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8/13/2019 Draft Punk

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SEC. 7. Counterclaim is compulsoryis one which, being cognizable by the regular courtsof justice, arises out of or is connected with the transaction or occurrence constituting thesubject matter of the opposing partys claim and does not require for its adjudication thepresence of third parties of whom the court cannot acquire jurisdiction of the court both as to theamount and the nature thereof, except that in an original action before the Regional Trial Court,

the counterclaim may be considered compulsory regardless of amount.

NOTES:

Permissive counterclaim is one which does not arise out of or is connected with thetransaction which is the basis of the subject of the action.

COMPULSORY COUNTERCL!M PERM!SS!"E COUNTERCL!M

!" one of which arises out of or is necessarilyconnected with the transaction or occurrencethat is the subject matter of the opposing

partys claim.

!" #t does not arise out of nor is it necessarilyconnected with the subject matter of theopposing partys claim.

$" #t does not require for its adjudication thepresence of third parties of whom the courtcannot acquire jurisdiction.

$" #t may require for its adjudication thepresence of third parties o%er whom the courtcannot acquire jurisdiction.

&" #t is barred if not set up in the action. &" #t is '(T barred e%en if not set up in theaction.

)" 'eed not be answered* no default. )" +ust be answered, otherwise, thedefendant can be declared in default.

These two are different for in their component elements and the effect of their not beingpleaded.

Compulsory Counterclaim:

a" compulsory counterclaim if not setup is barred b" #t requires no payment of the doc-et fee c" Need not be answered d" oes not need a certificate against forum shoppingTests to #etermine $%et%er or not a counterclaim is compulsory:

a" re the issues of fact or law raised by the claim and counterclaim largely the same/ b" 0ould res judicatabar a subsequent suit on defendant1s claims absent the compulsorycounterclaim rule/

c" 0ill substantially the same e%idence support or refute plaintiff1s claim as well asthe defendant1s counterclaim/ and d" #s there any logical relation between the claim and the counterclaim/

positi%e answer to all four questions would indicate that the counterclaim is compulsory.

(Financial Building Corp. vs. Forbes Park Assn. Inc., 33 !C"A ##$.


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The %ailure o% t&e de%endant to set up a compulsory counterclaim shall bar its institution,subject to the following exceptions2

a" #f the counterclaim matured or was acquired after the defendant had ser%ed hisanswer. #n such case, it may be pleaded by filing a supplemental answer or pleading before

judgment* and

b" 0hen a pleader fails to set up a counterclaim through o%ersight, inad%ertence,excusable negligence, or when justice requires, he may, by lea%e of court, set up thecounterclaim by amendment of the pleadings before judgment.

E&ample:

This is an action of against 3 for the reco%ery of a lot. The counterclaim of 3 against isfor the reco%ery of money which represents the unpaid wages of 3 payable by and the wagesbeing the result of a contract of employer4employee relationship.

'. #s this money claim of 3 arising from the employer4employee relationship is not cognizableby the court/. 'o, because the money claimed arising from the employer4employee relationship is notcognizable by the courts of justice. '&is is cogniable b) t&e *+- abor Arbiter or t&e N"C.

5o, if files his complaint and 3 pleads his money claim arising from the employer4employee relationship, that counterclaim is not a compulsory counterclaim. #t cannot be filed inthis case.

The counterclaim must be one which arises from the transaction which is the basis of theaction of the plaintiff against the defendant.

E&ample:

The action of 3 is for reco%ery of lot. The claim of 3 is for money arising from a contractof loan being 3 the lender and the borrower. 5hould 3 interpose as a counterclaim this actionfor reco%ery of money here.

'. Can that be %alidly done/. (n the assumption that all the other elements are present, this is allowed.

5upposing, this is the +TC, the action is for reindi%icacion because the %alue of the propertyis only 6$77,777. This an action filed outside +anila.

'. #s this counterclaim here allowed to be filed by 3 as a counterclaim in this case/. 8es, because this is a claim that is compulsory.

3ut supposing 3 does not file a separate case against for a reco%ery of money such thatif this is done, there will be now two $" actions

'. Can %alidly file a motion to dismiss this complaint on the ground that since this is acounterclaim, that should ha%e been impleaded by 3 in the main case/. 'o, because this amount does not arise from the transaction constituting the claim by against 3, this is a reco%ery of money. This is a permissi%e counterclaim the fact that it is notpleaded in the answer in the main case, is not a ground to dismiss it.


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E&ample: Compulsory Counterclaim

This is an action for the reco%ery of a lot. The counterclaim of 3 is for reco%ery of the %alueof the property impro%ements which 3 introduced.

'. #s it money claim by nature cognizable by a court whether +TC or RTC/. 8es.

'. #s it connected with the case filed by against 3 for reco%ery of the land/. 8es, because the amount being claimed represents the %alue of the impro%ementsintroduced by 3 in this lot, which is the subject of the main case. 5o, it is connected.

'. oes this action for reco%ery requires the presence of C, a third person o%er whom thecourt cannot acquire jurisdiction/. 'o.

'. #s an action for reco%ery of a 6$7!,777.77 one with the jurisdiction of the RTC/. 8es.

5o, in all these cases therefore, the elements of a compulsory counterclaim are present.

'. 0hat is the rule/. &en a counterclai/ is co/pulsor) it /ust be pleaded in t&e answer, ot&erwise, t&atcounterclai/ is barred.

E&ample:#n the example that 3 sues to reco%er 6$7!,777.77 representing the %alue of

impro%ements introduced on the lot which is the subject matter of the complaint of . 0hat 3 did

was to institute separate action against for reco%ery of the impro%ements. 9e did not pleadthis as a counterclaim in the action of .

now files a motion to dismiss on the ground that, the counterclaim is a compulsorycounterclaim, the fact that it not was pleaded in the main case, is a ground to dismiss it.

'. 8ou are the judge, what will be your correct ruling on this motion of to dismiss the case/. :rant the motion, bec. a compulsory counterclaim not pleaded in the answer is consideredbarred.

Permissive Counterclaim:

a" e%en if not set up is not barred because it doesnt arise out of the same transaction asthat of the complaint b" it can be brought as a separate action in itself c" doc-et fee must be paid d" it must be answered by the ad%erse party to pre%ent default e" it needs a certificate against forum shopping.

E&ample:


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files an action against 3 for collection for sum of money. 3, howe%er, has an actionagainst for reco%ery of lot. This action of 3 against for reco%ery of a lot is a permissi%ecounterclaim. 0hy/ 3ecause it is not in any way related.

'. 0hy is this permissi%e/. 3ecause if 3 wants to he can file his counterclaim against in the same action. #f he does

not file it as a claim, this case filed against him.

'. Can he file it separately, so that if he can file it separately there are now two cases, %s. 3for reco%ery of lot.. 8es.

'. 5upposing he 3" does not file his counterclaim in this case against him, and subsequently,3 files a separate action, can now file an action to dismiss a second action on the ground thatthis action of 3 against should not be pleaded as a claim counter in nature in the ci%il case/. 'o, because this is a permissi%e counterclaim. 3 can file if he wants in to this main action,he may not file if he does not want to file.

!n t%is case( )*s counterclaim is not compulsory( +ut merely permissive.

E&ample:The counterclaim of 3 consists of 6$77,777.77 but the counterclaim of 3 is against

and C o%er this amount is solidary. 3 does not plead in his answer in the main case claim andafter 3 files his separate action against and C to reco%er his 6$77,777.77. filed motion todismiss on the ground that this should ha%e been impleaded in the main case because it arosefrom this main case.

'. #s the motion to dismiss proper/. 'o, because the presence of C is required in their litigation on this 6$77,777.77 and C is in

;.5. and the Court does not acquire jurisdiction o%er him.

5o, this counterclaim although arising from that action is merely a permissi%ecounterclaim not compulsory counterclaim because it requires for its adjudication the presenceof a third person o%er whom the court does not acquire jurisdiction.

This is an action in the +TC. The counterclaim of 3 arising from this, lets say, the %alueof the impro%ements which 3 introduced in this lot is 6$7!,777.77. 9e does not plead hiscounterclaim in this action. #nstead, he files a separate action on the reco%ery of 6$7!,777.77.'ow he files a motion to dismiss on the ground that this counterclaim being connected in theclaim of against 3 should be pleaded.

'. #s the motion to dismiss proper/. 'o, because the amount claimed though arising from the action exceeds the jurisdiction ofthe +TC. The jurisdiction being only up to 6$77,777.77. 5o, it is not.

5upposing, howe%er, that this case is filed in the RTC. nd on the assumption that thecounterclaim of 3 against arises out of this action of against 3, and the counterclaim is only6


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. Compulsory. #n the RTC, as long as the counterclaim is money, irrespecti%e of the amount,it is always compulsory.

=et us now ta-e a case where the counterclaim is compulsory.

Rules on Counterclaim!" counterclaim before the +TC must be within the jurisdiction of said court, both as to

the amount and nature thereof.$" #n an original action before the RTC, a counterclaim may be considered compulsory

regardless of the amount.&" #f a counterclaim if filed in the +TC in excess of its jurisdictional amount, the excess is

considered wai%ed.)" The remedy where a counterclaim is beyond the jurisdiction of the +TC is to set of the

claims and file a separate action to collect the balance.

SEC. ,. Cross-claim. cross-claim is any claim +y one party aainst a co-party arisin

out o/ t%e transaction or occurrence t%at is t%e su+0ect matter eit%er o/ t%e oriinal actionor o/ a counterclaim t%erein. Suc% cross-claim may inclu#e a claim t%at t%e party aainst$%om it is asserte# is or may +e lia+le to t%e cross-claimant /or all or part o/ a claimasserte# in t%e action aainst t%e cross-claimant.

RE'U!REMENTS 1OR CROSS-CL!M:

!. claim by one party against a co4party*$. #t must arise out of the subject matter of the complaint or of the counterclaim* and&. The cross4claimant is prejudiced by the claim against him by the opposing party.

#f it is not setup in the action, it is barredexcept2

!. 0hen, it is outside the jurisdiction of the court* or$. #f the court cannot acquire jurisdiction o%er third parties whose presence is necessary for theadjudication of said cross4claim.

#n which case, the cross-claim is consi#ere# permissive.

The dis/issal o% t&e co/plaint carrieswith it the dismissal of a cross4claim which ispurel)de%ensive, but not a cross4claim see-ing an affirmati%e relief.

Cross Claim Counterclaim &rdparty Complaint

gainst a co4party gainst an opposing party. gainst a person not a partyto the action.

+ust arise out of thetransaction that is the subjectmatter of the original action orof a counterclaim therein

+ay arise out of or benecessarily connected withthe transaction or that is thesubject matter of the opposingparts claim in which case, it iscalled a compulsorycounterclaim, or it may not, in


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