Case Digest (G.R. No. 214074) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On November 2, 2010, Median Container Corporation and Eldon Industrial Corporation (collectively, respondents) filed a complaint for reformation of instrument against Philippine National Bank (PNB) before the Regional Trial Court (RTC), Branch 91, Quezon City. They alleged that they entered into a loan agreement financed by a PHP 50 million credit line with PNB but were made to sign trust receipts instead of promissory notes, which did not reflect their real agreement and were used to compel payment under threat of criminal liability. PNB answered and filed a counterclaim demanding payment of PHP 31,059,616.29 for unpaid obligations under the trust receipts and sought to implead Spouses Carlos and Fely Ley, officers of Median, for solidary liability. The RTC dismissed PNB's counterclaim without prejudice, ruling it was permissive and that PNB failed to comply with procedural requirements such as payment of docket fees and filing of certificate of non-forum shopping. The motion t Case Digest (G.R. No. 214074) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- The Parties and Background
- Philippine National Bank (PNB) is the petitioner.
- Median Container Corporation and Eldon Industrial Corporation (collectively, respondents) are the respondents.
- Filing of Complaint
- On November 2, 2010, respondents filed a complaint for Reformation of Instrument before the Regional Trial Court (RTC), Branch 91, Quezon City.
- Respondents alleged that they availed a PHP 50 Million credit line from PNB, and instead of usual promissory notes, PNB induced them to sign trust receipts which did not reflect the real agreement.
- Respondents contended that PNB coerced them and their officers to pay under threat of criminal prosecution.
- PNB’s Counterclaim and Motion
- In its Answer with Counterclaim, PNB argued that the trust receipts reflected the real agreement.
- PNB claimed no enticement occurred; provisions were voluntarily executed.
- PNB alleged respondents were liable for unpaid obligations amounting to PHP 31,059,616.29.
- PNB moved to implead Spouses Carlos and Fely Ley (Ley spouses), President and VP/Treasurer of Median, to hold them severally liable.
- RTC’s Rulings
- On February 14, 2011, the RTC dismissed PNB’s counterclaim without prejudice and denied the motion to implead Ley spouses.
- RTC held that PNB’s counterclaim was permissive as it was independent from respondents’ complaint.
- RTC ruled that PNB failed to pay docket fees and file certificate of non-forum shopping, barring jurisdiction over the counterclaim.
- Motion to implead was deemed improper due to lack of jurisdiction over the counterclaim.
- PNB’s motion for reconsideration was denied on July 29, 2011.
- Court of Appeals’ (CA) Decision
- PNB filed a Petition for Certiorari before the CA.
- On March 19, 2014, CA dismissed the petition for lack of merit.
- CA affirmed RTC’s ruling that PNB’s counterclaim was permissive and required payment of docket fees.
- CA ruled that the issues and evidence necessary for reformation claim and counterclaim differ markedly.
- CA held PNB could still file a separate action on its counterclaim.
- CA denied PNB’s motion for reconsideration on August 18, 2014.
- Issues Raised by Parties
- PNB argued the counterclaim is necessarily connected to respondents’ petition and should be compulsory.
- PNB contended the RTC should have allowed payment of docket fees instead of outright dismissal.
- PNB insisted that Ley spouses are real parties-in-interest and must be impleaded.
- Respondents maintained the counterclaim is permissive, unconnected to reformation action.
- Respondents argued issues and evidence needed for both cases are distinct.
- Respondents supported RTC and CA rulings denying impleader and dismissing counterclaim.
Issues:
- Whether the Court of Appeals committed reversible error in affirming the RTC's dismissal of PNB’s counterclaim and motion to implead Spouses Ley.
- Whether PNB’s counterclaim is compulsory or permissive in nature.
- Whether PNB should have been allowed to implead Spouses Carlos and Fely Ley.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)