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Agustin v. Bacalan He claims that this is beyond the jurisdiction of

G.R. No. L-46000|March 18, 1985| Gutierrez the City Court of Cebu because Section 88 of
CAUSE OF ACTION the Judiciary Act of 1948, as amended, limits
Complaint for ejectment the jurisdiction of the city courts in civil cases
FACTS to P10, 000.00 as the maximum amount
of the demand.
Ejectment complaint filed against Bacalan
ISSUE: WON the Court of First Instance may,
who files a conterclaim
in an appeal, award the defendant-appellee's
Bacalan is a lessee of a one-door ground floor counterclaim in an amount exceeding or
space in a building owned by the late Susana beyond the jurisdiction of the court of origin.
Agustin. Due to nonpayment of rentals an
action to eject him was filed. HELD: NO

In his answer, Bacalan included a counter- A court has no jurisdiction to hear and
claim alleging that the action was "unfounded determine a set-off or counterclaim in
and devoid of merits, tainted with malice and excess of its jurisdiction
bad faith on the part of the plaintiff, and filed A counterclaim beyond the courts jurisdiction
may only be pleaded by way of defense, the
merely to annoy, vex, embarrass and
purpose of which, however, is only to defeat or
inconvenience the defendant."
weaken plaintifs claim, but NOT to obtain
City Court Of Cebu dismissed affirmative relief (Section 5, Rule 5).
counterclaim and ordered him to vacate, Nevertheless, Bacalan set up his claim in
Bacalan appeals before CFI Cebu excess of the jurisdiction of the city court as a
compulsory counterclaim.
The City Court of Cebu dismissed the
counterclaim and ordered the Bacalan to What is the legal effect of such a move?
vacate and pay damages. From this decision,
the Bacalan filed an appeal with Branch Ill of The effect of that is to waive so much of
the Court of First Instance of Cebu. your claim as would exceed the
jurisdictional amount
CFI reverses in favor of Bacalan, it also An appellant who files his brief and submits his
awarded huge amounts of damages case to the Court of Appeals for decision,
(16000 total) without questioning the latter's jurisdiction
until decision is rendered therein, should be
The judgment ordered Agustin to pay the f considered as having voluntarily waives so
amounts much of his claim as would exceed the
a) P10,000.00 as moral damages; jurisdiction of said Appellate Court
b) P5,000.00 as exemplary damages;
c) P1,000.00 as attorney's fees; and Thus, by presenting his claim voluntarily before
the City Court of Cebu, the defendant-appellee
submitted the same to the jurisdiction of the
NO APPEAL was taken by AGUSTIN. The
court. He became bound thereby. The amount
decision lapsed into finality and became
of P10,000.00 being the jurisdictional amount
assigned the City Court of Cebu, whose
jurisdiction the defendant-appellee has
Agustin files a new complaint! He claims
invoked, he is thereby deemed to have
that the damages awarded are beyond
waived the excess of his claim beyond
jurisdiction of City court of Cebu, hence
P10,000.00. It is as though the defendant-
appellee had set up a counterclaim in the
amount of P10,000.00 only.
Thereafter, with the aid of new counsel,
Agustin filed another complaint with Branch V,
May the CFI then, on appeal, award
CFI of Cebu for the declaration of the nullity defendant-appellee's counterclaim
of the above-cited decision of Branch III, beyond that amount?
CFI of Cebu because the award (16,000)
exceeded the jurisdictional amount cognizable STILL NO: A counterclaim not presented
by the City Court of Cebu and the said Branch in the inferior court cannot be
III of this Court has no jurisdiction to award the entertained in the Court of First Instance
defendants an amount more than P10,000.00. on appeal


Thus, the defendant-appellee's counterclaim jurisdiction to the extent of P6,000.00 over the
beyond P10,000.00, the jurisdictional amount maximum allowable award of P10,000.00, the
of the city Court of Cebu, should be treated as excess is null and void and of no efect. Such
having been deemed waived. It is as though it being the case, an action to declare the nullity
has never been brought before trial court. It of the award as brought by the plaintif-
may not be entertained on appeal. appellant before the Court of First Instance of
Cebu, Branch V is a proper remedy.
The amount of judgment, therefore, obtained
by the defendant-appellee on appeal, cannot A counterclaim is a cause of action
exceed the jurisdiction of the court in which separate and independent from the
the action began. Since the trial court did plaintiffs claim over against the
not acquire jurisdiction over the defendant.
defendant's counterclaim in excess of the
jurisdictional amount, the appellate (This is why the courts jurisdiction over the
court, likewise, acquired no jurisdiction main action would not be afected even if the
over the same. Appellate jurisdiction being counterclaim is void, since they are separate
not only a continuation of the exercise of the causes of action)
same judicial power which has been executed
in the court of original jurisdiction, also The nullity of such portion of the decision in
presupposes that the original and appellate question, however, is not such as to affect
courts are capable of participating in the the conclusions reached by the court in
exercise of the same judicial power the main case for ejectment. As held in a
Application case where the amount set up by the
defendant was not proper as a defense and it
Award of damages in excess of the exceeded the inferior court's jurisdiction, it
jurisdictional amount (10k) is null and cannot be entertained therein, but the
void court's jurisdiction over the main action
It is, of course, a well-settled rule that when will remain unaffected. Consequently, the
court transcends the limits prescribed for it by decision over the main action, in the case at
law, its adjudications will be utterly void and of bar, must stand, best remembering that a
no efect either as an estoppel or otherwise. counter-claim, by its very nature, is a cause of
action separate and independent from the
The Court of First Instance, in the case at bar, plaintif's claim against the defendant.
having awarded judgment in favor of the
defendant-appellee in excess of its appellate CHOI