DIO VS SUBIC BAY

For all intents and purposes, such proposition runs counter to the nature of a
compulsory counterclaim in that it cannot remain pending for independent
adjudication by the court. This is because a compulsory counterclaim is auxiliary to
the proceeding in the original suit and derives its jurisdictional support therefrom,
inasmuch as it arises out of or is necessarily connected with the transaction or
occurrence that is the subject matter of the complaint. It follows that if the court
does not have jurisdiction to entertain the main action of the case and dismisses the
same, then the compulsory counterclaim, being ancillary to the principal
controversy, must likewise be dismissed since no jurisdiction remained for any grant
of relief under the counterclaim.
The aforementioned doctrine is in consonance with the primary objective of a
counterclaim which is to avoid and prevent circuity of action by allowing the entire
controversy between the parties to be litigated and finally determined in one action,
wherever this can be done with entire justice to all parties before the court. The
philosophy of the rule is to discourage multiplicity of suits.1wphi1 It will be
observed that the order of the trial court allowing herein private respondent to
proceed with the
presentation of his evidence in support of the latter's counterclaim is repugnant to
the very purpose and intent of the rule on counterclaims.
Thus, it necessarily follows that if the trial court no longer possesses jurisdiction to
entertain the main action of the case, as when it dismisses the same, then the
compulsory counterclaim being ancillary to the principal controversy, must likewise
be similarly dismissed since no jurisdiction remains for the grant of any relief under
the counterclaim.28
As the rule now stands, the nature of the counterclaim notwithstanding, the
dismissal of the complaint does not ipso jure result in the dismissal of the
counterclaim, and the latter may remain for independent adjudication of the court,
provided that such counterclaim, states a sufficient cause of action and does not
labor under any infirmity that may warrant its outright dismissal. Stated differently,
the jurisdiction of the court over the counterclaim that appears to be valid on its
face, including the grant of any relief thereunder, is not abated by the dismissal of
the main action. The courts authority to proceed with the disposition of the
counterclaim independent of the main action is premised on the fact that the
counterclaim, on its own, raises a novel question which may be aptly adjudicated by
the court based on its own merits and evidentiary support.

It bears to emphasize that petitioner's counterclaim against respondent is for

damages and attorney's fees arising from the unfounded suit. While respondent's
Complaint against petitioner is already dismissed, petitioner may have very well
already incurred damages and litigation expenses such as attorney's fees since it
was forced to engage legal representation in the Philippines to protect its rights and

to assert lack of jurisdiction of the courts over its person by virtue of the improper
service of summons upon it. Hence, the cause of action of petitioner's counterclaim
is not eliminated by the mere dismissal of respondent's complaint.30 (Emphasis
theirs).
Once more, we allow the counterclaim of the petitioners to proceed independently
of the complaint of the respondent
Cabaero v. Hon. Cantos, G.R. No. 102942, April 18, 1997
On top of the above procedural difficulties, some members of the Court believe
that a cause of action for malicious prosecution may be premature because there is
as yet no finding of such wrongful prosecution. This fact is precisely what the trial
court still has to determine.

By the foregoing discussion, we do not imply any fault in Javier. The real problem
lies in the absence of clear-cut rules governing the prosecution of impliedly
instituted civil actions and the necessary consequences and implications thereof.
For this reason, the counter-claim of the accused cannot be tried together with the
criminal case because, as already discussed, it will unnecessarily complicate and
confuse the criminal proceedings. Thus, the trial court should confine itself to the
criminal aspect and the possible civil liability of the accused arising out of the crime.
The counter-claim (and cross-claim or third party complaint, if any) should be set
aside or refused cognizance without prejudice to their filing in separate proceedings
at the proper time. 34

At balance, until there are definitive rules of procedure 35 to govern the institution,
prosecution and resolution of the civil aspect (and the consequences and
implications thereof) impliedly instituted in a
criminal case, trial courts should limit their jurisdiction to the civil liability of the
accused arising from the criminal case.

On the other hand, this Court is only too well aware that the antecedent case was
filed in the Respondent Court on October 18, 1990. Although it has dragged on for
more than six (6) years now, trial has yet to start because of the herein procedural
question raised on certiorari. In view of this, it is to the best interest of the parties
that the trial of the criminal action should now proceed.

The trial has waited too long; it is time to continue and finish it with all reasonable
dispatch. In fairness to the accused, he may file separate proceedings to litigate his
counterclaim after the criminal case is terminated and/o