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    Rule - 11 Banco de Oro V CA - Digest

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    Nyla
    Banco de Oro Universal Bank (BDO) filed for extrajudicial foreclosure against Gabriel and Ma. Geraldine Locsin for failing to comply with their credit agreement. The Locsins then filed a complaint against BDO seeking to stop the foreclosure. BDO later filed its own collection case against the Locsins. The Locsins argued BDO's claim should have been raised as a counterclaim in the initial case. The Court of Appeals agreed, but the Supreme Court held that BDO's cause of action had not arisen yet, as the Locsins had only later refused payment. A counterclaim must exist when the answer is filed, not just the complaint. Even if BDO

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    Rule - 11 Banco de Oro V CA - Digest

    Uploaded by

    Nyla
    97 views2 pages
    Banco de Oro Universal Bank (BDO) filed for extrajudicial foreclosure against Gabriel and Ma. Geraldine Locsin for failing to comply with their credit agreement. The Locsins then filed a complaint against BDO seeking to stop the foreclosure. BDO later filed its own collection case against the Locsins. The Locsins argued BDO's claim should have been raised as a counterclaim in the initial case. The Court of Appeals agreed, but the Supreme Court held that BDO's cause of action had not arisen yet, as the Locsins had only later refused payment. A counterclaim must exist when the answer is filed, not just the complaint. Even if BDO

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    Banco de Oro v CA

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    Rule_11 Banco de Oro v CA -Digest

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    Banco de Oro Universal Bank (BDO) filed for extrajudicial foreclosure against Gabriel and Ma. Geraldine Locsin for failing to comply with their credit agreement. The Locsins then filed a complaint against BDO seeking to stop the foreclosure. BDO later filed its own collection case against the Locsins. The Locsins argued BDO's claim should have been raised as a counterclaim in the initial case. The Court of Appeals agreed, but the Supreme Court held that BDO's cause of action had not arisen yet, as the Locsins had only later refused payment. A counterclaim must exist when the answer is filed, not just the complaint. Even if BDO

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    97 views2 pages

    Rule - 11 Banco de Oro V CA - Digest

    Uploaded by

    Nyla
    Banco de Oro Universal Bank (BDO) filed for extrajudicial foreclosure against Gabriel and Ma. Geraldine Locsin for failing to comply with their credit agreement. The Locsins then filed a complaint against BDO seeking to stop the foreclosure. BDO later filed its own collection case against the Locsins. The Locsins argued BDO's claim should have been raised as a counterclaim in the initial case. The Court of Appeals agreed, but the Supreme Court held that BDO's cause of action had not arisen yet, as the Locsins had only later refused payment. A counterclaim must exist when the answer is filed, not just the complaint. Even if BDO

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    © All Rights Reserved
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    Download as docx, pdf, or txt
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    Case Digest: BANCO DE ORO UNIVERSAL BANK v.

    COURT OF
    APPEALS, et al.

    Having failed to comply with the Credit Line Agreement (CLA)


    obligation, Banco de Oro Universal Bank filed before the Regional Trial
    Court of Quezon City (RTC) an application for an extrajudicial foreclosure
    of the mortgaged properties against Gabriel and Ma. Geraldine Locsin.
    Subsequently, the Locsins filed a complaint against BDO, the RTC Clerk of
    Court and Ex-Oficio Sheriff of Quezon City, and Sheriff VI Marino V.
    Cahero, for Specific Performance, Tort and Damages with Prayer for the
    Issuance of a Temporary Restraining Order (TRO) and a Writ of
    Preliminary Injunction. The RTC denied the issuance of a TRO.

    A Supplemental Complaint was filed by the Locsins. They repleaded in


    toto the allegations in their Complaint and additionally alleged that BDO
    proceeded with the public auction of the properties covered by the
    mortgage in the CLA contrary to law.BDO admitted that the public
    auction took place but it denied that it was contrary to law

    More than eight months after the Locsins filed their Supplemental
    Complaint, BDO filed a complaint against them before the Mandaluyong
    RTC for Collection of Sum of Money. To such, the Locsins filed a Motion to
    Dismiss on the ground that it should have been raised as compulsory
    counterclaim in their complaint and by failing to raise it as such, it is now
    barred by the rules. The RTC denied the same.

    The Locsins appealed to the Court of Appeals which reversed the


    decision of the Mandaluyong RTC finding that BDOs complaint was a
    compulsory counterclaim which should have been raised in its Answer to
    the Locsins complaint, and having failed to do so, it is now barred.

    ISSUE:

    Whether or not BDOs complaint is barred for failure to raise it as a


    compulsory counterclaim in its Answer to the Locsins complaint

    HELD:

    The Court held that until after the Locsins allegedly refused and failed to
    settle the alleged deficiency amount of their outstanding obligation, despite
    BDOs letter of demand sent to the Locsins, BDOs cause of action had not
    arisen. BDO could not, therefore, have set its claim assuming arguendo that
    it is a compulsory counterclaim.

    The counterclaim must be existing at the time of the filing of the answer,
    though not at the commencement of action-a premature counterclaim
    cannot be set in the answer. The party who fails to interpose a counterclaim
    although arising out of or is necessarily connected with the transaction or
    occurrence of the plaintiffs 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.

    The setting up of such after-acquired counterclaim, is merely permissive,


    not compulsory. At all events, even if the claim of BDO is a compulsory
    counterclaim which should have been set up in its Answer to the Locsins
    Supplemental Complaint, technicality should give way to justice and equity
    to enable BDO to pursue its after-acquired claim against the Locsins.

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