Gsis Vs Heirs of Caballero

Macalinao, Romielyn P.
Subject: Constitutional Law 1

Topic: Judicial Department
Title: GSIS vs HEIRS OF FERNANDO CABALLERO
Reference: G.R. No. 158090
FACTS
Before this Court is a petition for review on certiorari under
Rule 45 of the Rules of Court seeking to set aside the Decision and
the Resolution, dated December 17, 2002 and April 29, 2003,
respectively, of the Court of Appeals in CA-G.R. CV. No. 49300.
Respondent Fernando C. Caballero was the registered owner
of a residential lot designated as Lot No. 3355, Ts-268, covered by
TCT No. T-16035 of the Register of Deeds of Cotabato, containing
an area of 800 square meters and situated at Rizal Street, Mlang,
Cotabato. On the said lot, respondent built a residential/commercial
building consisting of 2 stories.
Fernando and his wife, Sylvia Caballero, secured a loan from
petitioner Government Service Insurance System in the amount of
P20,000.00, as evidenced by a promissory note. Fernando and his
wife likewise executed a real estate mortgage on the same date,
mortgaging the afore-stated property as security.
Fernando defaulted on the payment of his loan with the
GSIS. Hence, the mortgage covering the subject property was
foreclosed, and the same was sold at a public auction where the
petitioner was the only bidder in the amount of P36,283.00.
Petitioner wrote a letter to Fernando, informing him of the
consolidation of title in its favor, and requesting payment of monthly
rental in view of Fernando's continued occupancy of the subject

property.
Petitioner scheduled the subject property for public bidding.
On the scheduled date of bidding, Fernando's daughter, Jocelyn
Caballero, submitted a bid in the amount of P350,000.00, while
Carmelita Mercantile Trading Corporation (CMTC) submitted a bid in
the amount of P450,000.00. Since CMTC was the highest bidder, it
was awarded the subject property. The Board of Trustees of the
GSIS issued Resolution No. 199 confirming the award of the subject
property to CMTC for a total consideration of P450,000.00.
Thereafter, a Deed of Absolute Sale was executed between
petitioner and CMTC
transferring the subject property to CMTC.
Consequently, TCT No. T-45874 in the name of GSIS was cancelled,

and TCT No. T-76183 was issued in the name of CMTC.
Fernando alleged that there were irregularities in the conduct
of the bidding. CMTC misrepresented itself to be wholly owned by
Filipino
citizens.
It
misrepresented
its
working
capital.
Its
representative Carmelita Ang Hao had no prior authority from its

board of directors in an appropriate board resolution to participate
in the bidding. The corporation is not authorized to acquire real
estate or invest its funds for purposes other than its primary
purpose. Fernando further alleged that the GSIS allowed CMTC to
bid despite knowledge that said corporation has no authority to do
so. The GSIS also disregarded Fernando's prior right to buy back his
family home and lot in violation of the laws. Petitioner and its
officers
filed
their
Answer
with
Affirmative
Defenses
and
Counterclaim.
The GSIS alleged that Fernando lost his right of redemption.
He was given the chance to repurchase the property; however, he
did not avail of such option compelling the GSIS to dispose of the
property by public bidding as mandated by law. There is also no
prior right to buy back that can be exercised by Fernando. Further,
it averred that the articles of incorporation and other papers of
CMTC were all in order. In its counterclaim, petitioner alleged that
Fernando owed petitioner the sum of P130,365.81, representing
back rentals, including additional interests from January 1973 to
February
1987,
excluding
and
applicable
the
additional
interests,
amount
representing
of
P249,800.00,
rentals
Fernando
unlawfully collected from Carmelita Ang Hao from January 1973 to

February 1988.
ISSUES
Whether or not the CA committed an error of law in holding
that GSIS counterclaim of P249,800.00 is in nature of a permissive
counterclaim?
RULINGS
No. To determine whether a counterclaim is compulsory or
not, the Court has devised the following tests: (a) Are the issues of
fact and law raised by the claim and by the counterclaim largely the
same? (b) Would res judicata bar a subsequent suit on defendants
claims,
absent
the
compulsory
counterclaim
rule?
(c)
Will
substantially the same evidence support or refute plaintiffs claim as

well as the defendants counterclaim? and (d) Is there any logical
relation between the claim and the counterclaim? A positive answer
to all four questions would indicate that the counterclaim is
compulsory.
Tested against the above-mentioned criteria, this Court
agrees with the CA's view that petitioner's counterclaim for the
recovery of the amount representing rentals collected by Fernando

from the CMTC is permissive. The evidence needed by Fernando to
cause the annulment of the bid award, deed of absolute sale and
TCT is different from that required to establish petitioner's claim for
the recovery of rentals.
The issue in the main action, i.e., the nullity or validity of the
bid award, deed of absolute sale and TCT in favor of CMTC, is
entirely different from the issue in the counterclaim, i.e., whether
petitioner is entitled to receive the CMTC's rent payments over the
subject property when petitioner became the owner of the subject
property by virtue of the consolidation of ownership of the property
in its favor.
The rule in permissive counterclaims is that for the trial court
to acquire jurisdiction, the counterclaimant is bound to pay the
prescribed docket fees. This, petitioner did not do, because it
asserted that its claim for the collection of rental payments was a
compulsory counterclaim. Since petitioner failed to pay the docket
fees, the RTC did not acquire jurisdiction over its permissive
counterclaim. The judgment rendered by the RTC, insofar as it
ordered Fernando to pay petitioner the rentals which he collected
from CMTC, is considered null and void. Any decision rendered
without jurisdiction is a total nullity and may be struck down at any
time, even on appeal before this Court.
Petitioner further argues that assuming that its counterclaim
is permissive, the trial court has jurisdiction to try and decide the
same, considering petitioner's exemption from all kinds of fees.
Due to the non-payment of docket fees on petitioner's
counterclaim, the trial court never acquired jurisdiction over it and,
thus, there is no need to discuss the second issue raised by

petitioner.

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Macalinao, Romielyn P.

Subject: Constitutional Law 1

rental in view of Fernando's continued occupancy of the subject

transferring the subject property to CMTC.

Consequently, TCT No. T-45874 in the name of GSIS was cancelled,

representative Carmelita Ang Hao had no prior authority from its

unlawfully collected from Carmelita Ang Hao from January 1973 to

substantially the same evidence support or refute plaintiffs claim as

recovery of the amount representing rentals collected by Fernando

thus, there is no need to discuss the second issue raised by

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