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Yulienco vs. CA 308 Scra 206
Yulienco vs. CA 308 Scra 206
Yulienco vs. Court of Appeals, 308 SCRA 206 , June 10, 1999
Case Title : FELIPE YULIENCO, petitioner, vs. COURT OF APPEALS (Ninth
Division) and ADVANCE CAPITAL CORPORATION, respondents.Case
Nature : PETITION for review on certiorari of a decision of the Court of
Appeals.
Syllabi Class : Remedial Law|Civil Procedure|Counterclaims|Forum-
Shopping
Division: FIRST DIVISION
Counsel: Emerito M. Salva & Associates, Puno and Puno Law Offices
Dispositive Portion:
WHEREFORE, the instant petition is hereby DENIED for lack of merit and the
appealed decision in CA-G.R. SP No. 42835 dismissing the petition therein
and ordering the RTC of Quezon City to proceed with the pre-trial of Civil
Case No. Q-95-23691 is hereby AFFIRMED.
Citation Ref:
263 SCRA 275 | 257 SCRA 509 | 263 SCRA 275 | 257 SCRA 509 | 155 SCRA
542 | 257 SCRA 509 | 230 SCRA 685 | 216 SCRA 485 | 275 SCRA 97 | 283
SCRA 493
206
SUPREME COURT REPORTS ANNOTATED
Yulienco vs. Court of Appeals
G.R. No. 131692. June 10, 1999.*
FELIPE YULIENCO, petitioner, vs. COURT OF APPEALS (Ninth Division) and ADVANCE
CAPITAL CORPORATION, respondents.
Remedial Law; Civil Procedure; Counterclaims; Counterclaim Defined; When
counterclaim is compulsory.A counterclaim is de-
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* FIRST DIVISION.
207
VOL. 308, JUNE 10, 1999
207
Yulienco vs. Court of Appeals
fined as any claim for money or other relief which a defending party may have
against an opposing party. A counterclaim is compulsory if (a) it arises out of, or is
necessarily connected with, the transaction or occurrence which is the subject
matter of the opposing partys claim; (b) it does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction; and (c) the
court has jurisdiction to entertain the claim. In other words, a compulsory
counterclaim cannot be made the subject of a separate action but should be
asserted in the same suit involving the same transaction or occurrence giving rise
to it.
Same; Same; Same; Test or criteria by which the compulsory or permissive nature of
specific counterclaims can be determined.The criteria or tests by which the
compulsory or permissive nature of specific counterclaims can be determined are as
follows: Are the issues of fact and law raised by the claim and counterclaim largely
the same? Would res judicata bar a subsequent suit on defendants claim absent the
compulsory counterclaim rule? Will substantially the same evidence support or
refute plaintiffs claim as well as defendants counterclaim? Is there any logical
relation between the claim and the counterclaim?
Same; Same; Forum-Shopping; For forum-shopping to exist, both actions must
involve the same transactions, same essential facts and circumstances and must
raise identical causes of actions, subject matter and issues.As to YULIENCOS
contention that ACC should be found guilty of forum-shopping, suffice it is to say
that for forum-shopping to exist, both actions must involve the same transactions,
same essential facts and circumstances and must raise identical causes of actions,
subject matter, and issues. Clearly, it does not exist where two different orders were
questioned, two distinct causes of action and issues were raised, and two objectives
were sought, as in the abovementioned cases. In other words, ACC did not engage
in forum-shopping.
PETITION for review on certiorari of a decision of the Court of Appeals.
208
SUPREME COURT REPORTS ANNOTATED
Yulienco vs. Court of Appeals
DAVIDE, JR., C.J.:
1 Annex A of Petition, Rollo, 38-42. Per Cosico, R., J., with Montoya, S. and Vidallon-
Magtolis, D., JJ., concurring.
2 Annex P of Petition, Id., 320-321.
3 Annex R of Petition, Id., 356.
209
4 Rollo, 38-40.
210
210
SUPREME COURT REPORTS ANNOTATED
Yulienco vs. Court of Appeals
as CA-G.R. SP No. 42835, questioning the aforementioned orders of the RTC of
Quezon City. YULIENCO challenged the jurisdiction of the RTC over Civil Case No. Q-
95-23691 principally on the ground of litis pendentia, because another case, Special
Case No. Q-93-2521, which, he claimed, involved the same parties (he and Advance
Capital Corporation [hereafter ACCI]) and subject matter, is pending before the RTC
of Makati City.
The Court of Appeals rejected YULIENCOs argument and consequently dismissed
the petition in its decision of 4 December 1997. It found that bar of litis pendencia
[sic] will not operate in the present suit, inasmuch as there appears to be no
identity in the subject matter from which the reliefs prayed for in the actions
pending were premised, and in support thereof, made the following observations:
There is no showing that the promissory notes involved in the present action are in
any way connected with the indebtedness of the petitioner, the enforcement of
which is sought to be restrained in SP Civil Case No. 93-2521, pending in the Makati
RTC. The promissory notes themselves (PN # 56, 57, 59 and 60) which are the
primary repositories of the true intent of the contracting parties, do not speak of
any reasonable relevance of the promissory notes subject of SP Civil Case No. 93-
2521 to the present issue.
It follows, therefore, that ACCs quest for relief is not barred by the other reasons
furthered by the petitioner.
The theory that ACCs claim is now barred because it should have been filed as a
compulsory counterclaim in the Makati case is untenable. A compulsory
counterclaim is one, which being cognizable by the regular courts of justice, arises
out of or is connected with the transaction or occurrence constituting the subject
matter of the opposing partys claim and does not require for its adjudication the
presence of third parties of whom the court cannot acquire jurisdiction. (Sec. 7, Rule
6, 1997 Rules of Civil Procedure). As we have observed, it was not shown that a
reasonable connection was established between ACCs present claim with the
petitioners attempt to restrain the foreclosure of his properties. Neither can it be
said, for
211
5 Id., 41-42.
6 Chan v. Court of Appeals, 230 SCRA 685, 696 (1994).
212
212
SUPREME COURT REPORTS ANNOTATED
Yulienco vs. Court of Appeals
the court has jurisdiction to entertain the claim.7 In other words, a compulsory
counterclaim cannot be made the subject of a separate action but should be
asserted in the same suit involving the same transaction or occurrence giving rise
to it.8
The criteria or tests by which the compulsory or permissive nature of specific
counterclaims can be determined are 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 defendants 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?9
Stripped of its legalese and trivial details, Special Civil Case No. 93-2521 of the RTC
of Makati City is basically an injunction suit, a petition for prohibition. On the other
hand, Civil Case No. Q-95-23691 is an ordinary action for collection of sums of
money. In the former, YULIENCO essentially seeks to prohibit or enjoin the
disposition and/or sale of his property, the proceeds of which will answer for his
unpaid obligations to ACC. Specifically, YULIENCO attempts to prevent (1) the
foreclosure of the real estate mortgages which he executed to secure his monetary
obligations, (2) the issuance of certificates of sale in cases of mortgages already
foreclosed, and (3) the sale of his specific club membership certificates and shares
of stocks in ACC. Promissory notes are also involved in that case but they are
specifically identified as Promissory Notes Nos. 315, 317 and 318, and are
intimately
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7 Intestate Estate of Amado B. Dalisay v. Marasigan, 257 SCRA 509, 513 (1996).
8 Visayan Packing Corporation v. Reparations Commission, 155 SCRA 542, 545
(1987).
9 Valencia v. Court of Appeals, 263 SCRA 275, 288 (1996).
213
214
SUPREME COURT REPORTS ANNOTATED
Yulienco vs. Court of Appeals
shopping to exist, both actions must involve the same transactions, same essential
facts and circumstances and must raise identical causes of actions, subject matter,
and issues.12 Clearly, it does not exist where two different orders were questioned,
two distinct causes of action and issues were raised, and two objectives were
sought,13 as in the abovementioned cases. In other words, ACC did not engage in
forum-shopping.
All told, the Court of Appeals did not therefore commit any reversible error in
rendering the assailed 4 December 1997 decision. The factual determinations of the
Court of Appeals therein are binding and conclusive upon this Court as no
compelling reasons exist necessitating a reexamination or reversal of the same.
WHEREFORE, the instant petition is hereby DENIED for lack of merit and the
appealed decision in CA-G.R. SP No. 42835 dismissing the petition therein and
ordering the RTC of Quezon City to proceed with the pre-trial of Civil Case No. Q-95-
23691 is hereby AFFIRMED.
Costs against petitioner.
SO ORDERED.
Melo, Kapunan, Pardo and Ynares-Santiago, JJ., concur.
Petition denied, judgment affirmed.
Note.The rule on forum-shopping applies only when two (or more) cases are still
pending. (Carlet vs. Court of Appeals, 275 SCRA 97 [1997])
o0o
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