19. GSIS VS.

CABALLERO pleading as to which the additional filing fee therefor shall constitute a lien on the
G.R. No. 158090. October 4, 2010.* judgment.—Petitioner also invoked our ruling in Sun Insurance Office, Ltd. v.
GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS), petitioner, vs. HEIRS Judge Asuncion, 170 SCRA 274 (1989), where the Court held that: x x x x 3. Where
OF FERNANDO F. CABALLERO, represented by his daughter, JOCELYN G. the trial court acquires jurisdiction over a claim by the filing of the appropriate
CABALLERO, respondents. pleading and payment of the prescribed filing fee but, subsequently, the judgment
Actions; Counterclaims; Tests to Determine Whether a Counterclaim is awards a claim not specified in the pleading, or if specified the same has been left
Compulsory or Permissive.—To determine whether a counterclaim is compulsory for determination by the court, the additional filing fee therefor shall constitute a
or not, the Court has devised the following tests: (a) Are the issues of fact and law lien on the judgment. It shall be the responsibility of the Clerk of Court or his duly
raised by the claim and by the counterclaim largely the same? (b) authorized deputy to enforce said lien and assess and collect the additional fee.
Would res judicata bar a subsequent suit on defendant’s claims, absent the In Ayala Corporation v. Madayag, 181 SCRA 687 (1990), the Court, in interpreting
compulsory counterclaim rule? (c) Will substantially the same evidence support or the third rule laid down in Sun Insurance Office, Ltd. v. Judge Asuncion,170 SCRA
refute plaintiff’s claim as well as the defendant’s counterclaim? and (d) Is there any 274 (1989), regarding awards of claims not specified in the pleading, held that the
logical relation between the claim and the counterclaim? A positive answer to all same refers only to damages arising after the filing of the complaint or similar
four questions would indicate that the counterclaim is compulsory. pleading as to which the additional filing fee therefor shall constitute a lien on the
Same; Same; Docket Fees; Jurisdiction; The rule in permissive counterclaims judgment. The amount of any claim for damages, therefore, arising on or before the
is that for the trial court to acquire jurisdiction, the counterclaimant is bound to pay filing of the complaint or any pleading should be specified. While it is true that the
the prescribed docket fees.—The rule in permissive counterclaims is that for the determination of certain damages as exemplary or corrective damages is left to the
trial court to acquire jurisdiction, the counterclaimant is bound to pay the sound discretion of the court, it is
prescribed docket fees. This, petitioner did not do, because it asserted that its claim 7
for the collection of rental payments was a compulsory counterclaim. Since VOL. 632, OCTOBER 4, 2010 7
petitioner failed to pay the docket fees, the RTC did not acquire jurisdiction over Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
its permissive counterclaim. The judgment rendered by the RTC, insofar as it the duty of the parties claiming such damages to specify the amount sought
ordered Fernando to pay petitioner the rentals which he collected from CMTC, is on the basis of which the court may make a proper determination, and for the
considered null and void. Any decision rendered without jurisdiction is a total proper assessment of the appropriate docket fees. The exception contemplated
nullity and may be struck down at any time, even on appeal before this Court. as to claims not specified or to claims although specified are left for
Same; Same; Same; Separation of Powers; The provision in the Charter of the determination of the court is limited only to any damages that may arise
Government Service Insurance System (GSIS), i.e., Section 39 of Republic Act No. after the filing of the complaint or similar pleading for then it will not be
8291, which exempts it from “all taxes, assessments, fees, charges or duties of all possible for the claimant to specify nor speculate as to the amount thereof.
kinds,” cannot operate to PETITION for review on certiorari of the decision and resolution of the Court of
_______________ Appeals.
* SECOND DIVISION. The facts are stated in the opinion of the Court.
6 GSIS Legal Services Group for petitioner.
6 SUPREME COURT REPORTS ANNOTATED Jorge D. Zerrudo for respondents.
Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero PERALTA, J.:
exempt it from the payment of legal fees—the Supreme Court now has the sole Before this Court is a petition for review on certiorariunder Rule 45 of the Rules
authority to promulgate rules concerning pleading, practice and procedure in all of Court seeking to set aside the Decision1 and the Resolution,2 dated December 17,
courts.—In In Re: Petition for Recognition of the Exemption of the Government 2002 and April 29, 2003, respectively, of the Court of Appeals (CA) in CA-G.R. CV.
Service Insurance System from Payment of Legal Fees, 612 SCRA 193 (2010), the No. 49300.
Court ruled that the provision in the Charter of the GSIS, i.e., Section 39 of The antecedents are as follows:
Republic Act No. 8291, which exempts it from “all taxes, assessments, fees, charges Respondent Fernando C. Caballero (Fernando) was the registered owner of a
or duties of all kinds,” cannot operate to exempt it from the payment of legal fees. residential lot designated as Lot No. 3355, Ts-268, covered by TCT No. T-16035 of
This was because, unlike the 1935 and 1973 Constitutions, which empowered the Register of Deeds of Cotabato, containing an area of 800 square meters and
Congress to repeal, alter or supplement the rules of the Supreme Court concerning situated at Rizal Street, Mlang, Cotabato. On the said lot, respondent built a
pleading, practice and procedure, the 1987 Constitution removed this power from residential/commercial building consisting of two (2) stories.
Congress. Hence, the Supreme Court now has the sole authority to promulgate _______________
rules concerning pleading, practice and procedure in all courts. 1 Penned by Associate Justice Delilah Vidallon-Magtolis, with Associate
Same; Same; Same; The third rule laid down in Sun Insurance Office, Ltd. v. Justices Andres B. Reyes, Jr. and Regalado E. Maambong, concurring; Rollo, pp.
Asuncion, 170 SCRA 274 (1989), regarding awards of claims not specified in the 162-172.
pleading, refers only to damages arising after the filing of the complaint or similar 2 Id., at p. 173.

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 8 In his complaint, Fernando alleged that there were irregularities in the conduct
8 SUPREME COURT REPORTS ANNOTATED of the bidding. CMTC misrepresented itself to be wholly owned by Filipino citizens.
Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero It misrepresented its working capital. Its representative Carmelita Ang Hao had
no prior authority from its board of directors in an appropriate board resolution to
On March 7, 1968, Fernando and his wife, Sylvia Caballero, secured a loan from participate in the bidding. The corporation is not authorized to acquire real estate
petitioner Government Service Insurance System (GSIS) in the amount of or invest its funds for purposes other than its primary purpose. Fernando further
P20,000.00, as evidenced by a promissory note. Fernando and his wife likewise alleged that the GSIS allowed CMTC to bid despite knowledge that said corporation
executed a real estate mortgage on the same date, mortgaging the afore-stated has no authority to do so. The GSIS also disregarded Fernando’s prior right to buy
property as security. back his family home and lot in violation of the laws. The Register of Deeds of
Fernando defaulted on the payment of his loan with the GSIS. Hence, on Cotabato acted with abuse of power and authority when it issued the TCT in favor
January 20, 1973, the mortgage covering the subject property was foreclosed, and of CMTC without
on March 26, 1973, the same was sold at a public auction where the petitioner was _______________
the only bidder in the amount of P36,283.00. For failure of Fernando to redeem the 3 Rollo, pp. 200-207.
said property within the designated period, petitioner executed an Affidavit of 10
Consolidation of Ownership on September 5, 1975. Consequently, TCT No. T-16035 10 SUPREME COURT REPORTS ANNOTATED
was cancelled and TCT No. T-45874 was issued in the name of petitioner. Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
On November 26, 1975, petitioner wrote a letter to Fernando, informing him of requiring the CMTC to submit its supporting papers as required by the law.
the consolidation of title in its favor, and requesting payment of monthly rental in Petitioner and its officers filed their Answer with Affirmative Defenses and
view of Fernando’s continued occupancy of the subject property. In reply, Fernando Counterclaim.4 The GSIS alleged that Fernando lost his right of redemption. He
requested that he be allowed to repurchase the same through partial payments. was given the chance to repurchase the property; however, he did not avail of such
Negotiation as to the repurchase by Fernando of the subject property went on for option compelling the GSIS to dispose of the property by public bidding as
several years, but no agreement was reached between the parties. mandated by law. There is also no “prior right to buy back” that can be exercised
On January 16, 1989, petitioner scheduled the subject property for public by Fernando. Further, it averred that the articles of incorporation and other papers
bidding. On the scheduled date of bidding, Fernando’s daughter, Jocelyn Caballero, of CMTC were all in order. In its counterclaim, petitioner alleged that Fernando
submitted a bid in the amount of P350,000.00, while Carmelita Mercantile Trading owed petitioner the sum of P130,365.81, representing back rentals, including
Corporation (CMTC) submitted a bid in the amount of P450,000.00. Since CMTC additional interests from January 1973 to February 1987, and the additional
was the highest bidder, it was awarded the subject property. On May 16, 1989, the amount of P249,800.00, excluding applicable interests, representing rentals
Board of Trustees of the GSIS issued Resolution No. 199 confirming the award of Fernando unlawfully collected from Carmelita Ang Hao from January 1973 to
the subject property to CMTC for a total consideration of P450,000.00. Thereafter, February 1988.
a Deed of Absolute Sale was executed between petitioner and CMTC on July 27, After trial, the RTC, in its Decision5 dated September 27, 1994, ruled in favor
1989, transferring the subject property to CMTC. Consequently, of petitioner and dismissed the complaint. In the same decision, the trial court
9 granted petitioner’s counterclaim and directed Fernando to pay petitioner the
VOL. 632, OCTOBER 4, 2010 9 rentals paid by CMTC in the amount of P249,800.00. The foregoing amount was
Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero collected by Fernando from the CMTC and represents payment which was not
TCT No. T-45874 in the name of GSIS was cancelled, and TCT No. T-76183 was turned over to petitioner, which was entitled to receive the rent from the date of
issued in the name of CMTC. the consolidation of its ownership over the subject property.
Due to the foregoing, Fernando, represented by his daughter and attorney-in- Fernando filed a motion for reconsideration, which was denied by the RTC in
fact, Jocelyn Caballero, filed with the Regional Trial Court (RTC) of Kabacan, an Order dated March 27, 1995.
Cotabato a Complaint3 against CMTC, the GSIS and its responsible officers, and Aggrieved by the Decision, respondent filed a Notice of Appeal. 6 The CA, in its
the Register of Deeds of Kidapawan, Cotabato. Fernando prayed, among others, Decision dated December 17, 2002, affirmed the decision of the RTC with the
that judgment be rendered: declaring GSIS Board of Trustees Resolution No. 199, modification that the portion of the judgment ordering Fernando to pay rentals in
dated May 16, 1989, null and void; declaring the Deed of Absolute Sale between _______________
petitioner and CMTC null and void ab initio; declaring TCT No. 76183 of the 4 Id., at pp. 72-77.
Register of Deeds of Kidapawan, Cotabato, likewise, null and void ab initio; 5 Id., at pp. 190-199.
declaring the bid made by Fernando in the amount of P350,000.00 for the 6 Records, p. 416.
repurchase of his property as the winning bid; and ordering petitioner to execute 11
the corresponding Deed of Sale of the subject property in favor of Fernando. He also VOL. 632, OCTOBER 4, 2010 11
prayed for payment of moral damages, exemplary damages, attorney’s fees and Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
litigation expenses.
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the amount of P249,800.00, in favor of petitioner, be deleted. Petitioner filed a compulsory counterclaim in the original action of Fernando against petitioner for
motion for reconsideration, which the CA denied in a Resolution dated April 29, annulment of bid award, deed of absolute sale and TCT No. 76183. Respondents,
2003. Hence, the instant petition. on the other hand, alleged that petitioner’s counterclaim is permissive and its
An Ex Parte Motion for Substitution of Party,7 dated July 18, 2003, was filed by failure to pay the prescribed docket fees results into the dismissal of its claim.
the surviving heirs of Fernando, who died on February 12, 2002. They prayed that _______________
they be allowed to be substituted for the deceased, as respondents in this case. 9 CA Rollo, pp. 190-191.
Petitioner enumerated the following grounds in support of its petition: 10 The petition was also denied for lack of proof of the petition on the adverse
I party and its failure to attach the affidavit of service of copy of the petition on the
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW adverse parties. (Id., at p. 190.)
IN HOLDING THAT GSIS’ COUNTERCLAIM, AMONG OTHERS, OF 11 CA Rollo, p. 193.
P249,800.00 REPRESENTING RENTALS COLLECTED BY PRIVATE 13
RESPONDENT FROM CARMELITA MERCANTILE TRADING CORPORATION VOL. 632, OCTOBER 4, 2010 13
IS IN THE NATURE OF A PERMISSIVE COUNTERCLAIM WHICH REQUIRED Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
THE PAYMENT BY GSIS OF DOCKET FEES BEFORE THE TRIAL COURT CAN
ACQUIRE JURISDICTION OVER SAID COUNTERCLAIM. To determine whether a counterclaim is compulsory or not, the Court has
II devised the following tests: (a) Are the issues of fact and law raised by the claim
THE HONORABLE COURT OF APPEALS COMMITTED AN ERROR OF LAW and by the counterclaim largely the same? (b) Would res judicata bar a subsequent
IN HOLDING THAT GSIS’ DOCUMENTARY EVIDENCE SUPPORTING ITS suit on defendant’s claims, absent the compulsory counterclaim rule? (c) Will
CLAIM OF P249,800.00 LACKS PROPER IDENTIFICATION.8 substantially the same evidence support or refute plaintiff’s claim as well as the
The petition of the GSIS seeks the review of the CA’s Decision insofar as it defendant’s counterclaim? and (d) Is there any logical relation between the claim
deleted the trial court’s award of P249,800.00 in its favor representing rentals and the counterclaim? A positive answer to all four questions would indicate that
collected by Fernando from the CMTC. the counterclaim is compulsory.12
In their Memorandum, respondents’ claim that CMTC cannot purchase real Tested against the above-mentioned criteria, this Court agrees with the CA’s
estate or invest its funds in any purpose view that petitioner’s counterclaim for the recovery of the amount representing
_______________ rentals collected by Fernando from the CMTC is permissive. The evidence needed
7 Rollo, pp. 234-285. by Fernando to cause the annulment of the bid award, deed of absolute sale and
8 Id., at p. 152. TCT is different from that required to establish petitioner’s claim for the recovery
12 of rentals.
12 SUPREME COURT REPORTS ANNOTATED The issue in the main action, i.e., the nullity or validity of the bid award, deed
Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero of absolute sale and TCT in favor of CMTC, is entirely different from the issue in
other than its primary purpose for which it was organized in the absence of a the counterclaim, i.e., whether petitioner is entitled to receive the CMTC’s rent
corporate board resolution; the bid award, deed of absolute sale and TCT No. T- payments over the subject property when petitioner became the owner of the
76183, issued in favor of the CMTC, should be nullified; the trial court erred in subject property by virtue of the consolidation of ownership of the property in its
concluding that GSIS personnel have regularly performed their official duty when favor.
they conducted the public bidding; Fernando, as former owner of the subject The rule in permissive counterclaims is that for the trial court to acquire
property and former member of the GSIS, has the preemptive right to repurchase jurisdiction, the counterclaimant is bound to pay the prescribed docket fees.13 This,
the foreclosed property. petitioner did not do, because it asserted that its claim for the collection of rental
These additional averments cannot be taken cognizance by the Court, because payments was a compulsory counterclaim. Since petitioner failed to pay the docket
they were substantially respondents’ arguments in their petition for review fees, the RTC did not acquire jurisdic-
on certiorari earlier filed before Us and docketed as G.R. No. 156609. Records show _______________
that said petition was denied by the Court in a Resolution 9 dated April 23, 2003, 12 Manuel C. Bungcayao, Sr., represented in this case by his Attorney-in-fact
for petitioners’ (respondents herein) failure to sufficiently show that the Court of Romel R. Bungcayao, v. Fort Ilocandia Property Holdings and Development
Appeals committed any reversible error in the challenged decision as to warrant Corporation, G.R. No. 170483, April 19, 2010, 618 SCRA 381.
the exercise by this Court of its discretionary appellate jurisdiction.10 Said 13 Id.
resolution became final and executory on June 9, 2003. 11 Respondents’ attempt to 14
re-litigate claims already passed upon and resolved with finality by the Court in 14 SUPREME COURT REPORTS ANNOTATED
G.R. No. 156609 cannot be allowed. Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
Going now to the first assigned error, petitioner submits that its counterclaim tion over its permissive counterclaim. The judgment rendered by the RTC, insofar
for the rentals collected by Fernando from the CMTC is in the nature of a as it ordered Fernando to pay petitioner the rentals which he collected from CMTC,
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is considered null and void. Any decision rendered without jurisdiction is a total “x x x x
nullity and may be struck down at any time, even on appeal before this Court.14 3. Where the trial court acquires jurisdiction over a claim by the filing of the
Petitioner further argues that assuming that its counterclaim is permissive, appropriate pleading and payment of the prescribed filing fee but, subsequently,
the trial court has jurisdiction to try and decide the same, considering petitioner’s the judgment awards a claim not specified in the pleading, or if specified the same
exemption from all kinds of fees. has been left for determination by the court, the additional filing fee therefor shall
In In Re: Petition for Recognition of the Exemption of the Government Service constitute a lien on the judgment. It shall be the responsibility of the Clerk of Court
Insurance System from Payment of Legal Fees,15 the Court ruled that the provision or his duly authorized deputy to enforce said lien and assess and collect the
in the Charter of the GSIS, i.e., Section 39 of Republic Act No. 8291, which exempts additional fee.”
it from “all taxes, assessments, fees, charges or duties of all kinds,” cannot operate _______________
to exempt it from the payment of legal fees. This was because, unlike the 1935 and 16 252 Phil. 280; 170 SCRA 274 (1989).
1973 Constitutions, which empowered Congress to repeal, alter or supplement the 16
rules of the Supreme Court concerning pleading, practice and procedure, the 1987 16 SUPREME COURT REPORTS ANNOTATED
Constitution removed this power from Congress. Hence, the Supreme Court now Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
has the sole authority to promulgate rules concerning pleading, practice and In Ayala Corporation v. Madayag,17 the Court, in interpreting the third rule
procedure in all courts. laid down in Sun Insurance Office, Ltd. v. Judge Asuncion regarding awards of
In said case, the Court ruled that: claims not specified in the pleading, held that the same refers only to damages
“The separation of powers among the three co-equal branches of our arising after the filing of the complaint or similar pleading as to which the
government has erected an impregnable wall that keeps the power to promulgate additional filing fee therefor shall constitute a lien on the judgment.
rules of pleading, practice and procedure within the sole province of this Court. The “The amount of any claim for damages, therefore, arising on or before the filing
other branches trespass upon this prerogative if they enact laws or issue orders of the complaint or any pleading should be specified. While it is true that the
that effectively repeal, alter or modify any of the procedural rules promulgated by determination of certain damages as exemplary or corrective damages is left to the
this Court. Viewed from this perspective, the claim of a legislative grant of sound discretion of the court, it is the duty of the parties claiming such damages to
exemption from the payment of legal fees under Section 39 of RA 8291 necessarily specify the amount sought on the basis of which the court may make a proper
fails. determination, and for the proper assessment of the appropriate docket fees. The
_______________ exception contemplated as to claims not specified or to claims although
14 Id. specified are left for determination of the court is limited only to any
15 A.M. No. 08-2-01-0, February 11, 2010, 612 SCRA 193. damages that may arise after the filing of the complaint or similar
15 pleading for then it will not be possible for the claimant to specify nor
VOL. 632, OCTOBER 4, 2010 15 speculate as to the amount thereof.” (Emphasis supplied.)
Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero Petitioner’s claim for payment of rentals collected by Fernando from the CMTC
did not arise after the filing of the complaint; hence, the rule laid down in Sun
Congress could not have carved out an exemption for the GSIS from the Insurance finds no application in the present case.
payment of legal fees without transgressing another equally important Due to the non-payment of docket fees on petitioner’s counterclaim, the trial
institutional safeguard of the Court’s independence—fiscal autonomy. Fiscal court never acquired jurisdiction over it and, thus, there is no need to discuss the
autonomy recognizes the power and authority of the Court to levy, assess and second issue raised by petitioner.
collect fees, including legal fees. Moreover, legal fees under Rule 141 have two basic WHEREFORE, the petition is DENIED. The Decision and the Resolution,
components, the Judiciary Development Fund (JDF) and the Special Allowance for dated December 17, 2002 and April 29, 2003,
the Judiciary Fund (SAJF). The laws which established the JDF and the SAJF _______________
expressly declare the identical purpose of these funds to “guarantee the 17 G.R No. 88421, January 30, 1990, 181 SCRA 687, cited in Proton Pilipinas
independence of the Judiciary as mandated by the Constitution and public policy.” Corporation v. Banque Nationale De Paris, G.R. No. 151242, June 15, 2005, 460
Legal fees therefore do not only constitute a vital source of the Court’s financial SCRA 260, 278.
resources but also comprise an essential element of the Court’s fiscal independence. 17
Any exemption from the payment of legal fees granted by Congress to government- VOL. 632, OCTOBER 4, 2010 17
owned or controlled corporations and local government units will necessarily Government Service Insurance System (GSIS) vs. Heirs of Fernando F. Caballero
reduce the JDF and the SAJF. Undoubtedly, such situation is constitutionally respectively, of the Court of Appeals in CA-G.R. CV. No. 49300, are AFFIRMED.
infirm for it impairs the Court’s guaranteed fiscal autonomy and erodes its SO ORDERED.
independence.” Velasco, Jr.,** Nachura*** (Actg. Chairperson), Mendoza and Sereno,**** JJ.,
Petitioner also invoked our ruling in Sun Insurance Office, Ltd. v. Judge concur.
Asuncion,16 where the Court held that: Petition denied, judgment and resolution affirmed.
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 Note.—The rules of counterclaim are designed to enable the disposition of
a whole controversy of interested parties’ conflicting claims, at one time and in one
action, provided all parties be brought before the court and the matter decided
without prejudicing the rights of any party. (Huerta Alba Resort, Inc. vs. Court of
Appeals, 339 SCRA 534 [2000])
——o0o——
_______________
** Designated as an additional member in lieu of Senior Associate Justice
Antonio T. Carpio, per Special Order No. 897, dated September 28, 2010.
*** Per Special Order No. 898, dated September 28, 2010.
**** Designated as an additional member in lieu of Associate Justice Roberto
A. Abad, per Special Order No. 903, dated September 28, 2010.
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