G.R. No. L-12699. May 31, 1961.
BLUE BAR COCONUT COMPANY, plaintiff-appellee, vs. ISABELO S. HILARIO, ET AL., defendants-appellants.

FACTS

Blue Bar Coconut Company filed an action to foreclose two mortgages executed by the spouses Isabelo Hilario and Encarnacion Gozum. The defendants, after Hilario’s death, admitted the material allegations but defended by alleging that their default was due to Blue Bar’s breach of a separate supply agreement dated January 27, 1948. Critically, this agreement was not with Blue Bar but with the Philippine Desiccated Coconut Corporation (PDCC), a distinct Delaware corporation authorized to do business in the Philippines. The defendants filed a counterclaim for damages and moved to implead PDCC as a third-party defendant, which the trial court denied.
During trial, the parties submitted a partial stipulation of facts confirming the execution of the mortgages and the outstanding debt of P316,871.75, exclusive of interest and fees. When the case was called for continuation, the defendants moved for postponement, stating their key witness, a Mr. Gozum, was in Pangasinan. Counsel stated this witness would testify that Blue Bar ordered a stoppage of factory operations due to low copra prices, causing the collapse of the business and their subsequent default. The trial court denied the motion for postponement, noting the witness’s testimony would be irrelevant as Blue Bar was not a party to the supply contract, and submitted the case for decision based on the stipulation and plaintiff’s evidence.

ISSUE

Whether the trial court erred in: (1) denying the motion to include PDCC as a third-party defendant; (2) dismissing the counterclaim; and (3) denying the motion for postponement of the trial.

RULING

The Supreme Court affirmed the trial court’s decision. On the first issue, the denial of the motion to implead PDCC was within the court’s sound discretion. The motion was fatally defective for not alleging any grounds under Rule 12 of the Rules of Court justifying third-party procedure. Moreover, the denial did not prejudice the appellants, as they retained the right to file a separate action for breach of contract against PDCC. The supply contract was exclusively with PDCC, not Blue Bar, making its inclusion in the foreclosure case unnecessary.
Regarding the dismissal of the counterclaim, it was proper due to a complete lack of supporting evidence. The appellants presented no evidence after their postponement was denied, and the stipulated facts contained nothing to substantiate a claim against Blue Bar. The legal logic is clear: a counterclaim must be proven like any other cause of action. Since the appellants failed to present evidence and the stipulation did not support their allegation that Blue Bar breached the PDCC contract, the counterclaim was correctly dismissed.
Finally, the denial of the motion for postponement was not a grave abuse of discretion. Motions for postponement are addressed to the court’s discretion. The appellants had ample time to prepare, and their proffered testimony was correctly deemed irrelevant. The witness would testify about a breach of a contract to which Blue Bar was not a party; thus, such testimony could not establish Blue Bar’s liability on the counterclaim. The trial court’s assessment that the testimony would not alter the outcome was legally sound.