GSIS V HEIRS OF CABALLERO

G.R. No. 158090 October 4, 2010

FACTS:
Fernando Caballero & his wife secured a loan from petitioner GSIS and executed a real estate
mortgage of a parcel of land registered under his name. Fernando defaulted on the payment of
his loan, hence, the subject property was foreclosed and sold at a public auction where the
petitioner was the only bidder. For failure to redeem the property, a new TCT was issued in the
name of petitioner. CMTC was the highest bidder during the public bidding to which Caballero
then filed a complaint against CMTC, the GSIS et al. praying, among others, that the Deed of
Absolute Sale between petitioner and CMTC be declared null and void ab initio. The RTC ruled
in favor of petitioner and dismissed the complaint and directed Caballero to pay the rentals he
collected from CMTC that was not turned over to GSIS. Fernando filed a motion for
reconsideration, which was denied. On appeal, the CA affirmed the decision of the RTC with
modification that the portion of the judgment ordering Fernando to pay rentals in favor of
petitioner, be deleted. GSIS filed a petition to seek the review of the CA’s decision insofar as it
deleted the trial court’s award in its favor as the counterclaim for the rentals which Caballero
collected from CMTC is in the nature of a compulsory counterclaim.

ISSUE:
Whether or not the rentals collected by Fernando from the CMTC was permissive and not
compulsory

RULING:
The Court agreed with the CA that the petitioner's counterclaim for the recovery of the amount
representing rentals collected by Fernando from the CMTC is permissive. The evidence needed
by Fernando to cause the annulment of the bid award, deed of absolute sale and TCT is
different from that required to establish petitioner's claim for the recovery of rentals.

Positive answers to the following would indicate a compulsory counterclaim: (a) Are the issues
of fact and law raised by the claim and by the counterclaim largely the same? (b) Would res
judicata bar a subsequent suit on defendant’s claims, absent the compulsory counterclaim rule?
(c) Will substantially the same evidence support or refute plaintiff’s claim as well as the
defendant’s counterclaim? and (d) Is there any logical relation between the claim and the
counterclaim?

The rule in permissive counterclaims is that for the trial court to acquire jurisdiction, the
counterclaimant is bound to pay the prescribed docket fees to which the petitioner did not do
because it asserted that its claim for the collection of rental payments was a compulsory
counterclaim. Since petitioner failed to pay the docket fees, the RTC did not acquire jurisdiction
over its permissive counterclaim and thus the RTC decision is null and void.