JOSE C. DE JESUS, PEDRO ALCANTARA, ET AL., PLAINTIFFS-APPELLANTS, VS. J. M. TUASON & CO., ET AL., DEFENDANTS-APPELLEES.

This is an appeal from a decision
of the Court of First Instance of Rizal.

The parties do not dispute these
antecedent facts: Telesforo Deudor claimed to own 50 quiñones
of land (140 has.) in Barrio Matalahib, Tatalon and Masambong,
Quezon City , by virtue of an informacion possessoria. This was
inherited by his son, Tomas Deudor and upon the
latter’s death, by Plorencio, Aniana, Pedro and Maria Deudor
(referred to as the Deudors). Since Telesforo’s time, the Deudors had
disposed of several portions of the land.

In 1914, J.M. Tuason & Co. (referred to as the Tuasons) obtained Original Certificate of Title No. 735
covering said land. The Deudors sued the Tuasons, seeking the annulment of the title certificate. The
result was a compromise agreement dated March 16, 1953 whereby the Deudors renounced their rights to the land, recognized the
complete and indefeasible title of the Tuasons, in
consideration of P1,201,063. Pursuant to the agreement, upon payment of
P100,000, the Tuasons
obtained possession of 20 quiñones (90 has.) of the
land. Because the balance of P1,101,063 was unpaid, the
Deudors went to court to rescind the agreement for
such non-payment. This Court, when the case reached It on appeal, ruled that
since the payment depended on the delivery of the remaining 30 quiñones of land, the obligation of the Tuasons to pay ceased when the Deudors failed to deliver the 30 quiñones and in that respect, or to that extent, the
agreement was rescinded (Deudor v. Tuason, L-13768, May 30, 1961; Deudor v. Tuason, L-20015, October
31, 1963).

In the meantime, the Tuasons had instituted ejectment
suits against occupants of the lands covered by their Torrens title. These occupants claimed
to have acquired the lands by purchase from the Deudors and alleged that under the compromise agreement the
Tuasons agreed to assume the obligations of the Deudors with them to the extent of acknowledging their
rights to buy or continue paying the value of their lands as per contract with
the Deudors. The Tuasons
however contended that the compromise agreement called for execution of new
sales agreements.

The plaintiffs here, Jose de
Jesus, et al., filed an amended complaint on December 5, 1962, alleging inter
alia that they purchased their lots from the Deudors and have either fully or partially paid; that on
February 28, 1957 CFI of Rizal Judge Hermogenes Caluag, in Deudor v. Tuason, C.C. No. Q-135,
ruled, subsequently upheld by the Court of Appeals on June 27, 1961, that the
purchasers from the Deudors, named in the list
attached to the compromise agreement, were entitled to continue their purchase
of lots they occupy and shall not be ejected therefrom
nor shall their constructions be demolished until final determination of their
rights; that on the basis of these orders, the plaintiffs, being “identically
and similarly situated,”[*] have the right to be
heard on their claim of ownership; that they tend to be damaged and prejudiced
by the ejectment suits filed by the Tuasons unless the court issues a writ of preliminary
injunction in their favor; and that they are willing to pay for their lots
should the court rule in their favor. They prayed the court to declare their
right to buy their lots as per compromise agreement; to issue a writ of
preliminary injunction to stop the threatened demolition of their houses; and to
grant them P500 as attorney’s fee, plus costs.

The defendant Tuasons answered on December 11, 1962, alleging as
affirmative defenses that (1) the cause of action is barred by prior judgment;
(2) the complaint states no cause of action; (3) the court has no jurisdiction
to interfere by injunction and stop the execution of decisions of Salas IV and V
of the same CPI; and (4) the plaintiffs are misjoined.

Subsequently, defendants moved to
dismiss, relying on their affirmative defenses.

On June 10, 1963, the Court of
First Instance ruled in its decision that the compromise agreement upon which
the plaintiffs’ cause of action depends having already been rescinded and set
aside by the Supreme Court in Deudor v. Tuason, L-13768, May 30, 1961, the action should be, as it
was thereby, dismissed.

The plaintiffs appealed directly
to Us from the decision of dismissal.

It can readily be seen from the
amended complaint that the plaintiffs depend on the compromise agreement for the
enforcement of their alleged rights. The situation herein is not materially
different from that in Tuason v. Sanvictores, L-16836, January 30,
1962 and
in Gonzales v. Tuason, L-21692, December 29, 1965 , where the alleged Deudor vendees, threatened with eviction by ejectments suits brought by the Tuasons, filed separate actions to enforce their claimed
preferential rights under the same compromise agreement. In said previous cases,
We held that this preferential right should be set up
in the possessory actions, it being in the nature of a
compulsory counterclaim therein, otherwise the same would be barred, pursuant to
Section 6 of Rule 10 – now Section 4 of Rule 9 – of the Rules of Court:

“SEC.
6. Counterclaim not set up barred. – A
counterclaim not set up shall be barred 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 and does not require for its adjudication the presence of
third parties of whom the court cannot acquire jurisdiction.”

It plainly appears that the
asserted right of the plaintiffs herein is necessarily connected with the
subject-matter of the afore-stated possessory actions
of the Tuasons against them. And it is not contended
that there are necessary third parties beyond the reach of the court’s process.
The plaintiffs, as mentioned earlier, alleged in their amended complaint,
particularly paragraph 8 thereof, that ejectment suits
filed by the Tuasons threaten their eviction. Nothing
in the records before Us, except for the claim of
defendants that the possessory actions have already
become final, indicates whether the possessory suits
have indeed become final or are still pending. It is clear, though, that, as
stated, plaintiffs’ action here is in the nature of a compulsory counterclaim in
those possessory actions. As compulsory counterclaims,
therefore, these may not be set up in subsequent actions such as this one. To
avoid, multiplicity of suits, they should rather be asserted in the possessory actions, If the same had
not yet resulted in final and executory judgment.

WHEREFORE, the decision appealed from is
hereby affirmed, with costs against appellants.

SO
ORDERED.

Concepcion, C.J., Reyes, J. B. L., Dizon, Regala, Makalintal, Zaldivar, Sanchez
and Ruiz Castro, JJ., concur.

[*] Record on Appeal, p. 152.