FACTS:
Ruperto Belzunce, plaintiff-appellee, filed an ejectment suit against Valentina Fernandez, et al., defendants-appellants, in September 1905, to recover possession of the “Anonolip” hacienda and unpaid rents amounting to P1,723.22. The hacienda had been sold by the defendants to the plaintiff on June 14, 1903, with the right of repurchase reserved to the former. Concurrently, the land was leased back to the defendants during the repurchase period, conditioned upon the payment of rent. The plaintiff alleged non-payment of rent for 1904 and 1905.

The Justice of the Peace (JP) court dismissed the ejectment claim but ordered the defendants to pay the specified rents. The JP also issued a preliminary attachment on the defendants’ carabaos and agricultural products. Both parties appealed to the Court of First Instance (CFI) of Occidental Negros.

In the CFI, the plaintiff reiterated his claims. The defendants denied the allegations, asserting that they had paid the claimed rents (which they considered interest on a mortgage debt) and even had a credit balance. They also filed a counterclaim for P15,000 in damages resulting from the preliminary attachment and the plaintiff’s alleged non-compliance with a contract to furnish money for cultivation.

The CFI ruled that the June 14, 1903 deed was a contract of sale with a right of repurchase, not a mortgage. It further found that the defendants had already paid the rents corresponding to 1904 and 1905. Consequently, the CFI reversed the JP’s judgment regarding rent payment for those years, absolved the defendants, and reserved the plaintiff’s right to bring an action for rents for 1906 and subsequent years.

Both parties initially appealed the CFI judgment. However, the plaintiff later withdrew his appeal. The defendants proceeded with their appeal to the Supreme Court, assigning four errors. The Supreme Court noted that the first three errors, which pertained to the nature of the deed, were irrelevant given that the CFI had already absolved the defendants from ejectment and rent payment for the years in question. The sole remaining point of contention was the fourth assigned error.

ISSUE:
Did the Court of First Instance err in not finding against the plaintiff for the payment of damages resulting from the preliminary attachment, or in not reserving to the defendants the right to bring a separate action for said damages?

RULING:
No. The Supreme Court affirmed the judgment of the Court of First Instance.

1. No error in non-reservation of rights: The court’s non-reservation of a right which a party believes they may exercise in a separate action is neither an error nor an injury. The law does not impose upon a judge the duty of making such a reservation in cases where the exercise of the right does not depend on it.
2. Improper counterclaim: The counterclaim for damages, having been filed for the first time on appeal before the Court of First Instance, was deemed improper. It was not filed nor was it proper in the original ejectment proceedings in the Justice of the Peace court. Thus, its denial was reasonable due to its “notorious impropriety.”
3. Procedure for damages from attachment: According to Section 439 of the Code of Civil Procedure (referring to Section 427), damages sustained by reason of a wrongful or insufficient attachment are to be determined after a summary hearing in the same action on due notice, if the attachment is finally adjudged to have been wrongful or without sufficient cause. This procedure indicates that claims for damages arising from attachment should be resolved within the same action, not reserved for a separate one or introduced as a new counterclaim on appeal.

For these reasons, the Supreme Court found no error in the CFI’s decision regarding the damages from preliminary attachment and upheld the lower court’s judgment.