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AIDA PADILLA v. GLOBE ASIATIQUE REALTY HOLDINGS CORPORATION

FACTS:

The case involves the Philippine National Bank (PNB), Globe Asiatique Realty Holdings Corporation (Globe Asiatique), and Filmal Realty Corporation (Filmal), represented by Delfin S. Lee and Dexter L. Lee. PNB entered into Contracts to Sell (CTS) Facility Agreements with Globe Asiatique and Filmal, agreeing to provide funds for the purchase of certain accounts receivables. As a condition for the availment of the CTS Facility, respondents executed Deeds of Assignment covering the accounts receivables. Respondents defaulted on their payments and delivery of transfer certificates of title, causing PNB to declare them in default. PNB demanded settlement of their outstanding obligation. PNB discovered fraudulent acts and misrepresentations committed by respondents, including contracts with non-existent buyers. PNB filed a civil case in Pasay City RTC seeking recovery of money and damages. Preliminary attachment was granted against the defendants. Defendants filed motions to dismiss and discharge the attachment, which were denied.

While the motions were being considered, defendants filed a complaint for damages in the RTC of Pasig City. The Pasay City RTC denied the defendants' motions for reconsideration and to admit amended answer. The hearings for the motion for summary judgment and motion to discharge the attachment were set. Defendants also filed a complaint against Judge Pedro De Leon Gutierrez and Aida Padilla, alleging malicious civil action that affected their businesses and lives.

Defendants sought to hold Judge Gutierrez personally liable for issuing the attachment despite sufficient security provided by the properties. They claimed that Judge Gutierrez approved an attachment bond with insufficient capital. They prayed for damages, expenses, attorney's fees, and the cost of suit. Judge Gutierrez moved to dismiss the complaint, and Aida Padilla filed her Answer with compulsory counterclaims.

The petitioner filed a motion for preliminary hearing on affirmative defenses, arguing that the respondents committed forum shopping. Respondents opposed, stating that they are not seeking any injunction or setting aside of the attachment in the Pasig City RTC. They seek recovery of damages from Judge De Leon for approving the bond. The Pasig City RTC dismissed the case for lack of jurisdiction, which respondents sought reconsideration. The petitioner filed a motion to set counterclaims for pre-trial conference, which was denied by the Pasig City RTC to avoid interference with the pending case in the Pasay City RTC.

Aida Padilla filed a motion for reconsideration to hear her counterclaims, but it was denied. The Court found that hearing the counterclaims would interfere with the jurisdiction and acts of another court. The petitioner raised the issue of whether a court can take cognizance of a compulsory counterclaim even if the corresponding complaint was dismissed for lack of jurisdiction. This case was separated from other petitions involving the same respondents and their transactions with Home Development Mutual Fund, as well as pending criminal complaints arising from these transactions.

ISSUES:

  1. Whether petitioner adopted the wrong mode of appeal in filing a Rule 45 petition instead of a Rule 65 petition for the dismissal of her counterclaims without prejudice.

  2. Whether the Pasig City RTC was correct in refusing to hear petitioner's counterclaims after the dismissal of respondent's complaint for lack of jurisdiction.

  3. Whether the counterclaim can survive the dismissal of the complaint.

  4. Whether petitioner's counterclaim for damages and attorney's fees based on the unfounded suit can still proceed despite the dismissal of the complaint.

  5. The main issue in this case is whether the Pasig City RTC has the authority to pass upon the validity of the writ of attachment and related orders issued by the Pasay City RTC, in ruling on the merits of the petitioner's counterclaim.

RULING:

  1. The Court held that petitioner did not adopt the wrong mode of appeal. While it is true that the remedy from the dismissal of counterclaims without prejudice is a petition for certiorari under Rule 65, the Rules do not prohibit any of the parties from filing a Rule 45 petition with the Supreme Court, in case only questions of law are raised or involved. Petitioner correctly filed a Rule 45 petition as she raised only questions of law in relation to the jurisdiction of the RTC to entertain a certiorari petition filed against the interlocutory order of the MeTC in an unlawful detainer suit.

  2. The Court ruled in favor of the petitioner. It held that a counterclaim is a distinct and independent cause of action, which, though alleged in the answer, is not part of the answer. Petitioner's counterclaim for damages raised in her answer before the Pasig City RTC is compulsory and is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim. Therefore, the Pasig City RTC was incorrect in refusing to hear petitioner's counterclaims after the dismissal of respondent's complaint for lack of jurisdiction.

  3. The counterclaim can survive the dismissal of the complaint as long as it states a sufficient cause of action.

  4. Petitioner's counterclaim for damages and attorney's fees based on the unfounded suit can still proceed despite the dismissal of the complaint because its cause of action is not eliminated by the mere dismissal of the complaint.

  5. The Supreme Court ruled in favor of the petitioner and held that the Pasig City RTC does not have the authority to pass upon the validity of the writ of attachment and related orders issued by the Pasay City RTC. The filing of a separate damage suit by the respondents is premature and constitutes forum shopping. The Supreme Court also emphasized the principle of judicial stability and the respect for the hierarchy of courts. The Orders of the Pasig City RTC are reversed and set aside, and the court is directed to proceed with the presentation of evidence in support of the petitioner's compulsory counterclaim.

PRINCIPLES:

  • The three modes of appeal from decisions of the RTC are: (1) by ordinary appeal or appeal by writ of error; (2) by a petition for review under Rule 42; and (3) by a petition for review on certiorari before the Supreme Court under Rule 45. The first mode is taken to the Court of Appeals on questions of fact or mixed questions of fact and law; the second mode is brought to the CA on questions of fact, of law, or mixed questions of fact and law; and the third mode is elevated to the Supreme Court only on questions of law.

  • A question of law is one that does not call for an examination of the probative value of the evidence presented or the truth or falsehood of the facts being admitted. The resolution of the issue must solely rest on what the law provides on the given set of circumstances.

  • A counterclaim is any claim which a defending party may have against an opposing party. It is in the nature of a cross-complaint and is a distinct and independent cause of action. Counterclaims may be either compulsory or permissive. A compulsory counterclaim arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require the presence of third parties for its adjudication.

  • Under the 1997 Rules of Civil Procedure, the dismissal of a complaint for failure to prosecute does not prejudice the defendant's right to prosecute his counterclaim.

  • The dismissal of a complaint due to the fault of the plaintiff does not preclude the defendant from pursuing his counterclaim, even if the court did not acquire jurisdiction over the complaint.

  • The jurisdiction of the court over the complaint and the counterclaim must be determined separately and independently.

  • The counterclaim may be treated as a separate action, where the defendant is the plaintiff and the plaintiff in the complaint is the defendant.

  • A counterclaim without a cause of action cannot survive.

  • The cause of action in a counterclaim is maintained by the defendant against the plaintiff.

  • The allegations that form the counterclaim are often rooted in an act or omission of the plaintiff other than the plaintiff's act of filing the complaint.

  • The dismissal or withdrawal of the complaint may not be sufficient to obviate a pending cause of action maintained by the defendant against the plaintiff.

  • Claims for damages and attorney's fees based on an unfounded suit constitute a compulsory counterclaim that must be pleaded in the same action or it shall be barred.

  • If a counterclaim is compulsory in nature and its cause of action survives the dismissal of the complaint, it should be resolved based on its own merits and evidentiary support.

  • The policy against interference with the proceedings of a co-equal court should not be strictly observed to deny the hearing of counterclaims.

  • Principle of judicial stability

  • Forum shopping

  • Hierarchy of courts

  • Power of the courts to determine whether a judgment or order is unjust

  • Competence of the courts to review a judicial order or decision

  • Requirement to make a counterclaim under threat of losing the right to claim the same ever again in any other court