Rule 6
Case Summary
01 | Financial The Union of Soviet Socialist Republic
Building Corp. v. (USSR) was the owner of a residential lot in
FPA (2000( | G.R. Forbes Park, Makati. USSR engaged the
No. 133119 services of Financial Building for the
construction of a multi-level office and staff
apartment building which would be used by
the Trade Representative of the USSR. Due
to the USSRs representation, Forbes
authorized its construction. Forbes reminded
USSR of existing regulations authorizing
only the construction of a single family
residential building. Despite this, Financial
Building submitted to the Makati
Government a building plan for the
construction of a multi-level apartment
building, which was a different building plan
submitted to Forbes. Forbes discovered the
second plan and did an ocular inspection
where it confirmed the violation of the deed
of restrictions. Thus, it enjoined further
construction work and suspended all permits
of entry of the staff and materials of
Financial Building. The parties attempted to
meet to settle their differences but failed to.
Financial Building filed the RTC Makati a
complaint for Injunction and Damages with a
prayer for Preliminary Injunction against
Forbes. The latter in turn filed a motion to
dismiss on the ground that Financial
Building had no cause of action because it
was not a real-party-in-interest.
RTC: issued a writ of preliminary injunction
against Forbes.
CA: nullified it and dismissed the complaint.
After the Financial Buildings case, Forbes
sought to vindicate its rights by filing with the
RTC a complaint for Damages against
Financial Building. (3M as actual damages,
1M as moral damages, 1M as exemplary
damages and 1M as attorney’s fees)
RTC: granted.
CA: affirmed.
An appeal was made to the SC contending
that the CA erred in not dismissing the
complaint filed by Forbes since the alleged
claims and causes of action are barred by
prior judgment and are deemed waived for
its failure to interpose the same as
compulsory counterclaims in the previous
civil case.
WN the CA erred in not dismissing the
complaint for damages - YES
02 | BDO v. CA, The private respondent Locsins entered into
(2005) G.R. No. a Term (TLA) and Credit (CLA) Line
160354, Agreement obligations with Petitioner bank,
BDO. Having failed to comply with the CLA,
the BDO filed before the RTC an application
for an extrajudicial foreclosure of the
mortgaged properties against the
respondents. Subsequently, the Locsins
filed a complaint against BDO for Specific
Performance, Tort and Damages with
Prayer for the Issuance of a TRO and a Writ
of Preliminary Injunction. The RTC denied
the issuance of a TRO.
Ruling + Doctrine
The instant case is barred due to Forbes Parks failure to set it up as a compulsory
counterclaim in the previous civil case. A compulsory counterclaim is one which
arises out of or is necessarily connected with the transaction or occurrence that is
the subject matter of the opposing party’s claim. If it is within the jurisdiction of the
court and it does not require for its adjudication the presence of third parties over
whom the court cannot acquire jurisdiction, such compulsory counterclaim is
barred if it is not set up in the action filed by the opposing party. A compulsory
counterclaim cannot be the subject of a separate action but it should instead be
asserted in the same suit involving the same transaction or occurrence, which gave
rise to it. To determine WN a counterclaim is compulsory or not, the following
tests are devised:
(1) are the issues of fact or law raised by the claim and counterclaim largely
the same?
2) Would res judicata bar a subsequent suit on defendants claim absent the
compulsory counterclaim rule?
(3) Will substantially the same evidence support or refute plaintiff’s claim as
well as defendants counterclaim?
(4) Is there any logical relation between the claim and the counterclaim?
Undoubtedly, the prior civil case and the instant case arose from the same
occurrence the construction work done by Financial Building on the USSRs lot in
Forbes Park Village. The issues of fact and law in both cases are identical. The
factual issue is whether the structures erected by Financial Building violate Forbes
Parks rules and regulations, whereas the legal issue is whether Financial Building,
as an independent contractor working for the USSR, could be enjoined from
continuing with the construction and be held liable for damages if it is found to have
violated Forbes Parks rules.Moreover, the two cases involve the same parties. The
aggregate amount of the claims in the instant case is within the jurisdiction of the
RTC, had it been set up as a counterclaim in the previous case.
More importantly, (Doctrine): Since Forbes filed a MTD, its existing compulsory
counterclaim at that time is now barred. A compulsory counterclaim is auxiliary to
the proceeding in the original suit and derives its jurisdictional support therefrom. A
counterclaim presupposes the existence of a claim against the filing party filing the
counterclaim. Thus, the filing of a MTD and the setting up of compulsory
counterclaim are incompatible remedies. In the event that a defending party has a
ground for dismissal and a compulsory counterclaim at the same time, he must
choose only one remedy. If he decides to file a motion to dismiss, he will lose his
compulsory counterclaim. But if he opts to set up his compulsory counterclaim, he
may still plead his ground for dismissal as an affirmative defense in his answer.
It bears noting that when BDO filed its Answer with Counterclaim to the Locsins’
complaint on September 11, 1998, the Real Estate Mortgages covering the 1st
TLA and the CLA had not been extrajudicially foreclosed, the extra-judicial
foreclosure having taken place subsequent thereto or on September 23, 1998.
It bears noting too that until after the Locsins allegedly refused and failed to settle
the alleged deficiency amount of their outstanding obligation, despite BDO’s
February 5, 1999 letter of demand sent to the Locsins on February 9, 1999,
petitioner’s cause of action had not arisen. BDO could not, therefore, have set its
claim, assuming arguendo that it is, a compulsory counterclaim when it filed on
September 11, 1998 its Answer with Compulsory Counterclaim to the Locsins’
complaint.
 A Supplemental Complaint was filed by the
respondent. They repleaded in toto the
allegations in their Complaint and
additionally alleged that the BDO proceeded
with the public auction of the properties
covered by the mortgage in the CLA
“contrary to law.” The BDO admitted that the
public auction took place but it denied that it
was contrary to law.
More than eight months after the
respondents filed their Supplemental
Complaint, BDO filed a complaint against
them before the RTC for Collection of Sum
of Money. To such, the respondents filed a
Motion to Dismiss on the ground that it
should have been raised as compulsory
counterclaim in their complaint and by failing
to raise it as such, it is now “barred by the
rules.”
RTC: denied the MTD; MR also denied.
CA: reversed RTC ruling
SC: revered CA ruling and remanded the
case to continue with the dispatch of the civil
case
W/N BDO’s Complaint for Collection of
Sum of Money should have been raised
as a Compulsory Counterclaim in
Locsin’s Complaint for Specific
Performance, Damages, and Nullification
of Public Sale - NO
03 | Asian
Construction v Monark Equipment Corporation (MEC) filed
CA (2005) | G.R. a Complaint for sum of money with damages
No. 160354 against Asian Construction and
Development Corp. (ACDC) with the RTC of
QC.
MEC alleged that ACDC leased from MEC
various equipment on different periods to
which ACDC failed to pay rentals. MEC
prayed that ACDC be ordered to pay the
total amount of the principal obligations
amounting to php5,071,335.86.
ACDC filed a motion to file and submit
answer with third-party complaint against
Becthel Overseas Corporation. In its
answer, ACDC admitted its indebtedness to
MEC but alleged the following special and
affirmative defenses: It incurred said amount
of obligation with MEC but Becthel failed
and refused to pay its overdue obligation in
connection with the leased equipment;
Equipment leased were all used in the
construction project of Becthel. ACDC was
not paid of its services that resulted to the
non-payment of rentals of the leased
equipment
In ACDC’s third-party complaint against
Becthel, it alleged that: Becthel contracted
the services of ACDC to do a construction
project. It rented the equipment from MEC; It
complied with its obligations with Becthel but
the latter did not pay despite repeated
demands; Becthel needs to be impleaded in
this case for contribution, indemnity,
subrogation or other reliefs to off-set or to
pay the money claim of MEC amounting to
The counterclaim must be existing at the time of filing the answer, though not at the
commencement of the action for under Section 3 of the former Rule 10, the
counterclaim or cross-claim which a party may aver in his answer must be one
which he may have "at the time" against the opposing party.
That phrase can only have reference to the time of the answer. Certainly a
premature counterclaim cannot be set up in the answer. This construction is not
only explicit from the language of the aforecited provisions but also serves to
harmonize the aforecited sections of Rule 10, with section 4 of the same rule which
provides that "a counterclaim . . . which either matured or was acquired by a party
after serving his pleading may, with the permission of the court, be presented as a
counterclaim . . . by supplemental pleading before judgment.
A party who fails to interpose a counterclaim although arising out of or is
necessarily connected with the transaction or occurrence of the plaintiff’s suit but
which did not exist or mature at the time said party files his answer is not
thereby barred from interposing such claim in a future litigation.
As such, the BDO’s claim is merely permissive. While BDO could have set up in its
Supplemental Answer its claim for recovery of sum of money, again assuming
arguendo that it is a Compulsory Counterclaim, the setting up of such after-
acquired counterclaim, is merely permissive, not compulsory.
RULING:
Claims of MEC against ACDC are different and separate from those between
ACDC and Becthel. There is no showing in the proposed third-party complaint that
MEC knew or approved the use of the leased equipment by ACDC for the
construction project of Becthel. The barefaced fact that ACDC used the leased
equipment from MEC in connection with the project of Becthel does not provide a
substantial basis for the filing of a third-party complaint. There is no causal
connection between the claim of of MEC and the failure of Becthel to pay the
balance of its account to ACDC.
DOCTRINES:
Third-party complaint –
● Permit a defendant to assert an independent claim against a third-party
● It is a rule of procedure and does not create a substantial right
● Does not have to show with certainty that there will be recovery against
the third-party complaint; possibility of recovery is sufficient
● In determining sufficiency, the allegations in the original complaint and
third-party complaint must be examined
● There must be a causal connection between the claim of the plaintiff and
the claim of the defendant against the third-party defendant
Determining causal connection:
a) Whether it arises out of the same transaction on which the plaintiff’s
claim is based; or whether the third-party claim is connected with the
plaintiff’s claim;
b) whether the third-party defendant would be liable to the plaintiff or
defendant for all or part of the plaintiff’s claim against the original
defendant, although the third-party defendant’s liability arises out of
another transaction; and
c) whether the third-party defendant may assert any defenses which the
third-party plaintiff has or may have to the plaintiff’s claim.
The defendant may implead another as third-party defendant:
 Php 456,666.67.
MEC opposed: ACDC already admitted its
principal obligation to MEC and that the
transaction between ACDC and Becthel
were independent.
MEC then filed a Motion for Summary
Judgment to which ACDC opposed.
MEC alleged that the demand of ACDC in its
special and affirmative defenses partook of
the nature of a negative pregnant
RTC Ruling: Denied ACDC’s motion for
leave to file a third-party complaint and
granted MEC’s motion for judgment on the
pleadings
CA Ruling: Affirmed RTC
W/N a third-party complaint is proper? No
04 | Philtranco Paras, while on his way home, boarded a
Services v. bus owned and operated by Inland
Paras (2012) | Trailways, Inc. and driven by its driver
GR No. 161909 Coner. A vehicular accident happened
involving Inland bus and another bus owned
and operated by Philtranco Service
Enterprises, Inc. As a result of this, Paras
suffered injuries. Paras filed a complaint for
damages based on breach of contract of
carriage against Inland. Inland, on the other
hand, filed a third party complaint against
Philtranco and its driver, Apolinar Miralles. It
sought for exoneration of its liabilities to
Paras, asserting that the latter’s cause of
action should be directed against Philtranco
considering that the accident was caused by
Miralles’ lack of care, negligence and
reckless imprudence.
RTC found out that there’s no negligence on
the part of Inland thus it is not guilty of
breach of contract of carriage. RTC ordered
Philtranco and its driver to solidarily pay
Paras the damages he suffered.
CA affirmed.
Philtanco contends that Paras could not
recover moral damages DIRECTLY from it
considering that it was only being
subrogated for Inland. It says that its liability
only attaches once Inland is also adjudged
liable. Moreover, it argues that awarding
moral damages to Paras despite the fact
that the complaint had been anchored on
breach of contract of carriage is improper.
WHETHER PARAS COULD RECOVER
MORAL DAMAGES DIRECTLY FROM
PHILTRANCO CONSIDERING THAT IT
WAS ONLY BEING SUBROGATED FOR
INLAND –YES
01 | Munsalud v.
NHA (2008) | GR Petitioner Munsalud is the daughter and
NO. 167181 compulsory heir of Bulado. Bulado was
awarded by the NHA a lot under the “Land
a) On an allegation of liability of the latter to the defendant for contribution,
indemnity, subrogation or any other relief;
b) On the ground of direct liability of the third-party defendant to the plaintiff;
or
c) The liability of the third-party defendant to both the plaintiff and
defendant
The requisites for a third-party action are:
firstly, that the party to be impleaded must not yet be a party to the action;
secondly, that the claim against the third-party defendant must belong to the
original defendant; thirdly, the claim of the original defendant against the third-party
defendant must be based upon the plaintiff’s claim against the original defendant;
and, fourthly, the defendant is attempting to transfer to the third-party defendant
the liability asserted against him by the original plaintiff.
Paras' cause of action against Inland (breach of contract of carriage) did not need
to be the same as the cause of action of Inland against Philtranco and its driver
(tort or quasi-delict) in the impleader. It is settled that a defendant in a contract
action may join as third-party defendants those who may be liable to him in tort for
the plaintiffs claim against him, or even directly to the plaintiff. In an action for
breach of contract of carriage commenced by a passenger against his common
carrier, the plaintiff can recover damages from a third-party defendant brought into
the suit by the common carrier upon a claim based on tort or quasi delict. The
liability of the third-party defendant is independent from the liability of the common
carrier to the passenger.
Section 16, Rule 6 of the Revised Rules of Court defines a third party complaint as
a "claim that a defending party may, with leave of court, file against a person not a
party to the action, called the third party defendant, for contribution,
indemnification, subrogation, or any other relief, in respect of his opponent’s claim."
Under this Rule, a person not a party to an action may be impleaded by the
defendant either (a) on an allegation of liability to the latter; (b) on the ground of
direct liability to the plaintiff-; or, (c) both (a) and (b).
The situation in (a)is covered by the phrase "for contribution, indemnity or
subrogation;" while (b) and (c) are subsumed under the catch all "or any other
relief, in respect of his opponent’s claim."
The case at bar is one in which the third party defendants are brought into the
action as directly liable to the plaintiffs. It is not indispensable in the premises that
the defendant be first adjudged liable to plaintiff before the third-party defendant
may be held liable to the plaintiff, as precisely, the theory of defendant is that it is
the third party defendant, and not he, who is directly liable to plaintiff. The situation
contemplated by appellants would properly pertain to situation (a) above wherein
the third-party defendant is being sued for contribution, indemnity or subrogation,
or simply stated, for a defendant's "remedy over".
Rule 7
A form is the methodology used to express rules of practice and procedure. It
relates to technical details.
 for the Landless” program. When Bulado
died, petitioner assumed the obligation of
paying the monthly amortizations. Petitioner
was allowed to occupy the lot.
When petitioners finally paid in full, the
official receipt was annotated as “full
payment”. Petitioners demanded NHA to
issue a deed of sale and title to the property.
NHA refused. After several demands,
petitioners filed a case for Mandamus before
the RTC.
RTC dismissed the mandamus case saying
that the complaint was insufficient in form
and substance there being no reference to
any law which respondent is mandated to by
reason of its office to fulfill the obligation. CA
affirmed.
WON the CA erred in affirming the RTC’s
ruling that the complaint was insufficient
in form and substance. - YES
02 | Midland Mid-Pasig Land and ECRM, 1 hectare, 3
Pasig (2010) | months, for Home & Garden Exhibition
GR 162924 Fair. Mid-Pasig Land is the registered owner
of a piece of land in Pasig, bounded by
PARTS OF A Meralco Ave, Ortigas Ave, Doa Julia Vargas
PLEADING Ave, and Valle Verde Subdivision. On Dec.
6, 1999, Mid-Pasig Land, represented by
Officers in corp Ronaldo Salonga, and ECRM Enterprises,
without need for represented by Mario P. Tablante, executed
board reso an agreement where Mid-Pasig Land would
lease to ECRM approx 1 hectare for 3
Facts Heavy; months, for the staging area for Home and
Very Important Garden Exhibition Fair.
Case, according
to GSA When lease expired:
1. Tablante (ECRM) assigned rights
to agreement to Rockland
2. Mid-Pasig discovered Tablante
leased property to MC Home
Depot,
3. Mid-Pasig demanded MC Home
Depot to vacate property.
On March 6, 2000, date of the expiration of
the Lease Agreement, Tablante assigned
all his rights and interests under the said
agreement to Laurie M. Litam and/or
Rockland Construction Company, Inc.
under a Deed of Assignment of the same
date. Mid-Pasig Land eventually learned that
Tablante had executed a Contract of
Lease with MC Home Depot, Inc. on
A pleading is sufficient in form when it contains the following:
a. A Caption
b. The Body
c. Signature and Address
d. Verification
e. A Certification of Non-Forum Shopping
f. An Explanation (in the case the pleading is not filed personally)
g. Proof of Service (all pleadings not initiatory in nature.
Likewise, for all other pleadings, not initiatory in nature, there must be:
A Proof of Service, which consists in the written admission of the
party served, or the official return of the server, or the affidavit of
the party serving, containing a full statement of the date, place
and manner of service. If the service is by ordinary mail, proof
thereof shall consist of an affidavit of the person mailing. If service
is by registered mail, proof shall be made by such affidavit and the
registry receipt issued by the mailing office.
In this case, a look into the complaint designated as mandamus reveals that it is
sufficient in form. It has the caption with the name of the court, the name of the
parties, and the docket number. The complaint contains allegations of petitioners'
claims. It has a prayer and the date when it was prepared. The signature page
shows the signature and name of petitioners' counsel, the counsel's IBP, PTR and
Roll of Attorney's Numbers. The complaint was also verified and accompanied by a
certificate of non-forum shopping and signed by petitioners as plaintiffs. It was filed
personally with the office of the clerk of court.
Substance relates to the material allegations in the pleading. It is the embodiment
of the essential facts necessary to confer jurisdiction upon the court.
A plain reading of the complaint reveals that petitioner assumed and fulfilled the
obligation to pay. It is now the NHA’s turn to comply with its obligation to turn over
the property. The action, although designated as mandamus, is in reality an action
for specific performance.
The designation or caption is not controlling, more than the allegations in the
complaint, for it is not even an indispensable part of the complaint. The court
should have proceeded to examine the essential facts rather than focusing on what
an action for mandamus should contain.
Certain officers in corporation can sign verification and certification without
the need of a board reso. In Cagayan Valley Drug Corporation v. CIR the Court
had occasion to explain that: It must be borne in mind that Sec. 23, in relation to
Sec. 25 of the Corporation Code, clearly enunciates that all corporate powers are
exercised, all business conducted, and all properties controlled by the board of
directors. A corporation has a separate and distinct personality from its directors
and officers and can only exercise its corporate powers through the board of
directors. Thus, it is clear that an individual corporate officer cannot solely exercise
any corporate power pertaining to the corporation without authority from the board
of directors. This has been our constant holding in cases instituted by a
corporation.
In a slew of cases, however, we have recognized the authority of some corporate
officers to sign the verification and certification against forum shopping. In Mactan-
Cebu International Airport Authority v. CA, we recognized the authority of a general
manager or acting general manager to sign the verification and certificate against
forum shopping; x x x. In sum, we have held that the following officials or
employees of the company can sign the verification and certification without need
of a board resolution:
1. the Chairperson of the Board of Directors,
2. the President of a corporation,
3. the General Manager or Acting General Manager,
4. Personnel Officer, and
5. an Employment Specialist in a labor case.
While the above cases do not provide a complete listing of authorized signatories
to the verification and certification required by the rules, the determination of the
sufficiency of the authority was done on a case to case basis. The rationale applied
in the foregoing cases is to justify the authority of corporate officers or
representatives of the corporation to sign the verification or certificate against
forum shopping, being in a position to verify the truthfulness and correctness of the
allegations in the petition.
November 26, 1999 over the same parcel
of land. MC Home Depot, Inc. constructed
improvements on the land and subdivided
the area into 59 commercial stalls, which it
leased to various entities. Upon the
expiration of the lease on March 6, 2000,
Mid-Pasig Land demanded that respondents
vacate the land. A final demand was made
in a letter dated December 20, 2000.
Failure to attach the Secretarys Certificate, attesting to General Manager Antonio
Mereloss authority to sign the Verification and Certification of Non-Forum
Shopping, should not be considered fatal to the filing of the petition. Nonetheless,
the requisite board resolution was subsequently submitted to the CA, together with
the pertinent documents. Considering that Mid-Pasig Land substantially complied
with the rules, the dismissal of the petition was, therefore, unwarranted.

Rockland filed a case for Specific

Performance with the Pasig RTC to forestall
the ejectment.

Mid-Pasig then simultaneously filed for: (1)

unlawful detainer against the respondents,
which was raffled to the Pasig MTC, Branch
70 and (2) a supplemental motion to dismiss
Rockland’s case on the ground of litis
pendentia. The motion to dismiss was
denied. The denial was questioned and
eventually elevated to the SC.

On the other hand, the MTC ruled that it has

no jurisdiction over the unlawful detainer
case because it held that the real issue of
the case was whether or not ECRM had the
right to exercise an option to renew its lease
contract. Such issue is incapable of
pecuniary estimation, thus the RTC has
jurisdiction. MTC dismissed the complaint
for lack of merit. Pasig RTC Branch 160
affirmed the decision in toto. The CA
dismissed Mid-Pasig’s petition for certiorari
on the following grounds:
1. The verification and certification
against non-forum shopping was
signed by a certain Antonio A.
Merelos as General Manager of
the petitioner-corporation without
attaching therewith a Corporate
Secretary’s certificate or board
resolution that he is authorized to
sign for and on behalf of the
petitioner; and
2. Lack of pertinent and necessary
documents which are material
portions of the record as required
by Section 2, Rule 42 of the Rules
of Civil Procedure

Whether CA erred in holding that the

verification and certification against
forum-shopping in the petition failed to
attach the board resolution showing
affiant’s authority. [YES, case law
provides that general managers need not
attach board resolution]