LOURDES G. SUNTAY, PLAINTIFF-APPELLANT, VS. HEROICO M. AGUILUZ, ET AL., DEFENDANTS-APPELLEES.

This is an appeal on a pure question of law, from the Orders of 7
January 1967 and 26 September 1967 of Branch IX (Quezon City) of the then Court
of First Instance (now Regional Trial Court) of Rizal in Civil Case No. Q-10343
which respectively dismissed said case on the ground of pendency of another
action, Civil Case No. Q-10313, entitled Heroico M. Aguiluz, et al. vs. Lourdes
G. Suntay, and denied the motion for its reconsideration.

The antecedent facts are not disputed.

On 9 June 1966, plaintiff and defendants executed a Deed of Sale
with Real Estate Mortgage under which the former sold to the latter Lot 12,
Block S-38 of the Diliman Estate Subdivision located in the District of
Diliman, Quezon City, containing an area of 441 square meters, and more
particularly described in Transfer Certificate of Title No. 82529 of the
Registry of Deeds of Quezon City, subject to the following conditions:

“WHEREFORE, for and in consideration of the sum of SIXTY
THOUSAND (P60,000.00) PESOS, Philippine Currency, the VENDOR-MORTGAGEE
hereby transfers, sells and conveys to the VENDEE-MORTGAGOR the above-described
parcel of land together with all the improvements existing thereon subject to
the following terms and conditions:

1.        
That the VENDOR-MORTGAGEE acknowledges having receipt (sic)
the sum of TWENTY THOUSAND P20,000.00) PESOS as partial payment and the
VENDEE-MORTGAGOR hereby binds himself to pay the balance of FORTY THOUSAND (P40,000.00)
PESOS on or before August 6, 1966, without need of any demand;

2.        
That failure on the part of the VENDEE-MORTGAGOR to pay the
balance of the purchase price in the sum of FORTY THOUSAND P40,000.00)
PESOS in full on the agreed date, the VENDEE-MORTGAGOR shall pay to the
VENDOR-MORTGAGEE the sum of TEN THOUSAND (P10,000.00) PESOS as
liquidated damages.

And to secure unto the VENDOR-MORTGAGEE the due and punctual
payment of the balance of the purchase price of FORTY THOUSAND (P40,000.00)
PESOS in accordance with the terms herein agreed upon, the VENDEE-MORTGAGOR
hereby constitutes in favor of the said VENDOR MORTGAGEE a valid and voluntary
first mortgage upon the property subject of this Deed of Sale with Real Estate
mortgage;

And the conditions of this mortgage is (sic) such that if the
VENDEE-MORTGAGOR, his heirs, successors and assigns shall faithfully comply
with the terms agreed upon by the parties as contained in this instrument, then
this mortgage shall have no further force or effect; otherwise, the said
mortgage shall remain binding;

That if at any time the VENDEE-MORTGAGOR fail (sic) to comply with
the terms and conditions herein stipulated, the VENDOR?MORTGAGEE may at
her discretion declare the mortgage defaulted and immediately foreclose this
mortgage judicially or extra-judicially under Act No. 3135, as amended by Act
No. 4119, and in case of foreclosure, the VENDOR-MORTGAGEE on filing the
corresponding petition shall be appointed receiver without any bond, and the
said VENDOR-MORTGAGEE shall at once take charge of the mortgaged property and
to (sic) hold possession of the same, and the rents and profits derived from
the mortgaged property before the sale, less the costs of expenses of the
receivership, the expenses of collection and attorney’s fees, which shall be
TWENTY FIVE (25%) PER CENT of the total indebtedness, but which shall not be
less than FIVE THOUSAND (P5,000.00) PESOS exclusive of all costs and
fees allowed by law, shall be applied first to the payment of interests and
then to the capital of the indebtedness secured herein and such rents and
profits that may be obtained after the sale will belong to the bidder to whom
the property shall have been adjudicated;

That all the expenses in connection with the registration of this
instrument, attorney’s fee for the preparation of this document and all other
expenses to effect the transfer of the above-mentioned Transfer Certificate of
Title to the VENDEE-MORTGAGOR shall be for his exclusive account.

That during the existence of this mortgage the VENDEE-MORTGAGOR
shall insure the building in the abovementioned parcel of land in the amount of
FORTY THOUSAND (P40,000.00) PESOS against all insurable risks with a
reputable insurance Company to be chosen by the VENDOR-MORTGAGEE and the policy
shall be endorsed to the VENDOR-MORTGAGEE;”^[1]

Defendants failed to pay the P40,000.00 on due date, 6
August 1966. Plaintiff demanded payment
and threatened to foreclose the mortgage.

On 9 August 1966, defendants filed a complaint against herein
plaintiff for specific performance with preliminary mandatory and prohibitory
injunction with the then Court of First Instance of Rizal, which was docketed
as Civil Case No. Q-10313. They allege
therein that upon the execution of the contract, the parties agreed that herein
plaintiff would simultaneously deliver to the defendants the certificate of
title and the tax declaration of the lot, the latest realty tax receipt, lot
plan and vicinity map and building permit for the existing building; the
defendants repeatedly made it known to the plaintiff that in order to fully pay
the balance of the purchase price, the former needed to obtain a loan from the
Social Security System (SSS) or any other lending institution, thus
necessitating the transfer of the property in their names; for no justifiable
reason and despite repeated demands, plaintiff refused to turn over to them the
above documents, resulting in the delay in the filing of an application for a
housing loan with the SSS; even if the application had been processed, however,
the proceeds of the loan cannot be released until the certificate of title is
surrendered to them and a new certificate of title is issued to them; plaintiff
has threatened to foreclose the mortgage, immediately take possession of the
property as receiver and enforce the penalty clause of the contract, which
would cause them irreparable injury; if the foreclosure and/or receivership
proceedings are initiated by herein plaintiff, their loan application would be
disapproved by the SSS; and that it is essential that the court fix a
reasonable period, to commence on the date the certificate of title is
delivered to them within which they may comply with their obligation to pay the
unpaid balance of P40,000.00 of the purchase price. They pray that: (a) a writ of preliminary mandatory and prohibitory injunction be
issued ordering the plaintiff to surrender the certificate of title and
enjoining her or her representative from inter alia, proceeding with the
threatened foreclosure of the mortgage, respectively; and (b) after trial,
judgment be rendered making the injunction permanent, fixing a reasonable
period, from the date of delivery of the certificate of title, within which
they may comply with their above obligation and awarding to them attorney’s
fees, exemplary damages and costs.^[2]

On the day the above complaint was filed, the court^[3]
issued an Order setting the hearing for the application for injunction on 20
August 1966, and directing the parties to maintain the status quo in the
meantime.

On 18 August 1966, before being served with summons, a copy of
the complaint in Civil Case No. Q-10313 and a copy of the above Order, herein
plaintiff filed with the same court a complaint for recovery of the unpaid
balance of the purchase price, the penalty provided for in the contract and
foreclosure of the mortgage. The
complaint was docketed as Civil Case No. Q-10343 and was raffled to another
branch of the court. In said complaint,
plaintiff prays for: (a) judgment
ordering the defendants to pay her the amount of P50,000.00 (P40,000.00
representing the unpaid balance and P10,000.00 representing the
liquidated damages) with legal interest from the date of the filing of the complaint
until the same is fully paid and a sum equivalent to 25% thereof as attorney’s
fees, plus certain sums as attorney’s fees for the preparation of the document,
documentary stamps and registration fees, and decreeing the foreclosure of the
mortgage and sale of the property in a public auction; and (b) an Order
appointing her, during the pendency of the action, as receiver of the property.^[4]

Plaintiff subsequently received the summons and a copy of the
complaint in Civil Case No. Q-10313 on 20 August 1966.^[5]

On 2 September 1966, defendants filed a motion to dismiss
plaintiff’s Civil Case No. Q-10343 on the following grounds:

“1. That there is another action pending between
the same parties for the same cause;

2.    That the complaint states no cause of action.”^[6]

The other action referred to is Civil Case No. Q-10313.

On 13 September 1966, defendants filed a Supplemental Complaint.^[7]

On 17 September 1966, plaintiff filed an Opposition to the motion
to dismiss^[8]
alleging therein that the two (2) complaints are not for the same cause of
action. While Civil Case No. Q-10313
prays for: (a) the issuance of a
mandatory and prohibitory injunction to compel her to deliver the certificate
of title and to prevent her from foreclosing the mortgage, and (b) the fixing of
a period within which herein defendants will pay the balance of the purchase
price of the property, Civil Case No. Q-10343 is an action for foreclosure of
mortgage. She further alleges that her
complaint states a valid cause of action as defendants failed to pay the
balance of the purchase price on due date.

On 7 January 1967, the trial court issued an Order dismissing
Civil Case No. Q-10343 on the ground of pendency of another action “between
the same parties for specific performance of the very contract subject of this
suit for foreclosure and it appearing that the issue raised in this present
action can well and should be litigated in the suit for specific
performance.”^[9]

Her motion for reconsideration^[10]
having been denied by the trial court in its Order of 26 September 1967,^[11]
plaintiff filed her notice of appeal on 21 October 1967,^[12]
deposited a case appeal bond^[13] and
filed a record on appeal which was approved on 12 March 1968.

In her Brief, plaintiff makes the following assignment of errors:

“I

The lower court erred in holding that there is pending an action
between the same parties for specific performance of the very contract subject
of this suit for foreclosure, and it appearing further that the issues raised
in this present action can well and should be litigated in the suit for
specific performance.

II

The lower court erred in dismissing the complaint.”

Defendants did not file their Appellee’s Brief despite three (3)
extensions of time granted by this Court.^[14]
Hence, this Court considered this case submitted for decision without the
Appellee’s Brief.^[15]

The appeal is meritorious.

As could be gathered from the body of the complaint, Civil Case
No. Q-10313 is an action for injunction filed in anticipation of the
foreclosure of the mortgage which plaintiff had threatened to pursue if
defendants failed to pay the unpaid balance of P40,000.00 on due
date. The contract explicitly provides
that said balance shall be paid “on or before August 6, 1966 without need
of any demand.” Defendants’ self-serving characterization thereof as an
action for “specific performance” is calculated to obfuscate the
issues and mislead the trial court. As
this Court sees it, defendants herein merely tried to beat the plaintiff to the
draw^[16]
and pre-empt the latter’s legal moves.

The other causes of action in Civil Case No. Q-10313 are but mere
embellishments to give a semblance of viability to the alleged grievance of
herein defendants. The contract fails
to indicate that (a) it was the intention of the parties to consider the
delivery of the certificate of title and the other documents mentioned therein
as a condition precedent before the balance of P40,000.00 would be paid
or (b) such delivery constitutes a suspensive condition the non-fulfillment of
which prevents the obligation of defendants to pay said balance from arising.^[17]
On the contrary, as earlier alluded to defendants unqualifiedly bound
themselves to pay the balance on or before 6 August 1966 without need
of any demand. Besides,
since under the contract the property was mortgaged to the plaintiff as
security for the payment of the unpaid balance of P40,000.00, plaintiff,
as mortgagee was entitled to possession of the certificate of title. The filing then of Civil Case No. Q-10313
was a clever ruse to avoid compliance with defendants’ obligation. Even if it were not so, lis pendens
does not apply in this case. The
requisites of lis pendens as a ground for dismissal of a complaint are: (1) there must be the same parties or at
least such as to represent the same interest; (2) there must be the same rights
asserted and the same relief prayed for, which relief must be founded on the
same facts and the title or essential basis of the relief sought must be the same;
(3) the identity in these particulars should be such that if the pending case
had already been disposed of, it would be pleaded in bar as a former
adjudication of the same matter between the same parties.^[18]

While concededly, the first requisite obtains in this case, the
last two are conspicuously absent. As
earlier discussed, Civil Case No. Q-10313, although cleverly denominated as one
for specific performance with mandatory and prohibitory injunction, is in
reality principally one for injunction to prevent the foreclosure of the
mortgage and to fix a new period to pay the remaining unpaid balance of P40,000.00
which was to be paid on or before 6 August 1966 without any need for a
demand. Upon the other hand, Civil Case
No. Q-10343 is a suit for specific performance which asks for the payment of
the balance and the liquidated damages and foreclosure of the mortgage. The causes of action and the reliefs sought
are entirely different. A decision in
the first will not amount to res judicata against the second case for
whether or not defendants prevail in the former, petitioner’s right to the
unpaid balance and the foreclosure of the mortgage would still be litigable.

To the mind of this Court, if any case should be dismissed at
all, it should be Civil Case No. Q-10313. That this case was filed ahead of the other is of no moment for as this
Court held in Teodoro vs. Mirasol:^[19]

“It is to be noted that the Rules do not require as a ground
for dismissal of a complaint that there is a prior pending action. They provide that there is a pending action
not a pending prior action. The
fact that the unlawful detainer suit was of a later date is no bar to the
dismissal of the present action.”

Plaintiff then had all the right to file the motion to dismiss
Civil Case No. Q-10313. Unfortunately,
however, while she actually filed such a motion, she failed to invoke lis
pendens; she merely raised: (a)
unenforceability of the demands under the statute of frauds and (b) lack of
cause of action^[20]
as grounds for the motion. Thus, the
same was denied by the trial court on 7 December 1966.^[21]

The trial court, therefore, committed an error in dismissing
Civil Case No. Q-10343. What it should
have done was to order its consolidation, for joint hearing and trial, with
Civil Case No. Q-10313 pursuant to Section 1, Rule 31 of the Rules of
Court. As ruled by this Court in Ramos
vs. Ebarle:^[22]

“x x x And, whatever difficulties or inconvenience may be
entailed if both causes of action are pursued on separate remedies, the proper
solution is not the dismissal order of the trial court. The possible consolidation of said cases as
well as stipulations and appropriate modes of discovery, may well be considered
by the court below to subserve not only procedural expedience but more
important, the ends of justice.”

WHEREFORE, judgment is hereby rendered REVERSING and
SETTING ASIDE the challenged Orders of 7 January 1967 and 26 September 1967 in
Civil Case No. Q-10343; REINSTATING said case; and ORDERING that it be jointly heard
and tried with Civil Case No. Q-10313, if that would still be feasible.

Costs against defendants-appellees.

SO ORDERED.

Gutierrez, Jr.,
(Chairman), Feliciano, Bidin, and
Romero,JJ., concur.

^[1]
Record on Appeal, 10-13.

^[2]
Record on Appeal, 25-34.

^[3]
Per Judge Walfrido delos Angeles.

^[4]
Record on Appeal, 1-15.

^[5]
Appellant’s Brief, 3.

^[6]
Record on Appeal, op. cit., 15.

^[7]
Id., 62-73

^[8]
Id., 36-43.

^[9]
Record on Appeal, 43-44.

^[10]
Id., 44-61.

^[11]
Id., 143-144.

^[12]
Id., 144.

^[13]
Id., 145.

^[14]
Rollo, 11, 14 and 15.

^[15]
Id., 19.

^[16]
This is an expression used by this Court to condemn petitions for consignation
of rentals filed by tenants who foresaw and anticipated the legal steps lessor
would take in view of their adamant refusal to vacate the premises or to pay
the new rentals fixed and demanded of them (Ching Pue vs. Gonzales, 87
Phil. 81 [1950]).

^[17]
Article 1181, Civil Code.

^[18]
Hongkong & Shanghai Bank vs. Aldecoa, 30 Phil. 255 [1915], citing
Watson vs. Jones, 13 Wall., 679, 715; 20 L. ed., 666. See also Santos vs. Geronimo, 89 Phil.
715 [1951]; Diana vs. Batangas Transportation Co., 93 Phil. 391 [1953];
Pampanga Bus Co., Inc. vs. Ocfemia, 18 SCRA 407 [1966]; Ramos vs.
Ebarle, 182 SCRA 245 [1990].

^[19]
99 Phil. 150 [1956].

^[20]
Record on Appeal, 110-123.

^[21]
Id., 93.

^[22]
Supra., footnote no. 18.