G.R. No. 198752, January 13, 2016
ARTURO C. ALBA, JR., represented by his attorneys-in-fact, ARNULFO B. ALBA and ALEXANDER C. ALBA, Petitioner, vs. RAYMUND D. MALAPAJO, RAMIL D. MALAPAJO and the Register of Deeds for the City of Roxas, Respondents.

FACTS

Petitioner Arturo Alba, Jr. filed a complaint for recovery of ownership and declaration of nullity of title against respondents Raymund and Ramil Malapajo. Alba alleged that the deed of sale conveying his property to the Malapajos was a forgery. In their Answer, the Malapajos asserted they were innocent purchasers for value and interposed a counterclaim. They alleged that Alba had previously obtained loans from them and their mother, secured by real estate mortgages on the same property, which remained undischarged. Their counterclaim sought damages and reimbursement of the loan plus interest should the sale be declared void.
Alba filed a motion to dismiss the counterclaim, arguing it was permissive in nature and thus required payment of docket fees and a certification against forum shopping, which were absent. The Regional Trial Court (RTC) denied the motion, ruling the counterclaim was compulsory. Alba’s motion for reconsideration was also denied. He then filed a petition for certiorari with the Court of Appeals (CA). The CA dismissed the petition purely on technical grounds, finding that Alba failed to show proper proof of service of the petition as required by the Rules of Court, as he only submitted registry receipts and an insufficient affidavit of service.

ISSUE

The primary issue is whether the Court of Appeals erred in dismissing the petition for certiorari on a technicality. The ancillary substantive issue is whether the counterclaims interposed by the Malapajos in their Answer are compulsory or permissive.

RULING

The Supreme Court partially granted the petition. On the procedural issue, the Court held that the CA erred in dismissing the petition for certiorari based on a strict technicality. The Court found that Alba had substantially complied with the rules on proof of service. He had submitted an affidavit of service and the registry receipts for the mailed copies of the petition. Under Section 13, Rule 13 of the Rules of Court, proof of service by registered mail is made by such affidavit and the registry receipt. The registry return card is only required if available. The CA’s dismissal on this ground was overly technical and disregarded the merits of the case.
However, on the substantive issue, the Supreme Court affirmed the RTC’s ruling that the counterclaims were compulsory, not permissive. A counterclaim is compulsory if it arises out of, or is necessarily connected with, the transaction or occurrence that is the subject matter of the opposing party’s claim. The test is whether a logical relationship exists between the claim and the counterclaim. Here, the Malapajos’ counterclaim for loan reimbursement is intimately related to Alba’s claim for annulment of the deed of sale. The alleged loans and mortgages form part of the series of transactions concerning the same property and are directly relevant to the issue of whether the subsequent sale was valid or forged. Therefore, the counterclaim did not require separate docket fees or a certification against forum shopping. The claim regarding the mother’s loan was also properly included, as it involved the same property and the Malapajos, as alleged creditors, had a direct interest in its outcome. The RTC orders were thus affirmed.