Philippine National Bank v. Median Container Corporation
REITERATIONFacts
The Antecedents: Respondents Median Container Corporation and Eldon Industrial Corporation (collectively, respondents) filed a complaint for Reformation of Instrument against Philippine National Bank (PNB). Respondents alleged that they availed of a PHP 50 Million credit line from PNB, but instead of loan documents, PNB made them sign trust receipts that did not reflect their real agreement, allegedly to coerce them into paying under threat of criminal prosecution for estafa. Procedural History: PNB filed an Answer with Counterclaim, arguing that the trust receipts reflected the true agreement and that respondents were attempting to evade their obligations. PNB sought to implead Spouses Carlos and Fely Ley, officers of Median, to hold them liable for PHP 31,059,616.29. The Regional Trial Court (RTC) dismissed PNB's counterclaim without prejudice and denied its motion to implead Spouses Ley, ruling that the counterclaim was permissive and PNB failed to pay the required docket fees and file a certificate of non-forum shopping. The Court of Appeals (CA) affirmed the RTC's ruling, finding no grave abuse of discretion. The Petition: PNB filed a Petition for Review on Certiorari before the Supreme Court, assailing the CA's decision. PNB maintained that its counterclaim was compulsory, as it was necessarily connected with the respondents' complaint and required the same evidence. PNB also argued that the RTC should have directed it to pay the docket fees instead of dismissing the counterclaim outright and that Spouses Ley were real parties-in-interest. Respondents asserted that the counterclaim was permissive, justifying its dismissal for non-payment of docket fees.
Issue(s)
Whether the Court of Appeals committed reversible error in upholding the Regional Trial Court's ruling that dismissed Philippine National Bank's counterclaim and motion to implead Spouses Carlos and Fely Ley. Whether PNB's counterclaim for payment of obligation under the trust receipts is compulsory or permissive. Whether the Regional Trial Court committed grave abuse of discretion in dismissing PNB's permissive counterclaim for failure to pay docket fees and in denying its motion to implead Spouses Ley.
Ruling
The Petition is denied. The Decision of the Court of Appeals affirming the Regional Trial Court's dismissal of PNB's counterclaim and motion to implead Spouses Ley is affirmed.
Ratio Decidendi
On the Court of Appeals' decision: The Court ruled that the Court of Appeals did not commit reversible error in upholding the Regional Trial Court's rulings. This is based on the analysis of the nature of the counterclaim and the motion to implead, as detailed below. On whether PNB's counterclaim is compulsory or permissive: The Court held that PNB's counterclaim for collection of sum of money is merely permissive. The issues in the main case, concerning the reformation of the instrument to reflect a loan agreement, are entirely different from the issues in the counterclaim, which pertain to whether respondents secured an obligation, the total amount due, and their refusal to pay. The evidence required for each claim also differs significantly; reformation requires proof of the parties' real intent, while collection requires proof of the unpaid obligation under the trust receipts. Furthermore, the causes of action arose from different occurrences, and the outcome of the reformation case would not bar a separate collection action. The Court reiterated that a compulsory counterclaim arises out of, or is necessarily connected with, the transaction or occurrence that is the subject matter of the opposing party's claim, and requires substantially the same evidence. Since these conditions were not met, the counterclaim was deemed permissive. On the dismissal of the counterclaim for non-payment of docket fees and the denial of the motion to implead Spouses Ley: As the counterclaim was determined to be permissive, it required the payment of docket fees and a certificate of non-forum shopping as initiatory pleadings. PNB failed to comply with these requisites within the reglementary period. The Court emphasized that failure to pay docket fees for a permissive counterclaim deprives the trial court of jurisdiction over it. PNB's continued assertion that the counterclaim was compulsory, even after the RTC's ruling, and its failure to attempt compliance with the requisites for a permissive counterclaim, further supported the dismissal. The Court noted that PNB only claimed a lack of opportunity to pay after the CA dismissed its petition. The Court also ruled that since PNB's motion to implead Spouses Ley was anchored on its permissive counterclaim, the dismissal of the counterclaim logically carried the denial of the motion to implead. The liability of Spouses Ley, if any, would stem from the counterclaim, which was found to be permissive and subsequently dismissed for lack of jurisdiction due to non-payment of docket fees. Therefore, the RTC and CA did not commit reversible error in denying the motion to implead.
Main Doctrine
A counterclaim is permissive if it does not arise out of or is not necessarily connected with the transaction or occurrence which is the subject matter of the opposing party's claim, and requires different evidence and raises different issues. Failure to pay docket fees for a permissive counterclaim deprives the court of jurisdiction over it.