REPUBLIC OF THE PHILIPPINES NATIONAL CAPITAL JUDICIAL REGION REGIONAL TRIAL COURT Makati City, Branch 1456 ABC

CORP PHILIPPINES, INC. Plaintiff, -versusLALALA CRUZ, LOLOLOLO CRUZ, MIMIMI CRUZ AND BANANA CUE DOING BUSINESS UNDER THE NAME OF KAMOTE CUE, Defendants. x-------------------------------------------x

Civil Case No._________

ANSWER WITH COMPULSORY COUNTERCLAIMS

Defendants,

respectfully

submit

their

Answer

with

Compulsory

Counterclaims to ABC CORP PHILIPPINES, INC. (ABC CORP) Complaint dated 10 May 2011 (Complaint), and in support thereof, respectfully state:

I ADMISSIONS Subject to the Denials, Affirmative Allegations and the Special and Affirmative Defenses hereinafter set forth, Defendants admit the following allegations in the Complaint: 1.1 Paragraphs 2.1, 2.2, 2.3, 2.4, 2.3 (which should be read as 2.5, obviously

a mistake in the sequential numbering, until the end of the allegations, last paragraph should read be as 2.17), 2.8 (2.10), 2.10 (2.12), 2.7 (2.13), 2.8 (2.14), and sub1

paragraphs 2.9.1 (2.15.1), 2.9.4 (2.15.4) of paragraph 2.9 (2.15), with respect to the facts and status of the Lease Contract between ABC CORP and the Defendants; 1.2 Paragraph 2.1, in so far as it alleged that ABC CORP entered into a

Lease Contract with Lalala Cruz, Lololo Cruz and Mimimi Cruz (collectively, the CRUZ SIBLINGS), wherein ABC CORP agreed to lease from the latter, for a term of fifteen (15) years, a portion, consisting of One Thousand One Hundred Fifty One Point Seventy Seven (1,151.77 m2) square meters, of the land covered by Transfer Certificate of Title (TCT) No. 111111 (Subject Property) under the names of CRUZ SIBLINGS;1 1.3 Paragraph 2.2, in so far as it is a verbatim of the Lease Contract agreed

into by ABC CORP and Defendants, dated March 15, 2001, to take effect after compliance with the certain conditions such as: a) Registration of the lease; b) Issuance of all necessary government permits for the construction of the service station building and installation of equipment; c) Turnover of the leased premises cleared (sic) of all occupants, and (sic) (d) Issuance of (sic) [e]nvironmental pollution clearance.(sic);2 1.4 Paragraph 2.3, in so far as it is a verbatim of the Letter dated June 15,

20013 of ABC CORP to Defendants, notifying the latter of the effectivity of the Lease Contract, after concurrence of the three conditions specificied in the Lease Contract, except the typographical error of the date of the Registration with the Register of Deeds, June 15-1, 2001 should be read as June 15, 2001; the effectivity of the Lease Contract starting June 15, 2001, and; the amendment of the Clause (2) only,
1 2 3

A copy of the Lease Contract dated 7 May 2001 herewith attached as Annex A. Lease Contract, p. 1, par. 2; Annex A hereof. A copy of the Letter dated June 15, 2001 herewith attached as Annex B.

Clause (3) not included, in the following manner: (2) TERMS: TO HAVE AND TO HOLD for a term of FIFTEEN (15) YEARS from June 15, 2001 to June 16, 2016 x x x;4 1.5 Paragraph 2.4, in so far as it is the verbatim of the manner of payment

agreed in the Lease Contract, by the LESSEE, ABC CORP, to the LESSOR, Defendants, to wit: ONE HUNDRED FIFTY PESOS PER SQUARE METER (P150.00) PER MONTH for the first year up to the seventh; ONE HUNDERED EIGHTY PESOS PER SQUARE METER (P180.00) PER MONTH for the eight to the fifteen (15) days of each anniversary year. However, as requested by LESSORS, LESSEE has agreed to pay LESSORS seven (7) years advance rental corresponding to the first seven (7) years of lease, without deducting discount and bank charges, payable upon the effectivity of this Lease Contract.5

1.6

Paragraph 2.3 (2.5), in so far as it is alleged that ABC CORP paid in

advance the rentals corresponding to the first seven (7) years of the lease (from June 2001 to June 2008) to the Defendants; 1.7 Paragraph 2.8 (2.10), in so far as it alleged that ABC CORP received a

Letter dated 20086 from the counsel of the Defendants, requesting for the manner of payment of the rentals for its lease over the Subject Property, except advising the former that the Subject Property was subject of a pending legal dispute before the Regional Trial Court of Bacoor, Cavite, Branch 1111, entitled Cruz, et al. v. Cue;

4 5 6

Annex B hereof. Lease Contract, p. 1, par. 3; Annex A hereof. A copy of the Letter dated October 15, 2008 is herewith attached as Annex E.

1.8.

Paragraph 2.10 (2.12), in so far as it alleged that ABC CORP received

another Letter dated November 20, 20107 from the Defendants, suggesting the consignment of the lease rentals that are due on the Subject Property, except the typographical error BAUTISTA SIBLINGS, which should be read as CRUZ SIBLINGS; 1.9 Paragraph 2.7 (2.13), in so far as it alleged that the rentals over the Subject Property for eight years (June 2008 to June 2009), nine (June 2009 to June 2010) and ten (June 2010 to June 2011) are computed as follows: Total Amount of Rentals Year 8 (June 2008 to June 2009) Year 9 (June 2009 to June 2010) Year 10 (June 2010 to June 2011) TOTAL P 2,487,823.20 P 2,487,823.20 P 2,487,823.20 P 7,463,469.60

1.10

Paragraph 2.8 (2.14), in so far as it alleged that ABC CORP has been

ready and willing to fulfill its obligations under the Lease Contract and pay the rentals for years eight (June 2008 to June 2009), nine (June 2009 to June 2010) and ten (June 2010 to June 2011) of the lease; and, 1.11 Sub-paragraphs 2.9.1 (2.15.1) and 2.9.4 (2.15.4) of paragraph 2.9 (2.15),

in so far as it alleged that it was with the Defendants that ABC CORP entered into the Lease Contract,8 thus, in pursuant thereof, ABC CORP paid in advance the rentals corresponding to the first seven (7) years of the lease (from June 2001 to June
7 8

A copy of the Letter dated November 20, 2010 is herewith attached as Annex F. Annex A.

2008) to the Defendants; that Defendants demanded payment of rentals on the Subject Property, in effect, claiming to be the proper party entitled to transact with ABC CORP with respect to the Subject Property, except the Defendants title over the same has been cancelled and a new one has been issued in the name of another.

II DENIALS

A. SPECIFIC DENIALS For the facts and reasons stated in the Affirmative Allegations and Special and Affirmative Defenses hereinafter set forth, Defendants specifically deny the following allegations in the Complaint: 2.1 Paragraphs 2.4 (2.6), 2.5 (2.7), 2.6 (2.8), 2.7 (2.9), and sub-paragraphs

2.9.2 (2.15.2), 2.9.3 (2.15.3) of paragraph 2.9 (2.15), in so as it alleged and made to appear that: (a) Defendants title over the Subject Property has been transferred to Ms. BANANA CUE (BANANA CUE) under the business name, KAMOTE CUE; and, (b) ABC CORP should transact business on the Subject Property with BANANA CUE, as the alleged proper party to deal with; and, 2.2 Paragraphs 2.8 (2.10), 2.9 (2.11), 2.9 (2.15) with sub-paragraph 2.9.5

(2.15.5), 2.10 (2.16) and 2.9 (2.17), in so far as it alleged and made to appear that: (a) Defendants and BANANA CUE have both legal rights to claim and to transact with ABC CORP over the Subject Property; and, (b) ABC CORP is unsure as to whom in what manner it must make rental payments for years eight (June 2008 to June 2009),

nine (June 2009 to June 2010) and ten (June 2010 to June 2011) for the lease of the Subject Property.

B.

NO KNOWLEDGE

Defendants have no knowledge or information sufficient to form a belief as to the truth of, and therefore specifically deny, the allegations in the Complaint contained in: 2.3 Paragraph 2.4 (2.6), with respect to the Letter dated August 29, 2006 of

BANANA CUE, informing ABC CORP that the title to the Subject Property had been transferred to KAMOTE CUE and accordingly advised to transact directly with her in connection with the Contract of Lease; and 2.5 Paragraph 2.7 (2.9), with respect to TCT No. 11111 under the names of

the Defendant,s which had been cancelled and a new title, TCT No. 22222, had been issued in the name of KAMOTE CUE, represented by its sole owner BANANA CUE.

III AFFIRMATIVE ALLEGATIONS

In support of their Specific Denials, Special and Affirmative Defenses and Compulsary Counterclaims, Defendants respectfully state: 3.1 Defendant Lalala Cruz, is of legal age, a Filipino, with address at No.

24 Halo Halo Street, Kawit, Cavite;

3.2

Defendant Lololo Cruz, is of legal age, a Filipino, married, with

address at No. 24 Halo Halo Street, Kawit, Cavite; and, 3.3 Defendant Mimimi Cruz, is of legal age, a Filipino, married, with

address at No. 25 Halo Halo Street, Kawit, Cavite.

IV SPECIAL AND AFFIRMATIVE DEFENSES

GROUNDS I. THAT COMPLAINT OF INTERPLEADER OF ABC CORP SHOULD BE DISMISSED AS IT IS CLEAR FROM THE LEASE CONTRACT THAT THE LESSORS ARE THE DEFENDANTS, AND THAT THE LEASE CONTRACT HOLDS FOR FIFTEEN (15) YEARS. II. THAT COMPLAINT SHOULD BE DISMISSED SINCE BANANA CUE, UNDER THE BUSINESS NAME KAMOTE CUE, HAS NO LEGAL INTEREST, NOT BEING A PARTY AND NOT BEING IN EXISTENCE DURING THE EXECUTION OF THE LEASE CONTRACT. III. THAT COMPLAINT SHOULD BE DISMISSED ON THE GROUND THAT BANANA CUE HAS ACTED INJUSTICE, DISHONESTY AND BAD FAITH AGAINST THE DEFENDANTS IN THE CANCELLATION, AND REGISTRATION OF SUBJECT PROPERTY UNDER HER BUSINESS NAME WITHOUT THEIR KNOWLEDGE.

DISCUSSION I. THAT COMPLAINT OF INTERPLEADER OF ABC CORP SHOULD BE DISMISSED AS IT IS CLEAR FROM THE LEASE CONTRACT THAT THE LESSORS ARE THE DEFENDANTS, AND THAT THE LEASE CONTRACT HOLDS FOR FIFTEEN (15) YEARS. 4.1 The Complaint of Interpleader of ABC CORP should be dismissed on

the ground that it is clear from the letters and wordings of the Lease Contracts that the proper LESSORS are the Defendants, being the present party during the execution of the Lease Contract between ABC CORP and the Defendants, and the Terms of the Lease Contract is TO HAVE AND TO HOLD for a term of FIFTEEN (15) YEARS from June 15, 2001 to June 16, 2016 x x x;9 4.2 That in pursuant thereof, ABC CORP paid in advance the rentals

corresponding to the first seven (7) years of the lease (from June 2001 to June 2008) to the Defendants; 4.3 In Leonardo R. Ocampo v. Leonora Tirona, 10 the Supreme Court held that

[a]n action for interpleader is proper only when the lessee does not know the person to whom to pay rentals due to conflicting claims on the property. In view of the above, it is ironical that ABC CORP will resort to an action for interpleader when it is clear from the Lease Contracts who are the proper LESSORS, and it has acknowledge the latter already in the past by paying to them the advance rentals corresponding to the first seven (7) years of the lease.

9 10

Annex B hereof. G.R. No. 147812, 06 April 2005, 455 SCRA 62.

4.5

In view of the above, the Defendants move that the complaint should

be dismissed for the LESSEE certainly knows from the start whom to pay its rentals.

II. THAT COMPLAINT SHOULD BE DISMISSED SINCE BANANA CUE, UNDER THE BUSINESS NAME KAMOTE CUE, HAS NO LEGAL INTEREST, NOT BEING A PARTY AND NOT BEING IN EXISTENCE DURING THE EXECUTION OF THE LEASE CONTRACT.

4.6

The Lease Contract was executed between ABC CORP and Defendants

on March 15, 2001 and took effective on June 15, 2001; 4.7 The alleged Letter dated 29 August 2006 of BANANA CUE, informing

the transfer of the title of the Subject Property, was received only by ABC CORP five years later; 4.8 In David v. Gloria Macapagal-Arroyo, 11 the Supreme Court held that the

real-party-in interest is the party who stands to be benefited or injured by the judgment in the suit or the party entitled to the avails of the suit. BANANA CUE, represented by KAMOTE CUE, not existent during the execution of the Lease Contract, is not the real-party-in interest and it is not entitled to any benefit of injury from any judgment. 4.9 The Defendants then moved to pray that this complaint be dismissed

since the other party in the interpleader, BANANA CUE, is not a real-party-in interest.

11

G.R. No. 171397, May 3, 2006.

III. THAT COMPLAINT SHOULD BE DISMISSED ON THE GROUND THAT BANANA CUE HAS ACTED INJUSTICE, DISHONESTY AND BAD FAITH AGAINST THE DEFENDANTS IN THE CANCELLATION, AND REGISTRATION OF SUBJECT PROPERTY UNDER HER BUSINESS NAME WITHOUT THEIR KNOWLEDGE.

4.10

The Defendants, acting in good faith, has allowed BANANA CUE to

use TCT No. 11111 as a collateral on a certain emergency of the latter by executing a Deed of Sale,12 although no monetary was actually transferred, to be used as encumbrances to the said Certificate of Title, sometime in December 2005; 4.11 That BANANA CUE, has registered the Deed of Sale at the Register of

Deeds, and instead of encumbering the same, has caused the cancellation of TCT No. 11111 and the issuance of TCT No. 22222, which she registered under a business name, KAMOTE CUE; 4.12 That on August 29, 2006, without the knowledge of the Defendants,

BANANA CUE has sent her alleged Letter to ABC CORP informing them of the transfer of the title and ownership of the Subject Property, and accordingly advised the latter to transact and directly with her; 4.13 The in view of the above, BANANA CUE has willfully causes damage

to Defendants, acted with injustice, dishonesty and bad faith, contrary to law, morals and good customs, in direct violations of Articles 19, 20 and 21 of the New Civil Code. 4.14 Thus, in view of the foregoing, the Defendants asked that the

Complaint be dismissed.

12

A copy of the Deed of Sale is herewith attached as Annex G.

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V COMPULSARY COUNTERCLAIMS The Defendants respectfully replead herein all the foregoing paragraphs by reference.

FIRST COMPULSORY COUNTERCLAIM FOR PAYMENT BY ABC CORP TO DEFENDANTS OF ALL RENTAL FEES FROM JUNE 2008 TO JUNE 2011 IN THE AMOUNT OF P 7,463,469.60

5.1

Under the Lease Contract, entered and executed into by ABC CORP

and the Defendants on March 15, 2001, the manner of payment of the former will be as follows: ONE HUNDRED FIFTY PESOS PER SQUARE METER (P150.00) PER MONTH for the first year up to the seventh; ONE HUNDERED EIGHTY PESOS PER SQUARE METER (P180.00) PER MONTH for the eight to the fifteen (15) days of each anniversary year. However, as requested by LESSORS, LESSEE has agreed to pay LESSORS seven (7) years advance rental corresponding to the first seven (7) years of lease, without deducting discount and bank charges, payable upon the effectivity of this Lease Contract.13

In the initial pursuant hereof, on June 15, 2011, ABC CORP paid in advance the rentals corresponding to the first seven (7) years of the lease (from June 2001 to June 2008) to the Defendants;

13

Lease Contract, p. 1, par. 3; Annex A hereof.

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5.2

Since the alleged party-in-interest of BANANA CUE to the Lease

Contract has been disputed, being the not real owner of the Subject Property but has acquired only through an act of injustice, dishonesty and bad faith, ABC CORP is liable to honor its obligations to the Lease Contract and to pay to the Defendants the rentals over the Subject Property for eight years (June 2008 to June 2009), nine (June 2009 to June 2010) and ten (June 2010 to June 2011), which are computed as follows: Total Amount of Rentals Year 8 (June 2008 to June 2009) Year 9 (June 2009 to June 2010) Year 10 (June 2010 to June 2011) TOTAL P 2,487,823.20 P 2,487,823.20 P 2,487,823.20 P 7,463,469.60

SECOND COMPULSORY CLAIM FOR RESTITUTION AND REPARATION OF SUBJECT PROPERTY TO DEFENDANTS

5.3

Since the Deed of Sale,14 which was executed by the Defendants in

favor of BANANA CUE, has no monetary value but it was only made by the former in good faith to help the latter in her loan, BANANA CUE has to cause the cancellation of TCT No. 22222 and return its ownership to the Defendants. All the monetary obligations, on the cancellation of TCT No. 22222, registration, administrative and legal proceedings of the issuance new Certificate of Title will be shouldered by BANANA CUE.
Ibid.

14

12

5.4

Due to the Letter dated August 29, 2006 of BANANA CUE to ABC

CORP, the latter has stopped its payment to Defendants, denying to the latter the aggregate sum of P7,463,469.60 rental payment from June 2008 to June 2011, and in case ABC CORP will fail to honor the Lease Contract and pay the rentals, BANANA CUE will pay the defendants total payment of P7,463,469.60.

THIRD COMPULSORY COUNTERCLAIM FOR MORAL AND EXEMPLARY DAMAGES

5.5

The Defendants are respected persons, both in their personal capacity

and as members of the community. Over the years, they have established good names and untarnished reputations. Evident of which is the Lease Contract

executed by ABC CORP with them. They are good persons and generous with their neighbors, as exemplified by their allowing BANANA CUE to use their property in her emergency loan. The action of BANANA CUE and the filing of this Complaint discredited and tarnished such reputation of the Defendants, and caused injustice, dishonesty and bad faith on their part, thus entitling the latter to recover at least P1,000,000.00 each from ABC CORP and BANANA CUE, pursuant to Articles 19, 20 and 21 of the New Civil Code. 5.6 By way of example or correction for the public good, so that others

who are like-minded may be deterred from committing such pernicious acts and actuations, ABC CORP and BANANA CUE should be ordered to pay the Defendants exemplary damages in the amount of not less than P1,000,000.00 from each.
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FOURTH COMPULSORY COUNTERCLAIM FOR ATTORNEYS FEES AND LITIGATION EXPENSES 5.7 As a consequence of the baseless and wrongful institution of this

Complaint, the Defendants were unnecessarily dragged into litigation, constrained to engage the services of counsel for a fee and incurred expenses of litigation and other costs of suit to protect their rights and interests and defend their good name and reputation. 5.8 In view of the above, the Defendants are entitled to the award of

attorneys fees and to be reimbursed the expenses of litigation and cost of suit they have unnecessarily spent, and will likely to continue spending for this suit. Thus, ABC CORP and BANANA CUE should be ordered to pay the Defendants the amount of not less than P1,000,000.00 by way of Attorneys fees, and the amount of not less than P1,000,000.00 for litigation expenses.

PRAYER

WHEREFORE, the Defendants respectfully pray that judgment be rendered dismissing the Complaint in toto for utter lack of merit. If the Complaint is not dismissed, the DEFENDANTS pray that after trial, judgment on the Compulsory Counterclaims, be rendered as follows: 1. Under the First Compulsory Counterclaim, ordering ABC CORP to pay the rentals amounting to P7,463,469.60;

14

2. Under the Second Compulsory Counterclaim, ordering BANANA CUE for restitution and reparation of the Subject Property, in case of non-payment of ABC CORP, to pay the rentals amounting to P7,463,469.60; 3. Under the Third Compulsory Counterclaim, ordering both ABC CORP and BANANA CUE to pay moral and exemplary damages to Defendants in the amount of not less than P1,000,000.00; and, 4. Under the Fourth Compulsory Counterclaim, ordering both ABC CORP and BANANA CUE to pay and reimburse the Defendants attorneys fees and litigation expenses amounting to less than P1,000,000.00, respectively.

The Defendants likewise pray for such further or other relief as may be deemed just or equitable. Manila, for Quezon City, 30 October 2012.

ATTY. FR. LENJENIE ARCAN Counsel for Defendants, CRUZ Siblings Class 1-D, Group 1 Law Firm

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