Dy v. Mandy Commodities Co.
REITERATIONFacts
The Antecedents: The underlying dispute concerns the possession of a 8,530.16 square meter portion of a government-owned land in Binondo, Manila. This land was originally leased by the National Government to the Philippine National Bank (PNB) for 25 years, commencing August 1, 1978. PNB, in turn, sublet a portion of this land to respondent Mandy Commodities Co., Inc. (Mandy Commodities) in 1994. Mandy Commodities constructed a warehouse on this subleased portion and leased it to its own tenants. The controversy arose as the lease agreement between the National Government and PNB approached its expiration, involving a series of revocations and re-approvals of the lease renewal by different Department of Environment and Natural Resources (DENR) Secretaries, ultimately leading to the withdrawal of the lease contract with PNB and the termination of Mandy Commodities' sub-lease. Procedural History: Following the DENR's withdrawal of the lease, PNB filed a complaint for injunction with the Regional Trial Court (RTC) of Pasay, which was initially denied. PNB appealed this denial to the Court of Appeals (CA), which later granted PNB's application for a Temporary Restraining Order (TRO), though this became moot as the Land Management Bureau (LMB) had already taken possession. The Office of the Solicitor General (OSG) opined that provisional permits could be issued. Subsequently, petitioner Gloria Dy obtained a provisional permit from the LMB and entered the premises. Mandy Commodities, the sub-lessee, filed a complaint for damages with injunction, regaining possession. Later, Mandy Commodities filed a forcible entry case against petitioner Dy, which the Metropolitan Trial Court (MeTC) of Manila initially ruled in favor of Dy. However, the RTC Manila reversed this decision, ordering Dy to vacate. Dy appealed to the CA. Meanwhile, Dy filed an unlawful detainer case against Mandy Commodities. The CA consolidated these cases and dismissed Dy's appeal in the forcible entry case on the grounds of forum shopping and lack of merit, also granting Mandy Commodities' motion to dismiss Dy's unlawful detainer case. The Petition: Petitioner Gloria S. Dy filed a Petition for Review on Certiorari with the Supreme Court, seeking to reverse and set aside the Court of Appeals' Decision dated September 15, 2005, which dismissed her appeal on the ground of forum shopping, and its Resolution dated March 3, 2006, which denied her motion for reconsideration. Dy argues that she did not commit forum shopping, as there was no identity of the cause of action or the issue between the forcible entry case and her unlawful detainer case. She contends that the CA should have allowed her unlawful detainer case to be decided on its merits rather than dismissing both cases.
Issue(s)
Whether the Court of Appeals erred in dismissing petitioner's appeal on the ground of forum shopping. Whether petitioner committed forum shopping by filing an Unlawful Detainer case while a Forcible Entry case involving the same parties and issues was pending before the Court of Appeals. Whether the Court of Appeals erred in dismissing the Forcible Entry case on the merits.
Ruling
The petition is denied. The Decision of the Court of Appeals dated 15 September 2005 and its Resolution dated 3 March 2006, dismissing petitioner's appeal on the ground of forum shopping and lack of merit, are affirmed.
Ratio Decidendi
On the issue of forum shopping: The Court held that forum shopping is a deplorable practice consisting of resorting to two different fora for the purpose of obtaining the same relief, thereby increasing the chances of obtaining a favorable judgment and creating the possibility of conflicting decisions. The test for determining forum shopping involves the presence of the elements of litis pendentia: (a) identity of parties, or at least parties representing the same interests; (b) identity of rights asserted and reliefs prayed for, founded on the same facts; and (c) the identity of the two preceding particulars such that any judgment rendered in one action will amount to res judicata in the other. In this case, the parties in the Forcible Entry case (CA-G.R. SP No. 86478) and the Unlawful Detainer case were the same. The rights asserted in both cases were identical, namely, the right of possession over the subject property. The Court emphasized that in ejectment cases, the sole issue is who is entitled to the physical possession of the premises, and any adjudication in one case would bind the other. Therefore, petitioner's filing of the Unlawful Detainer case during the pendency of the Forcible Entry case constituted forum shopping. On the penalty for forum shopping: The Court reiterated that once a finding of forum shopping is made, the penalty is summary dismissal not only of the case before the Supreme Court but also of the other case pending in a lower court. This twin dismissal serves as a punitive measure against those who trifle with the orderly administration of justice. Citing Buan v. Lopez, Jr. and First Philippine International Bank v. Court of Appeals, the Court affirmed the Court of Appeals' action of dismissing both the appeal in the Forcible Entry case and the Unlawful Detainer case filed by the petitioner. On the merits of the Forcible Entry case: The Court found no error in the Court of Appeals' dismissal of the case on the merits. The Court reiterated that in forcible entry cases, the inquiry centers on who has the prior possession de facto. The respondent, as a sub-lessee, had been in peaceful possession of the property from 1994 until the controversy arose. Even when the LMB took possession, respondent was allowed to continue its business. In contrast, petitioner's possession was predicated on a provisional permit whose validity was questionable and whose underlying order (RTC Pasay's take-over order) was declared void by the Court of Appeals. The Court noted that the records were barren of any formal demand on the respondent to vacate. Therefore, the respondent, with its prior possession de facto, had a better right to the property, and its filing of the forcible entry case was a valid exercise of its right.
Main Doctrine
The dismissal of a case due to forum shopping warrants the dismissal of all related cases pending before lower courts, as it is a punitive measure against litigants who trifle with the orderly administration of justice.