Evangeline Alday v.

FGU Insurance Corporation

GR No. 138822, January 22, 2001

Facts:

FGU Insurance Corporation (FGU) filed a complaint for sum of money with the Regional Trial
Court (RTC) of Makati against Evangeline Alday (Alday) amounting to P114,650.76. Alday filed her
Answer by way of counterclaim and asserted that it is FGU who owes them P104,893.45 in direct
commissions, profit commissions, and bonuses from July 1, 1986 to December 7, 1986 and for premium
reserves amounting to P500,000. She also prayed for attorney’s fees, litigation expenses, moral damages
and exemplary damages for the allegedly unfounded actions filed by FGU. FGU then moved to strike out
Alday’s answer and to declare her in default for filing the answer out of time. The motion was denied.
FGU again moved to dismiss Alday’s counterclaim by contending that the trial court never acquired
jurisdiction over the same because of non-payment of docket fees. Alday also in response, asked the
trial court to declare her counterclaim as exempt from payment of docket fees since it is compulsory
and that FGU be declared in default for failing to answer such counterclaim.
The trial court ruled in favor of FGU by dismissing Alday’s counterclaim and consequently denied
Alday’s motion. It found Alday’s counterclaim to be merely permissive and that failure to pay the docket
fees prevented the court from acquiring jurisdiction over the same. Alday moved for reconsideration but
was denied. The Court of Appeals (CA) sustained the trial court, and her motion for reconsideration was
denied. Hence this petition.

Issue:
WON the counterclaim is compulsory or permissive

Held:
No. A Compulsory Counterclaim is one which, xxx, arises out of or is connected with the
transaction or occurence constituting the subject matter of the opposing party’s claim and does not
require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.
The Supreme Court cited Valencia v. Court of Appeals and Quintanilla v. Court of Appeals which
determines whether a counterclaim is permissive or compulsory. It found that the counterclaim is
merely permissive with regard her claim for commissions, bonuses and premium reserves. The evidence
required to prove Alday’s claims differs from that needed to establish FGU’s demands for the recovery
of cash accountabilities from Alday, such as cash advances and costs of premiums. However, Alday’s
claims for damages are COMPULSORY. There is no need to pay docket fees for her compulsory
counterclaim but in order for the trial court to acquire jurisdiction over her permissive counterclaim, she
is bound to pay the prescribed docket fees, citing Sun Insurance Office Ltd v Hon. Maximiano Asuncion
as reiterated in Suson v Court of Appeals, where 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 withing the applicable prescriptive or reglementary period. The court
should have instead given Alday a reasonable time, but in no case beyond the applicable prescriptive or
reglementary period, to pay the filing fees for her permissive counterclaim.
Judgement: The decision of the Court of Appeals is MODIFIED. The compulsory counterclaim for
damages is REINSTATED and ordered the RTC of Makati to require petitioner to pay docket fees for her
permissive counterclaim.