counterclaim, such that conducting separate
trials for the claim and the counterclaim would result in the substantial
duplication of the time and effort of the court and the parties. Thus, this is
the situation contemplated under the “compelling test of compulsoriness.”
The counterclaims of Kaakbay herein are obviously
compulsory, not permissive. In this
light, considering that the counterclaims Kaakbay are compulsory in nature,
payment of docket fees is not required.
The CA did not err in holding that the trial court had acquired
jurisdiction on the matter.
Thus, the PETITION IS DENIED.
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