FACTS:

Fernando Caballero & his wife secured a loan from petitioner GSIS and executed a real estate mortgage of a parcel of land registered under his name.

Fernando defaulted on the payment of his loan, hence, the subject property was foreclosed, and the same was sold at a public auction where the petitioner was the only bidder. For failure to redeem the property,  a new TCT was issued in the name of petitioner.

When petitioner scheduled the subject property for public bidding, Fernando’s daughter, Jocelyn, submitted a bid. However, CMTC was the highest bidder, thus, it was awarded the subject property. Thereafter, a new TCT was issued in the name of CMTC.

Caballero filed a Complaint against CMTC, the GSIS et al. praying, among others, that the Deed of Absolute Sale between petitioner and CMTC be declared null and void ab initio.

The RTC ruled in favor of petitioner and dismissed the complaint. In the same decision, the trial court granted petitioner’s counterclaim and directed Fernando to pay petitioner the rentals paid by CMTC which was collected by Fernando from the CMTC. The amount represents payment which was not turned over to petitioner GSIS, which was entitled to receive the rent from the date of the consolidation of its ownership over the subject property.

Fernando filed a motion for reconsideration, which was denied.

On appeal, the CA affirmed the decision of the RTC with  modification that the portion of the judgment ordering Fernando to pay rentals in favor of petitioner, be deleted.

GSIS filed a petition which seeks the review of the CA’s Decision insofar as it deleted the trial court’s award in its favor.

ISSUE:

1. Whether petitioner’s counterclaim for the rentals collected by Fernando from the CMTC is in the nature of a compulsory counterclaim or a permissive counterclaim.
2. Whether or not GSIS is exempt from payment of legal fees

RULING:

1.

To determine whether a counterclaim is compulsory or not, the Court has devised the following tests: (a) Are the issues of fact and law raised by the claim and by the counterclaim largely the same? (b) Would res judicata bar a subsequent suit on defendant’s claims, absent the compulsory counterclaim rule? (c) Will substantially the same evidence support or refute plaintiff’s claim as well as the defendant’s counterclaim? and (d) Is there any logical relation between the claim and the counterclaim? A positive answer to all four questions would indicate that the counterclaim is compulsory.

The rule in permissive counterclaims is that for the trial court to acquire jurisdiction, the counterclaimant is bound to pay the prescribed docket fees. This, petitioner did not do, because it asserted that its claim for the collection of rental payments was a compulsory counterclaim. Since petitioner failed to pay the docket fees, the RTC did not acquire jurisdiction over its permissive counterclaim. The judgment rendered by the RTC, insofar as it ordered Fernando to pay petitioner the rentals which he collected from CMTC, is considered null and void. Any decision rendered without jurisdiction is a total nullity and may be struck down at any time, even on appeal before this Court.

2.

Petitioner further argues that assuming that its counterclaim is permissive, the trial court has jurisdiction to try and decide the same, considering petitioner’s exemption from all kinds of fees.

In In Re: Petition for Recognition of the Exemption of the GSIS from Payment of Legal Fees, the Court ruled that the provision in the Charter of the GSIS which exempts 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 the 1987 Constitution removed the power of Congress to repeal, alter or supplement the rules of the Supreme Court concerning pleading, practice and procedure, from Congress. The Supreme Court now has the sole authority to promulgate rules concerning pleading, practice and procedure in all courts.

The claim of a legislative grant of exemption from the payment of legal fees under Section 39 of RA 8291 necessarily fails.

Congress could not have carved out an exemption for the GSIS from the payment of legal fees without transgressing another equally important institutional safeguard of the Court’s independence − fiscal autonomy. Fiscal autonomy recognizes the power and authority of the Court to levy, assess and collect fees, including legal fees. Legal fees do not only constitute a vital source of the Court’s financial resources but also comprise an essential element of the Court’s fiscal independence. Any exemption from the payment of legal fees granted by Congress to government-owned or controlled corporations and local government units will necessarily reduce the JDF and the SAJF. Undoubtedly, such situation is constitutionally infirm for it impairs the Court’s guaranteed fiscal autonomy and erodes its independence.

The petition is DENIED.