EVANGELINE ALDAY, petitioner, vs.

FGU INSURANCE CORPORATION,

respondent. - COUNTERLCAIM
Facts:
FGU Insurance Corporation filed a complaint with the RTC of Makati alleging that
Alday owed it P114,650.76, representing unliquidated cash advances, unremitted
costs of premiums and other charges incurred as an insurance agent. Respondent
also prayed for exemplary damages, attorneys fees, and costs of suit. Petitioner filed
her answer and by way of counterclaim, asserted her right for the payment of
P104,893.45, representing direct commissions, profit commissions and contingent
bonuses and for accumulated premium reserves amounting to P500,000.00. In
addition, petitioner prayed for attorneys fees, litigation expenses, moral damages and
exemplary damages for the allegedly unfounded action filed by respondent.
Respondent filed a Motion to Strike Out Answer With Compulsory Counterclaim And
To Declare Defendant In Default because petitioners answer was allegedly filed out of
time. However, the trial court denied the motion. A few weeks later, respondent filed a
motion to dismiss petitioners counterclaim, contending that the trial court never
acquired jurisdiction over the same because of the non-payment of docket fees by
petitioner. In response, petitioner asked the trial court to declare her counterclaim as
exempt from payment of docket fees since it is compulsory and that respondent be
declared in default for having failed to answer such counterclaim.
The trial court granted the motion to dismiss. The court found petitioners counterclaim
to be merely permissive and held that petitioners failure to pay docket fees prevented
the court from acquiring jurisdiction over the same. The Court of Appeals sustained
the trial court.

2.
3.

Whether or not the respondent is estopped from questioning her nonpayment of docket fees because it did not raise this particular issue when it
filed its first motion.
Whether or not the Court of Appeals had jurisdiction to entertain the appeal
of the petitioner.
Whether or not the counterclaim was permissive or compulsory

Held:
1.

3.

a.
b.
c.

Issues:
1.

2.

assert it either has abandoned or declined to assert it. In the case at bar,
respondent cannot be considered as estopped from assailing the trial
courts jurisdiction over petitioners counterclaim since this issue was raised
by respondent with the trial court itself the body where the action is pending
- even before the presentation of any evidence by the parties and definitely,
way before any judgment could be rendered by the trial court.
This objection to the CAs jurisdiction is raised for the first time before this
Court. Although the lack of jurisdiction of a court may be raised at any stage
of the action, a party may be estopped from raising such questions if he has
actively taken part in the very proceedings which he questions, belatedly
objecting to the courts jurisdiction in the event that that the judgment or
order subsequently rendered is adverse to him. In this case, respondent
actively took part in the proceedings before the CA by filing its appellees
brief with the same. Its participation, when taken together with its failure to
object to the jurisdiction during the entire duration of the proceedings before
such court, demonstrates a willingness to abide by the resolution of the
case by such tribunal and accordingly, respondent is now most decidedly
estopped.
BOTH. 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 parties claim and
does not require for its adjudication the presence of third parties of whom
the court cannot acquire jurisdiction. In Valencia v. Court of Appeals, this
Court set the criteria to determine whether a counterclaim is compulsory or
permissive,

Estoppel by laches arises from the negligence or omission to assert a right

within a reasonable time, warranting a presumption that the party entitled to

d.

Are the issues of fact and law raised by the claim and
counterclaim largely the same?
Would res judicata bar a subsequent suit on defendants claim
absent the compulsory counterclaim rule?
chanroblesvirtuallawlibrary
Will substantially the same evidence support or refute plaintiffs
claim as well as defendants counterclaim?
chanroblesvirtuallawlibrary
Is there any logical relation between the claim and the
counterclaim?chanroblesvirtuallawlibrary

Another test, applied in Quintanilla v. Court of Appeals, is the compelling

test of compulsoriness which requires 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.
Petitioners counterclaim for commissions, bonuses, and accumulated
premium reserves is merely permissive. The evidence required to prove
petitioners claims differs from that needed to establish respondents
demands for the recovery of cash accountabilities from petitioner, such as
cash advances and costs of premiums. This conclusion is further reinforced

by petitioners own admissions since she declared in her answer that

respondents cause of action, unlike her own, was not based upon the
Special Agents Contract.
However, petitioners claims for damages, allegedly suffered as a result of
the filing by respondent of its complaint, are compulsory.
The rule on the payment of filing fees has been laid down by the Court in
the case of Sun Insurance Office, Ltd. v. Hon. Maximiano Asuncion
a.

b.

c.

It is not simply the filing of the complaint or appropriate initiatory

pleading, but the payment of the prescribed docket fee, that vests a
trial court with jurisdiction over the subject-matter or nature of the
action. Where the filing of the initiatory pleading is not accompanied by
payment of the docket fee, the court may allow payment of the fee
within a reasonable time but in no case beyond the applicable
prescriptive or reglementary period.chanroblesvirtuallawlibrary
The same rule applies to permissive counterclaims, third-party claims
and similar pleadings, which shall not be considered filed until and
unless the filing fee prescribed therefor is paid. The court may allow
payment of said fee within a reasonable time but also in no case
beyond its applicable prescriptive or reglementary
period.chanroblesvirtuallawlibrary
Where the trial court acquires jurisdiction over a claim by the filing of
the appropriate pleading and payment of the prescribed filing fee but,
subsequently, the judgment awards a claim not specified in the
pleading, or if specified the same has been left for determination by the
court, the additional filing fee therefor shall constitute a lien on the
judgment. It shall be the responsibility of the Clerk of Court or his duly
authorized deputy to enforce said lien and assess and collect the
additional fee.chanroblesvirtuallawlibrary

In Suson v. Court of Appeals, the Court explained that although the payment
of the prescribed docket fees is a jurisdictional requirement, its non-payment
does not result in the automatic dismissal of the case provided the docket
fees are paid within the applicable prescriptive or reglementary period.
Coming now to the case at bar, it has not been alleged by respondent and
there is nothing in the records to show that petitioner has attempted to
evade the payment of the proper docket fees for her permissive
counterclaim. As a matter of fact, after respondent filed its motion to dismiss
petitioners counterclaim based on her failure to pay docket fees, petitioner
immediately filed a motion with the trial court, asking it to declare her
counterclaim as compulsory in nature and therefore exempt from docket
fees and, in addition, to declare that respondent was in default for its failure
to answer her counterclaim. The trial court should have instead given
petitioner a reasonable time, but in no case beyond the applicable

prescriptive or reglementary period, to pay the filing fees for her permissive
counterclaim.

UST VS SURLA PLEADINGS

the rule does not require a certification against forum shopping for a compulsory
counterclaim, because it cannot be the subject of a separate and independent
adjudication; It is not therefore, an initiatory pleading, (in Riano, 2007, page 58).
Respondent spouses sued petitioner hospital for damages before the Regional Trial
Court of Quezon City based on their claim that their son, Emmanuel Cesar Surla,
while confined at the said hospital for having been born prematurely, had accidentally
fallen from his incubator possibly causing serious harm on the child. In its answer with
compulsory counterclaim, petitioner asserted that respondents still owed to it hospital
bills for their son's confinement thereat, and claimed moral and exemplary damages,
plus attorney's fees. Respondents sought dismissal of petitioner's counterclaim on the
ground that it was not accompanied with a certificate of non-forum shopping pursuant
to Supreme Court Administrative Circular No. 04-94. Petitioner, however, contended
that since its counterclaim was compulsory in nature, the circular did not apply to it.
The trial court dismissed petitioner's counterclaim as the circular does not distinguish
whether the counterclaim should be permissive or compulsory. Petitioner's petition
for certiorari with the Court of Appeals was dismissed. Hence, this appeal.
The Supreme Court ruled that the language of Circular No. 04-94 distinctly suggests
that it is primarily intended to cover an initiatory pleading or an incipient application of
a party asserting a claim for relief. 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

and as deriving its substantive and jurisdictional support therefrom, can only be

any supposed error committed by it will amount to nothing more than an error of

appropriately pleaded in the answer and not remain outstanding for independent

judgment reviewable by a timely appeal and not assailable by a special civil action

resolution except by the court where the main case pends. The appealed decision was

of certiorari. This rule, however, is not a rigid and inflexible technicality. This Court has

modified and the claim for moral, exemplary damages and attorney's fees of petitioner

not too infrequently given due course to a petition for certiorari even when the proper

was ordered reinstated.

remedy would have been an appeal, where valid and compelling considerations could
warrant such a recourse. Certiorari has been deemed to be justified, for instance, in
SYLLABUS

order to prevent irreparable damage and injury to a party where the trial judge has
capriciously and whimsically exercised his judgment, or where there may be danger of

1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; FINAL JUDGMENT OR

clear failure of justice, or where an ordinary appeal would simply be inadequate to

ORDER, DISTINGUISHED FROM INTERLOCUTORY ORDER. The concept of a

relieve a party from the injurious effects of the judgment complained of.

final judgment or order. distinguished from an interlocutory issuance, is that the former
decisively puts to a close, or disposes of, a case or a disputed issue leaving nothing
else to be done by the court in respect thereto. Once that judgment or order is
rendered, the adjudicative task of the court is likewise ended on the particular matter
involved. An order is interlocutory, upon the other hand, if its effects would only be
provisional in character and would still leave substantial proceedings to be further had
by the issuing court in order to put the controversy to rest.

3. ID.; FORUM-SHOPPING; ADMINISTRATIVE CIRCULAR NO. 04-94; PURPOSE.

It bears stressing, once again, that the real office of Administrative Circular No. 0494, made effective on 01 April 1994, is to curb the malpractice commonly referred to
also as forum-shopping. It is an act of a party against whom an adverse judgment has
been rendered in one forum of seeking and possibly getting a favorable opinion in
another forum, other than by appeal or the special civil action of certiorari or the
institution of two or more actions or proceedings grounded on the same cause on the

2. ID.; ID.; ID.; ERROR OF JUDGMENT, NOT REVIEWABLE BY EXTRAORDINARY

supposition that one or the other court would make a favorable disposition. The

REMEDY OF CERTIORARI. As a rule, errors of judgment, as well as of procedure,

language of the circular distinctly suggests that it is primarily intended to cover an

neither relating to the jurisdiction of the court nor involving grave abuse of discretion,

initiatory pleading or an incipient application of a party asserting a claim for relief.

are not reviewable by the extraordinary remedy of certiorari. As long as a court acts
within its jurisdiction and does not gravely abuse its discretion in the exercise thereof,

4. ID.; ID.; ID.; APPLICATION IN CASE OF COUNTERCLAIM. It should not be too

difficult, foregoing rationale of the circular aptly taken, to sustain the view that the

circular in question has not, in fact, been contemplated to include a kind of claim

Petitioner, nevertheless, is entitled to a mere partial relief. The so-called

which, but its very nature as being auxiliary to the proceedings in the suit and as

"counterclaim" of petitioner really consists of two segregative parts: (1) for unpaid

deriving its substantive and jurisdictional support therefrom, can only be appropriately

hospital bills of respondents' son, Emmanuel Surla, in the total amount of P82,632.10;

pleaded in the answer and not remain outstanding for independent resolution except

and (2) for damages, moral and exemplary, plus attorney's fees by reason of the

by the court where the main case pends. Prescinding from the foregoing, the proviso

alleged malicious and unfounded suit filed against it. It is the second, not the first,

in the second paragraph of Section 5, Rule 8, of the 1997 Rules of Civil Procedure,

claim that the Court here refers to as not being initiatory in character and thereby not

i.e., that the violation of the anti-forum shopping rule "shall not be curable by mere

covered by the provisions of Administrative Circular No. 04-94.

amendment . . . but shall be cause for the dismissal of the case without prejudice,"

||| (Santo Tomas University Hospital v. Spouses Surla, G.R. No. 129718, [August 17,
1998], 355 PHIL 804-815)

being predicated on the applicability of the need for a certification against forum
shopping, obviously does not include a claim which cannot be independently set up.