LAFARGE CEMENT PHILIPPINES vs.

CCC
G.R. No. 155173 | 23 November 2004

NATURE: Petition for review on certiorari of the orders of RTC-QC Branch 80

PONENTE: J. Panganiban
FACTS:
Through a Letter of Intent (LOI) both parties agreed on 11-AUG-1998, that petitioner Lafarge on
behalf of its affiliates and other entities, including Luzon Continental Land Corp., agreed to
purchase the cement business of respondent Continental Cement Corporation.
21-OCT-1998 Both parties entered into a Sale and Purchase Agreement petitioner was aware of
respondents pending case with the SC.
In anticipation of respondents liability, parties allegedly agreed [Clause 2(c)] to retain from the
purchase price a portion of the contract price in the amount of P117,020,846.84 which will be
deposited in an interest-bearing account for payment to Asset Privatization Trust (petitioner in
pending case of CCC)
However, petitioners Lafarge allegedly refused to apply the sum to the payment to APT despite
finality of the pending case.
Respondent CCC filed a Complaint with Application for Preliminary Attachment against petitioners
Lafarge, with the prayer that petitioners pay the APT Retained Amount in Clause 2 (c) of the SPA
Petitioners filed their Answer and Compulsory Counterclaims with the RTC, denying the
allegations; prayed for damages and alleged that respondent, through Lim and Mariano, filed
baseless complaints and procured the writ of attachment in bad faith.
Respondent CCC moved to dismiss the compulsory counterclaims on the ground that Lim and
Mariano were not parties to the original complaint filed.
RTC dismissed petitioners counterclaims

ISSUE: Whether defendants in a civil case implead in their counterclaims persons who were not parties
to the original
complaints
HELD: Yes. PETITION GRANTED.
RATIO:
Sec. 6, Rule 6 defines counterclaims as any claim which a defending party may have against an
opposing party. It is generally allowed to avoid multiplicity of suits and to facilitate the
disposition of the whole controversy in a single action.

Limitations:
o That the court should have jurisdiction over the subject matter of the counterclaim; and
o That it could acquire jurisdiction over third parties whose presence is essential for its
adjudication.

It can either be:

o Permissive: if it does not arise out of or is not necessarily connected with the subject
matter of the opposing partys claim. It is essentially an independent claim that may be
filed separately in another case.

o Compulsory: when its object arises out of or is necessarily connected with the transaction
or occurrence constituting the subject matter of the opposing partys claim and does not
requires for its adjudication the presence of third parties of whom the court cannot
acquire jurisdiction. It should be set up in the same action; otherwise, they would be
barred forever.

o NAMARCO v. Federation of United Namarco Distributors: Criteria to determine whether

permissive or compulsory counterclaims: (positive answer to the following makes it a
counterclaim)
Are issues of fact and law raised by the claim and by the counterclaim largely the
same?
Would res judicata bar a subsequent suit on defendants claim, absent the
compulsory counterclaim rule?
Will substantially the same evidence support or refute plaintiffs claim as well as
defendants counterclaim?
 Is there any logical relation between the claim and the counterclaim?

o Alday v. FGU Insurance: Compelling test of compulsoriness of a counterclaim if there

should exist a logical relationship between the main claim and the counterclaim; i.e.:
when conducting separate trials of the respective claims of the parties would entail
substantial duplication of time and effort by the parties and the court;
when the multiple claims involve the same factual and legal issues; or
when the claims are offshoots of the same basic controversy between the parties.

In the present case, recovery of petitioners counterclaims for damages is contingent upon the
case filed by respondents. Thus, conducting separate trials will result in a substantial duplication
of the time and effort of the court and the parties.
The Court held that the inclusion of the corporate officers (Lim and Mariano) is based on the
allegations of fraud and bad faith on their part, and such may warrant the piercing of the veil of
corporate fiction.
As established, Lim and Mariano are real parties in interest to the compulsory counterclaim, thus
it is imperative that they be joined therein.