Pentacapital Investment Corp. v. Mahinay
REITERATIONFacts
The Antecedents: Pentacapital Investment Corporation (Petitioner) filed a complaint for a sum of money against Makilito B. Mahinay (Respondent) based on two promissory notes for loans totaling ₱1,936,800.00. Respondent admitted signing the notes but claimed they were not intended as evidence of indebtedness and were subject to a condition that did not occur. Respondent also claimed he was counsel for Ciudad Real Development Inc. (CRDI) and was entitled to a commission from the sale of Molino Properties by CRDI to Pentacapital Realty Corporation (Pentacapital Realty), a subsidiary of Petitioner. Respondent had previously filed an action for Specific Performance/Preliminary Mandatory Injunction against Pentacapital Realty for this commission, which was dismissed with prejudice. Respondent then sought to file a supplemental compulsory counterclaim in the present case against Petitioner for his commission, invoking the doctrine of piercing the corporate veil, alleging Petitioner and Pentacapital Realty are the same entity. Procedural History: The Regional Trial Court (RTC) allowed Respondent to file the supplemental compulsory counterclaim. After trial, the RTC dismissed Petitioner's complaint and granted Respondent's counterclaims, ordering Petitioner to pay Respondent sums related to his commission. The Court of Appeals (CA) affirmed the RTC decision. Petitioner filed two petitions for review on certiorari with the Supreme Court. The Petition: Petitioner assails the CA's decisions, arguing that Respondent's counterclaim is barred by res judicata, that piercing the corporate veil is improper, that Pentacapital Realty is an indispensable party, and that Petitioner is not liable for Respondent's claims. Petitioner also argues that Respondent's supplemental counterclaim is actually a third-party complaint requiring docket fees and that Petitioner itself is not guilty of forum shopping.
Issue(s)
Whether the admission of Respondent's supplemental compulsory counterclaim was proper. Whether Respondent's counterclaim is barred by res judicata. Whether Petitioner is guilty of forum shopping. Whether Respondent is liable to Petitioner for the loan amounts evidenced by the promissory notes, and if so, to what extent, considering the stipulated interest and penalties. Whether Petitioner can be held liable on Respondent's counterclaim and supplemental counterclaim.
Ruling
The petitions are GRANTED. The Decisions and Resolutions of the Court of Appeals are REVERSED and SET ASIDE. Respondent Makilito B. Mahinay is ordered to pay Petitioner Pentacapital Investment Corporation ₱1,936,800.00 plus 12% interest per annum and 12% per annum penalty charge, starting February 17, 1997. He is likewise ordered to pay 10% of his outstanding obligation as attorney's fees.
Ratio Decidendi
On the Admission of Respondent's Supplemental Compulsory Counterclaim: The Supreme Court ruled that the admission of Respondent's supplemental compulsory counterclaim was improper. Under Section 6 of Rule 10 of the Rules of Court, a supplemental pleading must set forth transactions, occurrences, or events that have happened since the date of the pleading sought to be supplemented. In this case, the alleged obligation of Petitioner to Respondent for his commission already existed and was known to Respondent at the time he filed his original Answer with Compulsory Counterclaim. Therefore, it could not be incorporated via a supplemental pleading, as it did not arise from subsequent events. The Court emphasized that supplemental pleadings must be founded on the same cause of action and relate to matters arising after the filing of the original pleading. On Respondent's Counterclaim and Supplemental Counterclaim (Res Judicata): The Supreme Court ruled that Respondent's counterclaim and supplemental counterclaim were barred by res judicata. Respondent had previously filed an action for his commission against Pentacapital Realty, which was dismissed with prejudice by the RTC of Cebu City. The RTC-Cebu had definitively concluded that Pentacapital Realty was not privy to the contract concerning the commission and that CRDI, not Pentacapital Realty, agreed to pay the commission. Since Petitioner's alleged liability stemmed from its relationship with Pentacapital Realty, the final and executory judgment of the RTC-Cebu regarding the non-liability of Pentacapital Realty should bind Petitioner. The Court reiterated that absolute identity of parties is not required for res judicata if there is an identity of interest and relief sought. On Forum Shopping: The Supreme Court disagreed with Respondent's contention that Petitioner was guilty of forum shopping. The Court explained that forum shopping involves filing multiple cases based on the same cause of action and prayer, or creating the possibility of conflicting decisions. In this instance, G.R. No. 171736 assailed the propriety of admitting the supplemental counterclaim (an interlocutory order), while G.R. No. 181482 appealed the decision on the merits. These involved distinct issues, and thus, no forum shopping was committed. On Petitioner's Complaint for Sum of Money and the Excessive Interest and Penalty Charges: The Supreme Court found that Respondent is liable to Petitioner for the loan amounts evidenced by the promissory notes. Respondent's contention that the notes lacked consideration because he did not receive the loan proceeds and that they were subject to a condition was insufficient to overcome the presumption of consideration under Article 1354 of the Civil Code and Section 3, Rule 131 of the Rules of Court. The Court held that the bare, uncorroborated, and self-serving assertion of lack of consideration is not enough to disprove the existence of consideration, which must be proven by a preponderance of evidence. The Court noted that Respondent, being a lawyer and law professor, is presumed to know the legal effects of promissory notes and that any collateral agreements should have been documented. While upholding Respondent's liability on the promissory notes, the Supreme Court found the stipulated interest rate of 25% and penalty charge of 3% per month (36% per annum) to be excessive and unconscionable. Citing Article 1229 of the Civil Code, the Court reduced the interest rate to a reasonable 12% per annum and the penalty charge to 1% per month or 12% per annum. The stipulated attorney's fees of 25% were also reduced to 10% as liquidated damages, deemed unconscionable under Article 2227 of the Civil Code. On Whether Petitioner can be held liable on Respondent's counterclaim and supplemental counterclaim: The Supreme Court ruled that Respondent's counterclaim and supplemental counterclaim were barred by res judicata. Respondent had previously filed an action for his commission against Pentacapital Realty, which was dismissed with prejudice by the RTC of Cebu City. The RTC-Cebu had definitively concluded that Pentacapital Realty was not privy to the contract concerning the commission and that CRDI, not Pentacapital Realty, agreed to pay the commission. Since Petitioner's alleged liability stemmed from its relationship with Pentacapital Realty, the final and executory judgment of the RTC-Cebu regarding the non-liability of Pentacapital Realty should bind Petitioner. The Court reiterated that absolute identity of parties is not required for res judicata if there is an identity of interest and relief sought.
Main Doctrine
A supplemental pleading must be based on matters arising subsequent to the filing of the original pleading related to the claim or defense presented therein, and founded on the same cause of action. Supplemental pleadings must state transactions, occurrences or events which took place since the time the pleading sought to be supplemented was filed. The presumption of consideration for a contract, such as a promissory note, cannot be overcome by bare, uncorroborated, and self-serving assertions of lack of consideration; it must be proven by a preponderance of evidence. The principle of res judicata bars the relitigation of issues that have been conclusively settled by a final and executory judgment.