National Marketing Corporation vs. Federation of United Namarco Distributors, Inc.
National Marketing Corporation vs. Federation of United Namarco Distributors, Inc.
239
240
241
9 of Rule 6). And the same may be allowed unless the case has progressed
so far that it may be inconvenient or confusing to allow the additional claim
to be pleaded.
Appeal; Questions not raised at trial can not be raised on appeal.
Well settled is the rule that questions which were not raised in the lower
court can not be raised for the rst time on appeal.
Obligations and contracts; Payment by delivery of commercial paper;
Impairment clause in article 1249 applies only to instruments executed by
third persons and delivered by the debtor to the creditor.The delivery of
promissory notes payable to order, or bills of exchange or drafts or other
mercantile documents shall produce the effect of payment only when
realized, or when by the fault of the creditor, the privileges inherent in their
negotiable character have been impaired (Article 1249, New Civil Code).
The clause of article 1249 relative to the impairment of the negotiable
character of the commercial paper by the fault of the creditor is applicable
only to instruments executed by third persons and delivered by the debtor to
the creditor, and does not apply to instruments executed by the debtor
himself and delivered to the creditor.
Statutory construction; Where statute adopted from another country,
construction placed upon it by courts of that country before its adoption
also adopted.It is a rational rule of statutory construction that a statute
adopted from another state or country will be presumed to have been
adopted with the construction placed upon it by the courts of that state or
country before its adoption. Such construction is regarded as of great
weight, or at least persuasive and will generally be followed if sound and
reasonable, and in harmony with justice and public policy, and with other
laws of the adopting jurisdiction on the subject. And while the construction
of a statute by courts of the original state after its adoption by another may
have no controlling effect on the adopting state, it may be strongly
persuasive and will be followed when it is considered to give true force and
effect to the statute.
242
ANTONIO, J.:
243
That, WHEREAS, for and in consideration of the sum of Two Hundred Thousand
Pesos (P200,000.00) as part payment of the items and/or merchandise above-
mentioned, and deposited by the FEDERATION with the NA-MARCO upon signing
of the items and/or merchandise above enumerated items and/or merchandise shall
be paid on cash basis upon delivery of the duly indorsed negotiable shipping
document covering the same, the NAMARCO agrees to sell the said items and/or
merchandise subject to the following terms and conditions:
** ** ** **
1. That the FEDERATION shall pay the NAMARCO the value of the goods
equivalent to the procurement costs plus 5% mark-up, provided, however,
that should there be any adjustment in the procurement costs the same shall
be refunded to the FEDERATION.
2. That all handling and storage charges of the goods sold shall be for the
account of the FEDERATION.
3. That the FEDERATION waives its right to claim for any loss or damage
that may be suffered due to force majeure such as war, riots, strikes, etc.,
except when such incident is directly or indirectly due to the negligence of
the NAMARCO or its representative;
4. That the items and/or merchandise sold by NAMARCO to the
FEDERATION shall be distributed among its members and retailers in
accordance with NAMARCOs existing rules and regulations governing the
distribution of NAMARCO goods and at the wholesale and retail prices to
be determined by NAMARCO.
** ** ** **
244
245
17. That now the defendant has refused and declined to accept the cash payments by
the FEDERATION, in accordance with the terms and conditions stipulated in said
contract, Annex A hereof, against deliveries to it of the commodities listed in
paragraph 16 hereof, and has refused and declined to make deliveries thereof to the
FE-DERATION, in accordance with such terms and conditions; and that the
plaintiffs have always been, and still are willing to take deliveries of the same
commodities and to pay for them, through the FEDERATION, in accordance with
the terms and conditions of said contract. (Exh. 1)
246
the NAMARCO that could not negotiate and effect payment on the sight
drafts drawn under PNB Domestic L/C Nos. 600570, 600606 and 600586,
in the amounts of P277,357.91, P135,-891.82 and P197,804.12, respectively,
as the requirements of the covering letters of credit had not been complied
with. The common condition of the three letters of credit is that the sight
drafts drawn on them must be duly accepted by the FEDERATION before
they will be honored by the Philippine National Bank. But the said drafts
were not presented to the FEDERATION for acceptance.
On June 7, 1960, the NAMARCO demanded from the FEDERATION
the payment of the total amount of P611,053.35, but the latter failed and
refused to pay the said amount, or any portion thereof, to the NAMARCO.
In the readjustment made on the basis of actual expenditures, the total
cost of the goods was reduced from P611,053.-35 to P609,014.73.
On October 15, 1960, the Court of First Instance of Manila promulgated
its decision in Civil Case No. 42684, ordering the NAMARCO to
specically perform its obligation in the Contract of Sale, by delivering to
the FEDERATION the unde-livered goods.
On November 11, 1960, the NAMARCO appealed from the decision.
1
On March 31, 1962, the Supreme Court rendered a decision on
NAMARCOs appeal in Civil Case No. 42684, holding that the Contract of
Sale was valid. (Record on Appeal, pp. 63-71, Civil Case No. 46124.)
___________________
247
248
the decision in that case; and that the failure of NAMARCO to set
up, in said Civil Case No. 42684, such a counterclaim, precludes
NAMARCO from raising it as an independent action, pursuant to
Section 6 of Rule 10 of the Rules of Court.
On February 11, 1961, NAMARCO interposed its opposition to
said motion to dismiss contending that its claim for the recovery of
the cost of merchandise delivered to the FEDERATION on January
29 and February 20, 1960 is not necessarily connected with the suit
in Civil Case No. 42684 for specic performance and, therefore,
does not fall under the category of compulsory counterclaim; that
NAMARCOs failure to set it up as a counterclaim in its answer in
Civil Case No. 42684 does not constitute res judicata; that the
deliveries of the merchandise were effected through the fault or
negligence of one of its personnel, Juan T. Arive, who was
administratively charged therefor, found guilty and accordingly
dismissed; that the issue in Civil Case No. 42684, was the
genuineness and due execution of said contract as the same was
entered into by the General Manager of the NAMARCO without the
knowledge, consent and approval of the Board of Directors and that
the same was not approved by the Auditor General conformably
with Administrative Order No. 290 dated February 3, 1959 of the
President of the Philippines and therefore it would have been
inconsistent for NAMARCO to avail itself of the contract the
validity of which it was impugning, to enforce its claim; and that the
present claim is not necessarily connected with the transaction or
occurrence that is the subject matter of Civil Case No. 42684, as the
same evidence would not support or refute both.
On February 18, 1961, the FEDERATION led a rejoinder
reiterating that the requirements on the rule of compulsory
counterclaim are present; that the rst requirement that the
counterclaim arises out of or is necessarily connected with the
contract of sale subject-matter of NAMARCOs cause of action
is evident from the face of the complaint itself.
On June 3, 1961, the lower court issued an order holding
249
The lower court erred in failing to hold that the complaint does not state a
cause of action against the defendant-appellant;
II
The lower court erred in holding that the plaintiff-appellees claim is not
a compulsory counterclaim as dened and governed by section 6, Rule 10 of
the old Rules of Court (Section 4, Rule 9 of the new) ;
III
The lower court erred in entering judgment in favor of the plaintiff-
appellee and ordering defendant-appellant to pay the former the sum of
P609,014.73 with interest thereon at
250
the legal rate from the date of delivery of the merchandise, and the
sum of P5,000.00 for and as attorneys fees and other expenses of
litigation, with costs.
We shall rst proceed because of its decisive signicance, with
the issue posed by appellant in its second assignment of error * * *
whether or not this action of NAMARCO for the collection of the
payment of the merchandise delivered to, but not yet paid by, the
FEDERATION, is already barred as a consequence of the failure of
NAMARCO to set it up as a counterclaim in the previous case,
(Civil Case No. 42684).
In ruling that the present claim of NAMARCO is not compulsory
counterclaim, that should have been asserted in the previous case the
lower court had the following to say:
The terms transaction and occurrence used in the section now under
consideration include the facts and circumstances out of which a claim may arise,
and whether two claims arise out of the same transaction or occurrence depends in
part on whether the same evidence would support or refute both. (Williams v.
Robinson, 3 Federal Rules Service, 174). These terms are broader than the term
contract, and authorize matters to be counter-claimed which could not be
counterclaimed as arising out of the contract sued upon by the plaintiff. This is
obvious, for while a contract is a transaction, a transaction is not necessarily a
contract. One of the denitions of the term transaction is, a matter or affair either
completed or in course of completion. (Story, etc., Commercial Co. v. Story, 100
Cal. 35, 34 Pac. 671).
Mr. Pomeroy denes the term as that combination of acts and events,
circumstances and defaults which viewed in one aspect results in the plaintiffs right
of action, and viewed in another aspect results in the defendants right of action. * *
* As these two opposing
251
rights cannot be the same, it follows that there may be, and generally must be, acts,
facts, events, and defaults in the transaction as a whole which do not enter into each
cause of action. Every transaction is more or less complex, consisting of various
facts and acts done by the respective parties and it frequently happens that one or
more of these acts, if viewed by itself, may be such a violation of duty as to give to
the other a right of action; but the obligation thus created may be so counter-
balanced by other matters growing out of the same transaction that no compensation
ought to be made therefor. In such a case, simple equity requires that the respective
causes of action in behalf of each be adjusted in a single suit. (Story, etc.,
Commercial Co. v. Story, 100 Cal. 35, 34 Pac. 671).
252
out of the transaction or occurrence which gave rise to the opposing partys
claim.
To illustrate the meaning of that requisite, the following cases are cited:
253
The right of the NAMARCO to the cost of the goods existed upon
delivery of the said goods to the FEDERATION which, under the Contract
of Sale, had to pay for them. Therefore, the claim of the NAMARCO for the
cost of the goods delivered arose out of the failure of the FEDERATION to
pay for the said goods, and not out of the refusal of the NAMAR-CO to
deliver the other goods to the FEDERATION. The action of the
FEDERATION in Civil Case No. 42684, based on. the refusal of the
NAMARCO to deliver the other goods, had nothing to do with the latters
claim for the cost of the goods delivered and, hence, such claim was not
necessarily connected therewith. * * *
The claim of the NAMARCO in this case could have been a permissive
counterclaim, but is not a compulsory counterclaim, in Civil Case No.
42684.
While the Contract of Sale created reciprocal obligations between the
FEDERATION and the NAMARCO, the refusal of the latter to deliver the
other goods was not due to the failure of the FEDERATION to pay for the
goods delivered, but rather to the fact that it believed, as alleged in its
answer in Civil Case No. 42684, that the Contract of Sale was not validly
entered into by it. Such being the case, the failure of the FEDERATION to
pay for the goods delivered could not have been properly raised by the
NAMARCO as a defense or pleaded as a compulsory counterclaim in Civil
Case No. 42684. However, had the NAMARCO alleged its present claim in
Civil Case No. 42684, the Court would have permitted it. A permissive
counter claim is one which does not arise out of, or is not necessarily
connected with, the transaction or occurrence that is the subject-matter of
the opposing partys claim.
Since the cause of action of the FEDERATION in Civil Case No. 42684
is such that the claim of the NAMARCO in this case could not properly be
pleaded as a compulsory counterclaim in that case, the NAMARCO is not
precluded from
254
bringing this present action. Section 6, Rule 10, Rules of Court, is not
2
applicable. (Italics supplied.)
________________
255
________________
5 Now Section 4 of Rule 9 of the new Rules of Court, with modication.
6 SEC. 97. Effect of Omission to Set up Counterclaim. If the right out of which
the counterclaim arises exists at the time of the commencement of the action and
arises out of the transaction set forth in the complaint as the foundation of the
plaintiffs claim, or is necessarily connected with the subject of the action, neither the
defendant nor his assignee can afterwards maintain an action against the plaintiff
therefor, if the defendant omits to set up a counterclaim for the same. But if the
counterclaim arises out of transactions distinct from those set forth in the complaint as
the foundation of the plaintiffs claim and not connected with the subject of the
action, the defendant shall not be barred from any subsequent action upon such
counterclaim by reason of his failure to set it up in his answer to the pending action.
(Code of Civil Procedure of the P.I., which took effect on Oct. 1, 1901; italics
supplied.)
256
The rst requisite that the claim should arise out of or is necessarily
connected with the transaction or occur-
______________
257
rence that is the subject matter of the opposing partys claim, may
give rise to the critical question: What constitutes a transaction or
occurrence? On this point the lower court has conveniently
embodied in its decision, quoted elsewhere herein, the meaning of
the terms transaction or occurrence, as dened in Williams v.
11
Robinson, and in Pomeroys Treatise on Remedies and Remedial
12
Rights. The formulation in Williams v. Robinson shows the futility
of attempting to reduce the term transaction or occurrence
within the context of an all-embracing denition. Such formulation
does not adequately answer every question whether a particular
claim is compulsory in character. As a matter of fact most courts,
rather than attempting to dene the key terms of the rule on
13
compulsory counterclaim, have preferred to suggest certain criteria
or tests by which the compulsory or permissive nature of specic
counter-claims can be 14 determined. Wright & Miller in their Federal
Practice and Procedure summarize them as follows:
1. Are the issues of fact and law raised by the claim and counterclaim
largely the same?
2. Would res judicata bar a subsequent suit on defendant claim absent
the compulsory counterclaim rule?
3. Will substantially the same evidence support or refute plaintiffs
claim as well as defendants counterclaim?
4. Is there any logical relation between the claim and the
counterclaim?
An afrmative answer to each of the foregoing questions suggests
that the counterclaim is compulsory. These tests or standards have
been the object of extensive analysis and criticisms, as follows:
_________________
258
15
The rst test * * * identity of issues had been considered of
doubtful utility for it assumes that, in order to protect himself from
inadvertently losing the right to present his claim in a later action,
defendant will be both motivated and able to determine before
answering whether his claim must be asserted as a compulsory
counter-claim. * * * Yet, no one can be certain what the issues are
until after the pleadings are closed and discovery is underway, and in
many instances the issues are not really formulated until the pre-trial
conference.
The second test * * * that the counterclaim is compulsory if it
16
would be barred by res judicata, has been judicially recognized by
some courts as the acid test for distinguishing compulsory from
permissive counterclaim. As aptly stated by Judge Frank in a
dissenting opinion:
_________________
15 Same issues of fact and law test applied in: Connecticut Indem. Co. v. Lee, C.A.
1st, 1948, 168 F. 2d 420. Nachtman v. Crucible Steel Co., C.A. 3d, 1948, 165 F. 2d
997. Nye Rubber Co. v. V.R.P. Rubber Co., D. C. Ohio 1948, 81 F. Supp. 635. Keyes
Fibre Co. v. Chaplain Corp., D.C. Me. 1947, 76 F. Supp. 981. International Union,
United Automobile, Aircraft & Agricultural Implement Workers of America v.
Piasecki Aircraft, Corp., D.C. Del. 1965, 241 F. Supp. 385.
16 Res judicata as test applied in: Libbey-Owens-Ford Glass Co. v. Sylvania Indus.
Corp., C.A. 2d, 1946, 154 F. 2d 814, 818, certiorari denied 66 S. Ct. 1353, 328 U.S.
859, 90 L. Ed. 1630; Big Cola Corp. v. World Bottling Co., C.A. 6th, 1943, 134 F. 2d
718; Weber v. Weber, D. C. Pa. 1968, 44 F.R.D. 227; Non Ferrous Metals, Inc. v.
Saramar Aluminum Co., D.C Ohio 1960, 25 F.R.D. 102; American Samec Corp. v.
Florian, D.C Conn. 1949, 9 F.R.D. 718.
259
Federal Practice, 682; Clark. Code Pleading, 447; Big Cola Corp. v. World
17
Bottling Co., 6 Cir., 134 F. 2d 718.
_________________
260
test, any claim a party has against an opposing party that is logically
related to the claim being asserted by the opposing party and that is
not within the exceptions to the rule, is a compulsory counterclaim.
Its outstanding quality is its exibility. On the other hand this
exibility necessarily entails some uncertainty in its application
because of its looseness and potentially overbroad scope. This
difculty notwithstanding, of the four judicially formulated criteria
it has by far attained the widest acceptance among the courts.
An examination of the cases on compulsory counterclaims may
help clarify and illuminate the judicial application of the logical
relation test. In the leading case of Moore v. New York Cotton
Exchange (1926, 46 S.Ct. 367, 371, 270 U.S. 593, 70 L.Ed. 750, 45
A.L.R. 1370) the logical relation or connection between the
defendants counterclaim and the plaintiffs claim has been
explained thus:
The bill sets forth the contract with the Western Union and the refusal of
the New York Exchange to allow appellant to receive the continuous cotton
quotations, and asks a mandatory injunction to compel appellees to furnish
them. The answer admits the refusal and justies it. The counterclaim sets
up that, nevertheless, appellant is purloining or otherwise illegally obtaining
them, and asks that this practice be enjoined. Transaction is a word of
exible meaning. It may comprehend a series of many occurrences,
depending not so much upon the immediateness of their connection as upon
their logical relation-
__________________
Cotton Exchange, 1926, 46 S. Ct. 367, 371, 270 U.S. 593, 70 L.Ed. 750, 45 A.L.R. 1370.
U.S. for Use & Benet of DAgostino Excavators, Inc. v. Heyward-Robinson Co., C.A. 2d,
1970, 430 F. 2d. 1077.
Revere Copper & Brass Inc. v. Aetna Cas. & Sur. Co., C.A. 5th, 1970, 426 F. 2d, 709.
Koufakis v. Carvel, C.A. 2d, 1970, 425 F. 2d. 892.
Diamond v. Terminal Ry. Alabama State Docks, C.A. 5th, 1970, 421 F. 2d. 228, certiorari
denied 90 S. Ct. 1531, 397 U.S. 1079, 25 L. Ed. 2 815.
Kissell Co. v. Farly, C.A. 7th 1969, 417 F. 2d. 1180. National Equip. Rental, Ltd. v. Fowler,
C.A. 2d. 1961. 267 F. 2d. 43.
Great Lakes Rubber Corp. v. Herbert Cooper Co., CA 3d, 1961, 286 F. 2d. 631, 634.
261
ship. The refusal to furnish the quotations is one of the links in the chain
which constitutes the transaction upon which appellant here bases its cause
of action. It is an important part of the transaction constituting the subject-
matter of the coun-terclaim. It is the one circumstance without which neither
party would have found it necessary to seek relief. Essential facts alleged by
appellant enter into and constitute in part the cause of action set forth in the
counterclaim. That they are not precisely identical, or that the counterclaim
embraces additional allegations, as for example, that appellant is unlawfully
getting the quotations, does not matter. To hold otherwise would be to rob
this branch of the rule of all serviceable meaning, since the facts relied upon
by the plaintiff rarely, if ever, are, in all particulars, the same as those
constituting the defendants counterclaim. Compare Xenia Branch Bank v.
Lee, 7 Abb. Pr. 372, 390-394. And see generally, Cleveland Engineering Co.
v. Galion Dynamic Motor Truck Co. supra, p. 408 [243 Fed.]; Champion
Spark Plug Co. v. Champion Ignition Co. (D.C.) 247 Fed. 200, 203-205.
So close is the connection between the case sought to be stated in the
bill and that set up in the counterclaim, that it only needs the failure of the
former to establish a foundation for the latter; but the relief afforded by the
dismissal of the bill is not complete without an injunction restraining
appellant from continuing to obtain by stealthy appropriation what the court
21
had said it could not have by judicial compulsion.
__________________
See also United States v. Heyward-Robinson Co. (430 F. 2d. 1077 [1970]) where the court
ruled in an action by DAgostino against Heyward to recover payments alleged to be due on a
Navy construction job, that Heywards counterclaim for alleged overpayments and extra costs
of completing both the Navy construction contract and the construction of a plant for Stelma
Inc., was compulsory. The court explaining the close and logical relationship between the two
claims thus:
There was such a close and logical relationship between the claims on the Navy and Stelma
jobs that the Stelma counterclaims arose out of the same transaction or occurrence as those
terms are now broadly dened. Both subcontracts were entered into by the same parties for the
same type of work and carried on during substantially the same period. Heyward had the right
to terminate both subcontracts in the event of a
262
262 SUPREME COURT REPORTS ANNOTATED
National Marketing Corporation vs. Federation of United Namarco
Distributors, Inc.
_________________
breach by DAgostino of either. Heyward also had the right to withhold monies due on one to
apply against any damages suffered on the other. Progress payments made by Heyward were
not allocated as between jobs and were made on a lump sum basis for both as though for a
single account.
A single insurance policy covered both jobs. The letters of Heyward to DAgostino of
October 8 and 19, 1965 threatening termination and terminating both jobs, allegedly because of
the cancellation by DAgostino of this point insurance coverage and failure to properly man
both projects, treated both jobs together. These letters formed the basis of one of Hey-wards
major claims at the trial.
The controversy between the parties which gave rise to this litigation was with respect to
both jobs and arose from occurrence affecting both. Indeed, it would seem to have been
impossible for Heyward to have fully litigated the claims against it on the Navy job without
including the Stelma job, because the payments it made to DAgostino could not be allocated
between the two jobs.
As the appellants themselves point out in their brief, the Stelma and Navy claims were so
interwoven at the trial that they are now absolutely incapable of separation. The proof as to
payments and alleged defaults in payments was made without any differentiation between the
two claims and neither of the parties was able to offer any evidence of apportionment. Finally,
the evidence as to the breaches of contract claimed by the respective parties related in the main
to both contracts rather than to one or the other.
263
_____________
264
______________
24 International Union, U.A., A. & A. 1. WKRS v. PIASEK 1 Air Corp. 241 Fed.
Supp. pp. 388-389.
265
II
But even assuming for the nonce that NAMARCOs present claim is
logically related to the claim of the FEDERA-TION in the previous
case, NAMARCOs claim having accrued or matured after the
service of its answer in the earlier case is in the nature of an after-
acquired counterclaim which under the rules is not barred even if it
is not set up in the previous case as a counterclaim. An after-
acquired counterclaim, is one of the recognized exceptions to the
general rule that a counterclaim is compulsory and must be asserted
if it arises out of the same transaction as the opposing partys claim.
________________
266
The rst exception is that the party need not assert a counterclaim that has
not matured at the time he serves his pleading. This is derived from the
language in the rule limiting its application to claims the pleader has at the
time of serving the pleading. A counterclaim acquired by defendant after he
has answered will not be considered compulsory, even if it arises out of the
same transaction as does plaintiffs claim. Similarly, a counterclaim
acquired by plaintiff after he has replied to a counterclaim by defendant is
not compulsory under Rule 13(a). However, if a party should acquire a
matured counterclaim after he has pleaded, Rule 13(e) provides that he may
obtain the courts permission to include it in a supplemental pleading under
27
Rule 15(d).
A counterclaim may be asserted under Rule 13(e) only by leave of
court, which usually will be granted in order to enable the parties to litigate
all the claims that they have against each other at one time thereby avoiding
multiple actions. However, Rule 13(e) is permissive in character. An after-
acquired counterclaim, even if it arises out of the transaction or occurrence
that is the subject matter of the opposing partys claim, need not be pleaded
supplementally; the after-acquired claim is not considered a compulsory
counterclaim under Rule 13(a) and a failure to interpose it will not bar its
assertion in a later suit.
The decision to grant or deny a motion to serve a sup-
_______________
Hartford Acc. & Indem. Co. v. Levitt & Sons, Inc., D.C. Pa. 1959, 24 F.R.D. 230.
Cyclotherm Corp. v. Miller, D.C. Pa, 1950, 11 F.R.D. 88.
Goodyear Tire & Rubber Co. v. Marbon Corp., D.C. Del. 1940, 32 F. Supp. 279, 280.
Cold Metal Process Co. v. United Engineering & Foundry Co., C.A. 3d, 1951, 190 F. 2d
217.
Magna Pictures Corp. v. Paramount Pictures Corp., D.C. Cal. 1967, 265 F. Supp. 144.
RFC v. First Nat. Bank of Cody, D.C. Wyo. 1955, 17 F.R.D. 397.
27 Ibid., Civil section 1411, p. 55.
267
_______________
** ** ** **
** ** ** **
268
_______________
269
III
The FEDERATION also contends that it has incurred no liability, as
NAMARCO has neither alleged nor proved
_______________
mission of the court under Rule 13(e). But under the specic language of Rule
13(e) such permission may be given only if the claim is a matured one at the time
permission is requested. (Stahl v. Ohio River Company, 424 F. 2d 52).
35 A motion to serve a supplemental counterclaim should be granted when plaintiff
cannot be seriously prejudiced by so doing inasmuch as the trial of the case will not
be delayed, (Dazians Inc. v. Switzer Bros., Inc., D.C. Ohio 1953, 14 F.R.D. 24),
unless the case has progressed to a stage in the action that to do so would cause
hardship or confusion (Newell v. O.A. Newton & Son Co., D.D. Del. 1950, 10 F.R.D.
286.) See also: Shwab v. Dolz, C.A. 7th, 1956, 229 F. 2d 749 Mi~ chigan Tool Co. v.
Drummond, D.C.D.C. 1938, 33 F. Supp. 540.
270
_______________
271
_______________
272
SEPARATE OPINION
TEEHANKEE, J.:
_______________
273
as such in the rst suit and it was long after Namarco had joined
issues therein with the ling of its answer that its sight drafts for
collection under the domestic letters of credit opened in its favor
were dishonored by the bank. Namarco had every reason to expect
that the federation, which was suing it for further deliveries, would
honor its just commitments and see to it that the sight drafts drawn
against its L/Cs would be duly honored and made good.
Namarco had every legal right therefore to institute in January,
1961 this action for collection and payment of the sums justly due it,
upon the federations failing to make payment notwithstanding the
lapse of over a year.
The Rules of Court were never intended to serve as a tool for a
party to unjustly enrich itself to the extent of over P1 million
(including interests) for merchandise long delivered to it in 1960
practically at procurement cost, which it could not otherwise have
procured due to exchange and import control restrictions and which
it has not paid for up to now notwithstanding its then having
immediately enjoyed the benets and prots thereof.
The defendant-appellants stance raises a mere technicality
which, as was long ago held by the Court, when it deserts its proper
ofce as an aid to the administration of justice and becomes its great
hindrance and chief enemy, deserves scant consideration from the
courts. (Alonso vs. Villamor, 16 Phil. 315).
Hence, even if Namarcos present collection suit could
technically be deemed a compulsory counterclaim which should
have been led by it as such in the rst suit led against it by the
federation, I would disregard such a technicality and hold
nevertheless as a matter of plain and simple justice and equity that
Namarcos failure to le such counterclaim should not bar the
present action and Namarcos right to judgment against defendant
federation for the sums justly due it.
275
_______________
1 The action herein was led and tried before the Revised Rules of 1964 took
effect.
276
277
278
279
must have already accrued at the time the answer is led by the
defendant, although I, for one, would prefer supplemental
counterclaims, the defendant should just the same be compelled to
allege it in such a supplemental pleading in those cases where his
claim accrues before trial has began or at the latest, before the
defendant has started presenting his evidence. Otherwise stated, my
position is that the claim of Namarco in this case did arise out of the
same transaction or occurrence that was the subject matter of the
Federations anterior action, but inasmuch as, on the hypothesis that
the contract were binding, the formers cause of action could not
have been considered as already matured when it led its answer,
there would have been no need for it to le this counterclaim.
The whole trouble with Namarcos pose in this appeal lies,
however, in the fact that in its answer to the Federations complaint,
it pleaded the defense of illegality or nullity of the contract. From
that point of view, it was immaterial to Namarcos recovery of the
purchase price of goods it had already delivered under the contract
that there was in said contract any term for the payment thereof. As
far as Namarco was concerned, those goods had been delivered
illegally and should have been immediately returned unless their
value had been paid for, (Article 1412 (2), Civil Code) or Namarco
was in pari delicto (Article 1411, id). Such being the case, it is quite
evident that when Namarco led its answer to the Federations
action, its cause of action for the recovery of the price of the
delivered goods was already existing and could have been the
subject of a counterclaim. This means that as of the time Namarco
led its answer contesting the legality or validity of the contract, it
was incumbent upon it to then and there seek recovery of whatever it
had delivered thereunder. Nothing could be more logical and legally
proper, specially when viewed from the angle of diligent protection
of public interest, Namarco being a government corporation.
Obviously, the foregoing consideration serves also to refute
Namarcos contention that it could not have claimed for the payment
now in question because it would have been inconsistent for it to do
so. Moreover, in Camara vs. Agui-
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