Cruz-Agana v. Serrano Enterprises
REITERATIONFacts
The Antecedents: Petitioner Estherlita Cruz-Agana filed a Complaint for annulment of title against respondent B. Serrano Enterprises, Inc., claiming sole ownership of a lot based on inheritance. Petitioner alleged the lot was fraudulently sold to Eugenio Lopez, Jr., who then transferred it to respondent. Procedural History: Respondent filed an Answer with a compulsory counterclaim. Petitioner moved to dismiss the counterclaim for lack of a certificate of non-forum shopping. The trial court initially denied the motion, reasoning that compulsory counterclaims are excluded from the requirement. Upon reconsideration, the trial court dismissed the counterclaim. However, after respondent's motion for reconsideration, arguing that Administrative Circular No. 04-94 does not apply to compulsory counterclaims per Santo Tomas University Hospital v. Surla, the trial court reversed itself again and recalled the dismissal order. The Petition: Petitioner filed a petition for certiorari under Rule 65, seeking to reverse the trial court's order recalling the dismissal of the counterclaim.
Issue(s)
WHETHER THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REFUSING TO DISMISS RESPONDENT'S COUNTERCLAIM.
Ruling
The petition lacks merit. The Supreme Court affirmed the Order of the Regional Trial Court, Branch 77, Malolos, Bulacan, dated 4 June 1999, which recalled the Order dated 25 May 1999 dismissing the compulsory counterclaim of respondent B. Serrano Enterprises, Inc.
Ratio Decidendi
On WHETHER THE TRIAL COURT COMMITTED GRAVE ABUSE OF DISCRETION IN REFUSING TO DISMISS RESPONDENT'S COUNTERCLAIM: The Supreme Court held that the petition lacks merit, reiterating its ruling in Santo Tomas University Hospital v. Surla. The Court clarified that Administrative Circular No. 04-94, which requires a certificate of non-forum shopping, is intended primarily for initiatory pleadings or incipient applications asserting a claim for relief. A compulsory counterclaim, by its nature, is auxiliary to the main proceedings and derives its support therefrom, thus it can only be appropriately pleaded in the answer and not independently. The Court emphasized that the distinction between a compulsory and a permissive counterclaim is vital in the application of the circular. A compulsory counterclaim arises out of, or is necessarily connected with, the same transaction or occurrence that is the subject matter of the plaintiff's complaint, and it will be barred if not set up in the answer. In this case, the respondent's counterclaim clearly arose from the filing of the petitioner's complaint and was so intertwined with the main case that it could not proceed independently, making it compulsory. Therefore, the lack of a certificate of non-forum shopping for a compulsory counterclaim is immaterial, and the trial court did not commit grave abuse of discretion in refusing to dismiss it.
Main Doctrine
A compulsory counterclaim does not require a certificate of non-forum shopping as it is not an initiatory pleading.