Republic of the
Supreme Court
SECOND DIVISION
|
DOTMATRIX TRADING as represented
by its proprietors, namely ROMY RENATO ROLLAN and ROLANDO D. Petitioner, - versus - ROMMEL B. LEGASPI under the name and style of BIG J FARMS and RBL
FARM,
Respondent. |
|
G.R. No. 155622
Present: QUISUMBING,
J., Chairperson, *CARPIO, CARPIO-MORALES, BRION, and ABAD, JJ.
Promulgated:
October 26, 2009 |
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D E C I S I O N
BRION, J.:
On a pure
question of law involving the issue of litis
pendentia, Dotmatrix Trading – represented by its proprietors, Romy Yap Chua,
Renato Rollan and Rolando D. Cadiz (petitioners)
– came directly to this Court via a petition
for review on certiorari[1]
to challenge the Orders[2]
dated September 2, 2002 and
FACTUAL BACKGROUND
The facts of the case, as gathered from the parties’ pleadings, are briefly summarized below:
The petitioners are engaged in the business of buying and selling of commodities, including day-old chicks. Rommel B. Legaspi (respondent), as the proprietor of Big J Farms and RBL Farm, was the petitioners’ supplier of day-old chicks from September to December 2001.
Sometime in May
2002, the respondent sent a demand letter to the petitioners for the payment of
delivered day-old chicks. The
petitioners, thru petitioner P1,360,000.00, but the respondent was able
to deliver only P1,136,150.00 worth of day-old chicks, leaving a
deficiency of P223,850.00 worth of day-old chicks. The petitioners demanded the delivery of the
deficiency, or the return of the overpayment made. When the parties refused to comply with each
other’s demands, both went to court for judicial relief.
On June 11, 2002, the petitioners (the buyers of the chicks) filed before RTC-Tarlac a complaint for sum of money and damages against the respondent, docketed as Civil Case No. 9354. The petitioners sought the return of the overpayment made, plus moral and exemplary damages, and attorney’s fees.
On P1,368,100.00 worth of day-old chicks, but the
petitioners only paid P1,150,000.00. Thus, the respondent prayed for the payment of the balance of P218,100.00.
Shortly upon
receipt of the summons and complaint in Civil Case No. 9354, or on
THE RTC RULING
On
The petitioners moved but failed to secure a reconsideration of the RTC order[5] and, from thence, came to us through the present petition on a pure question of law.
THE PETITION and
THE PARTIES' SUBMISSIONS
The petitioners argue that Civil Case No. 9354 should not have been dismissed on the ground of litis pendentia because it was filed ahead of Civil Case No. 489-M-2002. They insist that Civil Case No. 9354 was filed to vindicate the wrong done to them by the respondent, and not to simply preempt the latter’s case for collection of sum of money. They stress that it is their right to seek the assistance of the court to rectify the damage they sustained.
The respondent, on the other hand, submits that the issue raised by the petitioners is far from novel; the consistent judicial holding is that litis pendentia does not specifically require that the action that should yield to the other should be the prior pending action.
THE ISSUE
The core issue is whether Civil Case No. 9354 (the buyers’ action for overpayment) – filed ahead of Civil Case No. 489-M-2002 (the seller’s action for collection of balance) – should be dismissed on the ground of litis pendentia.
OUR RULING
We see no merit in the petition.
The
elements of Litis
Pendentia
are present.
Litis
pendentia
is a Latin term, which literally means “a pending suit” and is variously
referred to in some decisions as lis pendens and auter action
pendant.[6] As a ground for the dismissal of a civil action, it refers to the
situation where two actions are pending between the same parties for the same
cause of action, so that one of them becomes unnecessary and vexatious.[7] It is
based on the policy against multiplicity of suits.[8]
To constitute litis pendentia, not only must the parties in the two actions be the
same; there must as well be substantial identity in the causes of action and in
the reliefs sought. Further, the
identity should be such that any judgment that may be rendered in one case, regardless
of which party is successful, would amount to res judicata in the other.[9]
From every conceivable angle, no dispute
exists that all the requisites of litis
pendentia are present in this case. The
parties in Civil Case No. 9354 and
Civil Case No. 489-M-2002 are
the same. They are suing each other for
sums of money which arose from their supply contract of day-old chicks. The
reliefs prayed for are based on the same facts and identity exists on the
rights asserted. Any judgment rendered in one case would necessarily amount to res
judicata in the other.
Guidelines for the dismissal of a complaint
on the ground of litis pendentia
We take this opportunity to revisit the cases
we have decided on the issue of litis
pendentia and the factors we considered in determining which case should
prevail and which must yield to the other.
The rule on litis pendentia does not
require that the case later in time should yield to the earlier case; what is
required merely is that there be another pending action, not a prior pending
action.[10] Neither
is it required that the party be served with summons before lis pendens can
apply; it is the filing of the action, not the receipt of summons, which
determines priority in date.[11]
Early on, we applied the principle of Qui prior est tempore, potior est jure[12] (literally, he who is before in time is better in right) in dismissing a case on the ground of litis
pendentia. This was exemplified in
the relatively early case of Del Rosario v. Jacinto[13] where two complaints for reconveyance and/or
recovery of the same parcel of land were filed by substantially the same
parties, with the second case only impleading more party-plaintiffs. The Court held that “parties who base their
contention upon the same rights as the litigants in a previous suit are bound
by the judgment in the latter case.”
Without expressly saying so in litis
pendentia terms, the Court gave priority to the suit filed earlier.
In Pampanga
Bus Company, Inc. v. Ocfemia,[14] complaints for damages arising from a
collision of a cargo truck and a bus were separately filed by the owners of the
colliding vehicles. The complaint of the
owners of the cargo truck prevailed and the complaint of the owners of the bus
had to yield, as the cargo truck owners first filed their complaint. Notably, the first and prevailing case was far
advanced in development, with an answer with counterclaim and an answer to the
counterclaim having been already filed, thus fully joining the issues.
In Lamis
Ents. v. Lagamon,[15] the first case was a complaint for specific performance of obligations
under a Memorandum of Agreement, while the second case was a complaint for sums
of money arising from obligations under a promissory note and a chattel
mortgage, and damages. We dismissed the second case because the claims for sums
of money therein arose from the Memorandum of Agreement sued upon in the first
case.
Ago
Timber Corporation v. Ruiz[16] offered an insightful reason after both
parties had each pleaded the pendency of another action between the same
parties for the same cause. The Court
ruled that the second action should be dismissed, “not only as a matter of
comity with a coordinate and co-equal court (Laureta & Nolledo,
Commentaries & Jurisprudence on Injunction, p. 79, citing Harrison v.
Littlefield, 57 Tex. Div. A. 617, 619, 124 SW 212), but also to prevent
confusion that might seriously hinder the administration of justice. (Cabigao,
et al. v. Del Rosario, et al., 44 Phil. 182).”
In all these cases, we gave preference to the
first action filed to be retained. The “priority-in-time rule,” however, is not
absolute.
In the 1956 case of Teodoro v. Mirasol,[17] we deviated from the “priority-in-time rule” and
applied the “more appropriate action test” and the “anticipatory test.”
The “more
appropriate action test” considers the real issue raised by the pleadings and
the ultimate objective of the parties; the more appropriate action is the one
where the real issues raised can be fully and completely settled. In Teodoro,
the lessee filed an action for declaratory relief to fix the period of the
lease, but the lessor moved for its dismissal because he had subsequently filed
an action for ejectment against the lessee. We noted that the unlawful detainer suit was
the more appropriate action to resolve the real issue between the parties –
whether or not the lessee should be allowed to continue occupying the land
under the terms of the lease contract; this was the subject matter of the second
suit for unlawful detainer, and was also the main or principal purpose of the first
suit for declaratory relief.
In the “anticipatory
test,” the bona fides or good faith of the parties is the critical element.
If the first suit is filed merely to
preempt the later action or to anticipate its filing and lay the basis for its
dismissal, then the first suit should be dismissed. In Teodoro, we noted that the first
action, declaratory relief, was filed by the lessee to anticipate the filing of
the second action, unlawful detainer, considering the lessor’s letter informing
the lessee that the lease contract had expired.
We also applied
the “more appropriate action test” in Ramos v. Peralta.[18] In this case, the
lessee filed an action for consignation of lease rentals against the new owner
of the property, but the new owner moved to dismiss the consignation case because
of the quieting of title case he had also filed against the lessee. Finding that the real issue between the
parties involved the right to occupy/possess the subject property, we ordered
the dismissal of the consignation case, noting that the quieting of title case is the more appropriate vehicle for the
ventilation of the issues between them; the
consignation case raised the issue of the right to possession of the lessee
under the lease contract, an issue that was effectively covered by the quieting
of title case which raised the issue of the validity and effectivity of the
same lease contract.
In University
Physician Services, Inc. v. Court of Appeals,[19] we applied both the “more appropriate action
test” and “anticipatory test.” In this
case, the new owner of an apartment sent a demand letter to the lessee to
vacate the leased apartment unit. When the lessee filed an action for damages
and injunction against the new owner, the new owner moved for the dismissal of
the action for damages on account of the action for ejectment it had also filed.
We noted that ejectment suit is the more appropriate action to resolve the issue
of whether the lessee had the right to occupy the apartment unit, where the
question of possession is likewise the primary issue for resolution. We also
noted that the lessee, after her unjustified refusal to vacate the premises,
was aware that an ejectment case against her was forthcoming; the lessee’s filing
of the complaint for damages and injunction was but a canny and preemptive
maneuver intended to block the new owner’s action for ejectment.
We also applied the “more appropriate action test”
in the 2003 case Panganiban v. Pilipinas Shell Petroleum Corp.,[20] where the lessee filed a petition for declaratory relief on the issue of
renewal of the lease of a gasoline service station, while the lessor filed an
unlawful detainer case against the lessee. On the question of which action should be
dismissed, we noted that the interpretation of a provision in the lease
contract as to when the lease would expire is the key issue that would
determine the lessee's right to possess the gasoline service station. The primary issue – the physical possession
of the gasoline station – is best settled in the ejectment suit that directly
confronted the physical possession issue, and not in any other case such as an
action for declaratory relief.[21]
A more recent case – Abines v. Bank of the Philippine Islands[22] in 2006 – saw the application of both the
“priority-in-time rule” and the “more appropriate action test.” In this case, the respondent filed a complaint
for collection of sum of money against the petitioners to enforce its rights
under the promissory notes and real estate mortgages, while the petitioners
subsequently filed a complaint for reformation of the promissory notes and real
estate mortgages. We held that the first
case, the collection case, should subsist because it is the first action filed
and the more appropriate vehicle for litigating all the issues in the
controversy. We noted that in the second
case, the reformation case, the petitioners acknowledged their indebtedness to
the respondent; they merely contested the amounts of the principal, interest
and the remaining balance. We observed,
too, that the petitioners’ claims in the reformation case were in the nature of
defenses to the collection case and should be asserted in this latter case.
Under this established jurisprudence on litis pendentia, the following
considerations predominate in the ascending order of importance in determining
which action should prevail: (1) the date of filing, with preference generally
given to the first action filed to be retained; (2) whether the action sought
to be dismissed was filed merely to preempt the later action or to anticipate
its filing and lay the basis for its dismissal; and (3) whether the action is the
appropriate vehicle for litigating the issues between the parties.[23]
Civil
Case No. 489-M-2002 is the appropriate case to determine the rights of the parties
In the present case, the undisputed facts
show that the respondent initiated the preparatory moves that led to the
present litigation when he sent the petitioners – in May 2002, or about five
(5) months after the end of their supply contract – a demand letter for the payment
of delivered day-old chicks. The
petitioners only reacted to this demand when they replied that there was in
fact an overpayment that should be refunded.
Under these facts, and given the law on sales that business is keenly
aware of, we can safely conclude that the petitioners knew that a case for sum
of money would be filed against them and thus filed Civil Case No. 9354 in anticipation
of this coming case which became Civil Case No. 489-M-2002; the purpose,
under this view, is purely preemptive, i.e.,
to seek the dismissal of the coming action.
The more compelling reason that strikes us,
however, is that Civil Case No. 489-M-2002 is the more appropriate
action to rule on the real issue
between the parties – whether or not the correct payment had been made on the
delivered day-old chicks; the petitioners’ claim of overpayment in Civil Case No. 9354 is more in the nature of
a defense to the respondent’s action for collection in Civil Case No.
489-M-2002. From this perspective, the real issue is
better asserted in Civil Case No. 489-M-2002 – the collection case –
rather than in the action that merely serves as a defense to the collection
case.
Another and equally compelling reason why Civil Case No. 489-M-2002 should prevail is the reason we put forward in Pampanga Bus Company, Inc. v. Ocfemia[24] – the stage of this case at this point. With the seven-year pendency of the present case (since the filing of Civil Case No. 9354 on June 11, 2002) and with no restraining order from this Court, there is no doubt that trial on the merits has already been conducted in Civil Case No. 489-M-2002, with the petitioners given the full opportunity to present evidence on their defense. To dismiss Civil Case No. 489-M-2002 at this point would result in needless delay in the resolution of the parties’ dispute and bring them back to square one. This consequence will defeat the public policy reasons behind litis pendentia which, like the rule on forum shopping, aims to prevent the unnecessary burdening of our courts and undue taxing of the manpower and financial resources of the judiciary; to avoid the situation where co-equal courts issue conflicting decisions over the same cause; and to preclude one party from harassing the other party through the filing of an unnecessary or vexatious suit.[25]
WHEREFORE, premises considered, we
hereby DENY the petition for its
failure to show any reversible error in the assailed Orders dated
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
Associate Justice
Chairperson
|
ANTONIO
T. CARPIO Associate Justice |
CONCHITA
CARPIO MORALES Associate Justice |
ROBERTO
A. ABAD
Associate Justice
ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
LEONARDO
A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
REYNATO S. PUNO
Chief Justice
* Designated additional Member of the
Second Division effective
[1] Under
Rule 45 of the Rules of Court.
[2] Penned by Judge Arsenio P. Adriano; rollo, pp. 8-10.
[3] Branch
63, Tarlac, Tarlac.
[4] Rollo, p. 8.
[5]
[6] City of Makati v. Municipality (now City) of Taguig, Metropolitan Manila, G.R. No. 163175, June 27, 2008, 556 SCRA 218, 227; Agilent Technologies Singapore (Pte.) Ltd. v. Integrated Silicon Technology Philippines Corporation, G.R. No. 154618, April 14, 2004, 427 SCRA 593, 601; Feliciano v. Court of Appeals, G.R. No. 123293, March 5, 1998, 287 SCRA 61, 66.
[7] Proton Pilipinas Corporation
v. Republic, G.R. No. 165027,
[8] Cruz v. Court of Appeals, G.R. No. 164797, February 13, 2006, 482 SCRA 379, 393; Calo v. Tan, G.R. No. 151266, November 29, 2005, 476 SCRA 426, 440.
[9] See Coca-Cola Bottlers (Phils.), Inc. v. Social Security Commission, G.R No. 159323, July 31, 2008, 560 SCRA 719, 736; Dayot v. Shell Chemical Company (Phils.), Inc., G.R. No. 156542, June 26, 2007, 525 SCRA 535, 545-546; Abines v. Bank of the Philippine Islands, G.R. No. 167900, February 13, 2006, 482 SCRA 421, 429.
[10] Andresons Group, Inc. v. Court of Appeals, G.R. No. 114928, January 21, 1997, 266 SCRA 423, 427; Ramos v. Peralta, G.R. No. 45107, November 11, 1991, 203 SCRA 412, 419; Teodoro v. Mirasol, 99 Phil. 150 (1956).
[11] See Pampanga Bus Co., Inc. v. Ocfemia,
No. L-21793,
[12] Priority in time gives preference in law, Black's Law Dictionary (Fifth ed.), 1125.
[13] No. L-20340,
[14] Supra note 11.
[15] No. L-57250,
[16] G.R. No. L-23887,
[17] 99 Phil. 150 (1956).
[18] G.R. No. 45107,
[19] G.R. No. 100424,
[20] G.R. No. 131471,
[21]
[22] G.R. No. 167900,
[23] Mid-Pasig
Land Development Corporation v. Court of Appeals, supra note 21, p. 213; Panganiban v. Pilipinas Shell
Petroleum Corp., supra
note 20, p. 634; Compania General
de Tabacos de Filipinas v. Court of Appeals, G.R. Nos. 130326 & 137868,
November 29, 2001, 371 SCRA 95, 114-115; Allied Banking Corp. v. Court of
Appeals, G.R. No. 95223,
[24] Supra note 14.
[25] Abines v. Bank of the Philippine Islands, supra note 9, pp. 433-434.