G.R. No. 170483 ; April 19, 2010
MANUEL C. BUNGCAYAO, SR., represented by ROMEL R. BUNGCAYAO, Petitioner, vs. FORT ILOCANDIA PROPERTY HOLDINGS, AND DEVELOPMENT CORPORATION, Respondent.

FACTS

Petitioner Manuel Bungcayao, Sr., a member of the D’Sierto Beach Resort Owner’s Association, claimed to have introduced improvements on a foreshore area in Laoag. The Department of Environment and Natural Resources (DENR) denied the foreshore lease applications of D’Sierto members, finding the area to be within the titled property of respondent Fort Ilocandia Property Holdings. Subsequently, during a meeting mediated by a third party, petitioner’s son, Manuel Bungcayao, Jr., accepted a financial settlement and signed a Deed of Assignment, Release, Waiver and Quitclaim in favor of the respondent.
Petitioner filed an action for declaration of nullity of the contract before the Regional Trial Court (RTC), alleging his son had no authority to represent him and that consent was vitiated by undue pressure. The parties later agreed to cancel the deed and return the settlement money, but petitioner maintained his claim for damages. The RTC, treating the case as submitted for resolution, granted respondent’s Motion for Summary Judgment. It dismissed petitioner’s claim for damages and ordered him to vacate the property, finding no basis for vitiated consent and confirming the area was within respondent’s titled land. The Court of Appeals affirmed the RTC decision.

ISSUE

The primary issue is whether the trial court correctly rendered a summary judgment dismissing petitioner’s claim for damages and ordering him to vacate the subject property.

RULING

The Supreme Court modified the appellate decision. It held that summary judgment was proper only for the claim for damages, not for the recovery of possession. A summary judgment is permissible when there is no genuine issue as to any material fact. The Court found that the parties’ pleadings and admissions established no genuine issue regarding the claim for damages, as the alleged pressure did not constitute the force or intimidation required to vitiate consent. Therefore, the dismissal of the damages claim was upheld.
However, the Court ruled that the trial court erred in granting summary judgment on respondent’s counterclaim for recovery of possession. This counterclaim was permissive, not compulsory, as it did not arise out of or was not necessarily connected with the transaction or occurrence constituting petitioner’s cause of action for nullity of contract. A permissive counterclaim requires the payment of docket fees and is not automatically joined in the main action. Since respondent did not pay the required docket fees for this permissive counterclaim, the trial court did not acquire jurisdiction over it. Consequently, the order for petitioner to vacate was set aside without prejudice to respondent filing a separate action for ejectment.