RULE 9

1. The counterclaim must be existing at the time of filing the answer, though not at the commencement
of the action for under Section 3 of the former Rule 10, the counterclaim or cross-claim which a party may
aver in his answer must be one which he may have at the time against the opposing party. That phrase
can only have reference to the time of the answer. Certainly a premature counterclaim cannot be set up
in the answer. This construction is not only explicit from the language of the aforecited provisions but also
serves to harmonize the aforecited sections of Rule 10, with section 4 of the same rule which provides
that a counterclaim . . . which either matured or was acquired by a party after serving his pleading may,
with the permission of the court, be presented as a counterclaim . . . by supplemental pleading before
judgment.

Thus a party who fails to interpose a counterclaim although arising out of or is necessarily connected with
the transaction or occurrence of the plaintiffs suit but which did not exist or mature at the time said party
files his answer is not thereby barred from interposing such claim in a future litigation.

(Banco de Oro vs. Spouses Locsin)

2. It should be borne in mind that the policy of the law is to have every litigated case tried on the merits
as much as possible. It is for this reason that judgments by default are frowned upon. The needless delay
and trouble spawned by the unfortunate order of default and judgment by default assailed in the instant
case warrant calling uattention once more to a previous reminder made by this Court through Mr. Justice
Claudio Teehankee:

Time and again the Court has enjoined trial judges to act with circumspection and not to precipitately
declare parties in default, needlessly compelling the aggrieved party to undergo the additional expense,
anxiety and delay of seeking the intervention of the appeciate courts and depriving them of the much
needed time and attention that could instead have well been devoted to the study and disposition of
more complex and complicated cases and issues. (Akut vs. Court of Appeals, 116 SCRA 213, 220.)

(Cathay Pacific Airways vs. Judge Romillo)

3. One declared in default has the following remedies:

a) The defendant in default may, at any time after discovery thereof and before judgment, file a motion
under oath to set aside the order of default on the ground that his failure to answer was due to fraud,
accident, mistake or excusable negligence, and that he has a meritorious defense (Sec. 3, Rule 18 [now
Sec. 3(b), Rule 9]);

b) If the judgment has already been rendered when the defendant discovered the default, but before the
same has become final and executory, he may file a motion for new trial under Section 1(a) of Rule 37;