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CASE SUMMARY
Sharp filed a complaint against petitioner and Phil Ports Authority and others.
Petitioner filed with its answer a compulsory counterclaim for P100M worth of
damages. PPA moved to dismiss the complaint. Petitioner adopted the manifestation.
Lower court dismissed the complaint and the counterclaim. Petitioner alleges that the
counterclaim should subsist. SC held that it cant. The counterclaim was so
intertwined with the original complaint, it had no independent existence as since it
was only an ancillary to the main action.
DOCTRINE
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 partys
claim; (2) it does not require for its adjudication the presence of third parties of whom
the court cannot acquire jurisdiction; and (3) the court has jurisdiction to entertain the
claim.
FACTS
Private respondents CF Sharp and First Integrated filed a complaint for
prohibition with prayer for preliminary injunction against DOTC Sec, Phil
Ports Authority (PPA), E. Razon Inc., and the petitioner International Container
Terminal Services
o Im assuming this was because DOTC and PPA awarded the development
contract to petitioner, but it was never categorically stated
Trial court issued a writ of preliminary injunction upon posting by Sharp of
a bond issued by Integrated Bonding in the sum of P10M
o On the same day, petitioner filed an answer with a compulsory
counterclaim against Sharp for its unfounded and frivolous action
o As a consequence of the preliminary injunction, petitioner allegedly
suffered injuries that would roughly be more than P100M
Later, the SC nullified the writ of preliminary injunction
o Sharp was not a proper party to stop the negotiation and awarding of the
contract for the development of the Container Terminal at the Port of
Manila
o Also, Sharps petition was premature because didnt exhaust
administrative remedies (PPA, the Bidding Committee, OP)
PPA, taking note of the above decision, filed a motion to dismiss Sharps
complaint on the same grounds SC stated
This motion was adopted by petitioner in a manifestation.
Trial court judge Sandoval then dismissed the complaint as well as the
counterclaim
Petitioner filed MR of the order insofar as it dismissed its counterclaim
o Also gave notice to First Integrated that it was claiming damages against
Sharp for the revoked injunction
Petitioners MR was denied
o Trial court: A compulsory counterclaim arises out of or is so intertwined
with the transaction or occurrence that is the subject-matter of the
complaint, so that by the dismissal of the latter, the same has to be
discarded, specially since the complaint was dismissed without trial.
CA upheld the lower court
o (1) Compulsory counterclaims for actual damages are not the claims
recoverable under the bond
o (2) Petitioners manifestation adopting PPAs MTD did not contain any
reservation
Hence, Sec 2 Rule 17 of RoC will not apply. The counterclaim for
damages being compulsory in nature, for which no filing fee has
been paid, was correctly dismissed.
o (3) Sec 20 Rule 57 of RoC provides that such damages recoverable against
the bond may be awarded only upon application and after proper hearing
This is distinct from the compulsory counterclaim alleged in
petitioners answer
Petitioner then filed the present petition for review, alleging that the trial
courts dismissal of the counter claim was with GAOD because:
o (1) Dismissal of the complaint upon defendants motion did not
necessarily entail dismissal of defendants compulsory
counterclaim.
o (2) A claim for damages arising from a wrongfully obtained injunction
may be made in a counterclaim.
o (3) There is no rule requiring a particular form of notice to the surety of
petitioners claim against the injunction bond.
For its part, the private respondent argues that the dismissal of the compulsory
counterclaim should be sustained because:
o (1) The dismissal of the complaint upon petitioners motion
necessarily entailed the dismissal of the compulsory
counterclaim.
o (2) The compulsory counterclaim raised by petitioner in its answer did
not partake of the nature of a claim for damages against the injunction
bond.
o (3) The notice given by the petitioner to the surety was fatally defective
and did not comply with the requirements of the Rule of Court.
ISSUE (there are other issues about damages and the bond but its not really
important)
1. WON dismissal of the complaint upon petitioners motion necessarily
entailed the dismissal of the compulsory counterclaim YES
RATIO
1. WON YES
[SUBJECT] | [TOPIC] 3
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