Carpio v. Rural Bank of Sto. Tomas
REITERATIONFacts
The Antecedents: Spouses Rodolfo Carpio and Remedios Orendain (petitioners) obtained a loan from Rural Bank of Sto. Tomas (Batangas), Inc. (respondent) and executed a real estate mortgage over their property. Subsequently, the respondent bank initiated an extra-judicial foreclosure of the mortgage. Petitioners alleged that the foreclosure sale was conducted without proper publication and notice, and without affording them an opportunity to redeem the property. They filed a complaint for annulment of foreclosure sale and damages. Procedural History: Respondent bank filed an Answer with Counterclaim. Petitioners moved to dismiss the counterclaim for lack of a certification against forum shopping. The Regional Trial Court (RTC) denied the motion, holding that a compulsory counterclaim is not an initiatory pleading and thus does not require such certification. The RTC denied petitioners' motion for reconsideration. Petitioners elevated the matter to the Court of Appeals (CA) via a Petition for Certiorari, alleging grave abuse of discretion by the RTC. The CA affirmed the RTC's twin orders. Petitioners' motion for reconsideration was denied. Hence, the instant petition. The Petition: Petitioners seek the reversal of the CA's decision, arguing that the RTC and CA gravely abused their discretion in not dismissing the respondent bank's counterclaim for failure to attach a certification against forum shopping.
Issue(s)
Whether the respondent bank's compulsory counterclaim requires a certification against forum shopping. Whether the RTC and CA committed grave abuse of discretion in denying the motion to dismiss the counterclaim, considering the nature of the counterclaim.
Ruling
The petition is DENIED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 58995 are AFFIRMED. Costs against petitioners.
Ratio Decidendi
On the requirement of a certification against forum shopping for a compulsory counterclaim: The Court held that the requirement for a certification against forum shopping applies only to an "initiatory pleading." The respondent bank's Answer with Counterclaim was deemed a responsive pleading, not an initiatory pleading, because its claim for relief was derived from and necessarily connected with the main action. The rule on certification against forum shopping does not contemplate a defendant's claim for relief that arises from the plaintiff's complaint. The rule explicitly states that upon failure of the plaintiff to comply with the certification requirement, the "dismissal of the case without prejudice" is directed, not the dismissal of the respondent's counterclaim. Therefore, the respondent bank's counterclaim, being compulsory, did not require a certification against forum shopping. On the alleged grave abuse of discretion: Since the respondent bank's counterclaim was not an initiatory pleading, the RTC did not err in denying the motion to dismiss. Consequently, the Court of Appeals did not commit grave abuse of discretion in affirming the RTC's orders. The petition lacked merit as it was based on a misinterpretation of the procedural rules regarding certifications against forum shopping.
Main Doctrine
A counterclaim that is compulsory in nature, being a mere response to the main action and necessarily connected therewith, is not considered an initiatory pleading that requires a certification against forum shopping.