[CivPro] | [Counterclaim and crossclaim] [jmcd]
Cruz-Agana v Santiago-Lagman [GR NO. 139018] | [11 April 2005] | [Carpio, J.] Petitioner: Estherlita Cruz-Agana Respondents: Hon. Judge Aurora Santiago-Lagman and B. Serrano Enterprises, Inc. CASE SUMMARY Petitioner Estherlita Cruz-Agana filed a complaint for annulment of title with prayer for preliminary mandatory injunction, claiming that as the sole heir of one Teodorico Cruz, she is the so le owner of a lot which was fraudulently sold to Eugenio Lopez and was later transferred to respondent B. Serrano Enterprises. When respondent filed an answer with compulsory counterclaim, petitioner moved for its dismissal for lack of a certificate of non-forum shopping. TC denied the motion, saying that since hus excluded from the coverage of Sec 5, Rule 7. In the respondent’s counterclaim is compulsory, it is t hus her motion for reconsideration, petitioner invoked the mandatory nature of a certificate of non-forum shopping under SC Admin Circular No. 04-94. TC then reversed its order and dismissed the counterclaim. However, respondent seasonably filed a motion for reconsideration, arguing that the SC ruling in Santo Tomas University Hospital v Surla already held that the Admin Circular does not apply to compulsory counterclaims. TC again reversed itself. Petition for certiorari filed with the SC. FACTS
Petitioner filed a Complaint for annulment of title with prayer for preliminary mandatory injunction so le owner of a Petitioner claims that as the sole heir of Teodorico Cruz, she is the sole lot covered by Transfer Certificate of Title No. T-3907 Said lot was fraudulently sold to Eugenio Lopez, Jr who later transferred the lot to respondent B. Serrano Enterprises. Respondent filed an Answer with compulsory counterclaim. Petitioner moved to dismiss the counterclaim for lack of a certificate of non-forum shopping. TC denied motion to dismiss. dis miss. Respondent’s counterclaim is compulsory and is therefore excluded from the coverage of Sec 5, Rule 7. Petitioner moved for reconsideration of the trial court’s Order, invoking the man datory nature of a certificate of non-forum shopping under SC Admin Circular No. 04-94. TC then reversed its order and dismissed the counterclaim for lack of a certificate of non-forum shopping. Respondent appealed, arguing that the Admin Circular does not apply to compulsory counterclaims, per the ruling in Sto. Tomas University Hospital v Surla. co mpulsory counterclaims do not require a TC again reversed its order, holding that compulsory certificate of forum shopping, as held by the Court in Santo Tomas.
PROCEDURE SUMMARY Action (Petition for review, appeal of CA decision etc.) Complaint for annulment of title with prayer for prelim mandatory injunction Respondent filed an answer with compulsory counterclaim Petitioner: motion to dismiss counterclaim for lack
Decision (RTC: petition denied) RTC Branch 77 Malolos:
RTC: denied
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of a certificate of non-forum shopping Petitioner: motion for reconsideration Respondent: motion for reconsideration Petition for certiorari to reverse RTC order
RTC: granted, counterclaim dismissed RTC: granted, dismissal of counterclaim reversed. SC: denied.
ISSUE and Ratio 1. WON the trial court committed grave abuse of discretion in refusing to dismiss respondent’s counterclaim NO a. In Santo Tomas University Hospital v Surla, the Court already clarified that the Admin Circular No. 04-94 is intended primarily to cover an initiatory pleading or an incipient application of a party asserting a claim for relief. The distinction between a compulsory and a permissive counterclaim is vital in the application of the circular. b. The circular has not been contemplated to include a kind of claim which, by its very nature as being auxiliary to the proceedings in the suit, can only be appropriately pleaded in the answer and not remain outstanding for independent resolution where the main case is pending. Sec 5, Rule 8 on the violation of the anti -forum shopping rule as a cause for dismissal is predicated on the applicability of the need for a certification against forum shopping. It does not include a claim which cannot be independently set up. c. Court in Ponciano v Judge Parentela, Jr reiterated this ruling. Admin Circular No. 04-94 applies to initiatory and similar pleadings. A compulsory counterclaim set up in the answer is not an “initiatory” or similar pleading. The initiatory pleading is the plaintiff’s complaint. A respondent has no choice but to raise a compulsory counterclaim the moment the plaintiff files the complaint. It is a reaction or response, mandatory upon pain of waiver, to an initiatory pleading which is the complaint. 2. WON the Court’s rulings in Santo Tomas and Ponciano are contrary to the mandate of Admin Circular No. 04-94 and other procedural laws NO because the Court has the power to promulgate rules as expressly bestowed by the Constitution a. Procedural matters are within the sole jurisdiction of the Court to prescribe. Administrative Circular No. 04-94 is an issuance of the Court and 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. b. The basis for the ruling in Santo Tomas and Ponciano is the distinction between a permissive counterclaim and a compulsory counterclaim. If it is a permissive counterclaim, the lack of a certificate of non-forum shopping is fatal. If it is a compulsory counterclaim, the lack of a certificate of non-forum shopping is immaterial. c. A compulsory counterclaim is any claim for money or other relief, which a defending party may have against an 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 plaintiff's complaint. It is compulsory in the sense that it is within the jurisdiction of the court, does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction, and will be barred in the future if not set up in the answer to the complaint in the same case. Any other counterclaim is permissive. d. The counterclaim set up by respondent arises from the filing of plaintiff’s complaint. The counterclaim is so intertwined with the main case that it is i ncapable of proceeding independently. The counterclaim will require a relitigation of the s ame evidence if it is allowed to proceed in a separate action.
[CivPro] | [Counterclaim and crossclaim] [jmcd]
DECISION. Petition denied. RTC order recalling the order which dismissed the compulsory counterclaim is affirmed.
APPENDIX DIGESTER’S NOTES / TABLES/ ILLUSTRATIONS Respondent's counterclaim as set up in its answer states: 3. That because of the unwarranted, baseless, and unjustified acts of the plaintiff, herein defendant has suffered and continue to suffer actual damages in the sum of at least P400,000,000.00 which the law, equity, and justice require that to be paid by the plaintiff and further to reimburse the attorney's fees of P2,000,000.00;
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