Lafarge Cement Phil v. Continental Cement

GR 155173, 23 November 2004

FACTS:

 In the Letter of Intent (LOI) executed by both parties, Petitioner Lafarge Cement Philippines, Inc. on behalf of its affiliates and other qualified entities agreed to purchase the cement business of Respondent Continental Cement Corporation. Both parties entered into a Sale and Purchase Agreement knowing that respondent has a case pending with the Supreme Court. In anticipation of future liability, the parties allegedly agreed to retain from the purchase price a certain amount to be deposited in an account for payment to the complainant who sued respondent herein. Upon the finality of the decision of the said case wherein liability was imposed to the respondent, petitioner allegedly refused to apply the sum for payment despite repeated instructions of the Respondent. Respondent filed a Complaint with Application for Preliminary Attachment against petitioners.

Petitioners filed their Answer and Compulsory Counterclaims denying all the allegations and alleged that respondent`s majority stockholder (Lim) which is also the company president and the corporate secretary (Mariano), influences respondent to file the baseless complaint and procured the Writ of Attachment in bad faith. Hence, petitioners prayed that both the president and corporate secretary be held jointly and solidarily liable with respondent. RTC dismissed petitioner`s counterclaims.

ISSUE:

 May defendants in civil cases implead in their counterclaims persons who were not parties to the original complaint?

RULING:

 Counterclaims are defined in Section 6 of Rule 6 of the Rules of Civil Procedure as any claim which a defending party may have against an opposing party. They are generally allowed in order to avoid a multiplicity of suits and to facilitate the disposition of the whole controversy in a single action, such that the defendants demand may be adjudged by a counterclaim rather than by an independent suit. The only limitations to this principle are (1) that the court should have jurisdiction over the subject matter of the counterclaim, and (2) that it could acquire jurisdiction over third parties whose presence is essential for its adjudication.

The general rule that a defendant cannot by a counterclaim bring into the action any claim against persons other than the plaintiff admits of an exception under Section 14, Rule 6 which provides that when the presence of parties other than those to the original action is required for the granting of complete relief in the determination of a counterclaim or cross-claim, the court shall order them to be brought in as defendants, if jurisdiction over them can be obtained.

The foregoing procedural rules are founded on practicality and convenience. They are meant to discourage duplicity and multiplicity of suits. This objective is negated by insisting — as the court a quo has done — that the compulsory counterclaim for damages be dismissed, only to have it possibly re-filed in a separate proceeding. Respondents Lim and Mariano are real parties in interest to the compulsory counterclaim; it is imperative that they be joined therein. Moreover, in joining Lim and Mariano in the compulsory counterclaim, petitioners are being consistent with the solidary nature of the liability alleged therein.

WHEREFORE, the Petition is GRANTED and the assailed Orders REVERSED. The court of origin is hereby ORDERED to take cognizance of the counterclaims pleaded in petitioners Answer with Compulsory Counterclaims and to cause the service of summons on Respondents Gregory T. Lim and Anthony A. Mariano.

 * Case digest by Frilin  Lomosad, LLB-1, Andres Bonifacio Law School, SY 2017-2018

By | 2018-05-17T03:50:04+00:00 May 17th, 2018|Case Digests|0 Comments

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