Chan v. CA (1994)
Chan v. CA (1994)
Chan v. CA (1994)
(B) IN RELYING ON THE CASE OF CHING PUE VS. In her Reply to the Comment, 17 Chan maintains that the
GONZALES (87 PHIL. 81) AS BASIS FOR NOT ACTING UPON Court of Appeals should not have dismissed the
THE COUNTERCLAIM FOR UNLAWFUL DETAINER AND IN counterclaim because such dismissal would deny her
IMPLIEDLY DISMISSING THE SAME; justice and give undue advantage to Cu. She set up the
counterclaim for ejectment to avoid the effects of Section
(C) IN RENDERING A DECISION WHICH PROMOTES, 4, Rule 9 of the Rules of Court which bars a counterclaim
INSTEAD OF AVOID, A MULTIPLICITY OF SUITS; not set up and Section 2 (A) of the Rules of Summary
Procedure which states that a compulsory counterclaim
(D) IN RENDERING A DECISION WHICH GAVE THE PRIVATE "must be asserted in the answer, or be considered
RESPONDENT UNWARRANTED BENEFITS BECAUSE SHE IS barred." The Metals case is not applicable to this case
PRACTICALLY ALLOWED TO CONTINUE OCCUPYING because the issue therein was lack of jurisdiction by
PETITIONER'S PREMISES WHILE PETITIONER, WHOSE reason of non-payment of docket fees.
RIGHTS OVER THE PREMISES WERE UPHELD, IS FORCED
TO LITIGATE ANEW AND/OR TO RE-COMMENCE UNLAWFUL Cu filled a Rejoinder to the Reply. 18
DETAINER PROCEEDINGS." 13
After deliberating on the allegations, issues, and
Chan maintains that the Court of Appeals erred in giving arguments raised by the parties in their pleadings, we find
due course to Cu's petition for review and in deciding merit in the petition.
upon issues which Cu never raised in her petition. Chan
contends that the Court of Appeals should have limited It must be stressed that the validity of the consignation
itself to the matter of the extension of the lease period and the propriety of the counterclaim for ejectment were
and not on the jurisdiction over the action or subject not raised before the Court of Appeals. As to the first, both
matter of the suit which was never raised, nor on the the MTC and the RTC rules that the consignation was
propriety of the counterclaim for ejectment. valid. The MTC specifically stated in its decision:
Chan submits that while it is true that her cause of action "On the validity of the consignation, both parties agreed
for unlawful detainer was incorporated in her answer to that the controlling case is Ponce de Leon vs. Syjuco Inc.,
the complaint for consignation, the Rules of Court do not 90 Phil., 311. The court believes that under the
prohibit such procedure, and in her case the MTC has undisputed facts earlier narrated, petitioner has complied
exclusive original jurisdiction on the counterclaim for with all the requisites laid down in the said case, namely;
ejectment. The summary disposition of the complaint for 'The debtor must show (1) that there was a debt due; (2)
consignation as determined by the trial court was not that the consignation of the obligation had been made
affected by the filing of the counterclaim since it is a because the creditor to whom tender of payment was
counterclaim allowed under Section 1 of the Rule on made refused to accept it, or because he was absent or
Summary Procedure as it did not involve any question of incapacitated, or because several persons claimed to be
ownership nor did it allege any claim in excess of entitled to receive the amount due (Art 1176, Civil Code);
P20,000.00. She then concludes that what the Court of (3) that previous notice of the consignation had been
Appeals has impliedly suggested was for her to file a given to the person interested in the performance of the
separate complaint for unlawful detainer, which would be obligation (Art. 1177, Civil Code);;(4) that the amount due
laborious and would encourage multiplicity of suits; was placed at the disposal of the court and (5) that after
hence, the counterclaim for unlawful detainer should not the consignation had been made the person interested
have been dismissed. was notified thereof." 19
Chan also contends that the case of Ching Pue vs. The RTC explicitly affirmed the MTC on this issue, thus:
Gonzales 14 is not applicable because in Ching Pue the
consignation cases were filed with the Court of First "3 With respect to the validity of the consignation, the
Instance of Manila which did not have jurisdiction to pass Court affirms the finding of the trial court that indeed
upon the unlawful detainer cases that were properly plaintiff substantially complied with all the requirements
cognizable by the Municipal Court. In the instant case, the of consignation and, therefore, the same was valid and
consignation case was filed with the MTC which also has effective." 20
jurisdiction over the counterclaim for ejectment. The Court
of Appeals should have ordered the ejectment of Cu not Chan filed no petition for the review of the RTC decision
only because it found that her refusal to accept the and had, therefore, accepted the said ruling, Cu did not,
payment was with just cause, thereby impliedly holding for obvious reasons, raise the issue on consignation in her
that Cu has no right to stay in the premises in question, petition for review in CA-G.R. SP No. 28870. Since the
but also because when it promulgated its decision on 20 validity of the consignation was not raised before it, the
January 1993, the extended period (until 30 June 1992) Court of Appeals seriously erred when it dismissed the
fixed by the trial court and the Regional Trial Court had complaint for consignation on the ground that it has no
already expired. merit. Section 7, Rule 51 of the Revised Rules of Court
provides:
Chan further asserts that the Court of Appeals' decision
gives Cu undue and unwarranted benefits since Cu was "SEC. 7. Question that may be decided. ---- No error
granted much more than what she prayed for in her which does not effect the jurisdiction over the subject
complaint for consignation and Chan's counterclaim was matter will be considered unless stated in the assignment
dismissed. A new ejectment suit may last for years, even of errors and properly argued in the brief, save as the
beyond March 1995 which is the expiration date originally court, at its option, may notice plain errors not specified,
and also clerical errors."
One will search therein in vain even for an obiter dictum
Jurisdiction is not involved in the consignation case, and which suggests that an action for ejection cannot be set
no plain errors with respect thereto are discernible from up in a counterclaim. In the instant case, the ejectment
the MTC and RTC decisions. was set up as a counterclaim in the MTC which has
jurisdiction over it and Cu joined that issue and the
As to the counterclaim for ejectment, it must be incidents thereto by her answer to the counterclaim and
emphasized that the parties have conceded its propriety the counterclaim to the counterclaim.
and accepted the MTC's jurisdiction thereon. As a matter
of fact, the consignation was relegated to the background The Court of Appeals therefore should have confined itself
and the parties heatedly tangled on the nagging issues on to the principal error raised in Cu's petition in CA-G.R. SP
the duration of the lease after the expiration of the last No. 28870, viz., the duration of the extended term of the
written contract, the power of the court to extend the lease fixed in the decision of the MTC and affirmed by the
lease, and the length of the extension ---- all of which RTC. As fixed, the term of the lease was extended to 30
were provoked by and linked to the counterclaim for June 1992. That period had expired six months before the
ejectment. In her Position Paper for the Plaintiff filed with Court of Appeals promulgated its challenged decision.
the MTC, 21 Cu admitted having filed an answer to the Considering that Chan did not file any petition for the
counterclaim and even a counterclaim to the review of the RTC decision and was, therefore, deemed to
counterclaim: have agreed to the extension; and considering further
that Cu, as petitioner in CA-G.R. SP No. 28870 , did not
"In answer to the counterclaim, plaintiff [Cu] asserted that come to us on a petition for review to seek reversal of the
the lease is not on a month-to-month basis but for as long decision therein and should thus be considered to have
as the premises is being used as a learning center. She agreed to the dismissal of her consignation case, the
contends that it will be highly inequitous that after parties must be deemed bound by the extended term,
undergoing so much expenses, her occupancy of the which has, nevertheless, already lapsed.
premises will be abruptly terminated. . . . that on the basis
of justice and equity, the period of plaintiff's lease should We hold that the MTC had the authority to extend the
be fixed for at least five years from February 1990. . . . period of the lease. The parties started with a written
contract of lease with a term for one year from 1 February
As counterclaim to the counterclaim, plaintiff alleged. . . ." 1983 to 1 February 1984. This was renewed every year for
22 two successive years, or up to 1 February 1986. No
written contract was made thereafter, but Cu was
and assigned as one of the errors to be resolved by the allowed to occupy the premises at a monthly rental which
court the following: was increased every year. In November 1989, Chan
informed Cu of the termination of the lease and gave her
"2. Whether or not the plaintiff may be ejected from the until 1 January 1990 to vacate the premises. Articles 1670
subject premises." 23 and 1687 of the Civil Code thus came into play:
A counterclaim is any claim for money or other relief "ART. 1670. If at the end of the contract the lessee
which a defending party may have against an opposing should continue enjoying the thing leased for fifteen days
party. It need not diminish or defeat the recovery sought with the acquiescence of the lessor and unless a notice to
by the opposing party, but may claim relief exceeding in the contrary by either party has previously been given. it
amount or different in kind from that sought by the is understood that there is an implied new lease, not for
opposing party's claim. 24 Counterclaims are designed to the period of the original contract, but for the time
enable the disposition of a whole controversy of established in Articles 1682 and 1687. The other terms of
interested parties' conflicting claims, at one time and in the original contract shall be revived.
one action, provided all the parties can be brought before
the court and the matter decided without prejudicing the xxx xxx xxx
rights of any party. 25 A counterclaim "is in itself a
distinct and independent cause of action, so that when ART, 1687. If the period for the lease has not been
properly stated as such, the defendant becomes, in fixed, it is understood to be from year to year, if the rent
respect to the matter stated by him, an actor, and there agreed upon is annual; from month to month, if it is
are two simultaneous actions pending between the same monthly; from week to week, if the rent is weekly; and
parties, wherein each is at the same time both a plaintiff from day to day, if the rent is to be paid daily. However,
and a defendant. . . . A counterclaim stands on the same even though a monthly rent is paid, and no period for the
footing and is to be tested by the same rules, as if it were lease has been set, the courts may fix a longer term for
an independent action." 26 In short, the defendant is a the lease after the lessee has occupied the premises for
plaintiff with respect to his counterclaim. over one year. If the rent is weekly, the courts may
likewise determine a longer period after the lessee has
Section 8, Rule 6 of the Rules of Court provides that the been in possession for over six months. In case of daily
answer may contain any counterclaim which a party may rent, the courts may also fix a longer period after the
have against the opposing party provided that the court lessee has stayed in the place for over one month."
has jurisdiction to entertain the claim and can, if the
presence of third parties is essential for its adjudication, Article 1687 grants the court the authority to fix the term
acquire jurisdiction of such parties. Under Section 4 of of the lease depending on how the rentals are paid and on
Rule 9, a counterclaim not set up shall be barred if it the length of the lessee's occupancy of the leased
arises out of or is necessarily connected with the premises. In the light of the special circumstances of this
transaction or occurrence that is the subject matter of the case, we find the extended term fixed by the MTC to be
opposing party's claim and does not require for its reasonable.
adjudication the presence of third parties of whom the
court cannot acquire jurisdiction. A counterclaim may be WHEREFORE, the instant petition is GRANTED and the
compulsory or permissive. The former is that covered by challenged Decision of 20 January 1993 of the Court of
Section 4 of Rule 9. Appeals in CA-G.R. SP No. 28870 is hereby SET ASIDE, and
the Decisions of 27 March 1992 of Branch 11 of the
Chan's counterclaim for ejectment is a compulsory Regional Trial Court of Manila in Civil Case No. 91-55879,
counterclaim because it is necessarily connected with the and of 18 December 1990 of Branch 15 of the
transaction or occurrence which is the subject matter of Metropolitan Trial Court of Manila in Civil Case No.
Cu's complaint, viz., the lease contract between them. 131203- CV are REINSTATED.
Consequently, the Court of Appeals erred when it held
that Chan's cause of action for ejectment could not be Costs against the private respondent.
seen up in a counterclaim.
SO ORDERED.
We agreed with Chan that Ching Pue vs. Gonzales is
inapplicable because in Ching Pue the consignation cases Cruz, Bellosillo, Quiason and Kapunan, JJ., concur.
were filed with the Court of First Instance which did not
have jurisdiction over ejectment cases; necessarily, no ---------------
counterclaim for ejectment could have been interposed Footnotes
therein. The ratio decidendi of the said case is that
consignation is not proper where the refusal of the
creditor to accept tender of payment is with just cause.
1. Rollo, 114-120. Per Associate Justice Angelina S.
Gutierrez, concurred in by Associate Jstices Fidel P.
Purisima and Jesus M. Elbinias.
2. Annex "G" of Petition; Id., 88-96.
3. Annex "F" of Petition; Id., 82-87.
4. Rollo, 115-116.
MTC Decision, 5-6; Rollo, 86-87.
6. Annex "I" of Petition; Id., 100-112.
7. Should be March 1990.
8. Id.
9. Rollo, 118.
10. Rollo, 118-119 mphasis supplied).
11. Annex "K" of Petition; Id., 121-129.
12. Annex "L" of Petition; Id., 131.
13. Rollo, 15-16; Petition, 10-11.
14. 87 Phil. 81 [1950].
15. Rollo, 133-140.
16. 203 SCRA 273 [1991].
17. Rollo, 144-148.
18. Rollo, 151-154.
19. Id., 86.
20. Id., 95.
21. Annex "E" of Petition; Rollo, 68-77.
22. Rollo, 71-72.
23. Id., 73.
24. Section 6, Rule 6, Rules of Court.
25. 1 VICENTE J. FRANCISCO, THE REVISED RULES OF
COURT IN THE PHILIPPINES 463 (2D ED. 1973).
26. FRANCISCO, op. cit., at 464.