MANUEL C. BUNGCAYAO, SR., represented in this case by his Attorney-in-fact ROMEL R.

BUNGCAYAO, petitioner, vs. FORT ILOCANDIA PROPERTY HOLDINGS AND DEVELOPMENT

CORPORATION, respondent.
G.R. No. 170483, April 19, 2010, CARPIO, J.
The criteria to determine whether the counterclaim is compulsory or permissive are as follows:
(1) Are issues of fact and law raised by the claim and by the counterclaim largely the same?
(2) Would res judicata bar a subsequent suit on defendant's claim, absent the compulsory rule?
(3) Will substantially the same evidence support or refute plaintiff's claim as well as defendant's
counterclaim?
(4) There any logical relations between the claim and the counterclaim?
A positive answer to all four questions would indicate that the counterclaim is compulsory. Any other
counterclaim is permissive.
FACTS:
Manuel C. Bungcayao, Sr. (petitioner) claimed to have introduced improvements on the foreshore
area of Calayab Beach in 1978 when Fort Ilocandia Hotel started its construction in the area. Other
entrepreneurs began setting up their own stalls and later formed themselves into the D’Sierto
Beach Resort Owner’s Association, Inc. (D’Sierto).
In 1992, petitioner and other D’Sierto members applied for a foreshore lease with the CENRO and
was granted a provisional permit. In 2002, Fort Ilocandia Property Holdings and Development
Corporation (respondent) filed a foreshore application over a 14-hectare area abutting the Fort
Ilocandia Property, including the 5-hectare portion applied for by D’Sierto members. DENR denied
the foreshore lease applications of petitioner and other D’Sierto members on the ground that the
subject area applied for fell either within the titled property or within the foreshore areas applied
for by respondent.
In 2003, a meeting was initiated by respondent where in Atty. Liza Marcos, as mediator, offered
P300,000 as financial settlement per claimant, on the condition that they would vacate the area.
D’Sierto members made a counter-offer of P400,000. Petitioner filed an action for declaration of
contract alleging that his son, Manuel Jr., was only made to accept the P400,000 and sign the Deed
of Assignment, Release, Waiver and Quitclaim in favor of respondent, upon the undue pressure
exerted by Atty. Marcos.
Respondent countered that petitioner’s sons, Manuel Jr. and Romel, attended the meeting on their
own volition and were able to talk to their parents through phone call before they accepted the
offer. As a counterclaim, it prayed that petitioner be required to return the amount of P400,000
from respondent, to vacate the portion of the respondent's property he was occupying, and to pay
damages.
RTC rendered a Summary Judgment holding that alleged pressure on petitioner’s sons could not
constitute force, violence or intimidation that could vitiate consent and granted the counterclaim
for recovery of possession. CA affirmed the RTC”s decision in toto holding that the counterclaims
raised by respondent were compulsory in nature.
ISSUE:
Whether respondent’s counterclaim is compulsory
RULING: No
A compulsory counterclaim is any claim for money or any relief, which a defending party may have
against an opposing party, which at the time of suit arises out of, or is necessarily connected with,
the same transaction or occurrence that is the subject matter of the plaintiff's complaint. It is
compulsory in the sense that it is within the jurisdiction of the court, does not require for its
adjudication the presence of third parties over whom the court cannot acquire jurisdiction, and will
be barred in the future if not set up in the answer to the complaint in the same case.
A counterclaim is compulsory if there exists a logical relationship between the main claim and the
counterclaim. The criteria to determine whether the counterclaim is compulsory or permissive are
as follows:
(5) Are issues of fact and law raised by the claim and by the counterclaim largely the same?
(6) Would res judicata bar a subsequent suit on defendant's claim, absent the compulsory rule?
(7) Will substantially the same evidence support or refute plaintiff's claim as well as
defendant's counterclaim?
(8) There any logical relations between the claim and the counterclaim?
A positive answer to all four questions would indicate that the counterclaim is compulsory. Any
other counterclaim is permissive.
In this case, respondent filed three counterclaims: (1) for recovery of the P400,000, (2) for recovery
of possession, and (3) for damages. The first counterclaim was rendered moot with the agreement
of the parties to cancel the Deed and return the P400,000. The third was waived and renounced by
respondent. The second was ruled to be a permissive counterclaim as it is very clear that it will not
be barred if not set up in the answer to the complaint in the same case despite it being an offshoot
of the same basic controversy between the parties.
The rule in permissive counterclaim is that for the trial court to acquire jurisdiction, the
counterclaimant is bound to pay the prescribed docket fees. Any decision rendered without
jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court.
In this case, respondent did not dispute the non-payment of docket fees. Respondent only insisted
that its claims were all compulsory counterclaims. As such, the judgment by the trial court in
relation to the second counterclaim is considered null and void without prejudice to a separate
action which respondent may file against petitioner.