Cruz vs CA : 134090 : July 2, 1999 : J. Purisima : Third Division

THIRD DIVISION

[G.R. No. 134090. July 2, 1999]

Ernesto R. Cruz, Lucia Nicio and Guillermo Coquilla, petitioners, vs. Court of Appeals and Spouses Jose and Miguela Lomotan, respondents.

D E C I S I O N

PURISIMA, J:

At bar is a special civil action for certiorari under Rule 65 of the Revised Rules of Court ascribing grave abuse of discretion to the Court of Appeals when, despite a finding of forum-shopping, it did not order the dismissal of the two cases filed by the respondent spouses, Jose Lomotan and Miguela Lomotan, against the herein petitioners, one for injunction and the other for unlawful detainer, and instead, allowed the said cases to prosper.

The antecedent facts of the case are as follows:

Sometime in 1975, the spouses Jose Lomotan and Miguela Lomotan purchased from Jose San Pedro a parcel of land located at No. 16 Tawiran Street, Interior Evangelista, Santolan, Pasig City, with an area of 4, 689 square meters. The corresponding Transfer Certificate of Title No. 477687 was issued to them by the Register of Deeds of Pasig City. Jose San Pedro, the vendor, executed the necessary affidavit attesting that subject property deeded out was not tenanted. Thereafter, the respondent spouses went to the United States.

In 1996, upon their return from the United States, they had the said land subdivided into smaller lots and enclosed the same with a concrete fence. At that time, however, the area was already occupied by the petitioners, Ernesto Cruz, Guillermo Coquilla and Lucita Nicio, who constructed their houses thereon. Respondent spouses sent written demands to the petitioners asking them to leave the place but the latter not only refused to vacate; they even prevented the workers hired by the respondent spouses from constructing the perimeter fence.

On December 6, 1996, respondent spouses brought before the Regional Trial Court in Pasig City a petition for injunction with prayer for the issuance of a temporary restraining order, in the interim, to enjoin the petitioners from preventing and obstructing the construction of the fence around the property in question. Respondent spouses allege that: (1) they own subject property and had the same subdivided into smaller lots; (2) they hired construction workers to build a concrete fence around the area; and (3) the workers were in the process of constructing the fence when the petitioners, armed with bolos, stopped and barred the workers from finishing their job.

Petitioners, on the other hand, theorize that they started residing within subject lot in 1964 and their father, Braulio Cruz, occupied the same since 1948; that respondent Miguela Lomotan offered to pay them P20,000.00 as consideration for their vacating the place but they would be effectively blocked off from the property with the construction of the fence.

On December 18, 1996, before the Regional Trial Court could resolve the petition and prayer for a temporary restraining order, the respondent spouses instituted a case for unlawful detainer against the same parties, the petitioners here, before the Metropolitan Trial Court of Pasig City. In their complaint, respondent spouses claimed that sometime in 1975, Braulio Cruz, the father of petitioners, requested permission from them (Lomotans) to plant on subject lot, to which request they agreed under the condition that once they (Lomotans) would need the property, Braulio Cruz will vacate the same. However, unknown to them, Braulio Cruz and his family constructed shanties on the subject area and resided therein.

On January 6, 1997, the Regional Trial Court which was hearing the injunction case issued an Order denying the prayer for a temporary restraining order. On the same day, they (petitioners herein) sent in their Answer to the complaint for injunction, alleging that subject property titled under the names of the spouses, Jose Lomotan and Miguela Lomotan, had been part of an agricultural land, a portion of which had been in the possession of petitioners for more than thirty (30) years. By way of counterclaim, petitioners prayed for the issuance of a temporary restraining order to prevent the respondent spouses from ejecting them. The answer petitioners submitted to the Metropolitan Trial Court before which court the unlawful detainer case was brought contained substantially the same arguments.

On January 27, 1997, petitioners moved to dismiss the injunction case before the Regional Trial Court on the ground of forum shopping, action auter pendant and/or lack of jurisdiction, contending that the issue in the case before the Regional Trial Court - which is possession of subject property - is interlinked with or inextricably involved in the issue before the Metropolitan Trial Court such that any decision to be rendered by the former court would constitute a bar to the action pending before the latter court. On the same day, a motion for contempt based on forum-shopping was presented by the petitioners in the ejectment case before the Metropolitan Trial Court.

But both the Motion to Dismiss and Motion for Contempt were denied by the two courts. The motions for reconsideration of the orders of denial met the same fate. They were likewise denied.

On August 11, 1997, the Metropolitan Trial Court handed down a decision in the ejectment case, disposing as follows:

“WHEREFORE, the foregoing premises considered judgment is hereby rendered

1. Ordering defendants and all persons claiming rights under them to vacate the subject premises and surrender peacefully possession thereof to possession thereof (sic) to plaintiffs;

2. Defendants to pay plaintiffs as reasonable compensation for use and occupation of the land, as follows:

a. Defendant Ernesto Cruz - Two Thousand Pesos (P2,000.00) and defendants Guillermo Coquilla and Lucita Nicio, One Thousand Pesos (P1,000.00) each, beginning January, 1997 and every month thereafter until they completely vacate the subject property;

3. To pay plaintiffs P5,000.00 as attorney’s fees; and

4. Cost of suit.

SO ORDERED.”

From the aforesaid decision of the Metropolitan Trial Court petitioners appealed to the Regional Trial Court, the appeal was raffled off to the same Regional Trial Court which was then hearing the injunction case.

On October 24, 1998, in view of the refusal of the Regional Trial Court to dismiss both Civil Case No. 6625 and the appealed Metropolitan Trial Court Civil Case No. 5771 on the ground of forum shopping, action auter pendant and/or lack of jurisdiction, the petitioners went to the Court of Appeals on a Petition for Certiorari under Rule 65, docketed as CA-G.R. Sp. No. 45723.

On February 19,1998, the Court of Appeals came out with a decision finding the respondent spouses guilty of forum shopping for the reason that the issue raised before it and the reliefs therein sought were no different from the reliefs they sought before the Metropolitan Trial Court in Civil Case No. 5771. The Court of Appeals then ordered the dismissal of RTC Civil Case No. 6625, but affirmed the orders of the Metropolitan Trial Court and refused to dismiss Civil Case No. 5771 for unlawful detainer.

The next step taken by petitioners was to move for a partial reconsideration of the decision of the Court of Appeals insofar as it denied the prayer for the dismissal of the unlawful detainer case. But on June 9, 1998, the Court of Appeals denied petitioners’ motion.

Hence, the present petition ascribing to the Court of Appeals grave abuse of discretion amounting to lack or excess of jurisdiction for:

I. Refusing to dismiss MTC Civil Case No. 5771 based on the court’s lack of jurisdiction because the issue of possession is interwoven into the issue of ownership; and

II. Refusing to dismiss MTC Civil Case No. 5771 based on forum shopping and/or res judicata or by action auter pendant doctrine.

Petitioners contend that the issue of de facto possession enjoyed by the petitioners could not be resolved by the Metropolitan Trial Court because the same is inseparably linked with the question of ownership then pending resolution before the Regional Trial Court, on the evidence so far presented before that more superior court, which divested the Metropolitan Trial Court of its jurisdiction over the issue of possession and ownership between the parties.

This contention is untenable. In ejectment cases, it is not unusual that the issue of possession may be resolved without deciding the question of ownership. When resolution of the question of ownership is indispensable to the disposition of the issue of possession, Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts are empowered to determine the matter of ownership for the sole purpose of resolving the issue of possession. It is now a well-settled rule that inferior courts are not divested of jurisdiction over ejectment cases just because the defendants assert ownership over the litigated property.[1]

“xxx As the law now stands, inferior courts retain jurisdiction over ejectment cases even if the question of possession cannot be resolved without passing upon the issue of ownership but this is subject to the same caveat that the issue posed as to ownership could be resolved by the court for the sole purpose of determining the issue of possession.

x x x An adjudication made therein regarding the issue of ownership should be regarded as merely provisional and therefore, would not bar or prejudice an action between the same parties involving title to the land. xxx”[2]

The aforecited ruling has been incorporated in the 1997 Amendments to the Rules of Civil Procedure under Section 16, Rule 70, to wit:

Section 16. Resolving defense of ownership - When the defendant raises the defense of ownership in his pleadings and the question of possession cannot be resolved without deciding the issue of ownership, the issue of ownership shall be resolved only to determine the issue of possession.

Conformably, although the unlawful detainer case instituted before the MTC to resolve the sole issue of de facto possession and the injunction case before the Regional Trial Court involved the issue of ownership, the fact that possession is inextricably linked with the issue of ownership did not divest the Metropolitan Trial Court of jurisdiction to decide the ejectment case as it is competent to determine ownership for the sole purpose of passing upon the matter of de facto possession.

With regard to the second assigned error, petitioners maintain that in view of its dismissal of the injunction case then pending before the Regional Trial Court on the ground of forum shopping, the Court of Appeals should have also dismissed the unlawful detainer case before the Metropolitan Trial Court as there was no factual nor legal basis to retain one and dismiss the other, or to be “selective” as to which of the two actions involving the same parties, the same causes of action or issues and the same reliefs, it should dismiss. In other words, it is petitioners’ submission that on the basis of its finding of forum-shopping, the Court of Appeals should have dismissed both the injunction case and the ejectment case.

The issue of who between the petitioners and respondents spouses could exercise the right of possession and/or ownership over subject property stems from an actual controversy brought for resolution by the court. The court is called upon to decide an issue which proceeds from a justiciable controversy. The dismissal of both cases, as petitioners would want the Court of Appeals to do, would result in the court’s abdication of its judicial function of resolving controversies which are ripe for adjudication.

Litis pendentia, res judicata and forum shopping are all based on the policy against multiplicity of suits. Forum shopping is sanctioned under Supreme Court Revised Circular No. 28-91 (now Section 5, Rule 8 of the Rules of Civil Procedure per amendments of July 1997) Moreover, forum-shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other.[3]

To determine which action should be dismissed given the pendency of two actions, relevant considerations such as the following are taken into account: (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 latter 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.[4]

Although in general, the rule is that it should be the later case which should be dismissed, this rule is not absolute such as when the latter action filed would be the more appropriate forum for the ventilation of the issues between the parties.[5]Thus, the Court of Appeals did not err when it ordered the dismissal of the injunction case but not that of the suit for unlawful detainer pending before the Metropolitan Trial Court, although the case for injunction was filed earlier. This is because the issue of whether or not respondents can lawfully enjoin the petitioners from obstructing the fencing of the lot in question (or whether or not respondents may prevent petitioners from constructing the concrete fence), may ultimately be resolved in the unlawful detainer case which was then hearing the issue of deprivation of possession. In the first place, the issue of whether or not petitioners have the right to construct a fence may be properly threshed out in the ejectment case because it is hinged on the more fundamental issue of who has the right of possession and/or ownership over the subject property.

As correctly observed by the Court of Appeals:

“xxx. in the final analysis, the relief prayed for by Private Respondents in their Petition with the Respondent RTC is for their eviction, although only ‘de facto’ or ‘constructive from the property. For, if the Respondent RTC granted Private Respondents’ petition for injunction or temporary restraining order, and allowed the Private Respondents to fence the perimeter of the property, the Petitioners would have been isolated or marooned in the property occupied by them without any means of ingress or egress, except through the cemented fence. Although the Petitioners would not have been physically and actually evicted from the said property, in effect and for all intents and purposes, their eviction from the property was a fait acompli while Private Respondents’ complaint for unlawful detainer was being litigated before the Respondent MTC. x x x

xxx After all, if the Respondent MTC decreed the eviction of the Petitioners from the property, the issue as to whether the Private Respondents had the unfettered right to fence their property would become moot and academic. Such a recourse would have averted a multiplicity of suits. xxx”

Furthermore, as held in the case of University Physicians Services, Inc. vs. Court of Appeals,[6] the mere fact that the unlawful detainer case was filed later than, in this case, the injunction suit, is no bar to the dismissal of the earlier case.

It is theorized by petitioners that the decision of the Court of Appeals dismissing RTC Civil Case No. 6225 for injunction, has already become final and has rendered moot and academic and/or otherwise barred by res judicata, the unlawful detainer case before the MTC. It is petitioners’ stance that since the dismissal of the injunction case based on forum shopping has already become final, such dismissal bears upon the unlawful detainer case and has the effect of res judicata on the same.

Again, this theory of petitioners is unmeritorious. Res judicata applies only where judgment on the merits is finally rendered on the first complaint. It does not apply if no trial has been held yet on the first complaint. A judgment on the merits presupposes that trial has been conducted, evidence presented, and issues sufficiently heard and passed upon. It is a judgment rendered after a determination of which party is right, as distinguished from a judgment rendered upon some preliminary or formal technical point.[7]

In the case under consideration, at the time the injunction case before the RTC was ordered dismissed by the Court of Appeals, no decision has yet been reached. The dismissal was merely based on the finding of forum-shopping and that a similar action is pending resolution before another court. It cannot therefore have the effect of res judicata in the case for unlawful detainer before the MTC.

Moreover, it is worthy to note that on August 11, 1997, prior to the decision of the Court of Appeals which was promulgated on February 18, 1998, the Metropolitan Trial Court had already rendered a decision in the unlawful detainer case. Consequently, the dismissal of the case would not be in keeping with the demands of judicial policy as well as equity. Courts, as a matter of judicial policy, must strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seeds of future litigation.[8]

Finally, it should be noted that this petition, which is an appeal from the decision of the Court of Appeals, is denominated as a special civil action for certiorari under Rule 65, when it should be properly a petition for review under Rule 45. Errors of judgment of the Court of Appeals when brought up to this Court for review are properly designated as petitions for review and not as special civil actions. Even for this reason alone, the petition must fail.

SC Circular 28-91 or the rule prohibiting forum-shopping was designed to promote and facilitate the orderly administration of justice. It should not be interpreted with absolute literalness as to defeat its ultimate objective which is to achieve substantial justice as expeditiously as possible.[9]Thus, the Court of Appeals was right in not ordering the dismissal of the unlawful detainer case.

WHEREFORE, the petition is hereby DISMISSED for lack of merit and the decision of the Court of Appeals AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Vitug, and Gonzaga-Reyes, JJ., concur.

Romero, J., (Chairman), on official business abroad.

Panganiban, J., in the result.