Banco de Oro Universal Bank vs. Court of Appeals

A claim that matures or is acquired after the filing of an answer cannot be a compulsory counterclaim in the prior action, and the failure to set it up in that action does not bar a separate suit.

Spouses Locsin obtained a term loan and a credit line from Banco de Oro (BDO), secured by real estate mortgages containing cross-default provisions. Upon the spouses' default on the credit line, BDO initiated extrajudicial foreclosure proceedings. The Locsins filed a complaint for specific performance and damages to annul the foreclosure, to which BDO filed an answer. The foreclosure sale subsequently proceeded, resulting in a deficiency balance. BDO later filed a separate collection suit to recover the deficiency.

• The Loan Agreements: On September 28, 1995, respondents Spouses Locsin obtained a ₱700,000.00 term loan (1st TLA) from petitioner BDO, secured by a mortgage on their property (TCT No. N-138739). On November 6, 1996, the Locsins obtained a ₱2.5 Million credit line (CLA) secured by mortgages on properties owned by the Spouses Evidente. The CLA contained a cross-default provision stipulating that default on the credit line would automatically mean default on the 1st TLA, and vice versa.
• The Foreclosure Proceedings: The Locsins defaulted on the CLA. BDO filed an application for extrajudicial foreclosure, initially erroneously including a property tied to a previously settled loan. BDO filed an amended application including the Locsin property securing the 1st TLA.
• The First Suit: On August 24, 1998, two days before the scheduled auction, the Locsins filed a complaint against BDO for specific performance, tort, and damages with a prayer for a TRO, docketed as Civil Case No. Q-98-35337. They alleged BDO acted in bad faith by undervaluing the Evidente properties and erroneously including the 1st TLA property in the foreclosure. BDO filed its Answer with Compulsory Counterclaim on September 11, 1998. The public auction proceeded on September 23, 1998, with BDO as the highest bidder.
• The Second Suit: On February 9, 1999, BDO demanded payment of the deficiency balance. On November 29, 1999, BDO filed a separate complaint for collection of sum of money against the Locsins, docketed as Civil Case No. MC-99-935 before the RTC of Mandaluyong.

• Nature of the Claim: Petitioner argued that its deficiency claim is a permissive, not compulsory, counterclaim because it arises from contract and law, whereas the Locsins' claim arises from tort and the annulment of foreclosure.
• Litis Pendentia and Res Judicata: Petitioner maintained that litis pendentia and res judicata do not apply because the causes of action, rights asserted, and reliefs prayed for are different. The evidence needed to prove a deficiency claim differs from that needed to prove specific performance or annulment of foreclosure.

• Compulsory Counterclaim: Respondents countered that the deficiency claim is logically related to their own claim, involving the same parties, facts, subject matter, and transactions, and would require the presentation of the same evidence. Having failed to set it up in the first case, it is now barred.
• Litis Pendentia and Forum Shopping: Respondents argued that the elements of litis pendentia are present, a judgment in the first case would constitute res judicata in the second, and filing the separate complaint constitutes willful and deliberate forum shopping.

• Compulsory Counterclaim: Whether the bank's complaint for collection of deficiency is a compulsory counterclaim that should have been set up in the borrowers' prior suit.
• Litis Pendentia: Whether litis pendentia bars the bank's separate collection suit.
• Forum Shopping: Whether the bank is guilty of forum shopping in filing the separate collection suit.

• Compulsory Counterclaim: The deficiency claim is not a barred compulsory counterclaim. A compulsory counterclaim must be existing at the time of the filing of the answer. When BDO filed its answer on September 11, 1998, the foreclosure sale had not yet occurred, and the cause of action for the deficiency had not yet arisen. A premature counterclaim cannot be set up in the answer. Even if the claim could have been set up in a supplemental answer to the Locsins' supplemental complaint, the setting up of an "after-acquired counterclaim" is merely permissive, not compulsory. Failure to interpose a counterclaim that did not exist or mature at the time of filing the answer does not bar a future independent action.
• Litis Pendentia: Litis pendentia does not apply. The allegations of the pleadings do not reflect an identity of rights asserted and reliefs sought sufficient to abate the complaint. The Locsins seek specific performance and annulment of the foreclosure, while BDO seeks payment of the deficiency balance.
• Forum Shopping: Forum shopping does not exist. The absence of identity of rights asserted and reliefs sought negates the presence of forum shopping, which requires the elements of litis pendentia.

• Premature Compulsory Counterclaim — A counterclaim must be existing at the time of the filing of the answer. A premature counterclaim cannot be set up in the answer. A party who fails to interpose a counterclaim that did not exist or mature at the time of filing the answer is not thereby barred from interposing such claim in a future litigation.
• After-Acquired Counterclaim — A counterclaim that matures or is acquired by a party after serving their pleading may, with the permission of the court, be presented as a counterclaim by supplemental pleading before judgment. The interposition of such a claim is permissive, not compulsory.

• "The counterclaim must be existing at the time of filing the answer, though not at the commencement of the action for under Section 3 of the former Rule 10, the counterclaim or cross-claim which a party may aver in his answer must be one which he may have 'at the time' against the opposing party. That phrase can only have reference to the time of the answer. Certainly a premature counterclaim cannot be set up in the answer."
• "Thus a party who fails to interpose a counterclaim although arising out of or is necessarily connected with the transaction or occurrence of the plaintiff’s suit but which did not exist or mature at the time said party files his answer is not thereby barred from interposing such claim in a future litigation."

• National Marketing Corporation v. Federation of United Namarco Distributors, Inc., 49 SCRA 238 (1973) — Followed. Cited as controlling authority for the rule that a counterclaim must exist at the time the answer is filed, and a premature counterclaim cannot be compelled; failure to plead an unmatured claim does not bar a subsequent suit.
• Bangko Silangan Development Bank v. Court of Appeals, 360 SCRA 322 (2001) — Relied upon by petitioner. Cited for the "same evidence" test to determine identity of causes of action, supporting the distinction between the specific performance suit and the deficiency collection suit.

• Rule 9, Section 2, Rules of Court — Provides that a compulsory counterclaim or cross-claim not set up is barred. Applied to determine the consequence of failing to plead a counterclaim, subject to the exception that the claim must have existed at the time of the answer.
• Rule 11, Section 8, Rules of Court — Requires that a compulsory counterclaim existing at the time the defending party files the answer shall be contained therein. Applied to establish the temporal requirement for compulsory counterclaims.
• Rule 11, Section 9, Rules of Court — Allows a counterclaim acquired after serving a pleading to be presented by supplemental pleading with court permission. Applied to show that setting up an "after-acquired counterclaim" is permissive, not compulsory.

Panganiban (Chairman), Sandoval-Gutierrez, Corona, Garcia.