Case Summary (G.R. No. 155173)
Key Dates
• August 11, 1998 – Letter of Intent executed
• October 21, 1998 – Sale and Purchase Agreement signed
• June 20, 2000 – CCC files complaint with preliminary attachment (RTC Q-00-41103)
• May 22, 2002 – RTC dismisses counterclaims against Lim and Mariano
• September 3, 2002 – RTC denies reconsideration
• November 23, 2004 – Supreme Court decision
Applicable Law
• 1987 Philippine Constitution
• 1997 Rules of Civil Procedure: Rules 2 (Joinder), 3 (Parties), 6 (Counterclaims), 45 (Review)
• Civil Code: Articles 1207 (solidary obligations), 1211 (solidarity notwithstanding varied conditions), 1222 (defenses of solidary debtors)
Facts
- Petitioners agreed under the SPA to withhold ₱117 million pending resolution of APT’s case (GR No. 119712) against CCC.
- After finality in APT’s favor, petitioners refused payment.
- CCC sued for specific performance and obtained a writ of attachment.
- Petitioners moved to dismiss for alleged forum-shopping, appealed, and filed an Answer with compulsory counterclaims seeking actual, moral, exemplary damages, and attorney’s fees against CCC, Lim, and Mariano for bad-faith litigation.
Procedural Posture
– RTC granted petitioners’ dismissal motion in part, ruling counterclaims against Lim and Mariano non-compulsory and improperly joined.
– Reconsideration denied as to individual impleading.
– Petitioners filed a Rule 45 petition, challenging:
a. CCC’s authority to move for dismissal on behalf of Lim and Mariano
b. RTC’s characterization of counterclaims as permissive
c. Inapplicability of Sapugay v. CA
d. Alleged joinder violations
Issues
- Can CCC move to dismiss counterclaims against Lim and Mariano?
- Are the counterclaims against Lim and Mariano compulsory?
- Does Sapugay v. CA permit impleading non-parties in compulsory counterclaims?
- Did petitioners violate joinder rules?
Ruling of the Trial Court
– Counterclaims against Lim and Mariano are not compulsory
– Sapugay inapplicable to individual respondents
– Joinder rules on causes of action allegedly breached
Supreme Court Ruling
- Compulsory Nature of Counterclaims
• Counterclaims for damages arise from the same transaction and would be barred if filed separately.
• They satisfy the four-part test (same issues, res judicata risk, identical evidence, logical relation). - Impleading Non-Parties under Rule 6, Sec. 12
• Lim and Mariano are indispensable parties as alleged joint tortfeasors.
• Sapugay v. CA authorizes bringing in corporate officers accused of bad faith. - CCC’s Authority to Represent Co-Debtors
• A corporation cannot validly file a motion on behalf of its
Case Syllabus (G.R. No. 155173)
Facts
- In August 1998 petitioners (Lafarge Cement Philippines, Inc., Luzon Continental Land Corporation, Continental Operating Corporation, and Philip Roseberg) entered into a Letter of Intent with respondent Continental Cement Corporation (CCC) for the purchase of CCC’s cement business.
- On October 21, 1998, the parties executed a Sale and Purchase Agreement (SPA) which provided under Clause 2(c) for retention of ₱117,020,846.84 (US$2,799,140) from the purchase price in a Citibank New York interest‐bearing account, pending potential liability of CCC in Supreme Court case GR No. 119712 (Asset Privatization Trust v. Court of Appeals and CCC).
- After final judgment in GR No. 119712 favored APT, CCC instructed petitioners to remit the retained amount to APT, but petitioners allegedly refused.
- On June 20, 2000, CCC filed Civil Case No. Q-00-41103 in the Regional Trial Court (RTC) of Quezon City Branch 80, seeking specific performance and payment of the “APT Retained Amount,” with application for preliminary attachment.
- Petitioners moved to dismiss CCC’s complaint for alleged forum shopping; after denial by the RTC on November 14, 2000, they appealed to the Court of Appeals (CA-GR SP No. 68688).
- Without prejudice to their appeal, petitioners filed Answer with Compulsory Counterclaims “ad cautelam,” seeking actual, moral, exemplary damages and attorney’s fees against CCC and its officers Gregory T. Lim and Anthony A. Mariano for bad faith filing of the complaint and procurement of the writ of attachment.
Trial Court Ruling
- On May 22, 2002, the RTC dismissed petitioners’ compulsory counterclaims for three principal reasons:
• Counterclaims against Lim and Mariano were not compulsory.
• Sapugay v. Court of Appeals was inapplicable.
• Petitioners violated procedural rules on cause‐of‐action joinder. - In an Amended Order of September 3