Sep 7, 2019

Sy-Vargas vs. Estate of Ogsos CASE DIGEST - Civil Procedure - Commencement of action


Sy-Vargas vs. Estate of Ogsos
Facts: Ogsos, Sr. and the Heirs of Fermina Pepico in 1994 entered into a Contract of Lease covering 5 parcels of agricultural land owned by the latter. Ogsos, Sr. agreed to pay the Heirs 290.95 liquid-kilogram of centrifugal sugar every crop year, starting from as lease rental. In, 1996 the lease contract was extended for 3 more years. On that same year, the said contract was amended, and the lease rental modified from lkg. centrifugal sugar every crop year to P 150k cash.

Sy-Vargas one of the heirs, filed a Complaint for Specific Performance and Damages against Ogsos, before RTC claiming that the lease rentals were not paid.  RTC declared Ogsos’ counterclaim as compulsory; thus holding that the payment of the required docket fees was no longer necessary and ordered Sy to pay Ogsos. CA affirmed RTC.

Issue: WON the CA correctly ruled that respondents’ counterclaim for damages is compulsory and not permissive in nature, and thus, no payment of docket fees is required.

Held: Permissive. The nature of a counterclaim is determinative of whether or not the counterclaimant is required to pay docket fees. A counterclaim is permissive if it does not arise out of or is not necessarily connected with the subject matter of the opposing party’s claim. It is essentially an independent claim that may be filed separately in another case.

By reason of the respondents’ counterclaim being permissive, and not compulsory, Ogsos are required to pay docket fees. However, it must be clarified that respondents’ failure to pay the required docket fees, per se, should not necessarily lead to the dismissal of the counterclaim. While the court acquires jurisdiction over any case only upon the payment of the prescribed docket fee, its non-payment at the time of the filing of the initiatory pleading does not automatically cause its dismissal provided that: (a) the fees are paid within a reasonable period; and (b) there was no intention on the part of the claimant to defraud the government.

Ogsos cannot be faulted for non-payment of docket fees in connection with their counterclaim, primarily because as early 2006, the RTC had already found such counterclaim to be compulsory in nature. As such, the lower courts did not require respondents to pay docket fees and even proceeded to rule on their entitlement thereto.

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