LAFARGE V CONTINENTAL CEMENT, GR 155173

FACTS: On August 11 1998, a Letter of Intent was completed. Lafarge Cement Philippines Inc., (the
petitioner) agreed to purchase the cement business of Continental Cement Corporation (CCC) (the
respondent). On October 21, 1998 they entered into a Sale and Purchase Agreement, knowing that CCC
had a pending case with the Supreme Court (GR No. 119712). They added clause 2 of the SPA to retain a
portion of the contract price that will be deposited in the bank for payment to the case.
On June 20, 2000 a complaint with “Application for Preliminary Attachment” against petitioners was
filed by CCC before the Regional Trial Court of Quezon City docketed as Civil Case No. Q-00-411-3. The
Complaint prayed that petitioners be directed to pay the amount mentioned in clause 2 of their SPA,
which was dismissed by the petitioners. On November 14, 2000 after the trial court denied the Motion
to Dismiss, the petitioners raised the matter before the Court of Appeals in CA-GR SP No. 68688.
While waiting, the petitioners filed their Answer and Compulsory Counterclaims, denying the allegations
in the complaint. They prayed that its majority stockholder, President Lim, and its Corporate Secretary
Mariano would each pay for damages, attorney’s fee plus cost of suit. The petitioners claimed that the
complaint was baseless and the Writ of Attachment was made in bad faith. Relying on this court’s ruling
to Sapugay V CA, the petitioners prayed that both Lim and Mariano be held “ Jointly and Solidarily”. The
respondent moved to dismiss petitioners’ compulsory counterclaims on grounds that essentially
constituted the very issues for resolution in the instant petition.
ISSUE: (A) Whether or not the RTC was wrong in refusing to rule that CCC has no personality to dismiss
petitioners' compulsory counterclaims on respondents Lim and Mariano's behalf.
(B) Whether or not the RTC gravely erred in ruling that (i) petitioners' counterclaims against
Respondents Lim and Mariano are not compulsory; (ii) Sapugay v. Court of Appeals is inapplicable here;
and (iii) petitioners violated the rule on joinder of causes of action.
RULING: (A) Respondent CCC can’t dismiss the counterclaims because it lacks requisite to do so. They
have to be authorized to act on behalf of its officers. The Motion to Dismiss the compulsory
counterclaim filed by Respondent CCC has no force and effect to them.
(B)
I The counterclaims against respondents Lim and Mariano are compulsory since it was a claim they have
against the other party.
Ii Sapugay V court of Appeals are applicable here because of a similar issue of bringing a party to the
case.
Iii Respondents Lim and Mariano are real parties in interest to the compulsory counterclaim; it is
imperative that they be joined therein.