TIU PO, GERARDO LEDONIO III AND EUSEBIO S. MILLAR, PETITIONERS, VS. HON. PEDRO JL. BAUTISTA, IN HIS CAPACITY AS DISTRICT JUDGE PRESIDING BRANCH III, CFI OF RIZAL, PASAY CITY AND…

Poised for resolution in
this Petition for Certiorari with Preliminary Injunction is the sole
issue of whether or not petitioners’ claim for moral, actual, compensatory and
exemplary damages, together with attorney’s fees and costs, constitutes a
compulsory counterclaim.

Private respondent, Juan Pambuan, Jr., filed a Com­plaint for Reconveyance
and Damages of approximately P400,000.00 against petitioners before the Court
of First Instance of Rizal, Pasay
City (Civil Case No. 5023-P) for an alleged wrongful sale at public auction of
a certain real property.  Petitioners
presented their Answer with a counter-claim, on account of the “malicious
and unfounded action,” for moral damages in the amount of P600,000.00; actual and compensatory damages of P100,000.00;
exemplary damages of P50,000.00; attorney’s fees of P30,000.00, plus P200.00
per appearance of counsel as representation and travelling
expenses.

On the same day that they
filed their Answer, petitioners filed an ex-parte
Motion for exemption from pay­ment of legal fees on their counterclaim alleging
that it was compulsory in nature and that under section 5(a), Rule 141, only a permissive counterclaim is
subject to payment of legal fees.

Since the Branch Clerk of
Court required peti­tioners to deposit the amount of P1,410.00
pending resolution by the Court, petitioners complied subject to refund.  That was on March 15, 1976. 
Petitioners’ Motion remained unresolved notwithstanding reiterations
made on May 5, 1978,
January 12, 1979 and on August 20, 1979. 
Eventually, on December 28, 1979, respondent Judge denied petitioners’ Motion
for refund on the ground that petitioners’
counterclaim is permissive and not compulsory. 
The reconsideration prayed for by peti­tioners was denied by respondent
Judge on August 26, 1980.  It
is these two Orders that are assailed in this Petition, to which we gave due
course on February 2, 1981.

Under section 4, Rule 9,
a counterclaim is compulsory in nature 1) if it arises out of, or is
necessarily con­nected with the transaction or occurrence that is the subject
matter of the opposing party’s claim; 2) if it does not require for its adjudication the presence of third parties over whom the Court cannot
acquire juris­diction; and 3) if the Court has jurisdiction to enter­tain the
claim.  A compulsory counterclaim is
barred if not set up.  Conversely, a counterclaim
is permissive where it has no necessary connection with the transaction or
occurrence that is the subject matter of the opposing party’s claim, or even
where there is such connection, the Court has no jurisdiction to entertain the
claim, or if it requires for its adjudication the presence of third persons
over whom the Court, cannot acquire jurisdiction.

Petitioners’ counterclaim
for damages fulfills the necessary requisites of a compulsory
counterclaim.  They are damages claimed
to have been suffered by petitioners as a consequence of the
action filed against them.  They have to
be pleaded in the same action, otherwise, petitioners
would be precluded by the judgment from invoking the same in an independent
action.  The pronouncement in Papa vs. Banaag,^[1] is in point:

“Compensatory moral and exemplary
damages, allegedly suffered by the creditor in consequence of the debtor’s
action, are also compulsory counterclaim barred by the dismissal of the
debtor’s action.  They cannot be claimed
in a subsequent action by the creditor against the debtor.”

Aside from the fact that petitioners’ counterclaim for damages
cannot be the subject of an independent action, it is the same evidence that
sustains petitioners’ counterclaim that will refute private respondent’s own
claim for damages, This is an additional factor that
characterizes petitioners’ counterclaim as compulsory.

“Defendants’ counterclaim is compulsory, not only because the
same evidence to sustain it will also refute the cause or causes of action alleged
in plaintiff’s com­plaint, but also because from its very nature, it is obvious
that the same cannot remain pending for independent adjudication by the
court.  (Section 2,
Rule 17; Lim Tanhu vs. Ramolete,
No. L-40098, August 29, 1975,
66 SCRA 426).”

In respect of attorney’s fees, it should also be held that where
a claim therefor arises out of the filing of the
complaint they, too, should be considered as in the nature of a compulsory
counterclaim.  They should be pleaded or
prayed for in the answer to the complaint in order to be recoverable,
otherwise, they would be barred.

WHEREFORE, the challenged Orders of December 28, 1979
and August 26, 1980 are
hereby set aside; the counterclaim contained in petitioners’ Answer is hereby
declared a compulsory counterclaim; and respondent Judge is hereby directed to
order the refund to petitioners of the amount of P1,410.00,
which they were compelled to pay on their compulsory counterclaim.

No costs.

SO ORDERED.

Teehankee, (Chairman), Makasiar, Fernandez, and
Guerrero, JJ., concur.

^[1]
17 SCRA 1081 (1966).