394 Phil. 777
GONZAGA-REYES, J.:
Plaintiff-appellant, Bayer Philippines, Inc., appointed defendant-appellant, Casimiro D. Bompat (doing business as Kaiser Enterprises), as its exclusive distributor of Bayluscide 70% W.P. sometime in December, 1977, for a period of one year and automatically renewed every year thereafter unless earlier terminated or revoked by either party (Exh. "1").On January 25, 1989, the trial court rendered its decision finding that inasmuch as plaintiff Bayer's claim against defendant Bompat was admitted, the only issue to be resolved was whether or not defendant Bompat can collect on his counterclaims against Bayer. The trial court stated that Bompat has shown that he spent more than P100,000.00 of his own money in promoting plaintiff's products; that plaintiff's answer to the counterclaim merely made a general denial of the allegations contained in Bompat's counterclaim and just averred therein that the truth thereof are those stated in the complaint; however, the complaint itself did not contain allegations denying specifically Bompat's counterclaim for breach of their exclusive distributorship agreement nor was there any allegation that could be pointed to as a defense to Bompat's counterclaims; since allegations not specifically denied are deemed admitted, the counterclaims of defendant are deemed submitted without need of proof. Furthermore, the trial court also found that Plaintiff Bayer's complaint did not contain allegations denying Bompat's counterclaim for actual and moral damages, attorney's fees and storage charges in the amount of P1,883,000.00 nor any statement on the unreasonableness of such claim for storage fees; that when plaintiff Bayer delivered the 4,000 kilos in 80 drums of 50 kilos to Bompat's house, the latter had to construct a bodega to store the products and protect the same from the elements, hence, Bompat is entitled to the payment of storage fees. It, however, found that Bompat's claim for storage fees of P1.00 per kilo per day or P50.00 per drum per day was exorbitant and concluded that a more reasonable figure would be P10 per day for 80 drums. The dispositive portion of the decision reads as follows:
Pursuant to said distributorship agreement, defendant-appellant obtained, on credit, from plaintiff-appellant Bayluscide 70% W.P. valued at P741,250.00. Defendant-appellant was unable to pay P117,500.00 so that on January 22, 1982, he executed a promissory note promising to pay said P117,500.00 in 12 monthly installments (Exh. "A"). He promised therein that in case he defaults in the payment of any of the installments, he would pay 14% interest thereon per annum, and compounded monthly until fully paid; that in the event of default of any three (3) monthly installments, the whole obligation is accelerated and he is to pay the accelerated principal balance plus accrued interest in the amount of P43,310.82 together with the monthly compounded interest. Defendant-appellant was able to pay, though belatedly, four (4) installments in the total sum of P40,000.00 plus the sum of P25,000.00 after plaintiff-appellant's lawyer's demand.
As of January 31, 1984, defendant-appellant's outstanding balance stood at P112,482.13, including interest. Because defendant-appellant failed to pay the same despite demand, plaintiff-appellant, on March 7, 1984, filed this collection suit praying that the former be ordered to pay aforesaid outstanding balance plus 14% interest thereon until fully paid, and 25% of the total amount due as attorney's fees.
On May 4, 1984, defendant-appellant filed his answer admitting the liability sued upon, but put up the special and affirmative defenses that by reason of the distributorship agreement, plaintiff-appellant, on January 29, 1979 delivered 4,000 kilos of Bayluscide 70% W.P. to defendant-appellant who received them preparatory for distribution to the end-users whom he had already canvassed; that when defendant-appellant was already in a position to sell the chemicals to the end-users, more particularly to some government entities, plaintiff-appellant, without any cause whatsoever, withdrew the said chemicals on May 16, 1980 thereby leaving defendant-appellant with nothing to deliver to his customers; that without revoking the distributorship agreement, plaintiff-appellant withdrew the said chemicals and directly dealt with the end-users; that the appointment of defendant-appellant by the plaintiff-appellant as the latter's exclusive distributor was merely a ploy just to get free storage fee from defendant-appellant's bodega; and that defendant-appellant has paid to plaintiff-appellant P40,000.00, thus leaving an unpaid balance of P77,000.00, which is offset by the storage fee.
As his counterclaim, defendant-appellant claims that plaintiff-appellant, in dealing directly with the end-users despite the former's appointment as exclusive distributor of Bayluscide 70% W.P., is guilty of breach of contract entitling defendant-appellant to damages in the amount of P100,000.00; that the delivery to defendant-appellant of some 4,000 kilos of Bayluscide 70% W.P., which was later withdrawn without any reason whatsoever after the lapse of 472 days, was a ploy just to get a free storage fee, for which defendant-appellant is entitled to collect from plaintiff-appellant storage fee in the amount of P1,888,000.00 computed at P1.00 per kilo per day; that to promote plaintiff-appellant's product, he spent some P100,000.00 to which he is entitled to reimbursement when plaintiff-appellant violated said distributorship agreement; and, that for said violation, he is entitled to P100,000.00 as nominal damages, P20,000.00 as attorney's fees, and P10,000.00 as litigation expenses.
In answer to counterclaim, plaintiff-appellant merely stated that it "denies the allegations contained in defendant's counterclaim the truth being those stated in the complaint."
At the pre-trial conference no amicable settlement was reached, hence trial on the merits ensued."
"WHEREFORE, in the light of the foregoing, judgment is hereby rendered as follows:Both parties appealed to the respondent Court of Appeals. The respondent Court rendered its decision, the dispositive portion of which reads as follows:
I. On the complaint, sentencing defendant to pay plaintiff the sum of P52,500.00 compounded monthly as of March 7, 1984, which amount may be set off from the award in favor of the defendant.
II. On the counterclaims, sentencing plaintiff to pay defendant the following sums:
- P377,600.00 for rental of the drums of bayluscide, with legal interest of 12% per annum from May 4, 1984, until fully paid;
- P100,000.00 for actual damages, with similar interest;
- P30,000.00 for moral damages;
- P10,000.00 for attorney's fees and litigation expenses."
"WHEREFORE, with the modification that: 1) defendant-appellant is ordered to pay plaintiff-appellant the sum of P112,482.13 plus interest thereon at 14% compounded per annum from default (March 7, 1984), until fully paid; and 2) plaintiff-appellant is ordered to pay defendant-appellant the sum of P50,000.00 as and for actual damages, the Decision appealed from is hereby AFFIRMED in all other respects."Motions for reconsideration filed respectively by both parties were denied by the respondent court in a resolution dated March 3, 1993. Dissatisfied, petitioner Bayer Philippines, Inc. filed this present petition submitting seven assignment of errors which may be simplified into whether or not the respondent court erred: (1) in awarding 14% compounded interest to petitioner only from March 7, 1984, the date of the filing of the complaint; (2) in not awarding attorney's fees which was stipulated upon by the parties in their promissory note; (3) in treating respondent's counterclaim as compulsory in nature which would not require payment of docket fees; and (4) in granting private respondent's counterclaims.
"It has been postulated that while a number of criteria have been advanced for the determination of whether the counterclaim is compulsory or permissive, the "one compelling test of compulsoriness" is the logical relationship between the claim alleged in the complaint and that in the counterclaim, that is, where conducting separate trials of the respective claims of the parties would entail a substantial duplication of effort and time, as where they involve many of the same factual and/or legal issues.Notably, petitioner's complaint was for collection of sum of money based on a promissory note executed by private respondent arising out of the non-payment of the products obtained on credit by virtue of the exclusive distributorship agreement. On the other hand, private respondent's counterclaims were for storage fees and damages premised on a violation of the same distributorship agreement. The claims of petitioner and private respondent arose from the same exclusive distributorship agreement, and the rights and obligations of the parties, as well as their potential liability emanated from the same contractual relation.[8] Considering that the counterclaims of private respondent are compulsory in nature, payment of docket fees is not required and the trial court had jurisdiction to rule on the same.
The phrase" logical relationship" is given meaning by the purpose of the rule which it was disputed to implement. Thus, a counterclaim is logically related to the opposing party's claim where, as already stated, separate trials of each of their respective claims would involve a substantial duplication of effort and time by the parties and the courts. Where multiple claims involve many of the same factual issues, or where they are offshoots of the same basic controversy between the parties, fairness and considerations of convenience and of economy require that the counter claimant be permitted to maintain his cause of action."
"The award of storage fee may be based on equity and on the principle of unjust enrichment. Defendant-appellant was not, under the distributorship agreement, obliged to provide free storage of the Baylusicde 70% W.P. And according to defendant-appellant, the practice and/or procedure was for plaintiff-appellant to effect deliveries to the project site upon its (defendant) instruction. But with respect to the 80 drums of Bayluscide 70% W.P. they were delivered to the residence of defendant-appellant, compelling the latter to construct a structure to house said chemicals and thereby protecting them from the elements. However, after having stored said chemicals for about 472 days, plaintiff-appellant, without revoking the agreement, withdrew them from defendant-appellant's warehouse. Under these circumstances, equity dictates that plaintiff-appellant is obligated to pay storage fee, otherwise it is enriching itself at the expense of defendant-appellant."Petitioner, however, contends that the award of storage fees to private respondent on the ground of equity should not be sustained since the latter cannot be considered without fault in dealing with petitioner, asseverating that he who comes to court to demand equity must come with clean hands. Petitioner posits that private respondent has no right to seek equity since he made a "killing" selling to the government at exorbitant prices; that the award cannot be justified on the ground of unjust enrichment since petitioner was not benefited at all by the storage of its own products as petitioner has enough storage facilities; that the arrangement between the parties was one for distributorship, not storage, so that the product was meant to be sold and not to be stored for an extended period of time only to be returned to Germany in its decomposing state.