Diaz, Jayson Paolo DM.

Civil Procedure Case Digest

2nd Year John Wesley School of Law and Governance

MELITON v. CA

FACTS:

Nelia Ziga filed a complaint against Lydia Meliton for rescission of a contract of lease
over a parcel of land with RTC of Naga City.

In her answer, Lydia Meliton denied the material avernments of the complaint and
setting up 3 counterclaims for the recovery of the value of her demolished kitchenette in
leased land, and for the improvements, and damages which was demolished by the
respondent.

The court dismissed the complaint based on the motion of Ziga contending that the
cause of action had already been moot and academic by the expiration of the leased
contract.

Melitons counterclaims were also dismissed for non-payment of docket fees. The trial
court said that it had not acquired jurisdiction because of the non-payment of the docket
fees.

Spouses Lydia Meliton and Virgilio Meliton filed a complaint against Ziga for recovery of
the same amounts involved and alleged in their counterclaims in the previous case and
assigned to Branch 27 of the same trial court.

Ziga filed a motion to dismiss the complaint on the ground that the cause of action was
barred by a prior judgment in the previous case. But the court denied her motion to
dismiss on the ground that the dismissal of the Meliton's counterclaims in the previous
case is not an adjudication on the merits because the court did not acquire jurisdiction
over the counterclaims for failure of Meliton to pay the docket fees, and for this reason,
the said dismissal does not constitute a bar to the filing of the later complaint. She also
filed a motion for reconsideration but the same was subsequently denied.

Aggrieved, Ziga filed a petition for certiorari filed a petition for certiorari with the SC.
Then, the higher court, in its resolution, referred the case to the Court of Appeals for
proper determination and disposition pursuant to Section 9, paragraph 1, of B.P. Blg.
129.

The CA found that Melitons counterclaim The Melitons' counterclaim against the Ziga is
a compulsory counterclaim, it having arisen out of or being necessarily connected with
the transaction or occurrence subject matter of Zigas complaint.

The failure of the Melitons to seek a reconsideration of the dismissal of their

counterclaim or to take an appeal rendered the dismissal final; and such dismissal
barred the prosecution of their counterclaim by another action.

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 Diaz, Jayson Paolo DM.
Civil Procedure Case Digest
2nd Year John Wesley School of Law and Governance

The Melitons challenged the judgment of the CA and praying for its annulment.

ISSUE:

Whether or not the counterclaims of the petitioners are compulsory in nature.

Whether or not the petioners are barred from asserting their counterclaims having failed
to seek reconsideration or to take an appeal from the order of dismissal of the same.

RULING:

YES. The counterclaims of the petitioners are compulsory in nature.

Section 7 of Rule 6 of the Rules of Court enumerates the requisites compulsory

counterclaim, to wit;(a) it arises out of, or is necessarily connected with, the transaction
or occurrence which is the subject matter of the opposing party's 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.

It has been postulated that while a number of criteria have been advanced for the
determination of whether the counterclaim is compulsory or permissive, the one
compelling test of compulsoriness is the logical relationship between the claim alleged
in the complaint and that in the counterclaim, e.i., where conducting separate trials of
the respective claims of the parties would entail a substantial duplication of effort and
time, as where they involve many of the same factual and/or legal issues.

In the case at bar, all the requisites of a compulsory counterclaim are present. The
counterclaims are logically related to the complaint. Private respondent Zigas complaint
was for rescission of the contract of lease due to petitioner Lydia Meliton's breach of her
obligations under the said contract. On the other hand, petitioner's counterclaims were
for damages for unlawful demolition of the improvements. Both the claims of petitioners
and private respondent arose from the same contract of lease. To state it diffently, They
are offshoots of the same basic controversy between the parties, e.i., the right of either
to the possession of the property.

NO. The petitioners are not barred from asserting claims in a separate suit.

While it is true,as stated in Section 2, Rule 9 of the Rules of Court, that a counterclaim
not set up shall be barred if it arises out of or is necessarily connected with the
transaction or occurrence that is the subject matter of the opposing party's claim and
does not require for its adjudication the presence of third parties of whom the court
cannot acquire jurisdiction, cannot be applied to the case at bar.

Firstly, where a compulsory counterclaim is made the subject of a separate suit, it may
be abated upon a plea of auter action pendant or litis pendentia and/or dismissed on the

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 Diaz, Jayson Paolo DM.
Civil Procedure Case Digest
2nd Year John Wesley School of Law and Governance

ground of res judicata, depending on the stage or status of the other suit. The action in
the case at bar cannot be dismissed either on the ground of litis pendentia since there is
no other pending action between the same parties and for the same cause, nor on the
ground of res judicata. Also, the dismissal of the counterclaims of the petitioners
because of failure to pay docket fees does not constitute res judicata, there having been
no consideration and adjudication of the case on the merits.

Secondly, a reading of the order of dismissal will show that the trial court, in dismissing
the complaint of private respondent, did not intend to prejudice the claims of petitioners
by barring the subsequent judicial enforcement thereof.

The failure of petitioners to seek reconsideration of or to take an appeal from the order
of dismissal of the counterclaim should not prejudice their right to file their claims in a
separate action because they were thereby made to understand and believe that their
counterclaims were merely permissive and could be the subject of a separate and
independent action. Had the trial court correctly specified that petitioners' counterclaims
were compulsory, petitioners could have objected to the dismissal sought by private
respondent on the ground that said counterclaims could not remain pending for
independent adjudication

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