COMPULSORY COUNTERCLAIM/CROSS-CLAIM of 1 year which was automatically renewed every year unless

15 Bayer PH v. CA earlier terminated or revoked by either party.

September 15, 2000 | Gonzaga-Reyes, J. | ● Bompat obtained from Bayer, on credit, Bayluscide worth
P741,250. Bompat was unable to pay P117,500 so he executed a
Doctrine: promissory note promising to pay it in 12 monthly installments.
A counterclaim is compulsory if: He also promised that should he default in any of the installments,
1. It arises out of or is necessarily connected with, the transaction or he would pay 14% interest per annum, and compounded monthly
occurrence which is the subject matter of opposing party’s claim until fully paid, and that in the event of default for any 3 monthly
2. It does not require for its adjudication the presence of third parties installments, the whole obligation was accelerated and he would
of whom the court cannot acquire jurisdiction; and pay the accelerated principal plus interest.
3. Subject to the qualification on the jurisdictional amount with regard ● Bompat was able to pay, although belatedly, 4 installments and as
to counterclaims raised in the Regional Trial Courts, the court has of January 31, 1984, he still had a balance of 112,482.13 plus
jurisdiction to entertain the claim. interes. He failed to pay the same which prompted Bayer to file a
● The “one compelling test of compulsoriness” is the logical collection suit praying that Bompat pay the balance plus interest.
relationship between the claim alleged in the complaint and ● Bompat filed his answer admitting his liability but put up special
that in the counterclaim, that is, where conducting separate trials and affirmative defenses. He alleged that Bayer delivered 4,000
of the respective claims of the parties would entail a substantial kilos of Bayluscide to Bompat but when Bompat was already in a
duplication of effort and time, as where they involve many of the position to sell the chemicals to the end-users, specifically
same factual and/or legal issues. government entities, Bayer, without reason, withdrew the
● A counterclaim is logically related to the opposing party’s claim chemicals leaving Bompat nothing to deliver to the end-users.
where, as already stated, separate trials of each of their respective That Bayer did this without revoking the distributorship
claims would involve a substantial duplication of effort and time agreement; and it instead dealt directly with the end-users.
by the parties and the courts. ● Bompat also alleged that his appointment as distributor was
BAREBONES: merely a ploy to get free storage from Bompat.
Bayer appointed Bompat as the exclusive distributor of Bayluscide to ● As his counter-claim, Bompat claims that Bayer is guilty of
government entities. Bompat obtained the chemicals on credit. However, he breach of contract by dealing directly with the end-users and that
failed to pay and so he executed a promissory note to pay the credit. Bayer their agreement was merely a ploy to get free storage.
delivered to Bompat 4,000 kilos of the chemicals but before Bompat could ● Bayer, in its answer to the counter-claim, merely denied the
sell the chemicals, Bayer took the chemicals and dealt directly with the allegations.
buyers. Bompat then failed to pay the credit which prompted Bayer to file a ● TC held that the only issue was W/N Bompat can collect on his
complaint for a sum of money. Bompat as his counterclaim, alleged that counterclaims against Bayer. It was found that Bompat spent
Bayer breached their contract since they took the chemicals without P100,000 of his own money in promoting the products and that
revoking the agreement. The Court held that Bompat’s counterclaim is Bompat had to construct a Bodega to store the chemicals and
compulsory since both Bayer and Bompat’s claim arose from the same protect them. Because of these, and that Bayer did not deny as
distributorship agreement. Their rights and obligations and well as their well the claims for damages, Bompat was entitled to payment for
liability to each other arose from the same contractual relation. damages.
Facts: ● Both appealed to the CA and the CA affirmed the TC with
● Bayer PH Inc (Bayer) appointed Casimiro Bompat (Bompat), doing modifications. Both filed an MR but both were denied.
business as Kaiser Enterprises, as its exclusive distributor of Issue:
Bayluscide 70% W.P to government accounts in 1977 for a period W/N the CA erred in treating Bompat’s counterclaim as compulsory
in nature which would not require payment of docket fees
(Other issues in notes) damages in favor of private respondent is DELETED. The judgment under
Held: review is affirmed in all other respects.
NO. Bompat’s counter claim was compulsory SO ORDERED.
● Bayer alleges that Bompat’s counter-claims are permissive in Notes
nature, not compulsory and so he must pay the required docket The Awarding of 14% compounded interest to Bayer - Private
fess. respondent’s total outstanding obligation in the amount of P112,482.13
● The SC held that Bompat’s counterclaim is compulsory. based on the statement of account dated January 31, 1984 prepared by
A counterclaim is compulsory if: petitioner, took into account among others, the stipulated 14%
4. It arises out of or is necessarily connected with, the transaction or compounded interest; thus, the interest that accrued prior to the date of the
occurrence which is the subject matter of opposing party’s claim filing of the complaint had been consolidated as of that date with the
5. It does not require for its adjudication the presence of third parties capital,the respondent court did not err in computing the 14% compounded
of whom the court cannot acquire jurisdiction; and interest from judicial demand, i.e., the date when the complaint was filed,
6. Subject to the qualification on the jurisdictional amount with regard which was on March 7,1984.
to counterclaims raised in the Regional Trial Courts, the court has
jurisdiction to entertain the claim. Attorney’s Fees - We also do not find merit in petitioner’s claim that it is
● The “one compelling test of compulsoriness” is the logical entitled to the award of attorney’s fees. We uphold private respondent’s
relationship between the claim alleged in the complaint and contention that petitioner did not raise this as an error on appeal before the
that in the counterclaim, that is, where conducting separate trials respondent Court despite the fact that there was no award made by the trial
of the respective claims of the parties would entail a substantial court.
duplication of effort and time, as where they involve many of the
same factual and/or legal issues. Entitlement of Bompat to recover on his counterclaims - We also
● A counterclaim is logically related to the opposing party’s claim sustain the findings of the respondent court that private respondent is
where, as already stated, separate trials of each of their respective entitled to recover on his counterclaims for breach of the exclusive
claims would involve a substantial duplication of effort and time distributorship agreement and storage fees. The respondent court correctly
by the parties and the courts. found that petitioner failed to adduce evidence to refute the material
● Bayer’s complaint was for collection of money based on the allegations in the counterclaims as well as the evidence presented in
promissory note executed by Bompat due to his nonpayment of support thereto. Private respondent had sufficiently established that
the chemicals obtained on credit by virtue of the exclusive petitioner violated the terms of their exclusive distributorship agreement.
distributorship. The distributorship agreement provides that private respondent is
● Bompat’s counterclaims were for storage fees and damages appointed as exclusive distributor for government account of Bayer
premised on a violation of the same distributoryship agreement chemical product, namely Bayluscide 70% W.P.
● Both their claims arose from the same exclusive dsitributorship
agreement and the rights and obligations of the parties as well as
their potential liability came from the same contractual relation.
● Being compulsory in nature, payment of docket fees is not
required and the TC had jurisdiction.

Dispositive
WHEREFORE, the decision of the Court of Appeals is Affirmed with
Modification that the award of P50,000.00 as actual and compensatory