G.R. No. L-9453; March 30, 1915
AUGUSTO TUASON, petitioner, vs. A. S. CROSSFIELD, judge of First Instance of Manila, and GEORGE C. SELLNER, respondents.

FACTS:
Petitioner Augusto Tuason filed a summary action for ejectment and recovery of rents in the justice of the peace court of Manila against respondent George C. Sellner. Sellner interposed a counterclaim for damages amounting to P5,000, alleging Tuason’s failure to make necessary repairs under their rental contract. The justice of the peace declined to take cognizance of this counterclaim for being beyond its jurisdictional limit and rendered judgment in favor of Tuason. Sellner appealed to the Court of First Instance (CFI). The CFI, over Tuason’s objection, entertained and adjudicated the counterclaim, offsetting P1,000 against the rents due and denying Tuason’s prayer for possession. Tuason then filed this original certiorari proceeding, alleging that the CFI acted in excess of its jurisdiction by adjudicating a counterclaim that was beyond the jurisdictional limit of the court of origin.

ISSUE:
Whether a justice of the peace court (and consequently the CFI on appeal) in a summary action for ejectment under Section 80 of the Code of Civil Procedure may entertain a counterclaim for an amount exceeding its jurisdiction in ordinary actions.

RULING:
No. The Supreme Court granted the petition for certiorari. It held that the jurisdiction of justices of the peace in summary ejectment actions is limited with respect to counterclaims, just as it is in ordinary actions, except where the statute expressly confers broader powers. Section 10 of Act No. 1627 provides that any offset, counterclaim, or reconvention cognizable by a justice of the peace must be “for an amount within the justice’s jurisdiction.” The Court found no express statutory authority allowing a counterclaim exceeding the jurisdictional limit in summary proceedings. The fact that a plaintiff in such proceedings may recover possession and unlimited rents/damages does not imply a legislative intent to remove the jurisdictional limit on a defendant’s counterclaim. Courts of limited jurisdiction cannot extend their power based on doubtful inferences or considerations of convenience; a clear legislative grant is required.

The Court clarified that its ruling does not deny a defendant the right to plead any lawful defense that tends to defeat the plaintiff’s claim for possession, rent, or damages. It merely denies jurisdiction over a counterclaim that seeks an affirmative recovery exceeding the court’s ordinary jurisdictional limit and which does not directly defeat the plaintiff’s specific cause of action.

The Court ordered the CFI to hold a new trial wherein the defendant would not be permitted to plead any counterclaim in excess of the justice of the peace’s jurisdiction in ordinary actions. Costs were awarded in favor of the petitioner.

Separate Opinion:
Justice Moreland dissented, arguing that it is absurd to allow a justice’s court to render an unlimited judgment for a plaintiff while prohibiting a defendant from offsetting that claim with a counterclaim arising from the same contract, especially when the counterclaim does not seek an affirmative judgment but merely serves as a defense.