1998 Bar: Rule on the motion to dismiss the counterclaim on the ground of lack jurisdiction over the subject matter. (2%)

1998 Bar: A, a resident of Lingayen, Pangasinan, sued X a resident of San Fernando, La Union in the Regional Trial Court (RTC) of Quezon City for the collection of a debt of P1 million.

X did not file a motion to dismiss for improper venue but filed his answer raising therein improper venue as an affirmative defense. He also filed a counterclaim for P80,000 against A for Attorney‘s fees and expenses for litigation. X moved for a preliminary hearing on said affirmative defense. For his part, A filed a motion to dismiss the counterclaim for lack of jurisdiction.

Rule on the motion to dismiss the counterclaim on the ground of lack jurisdiction over the subject matter. (2%)

There should be a denial of the motion to dismiss on the ground of lack of jurisdiction over the subject matter.

Under the Rules, a compulsory counterclaim is one which, being cognizable by the regular courts of justice, arises out of or is connected with the transaction or occurrence constituting the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Such a counterclaim must be within the jurisdiction of the court both as to the amount and the nature thereof, except that in an original action before the Regional Trial Court, the counter-claim may be considered compulsory regardless of the amount. (Sec. 7, Rule 6)

In the case at bar, the counterclaim for attorney‘s fees and expenses of litigation is a compulsory counterclaim because it necessarily arose out of and is connected with the complaint. In an original action before the RTC, the counterclaim may be considered compulsory regardless of the amount.