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Lafarge Cement Philippines, Luzon Continental Land Corp,

Continental Operating Corp and Philip Roseberg v Continental

Cement Corporation, Gregory Lim, Anthony Mariano
23 Nov 2004
Panganiban, J.
DOCTRINE: Asolidarydebtormay,inactionsfiledbythecreditor,availitselfofalldefenses
1. Letter of Intent showed that Lafarge intended to purchase Continental
Cement Corp (CCC) and entered into sale and purchase agreement
2. CCC had a case pending before the SC against Asset Privatization Trust
3. Parties ALLEGEDLY agreed in the SPA to deposit 117M from the
purchase price in an interest-bearing account in First City National
Bank in NY that can be used should SC find CCC liable against APT
4. SC found CCC liable against APT, but Lafarge refused to use money
from the 117M deposited, prompting CCC to file a case in the RTC
demanding that Lafarge pay the retained amount
5. Lafarge claims that there was already a similar case (CASE A) filed by
CCC in another court, thus, the second case, (Case B) should be
dismissed for forum shopping
6. Lafarges motion to dismiss in Case B was denied, and then appealed
to the CA
7. In Case A, Lafarge created an answer with counterclaims, denying the
allegations of CCC, praying for damages, and holding CCC president
Lim and corporate lawyer Mariano jointly and solidarily liable for
making baseless claims against Lafarge
8. RTC dismissed Case A (counterclaims against Lim and Mariano not
compulsory, ruling in Sapugay alleged by Lafarge not applicable,
answer with counterclaim is a violation of due process)
9. Lafarge filed the current petition for review of RTCs decision in Case A,
with CCC moving to dismiss
1. WON ruling on compulsory counterclaims valid
a. Lafarge: counterclaim is compulsory, necessary for them to seek
b. CCC: counterclaim violates rules of joinder of action, the original
case being petition for specific performance based on contract,
and the counterclaim being for damages based on torts of
c. Lafarge: Apply Sapugay ruling, allowing the inclusion of
corporate officers

d. CCC: Corporate officers should not be included here, CCC having

the capacity to indemnify Lafarge on its own
2. WON CCC has personality to move to dismiss counterclaims
a. Lafarge: CCC cannot move to dismiss the case with respect to
Lim and Mariano
1. Counterclaim valid and compulsory
a. Counterclaims are claims which a defending party may have
over an opposing party
b. Generally allowed to avoid multiple litigations if the court has
jurisdiction over the counterclaim and over third persons who
may be part of the counterclaim
c. Counterclaim may be permissive or compulsory, the former
being an action which may be filed in another case
d. Compulsory counterclaims have the following requirements:
i. Issues of fact and law the same
ii. Would res judicata bar the defendants claim
iii. Same evidence needed for both plaintiff and defendants
iv. Logical connection between claim and counterclaim
e. Lafarges counterclaim is compulsory, and thus valid in this case
because it arose out of their contention that Lim and Mariano
made baseless claims against them in bad faith settling Case A
(whether there is basis for making Lafarge pay APT) would settle
this matter as well, and if the counterclaim is not raised, res
judicata would bar Lafarge from seeking future damages
f. Procedural rules relied on by CCC to negate counterclaim were
made to avoid multiplicity of suits, which is what Lafarges
counterclaim attempts
g. Sapugay case (see below) applicable: Mariano and Lim are not
being impleaded because CCC cant pay on its own, but because
the case arose due to their fraud and bad faith
2. CCC has personality to move to dismiss, but not on behalf of Lim and
a. Lafarge wishes Lim and Mariano to be jointly and solidarily liable
with CCC
i. Joint = each obligor answers for part of the whole liability
ii. Solidary = joint and several = several = each obligors
actions are so close that each must comply with the
fulfillment of the obligation
b. Lim and Mariano are solidarily liable with CCC
c. A solidary debtor is allowed to avail of the rights available to codebtors, with respect to grounds that pertain only to himself
hence, in general, CCC is allowed to file a motion to dismiss with
respect to itself
d. However, CCCs motion to dismiss was not for itself but for
Mariano and Lim this should not be allowed
e. CCCs personality is distinct from that of its officers

REVERSED RTC ordered to take cognizance of counterclaim and to summon

Lim and Mariano

Mobil Philippines entered a dealership agreement with spouses

Sapugay to sell gas
Spouses incurred debt for pre-operational expenses in anticipation of
dealership agreement
Mobil required spouses to give bond first before giving them a copy of
the dealership agreement, but surety companies required a copy of the
dealership agreement
Spouses found that Mobil wanted to award the dealership to Air
Product Corp
Mobil filed claim against spouses for not giving bond, spouses filed
counterclaim for damages
In counterclaim, spouses impleaded Mobil manager Cardenas
Court said impleading new parties in the counterclaim allowed if it will
bring complete relief to all pertinent issues