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NAMARCO vs Federation of United Namarco Distributors

Facts:
1. The parties of this case enterd into a contract of Sale which
stipulated that NAMARCO will import a certain amount of goods
to be paid by the Federation plus 5% mark up.
2. 1st Case: the FEDEATION FILED A COMPLAINT AGAINST
NAMARCO for specific performance for the latters refusal to
deliver the remaining goods based on the contract of sale.
a. In NAMARCOs answer. It alleged alleged that the
contract of sale was not validly entered into and
therefore it is not bound by the obligations thereto.
b. NAMARCo made no counterclaims as to the remaining
unpaid amounts representing the already delivered
goods.
3. NAMARCO was ordered by the CFI to comply with the obligations
of further delivering the other goods under the premise that the
contract was validly entered into by the parties.
4. CASE 2: NAMARCO then instituted an action to collect the
amounts remaining yet to be paid by the Federation.
a. On February 7, 1961, the FEDERATION moved to dismiss
the complaint on the ground that the cause of action
alleged therein is barred forever, pursuant to Section 6 of
Rule 10 of the Rules of Court. In support thereof, the
FEDERATION alleged that on March 2, 1960, the
FEDERATION and some of its members instituted Civil
Case No. 42684 against NAMARCO for specific
performance to enforce compliance with the contract of
sale; that said contract, basis of Civil Case No. 42684, is
also the basis of NAMARCO's present complaint in Civil
Case No. 46124; that when NAMARCO filed, on March 19,
1960, its answer to the complaint in Civil Case No.
42684, it did not set up any counterclaim therein
b. NAMARCO interposed its opposition to said motion to
dismiss contending that its claim for the recovery of the
cost of merchandise delivered to the FEDERATION on
January 29 and February 20, 1960 is not necessarily
connected with the suit in Civil Case No. 42684 for
specific performance and, therefore, does not fall under
the category of compulsory counterclaim; that
NAMARCO's failure to set it up as a counterclaim in its
answer in Civil Case No. 42684 does not constitute res
judicata

Issue: Is the present case a compulsory counterclaim? Corollary to this,


Is the petitioner barred from claiming the unpaid deliveries in view of
the Civil case filed by the respondent prior to the present case as they
were made both pursuant to the same COtnract of Sale?
Ruling: the present case is not a compulsory counterclaim. Therefore
the petitioner may still claim for the same in a different action.
Test of Determining WON a claim comes under a compulsory
counterclaim:
a. Are the issues of fact and law raised by the
claim and counterclaim largely the same?
b. Would res judicata bar a subsequent suit on
defendant's claim absent the compulsory
counterclaim rule?
c. Will substantially the same evidence support
or refute plaintiff's claim as well as
defendant's counter-claim?
d. Is there any logical relation between the
claim and the counter-claim?
1. The fourth test ... the logical relationship between the claim and
counterclaim has been called "the one compelling test of
compulsoriness". Under this rule, any claim a party has against
an opposing party that is logically related to the claim being
asserted by the opposing party and that is not within the
exceptions to the rule, is a compulsory counterclaim. Its
outstanding quality is its flexibility. On the other hand this
flexibility necessarily entails some uncertainty in its application
because of its looseness and potentially over broad scope. This
difficulty notwithstanding, of the four judicially formulated
criteria it has by far attained the widest acceptance among the
courts.
2. In this case, While the refusal of NAMARCO to deliver the
remainder of the goods contracted for in its "trade assistance
agreement" with FEDERATION, is the important link in the chain
of facts and events that constituted the transaction upon which
Federation's cause of action was based in Civil Case No. 42684, it
is not even a part of the transaction constituting the subject
matter of NAMARCO's present suit. For the action of FEDERATION
on March 2, 1960, to compel NAMARCO to recognize the validity

of their agreement and deliver the remainder of the goods to be


paid "on cash basis" in no way involved the payment of the
merchandise worth P609,014.73, already delivered and paid for
in cash by means of the domestic letters of credit. When the
domestic letters of credit were subsequently dishonored by the
Philippine National Bank on May 19, 1960 compelling NAMARCO
to send on June 7, 1960 a letter of demand for payment to
FEDERATION which the latter received on July 5, 1960, but which
it apparently ignored and because of such inaction NAMARCO
therefore sued FEDERATION for payment on January 25, 1961,
such non-payment by FEDERATION was a matter which was
distinct and separate from and had no logical relationship with
the subject matter of FEDERATION's own suit. These two claims
are separate and distinct, as they involve totally different factual
and legal issues and do not represent the same "basic
controversy".
Further notes: exception to the rule of compulsory counterclaims:
1)
Time of Filing. The claim which is the basis of the counterclaim
must be in existence at the time of "counter-claimant" files his
pleading. Thus if P sues A and A does not have a claim arising out of
the transaction or occurrence of P's suit at the time A files his answer A
is not obliged to plead such a claim, although one arises subsequent to
the filing of his answer.

Bungcayao vs Fort Ilocandia Property Holdings


1. six parcels of land in Barrio Balacad (now Calayad) were
transferred, ceded, and conveyed to the Philippine Tourism
Authority (PTA) pursuant to Presidential Decree No. 1704. Fort
Ilocandia Resort Hotel was erected on the area.
2. Fort Ilocandia Property Holdings and Development Corporation
(respondent) filed a foreshore application over a 14-hectare area
abutting the Fort Ilocandia Property, including the 5-hectare
portion applied for by DSierto members
3. Negotiations happened between the respondent and the Dsierto
Members and they were able to make a settlement. They
executed therein a Deed of Assignment , Release, Waiver and
Quitclaim if favour of the respondent for the consideration of
P400k
4. Petitioner then filed an action for declaration of nullity of
contract before the Regional Trial Court of Laoag, City, Branch
13 (trial court), docketed as Civil Case Nos. 12891-13, against
respondent. Petitioner alleged that his son had no authority to
represent him and that the deed was void and not binding upon
him.
5. the trial court confirmed the agreement of the parties to cancel
the Deed of Assignment, Release, Waiver and Quitclaim and the
return of P400,000 to respondent. Petitioners counsel,
however, manifested that petitioner was still maintaining its
claim for damages against respondent.
6. The trial court ruled that the only issue raised by petitioner was his claim for
damages while respondents issue was only his claim for possession of the
property occupied by petitioner and damages. The trial court noted that the
parties already stipulated on the issues and admissions had been made by both
parties. The trial court ruled that summary judgment could be rendered on the
case.
7. The CA affirmed the decision of the RTC and also held that the counterclaim of
the respondent is compulsory and therefore, adjudicated the issue of possession
in favour of the respondent.
Issue: Is the counterclaim of the respondent compulsory or permissive?
If it is compulsory, then there is no need to pay the docket fees
and may be tried. If is permissive, no payment of docket fees,
no jurisdiction.
Ruling: the counterclaim of the respondent is merely permissive.
1. A compulsory counterclaim is any claim for money or any relief,
which a defending party may have against an opposing party,
which at the time of suit arises out of, or is necessarily

2.

3.

4.

5.

connected with, the same transaction or occurrence that is the


subject matter of the plaintiffs complaint.[13] 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.[14] Any other counterclaim is permissive
The Court has ruled that the compelling test of compulsoriness
characterizes a counterclaim as compulsory if there should exist
a logical relationship between the main claim and the
counterclaim.[16] The Court further ruled that there exists
such a relationship when conducting separate trials of the
respective claims of the parties would entail substantial
duplication of time and effort by the parties and the court; when
the multiple claims involve the same factual and legal issues; or
when the claims are offshoots of the same basic controversy
between the parties.
In this case, the only issue in the complaint is whether Manuel,
Jr. is authorized to sign the Deed of Assignment, Release, Waiver
and Quitclaim in favor of respondent without petitioners
express approval and authority. In an Order dated 6 November
2003, the trial court confirmed the agreement of the parties to
cancel the Deed of Assignment, Release, Waiver and Quitclaim
and the return of P400,000 to respondent. The only claim that
remained was the claim for damages against respondent. The
trial court resolved this issue by holding that any damage
suffered by Manuel, Jr. was personal to him. The trial court ruled
that petitioner could not have suffered any damage even if
Manuel, Jr. entered into an agreement with respondent since the
agreement was null and void.
The only counterclaim that remained was for the recovery of
possession of the subject property. While this counterclaim was
an offshoot of the same basic controversy between the parties,
it is very clear that it will not be barred if not set up in the
answer to the complaint in the same case. Respondents
second counterclaim, contrary to the findings of the trial court
and the Court of Appeals, is only a permissive counterclaim. It
is not a compulsory counterclaim. It is capable of proceeding
independently of the main case.
The rule in permissive counterclaim is that for the trial court to
acquire jurisdiction, the counterclaimant is bound to pay the
prescribed docket fees.[20] Any decision rendered without

jurisdiction is a total nullity and may be struck down at any


time, even on appeal before this Court.[21] In this case,
respondent did not dispute the non-payment of docket fees.
Respondent only insisted that its claims were all compulsory
counterclaims. As such, the judgment by the trial court in
relation to the second counterclaim is considered null and
void[22] without prejudice to a separate action which
respondent may file against petitioner.

Calibre Traders Inc. vs Bayer Philippines


1. Calibre Traders, Inc. (Calibre) was one of Bayerphils
distributors/dealers of its agricultural chemicals within the
provinces of Pangasinan and Tarlac.[4] Their last distributorship
agreement was effective from June 1989 to June 1991.[5]
However, Bayerphil stopped delivering stocks to Calibre on July
31, 1989 after the latter failed to settle its unpaid accounts in
the total amount of P1,751,064.56
2. Accusing Bayerphil of maliciously breaching the distributorship
agreement by manipulating Calibres accounts, withholding
discounts and rebates due it, charging unwarranted penalties,
refusing to supply goods, and favoring the new
distributors/dealers to drive it out of business, Calibre, on March
14, 1990, filed a suit for damages, docketed as Civil Case No.
59258, before the Regional Trial Court (RTC) of Pasig.[17] Calibre
prayed for P8,000,000.00 actual damages, representing alleged
actual losses and profits;[18] P2,000,000.00 award as alleged
damage to its goodwill and business reputation; P3,500,000.00
as exemplary damages; and, attorneys fees of P1,500,000.00
3. In its Answer with Counterclaim, Bayerphil denied its alleged wanton
appointment of other distributors, reasoning that it could not be faulted for a
difference in treatment between a paying dealer and a non-paying one. It
maintained that Calibre filed the damage suit to avoid paying its overdue
accounts. Considering that those purchased on credit remained unpaid,
Bayerphil had to refuse to further supply Calibre with its products.
4. the trial court rendered judgment[25] favoring Calibre. It held
that Calibre was justified in withholding payment because there
was deliberate inaction/employment of dilatory tactics on the
part of Bayerphil to reconcile accounts making it liable for
damages for abuse of rights and unfair competition under
Articles 19, 20, and 28 of the Civil Code

5. The CA reversed the trial courts factual findings. CA favored


Bayerphils counterclaim. It ruled that Bayerphils counterclaim
was compulsory hence it need not pay the docket and filing
fees. It noted that it arose out of the same dealership
agreement from which the claims of Calibre in its complaint
were likewise based. Finding that Calibre never denied that it
owes Bayerphil, and that the evidence of Bayerphil regarding
the amount owed by Calibre was unrebutted, the CA deemed
justified the award of actual damages.
Issue; Was the counterclaim of the respondent compulsory or
permissive?
Ruling: Bayerphils counterclaim is permissive, but the trial court should have
given it the opportunity to pay the docket fees since it did not avoid paying said fees.
1. Although the rights and obligations of the parties are
anchored on the same contract, the causes of action they
filed against each other are distinct and do not involve the
same factual issues. We find no logical relationship between
the two actions in a way that the recovery or dismissal of
plaintiffs suit will establish a foundation for the others
claim. The counterclaim for collection of money is not
intertwined with or contingent on Calibres own claim for
damages, which was based on the principle of abuse of
rights. Both actions involve the presentation of different
pieces of evidence. Calibres suit had to present evidence of
malicious intent, while Bayerphils objective was to prove
nonpayment of purchases. The allegations highlighting bad
faith are different from the transactions constituting the
subject matter of the collection suit. Respondents
counterclaim was only permissive. Hence, the CA erred in
ruling that Bayerphils claim against the petitioners partakes
of a compulsory counterclaim.
2. Be that as it may, the trial court was incorrect in dismissing Bayerphils
counterclaim for non-payment of docket fees.
3. All along, Bayerphil has never evaded payment of the docket fees on the
honest belief that its counterclaim was compulsory. It has always argued
against Calibres contention that its counterclaim was permissive ever since
the latter opposed Bayerphils motion before the RTC to implead the
Sebastian spouses. Lastly, Bayerphils belief was reinforced by Judge
Claravalls October 24, 1990 Resolution when she denied Calibres motion
to strike out Bayerphils counterclaim

Planters Developmental Bank (PDB) vs LZK Holdings and Development


Corporation
Facts:
1. LHDC entered into a contract of Loan with the PDB where the
former was granted by the latter a credit accommodation in the
amount of 40M.
a. the loan was secured by a Real Estate Mortgage on the
land and the building that was constructed through the
loan.
2. PDB caused the extrajudicial foreclosure of the property for the
noncompliance with the terms and conditions of the Deed of
Assignment as well as the promissory notes to cover the unpaid
obligations
3. The LHDC then filed with the RTC a complaint for Annulment of
Extrajudicial Foreclosure, Mortgage contract, Promissory notes,
and damages alleging that they were not able to receive the full
extent of the proceeds of the loan.
4. The PDB filed in due course its answer, traversing the material
allegations thereof and interposing a counterclaim for attorneys
fees and costs.
5. just before the scheduled pre-trial, the LHDC filed a Motion
for Leave to file a Supplemental Complaint to cover
occurrences subsequent to the original complaint. It
alleged that after the filing of the original complaint, it agreed
in principle to enter into a contract of lease with a
prospective lessee, AMA Computer College, over three
floors of the AGZ Building, but the latter required it to
first secure the petitioners consent.
a. The LHDC averred that until title to the property had
been consolidated to the PDB, it (the LHDC) remained its
owner, and as such is entitled to exercise all the
attributes of ownership, including the right to receive
rentals from the tenants of the building. As such, the
PDB had no authority to collect the rentals and apply the
previous loan deficiency because the legality and validity
of the promissory notes, the real estate mortgage, and
the subsequent extrajudicial foreclosure were in question
before the courts. By applying the rentals to the
perceived loan deficiency, the PDB ignored the authority
of the court.
6. The Trial Court issued an order admitting the Supplemental
Complaint finding that the terms in plaintiffs supplemental
complaint to be just and proper; hence, can be permitted by the

Court. The additional causes of action are intimately and


necessarily connected to the causes of action set forth in
plaintiffs Complaint dated March 29, 2000 and are proper under
the circumstances inasmuch as the events happened since the
filing of the complaint sought to be supplemented
7. PDB filed a petition for certiorari. The CA rendered a Decision,
finding that no grave abuse of discretion was committed by the
trial court in admitting the supplemental complaint of the LHDC.
In dismissing the petition, the CA ratiocinated:
In the case at bench, respondent ably demonstrated the
connection between the original complaint and the
supplemental complaint. Thus, the original complaint
for
annulment
of
extrajudicial
foreclosure,
mortgage contract, promissory notes and for
damages was founded on the same transaction
the loan and contract of mortgage as security for
such loan as that of the supplemental complaint. The
original complaint sought the annulment of the
promissory note and the contract of mortgage. On
the other hand, the supplemental complaint alleged
petitioners subsequent acts in asserting its rights
as such purported obligee and mortgagor. Thus, the
acts complained of under the supplemental complaint,
namely: that petitioner imposed unreasonable conditions
in giving its consent to a pending lease agreement
between respondent and a third party and that petitioner
demanded that rentals on the property be made directly to
it are acts calculated to exercise petitioners rights,
validly or invalidly, as the obligee and mortgagor in the
transaction sought to be annulled in the original complaint.
Issue: Was the lower court correct in admitting the supplemental
complaint?
Ruling: Yes.
1. The purpose of the supplemental pleading is to bring into
the records new facts which will enlarge or change the
kind of relief to which the plaintiff is entitled; hence, any
supplemental facts which further develop the original right
of action, or extend to vary the relief, are available by way
of supplemental complaint even though they themselves
constitute a right of action.

2. the Court ruled that when the cause of action stated in the
supplemental complaint is different from the causes of
action mentioned in the original complaint, the court
should not admit the supplemental complaint. However, a
broad definition of causes of action should be applied.
3. In the present case, the issue as to whether the petitioner
stopped the payment of rentals and the application
thereof on the perceived loan deficiency of the
respondent, is a new matter that occurred after the filing
of the original complaint. However, the relief for damages,
the collection of the rentals and the application thereof by
the petitioner to the perceived loan deficiency of the
respondent are germane to, and are in fact, intertwined
with the cause of action of nullification of the real estate
mortgage and the extrajudicial foreclosure thereof, as well
as the sale at public auction. It is the respondents
contention that the petitioner remained liable to it for
rentals, and until title to the property had been lawfully
consolidated with the petitioner.
4. The claims of unrealized income by way of rentals from the
AMA Computer College on account of the respondents
insistence that such should be remitted to it, and that the
respondent first drop the criminal complaint for
falsification and perjury filed by it against Mauro Tividad,
the officer of the petitioner, are, likewise, germane and
related to the respondents claim in its original complaint
that it remained the owner of the property despite the sale
at public auction; hence, it is entitled to lease the property
and collect the rentals therefrom. By its supplemental
complaint, the respondent merely enlarged its original
causes of action on account of events that transpired after
the filing of the original complaint and prayed for
additional reliefs. The principal and core issues raised by
the parties in their original pleadings remain the same.

Young vs Sy
1. Genalyn Young filed a Complaint for Nullification of
Second Supplemental Extrajudicial Settlement,
Mortgage, Foreclosure Sale, and Tax Declaration
with the RTC alleging that the partition executed by her
mother Lilia Dy Young solely in favour of the Sys
unenforceable, since at the time of the execution, she
(petitioner) was only 15 years old and no court approval
had been procured; that the partition had been registered
with the Register of Deeds; that Lilia Dy obtained a loan
from spouses Manuel Sy and Victoria Sy (respondents) and
mortgaged the subject property; that the property was
foreclosed and sold to the highest bidder, respondent
Manuel Sy; that a Certificate of Sale for this purpose had
been registered with the Register of Deeds; and that,
thereafter, respondents obtained in their name a tax
declaration over the property in question.
2. On July 20, 2000, the petitioner filed with the RTC a
Motion to Admit Supplemental Complaint, attaching
the Supplemental Complaint wherein petitioner
invoked her right, as co-owner, to exercise the legal
redemption.
3. The RTC denied the Motion in an Order dated December
28, 2000. The CA promulgated its Decision denying the
Petition for Certiorari and Mandamus and held that the
cause of action of the petitioner in the Supplemental
Complaint is entirely different from the original complaint;
that the Supplemental Complaint did not merely supply its
deficiencies.
Issue: Should the Supplemental complaint of the petitioner be
admitted?
Ruling: Yes.
1. In this case, the consolidation of title over the subject
property in the name of respondent Manuel Sy and the
issue as to whether it precluded petitioner as alleged coowner from exercising the right of legal redemption, are
new matters that occurred after the filing of the
original complaint. The relief prayed for in the
Supplemental Complaint, which is the exercise of
the right of legal redemption accorded to co-owners
of property, is germane to and intertwined with the

cause of action in the Complaint for the nullification


of the "Second Supplemental to the Extrajudicial
Partition" on the ground that it lacked the approval
of a guardianship court.
2. The petitioner's right to redeem the property is dependent
on the nullification of the partition which is the subject of
the original complaint. Unless the partition is nullified or
declared without any force or effect, the petitioner will not
be considered a co-owner of the property and,
consequently, she will be unable to exercise any right of
legal redemption under Article 1620 of the Civil Code
granted to co-owners of property.

Leobrera vs Court of Appeals vs BPI


Facts:
1. Loan 1: Sometime in 1980, petitioner Carlos Leobrera
(Leobrera for short) was granted an P 800,000.00 credit
facility by private respondent Bank of the Philippine
Islands. The line was last renewed on 21 March 1986
evidenced by two 90-day promissory notes
2. Loan 2: Leobrera also obtained from BPI a separate threeyear term loan in the amount of P 500,000.00 evidenced
by Promissory Note No. 01785/0224-0 dated 15 November
1985 [Rollo, p. 66.] This three-year term loan was secured
by a third real estate mortgage dated 23 October 1985.
3. Upon maturity of the 90-day notes [Rollo pp. 67-681 BPI
and Leobrera negotiated, albeit unsuccessfully, on the
terms of their renewal. No agreement having been
reached by them, BPI demanded the full payment of the
loan. Leobrera failed to settle his loan account thus BPI
prepared to foreclose the real estate mortgages securing
the same. Before BPI could institute foreclosure
proceedings however, Leobrera filed on 6 January 1987 a
complaint for damages with a prayer for the issuance of a
writ of preliminary injunction seeking to enjoin BPI from
foreclosing the mortgages
4. Meanwhile, on 9 February 1987, the bank wrote Leobrera
claiming that he failed to pay the amortization due on the
three-year term loan, as a result of which, BPI opted to
accelarate the maturity of the loan and called the entire
loan due and demandable. Leobrera likewise failed to
remit the amount due and BPI thus threatened to foreclose
the real estate mortgage securing the loan.
5. Before BPI could foreclose the mortgage, petitioner filed
with the trial court on 11 March 1987 a "Motion to File
Supplemental
Complaint,"
attaching
thereto
the
supplemental complaint which prayed for the issuance of
an injunction to restrain BPI from foreclosing the third
mortgage. The next day, 12 March 1987, the trial court
granted Leobrera's motion to file the supplemental
complaint and issued a restraining order enjoining BPI
from proceeding with any "Legal, court or other action"
arising from the promissory note evidencing the three-year
term loan.

6. BPI filed a motion to set it aside but the motion was denied
by the trial court on 31 March 1987.
Issue: Should the Supplemental complaint be admitted?
Ruling: No.
A. Invalidity as to the Notice
a. The Motion was sent to BPI on March 11, 1987
b. BPI received notice of the motion on March 13,
1987
c. The decision was made on March 12, 1987
B. Matter involved in the supplemental complaint is entirely
different and independent from the cause of action of the
original complaint.
a. the P 500,000.00 three-year term loan is a
transaction independent of the P 800,000.00 credit
facility and BPI's questioned act of threatening to
foreclose the properties securing said loan was the
result of an alleged default by petitioner in the
payment of the amortization due for 9 February
1987 and not because of any circumstance related
to the 1980 amicable settlement.
b. The two causes of action being entirely different,
the latter one could not be successfully pleaded by
supplemental complaint.