LIANGA BAY LOGGING CO., INC., PLAINTIFF-APPELLEE, VS. NARCISO LANSANG, AGO TIMBER CORPORATION AND PASTOR D. AGO, DEFENDANTS-APPELLANTS.

Appeal taken by Narciso Lansang, Ago Timber
Corporation and Pastor D. Ago
from the order of the Court of First Instance of Manila dated November 13, 1962
in Civil Case No. 38157 entitled “Lianga Bay
Logging Co., Inc. vs. Narciso Lansang,
et al.” dismissing their counterclaims filed there­in.

On October 17, 1958 appellee Lianga Bay Logging Co., Inc. filed an action for damages
with the above-named court, with a prayer for the issuance of a writ of
preliminary in­junction, against appellant Lansang,
the licensee of an ad­joining lumber concession, alleging in its complaint that
on or about September 28, 1958 Lansang had entered its lumber concession, constructed a
logging road, felled logs within said concession and carted them away, thereby
causing appel­lee to suffer damages in the sum of
P10,000.00.  Upon the filing of a bond in
the amount of P10,000.00, the court issued the writ
prayed for.

On December 2, 1958,
Lansang filed a motion to dis­solve the aforesaid
writ and to dismiss the complaint, with a claim for damages, alleging, among other
things, that the lower court had no jurisdiction over the action because appellee had failed to exhaust all administrative remedies
available to him, invoking our ruling in Mauricia Vda. de Villanueva, et al. vs.
Montano A. Ortiz, et al. (G. R. No.
L-11412, May 28, 1958).

Appellee opposed the motion on the ground that the
ruling relied upon referred to a controversy between two duly licensed
adjoining timber concessioners, whereas the present case involved unauthorized logging
operations by one without any license nor title over the timber concession
affected by his acts.  The motion having
been denied, Lansang took the matter to Us by certiorari and prohibition (G. R. No. L-14944) but
his petition was dismissed on January 27, 1959. 
Thereafter, Lansang filed his answer to the
complaint denying the material allegations thereof, with a counterclaim for
damages.

On April 4, 1959, appellee, with previous leave of court, filed an amended
complaint to include as parties defendants in the action the other appellants
herein, namely, Pastor D. Ago and Ago Timber Corporation, on the ground that,
as actual operators of Lansang’s timber concession or
in col­laboration with the latter, they were likewise responsible for the
illegal logging operations complained of.

 A motion to dismiss the amended complaint
filed by said appellants on the grounds of (a) improper venue and (b) pendency of Civil Case No. 73 of the Court of First
Instance of Agusan entitled “Pastor D. Ago vs. Lianga Bay Logging Co., Inc., et al.” was denied, and a special civil action for
prohibition filed assailing the order of denial was dismissed by the Court of
Appeals.  This order was subsequently
affirmed by Us. 
As a result, appellants Ago and Ago Timber Corporation filed their answer to
the amended complaint, with a counterclaim for damages, alleging that they had never entered any portion of appellee’s timber concession nor committed the illegal acts
complained; that they never operated or logged in Lansang’s
timber concession at any time prior to January 19, 1960 when the eastern part
of said concession was
transferred to Ago Timber Corporation under Ordinary Timber License No.
1323-’60; that since that date, it had begun logging operations within its
forest concession with the Agusan-Surigao Provincial
boundary line as the common boundary line between their concession and that of Lianga Bay Logging Co., Inc.

For failure of appellee to appear on the date set for the trial, despite
due notice thereof, the court, on September 17, 1962, dismissed the complaint
and set the date for the hearing to be held in relation to appel­lants’
counterclaims.  Appellee’s
motion for reconsidera­tion and new trial was denied by the court, and an
appeal from the order dismissing the appellee’s
complaint was taken by it to the Court of Appeals where it is now pending
resolution.

Meanwhile, on October 16,
1962, during the trial of appellant’s counterclaims, appellee
asked for leave to file a motion to dismiss said counterclaims on the follow­ing
grounds:  that appellants had not
exhausted all admi­nistrative remedies before filing the same; that there were
two other actions pending between the same parties involving the same subject
matter, and that some of the allegations made in the Counterclaim were
premature.  Thereafter the court issued an
order suspending further proceedings on the counterclaims and allowing appellee to file a motion to dismiss the same.  On October 19, 1962, appellee filed
said motion based on the grounds men­tioned heretofore, and over appellants’
opposition, the lower court issued the appealed order.

In spite of the many assignments of error submitted in
defendants-appellants brief, the only issue to be re­solved is whether the
counterclaims interposed by them (Narciso Lansang, Pastor Ago and Ago Timber Corporation) were
correctly dismissed by the trial court upon the grounds set forth in the
appealed order of dismissal, name­ly: 
that the subject matter of the dismissed counterclaims are involved in
and covered by the issues litigated in two prior civil actions involving the
same parties:  Civil Case No. 1416 of the
Court of First Instance of Surigao del Sur and Civil Case No. 815 of the Court of First Instance
of Agusan, and were also being litigated
administratively before the Department of Agriculture and Natural Resources.

Let us start with the
administrative case.

The main question between
the parties herein is undoubtedly who amongst them is entitled to conduct log­ging
operations within the area of a certain lumber con­cession mentioned and
described in the record.  It appears in
this connection that pursuant to Sections 5 and 6 of Forestry Administrative
Order No. 62 the Lianga Bay Logging Co., Inc., filed a complaint against the Ago Timber Cor­poration
charging the latter with encroachment upon the area covered by its Timber
License Agreement No. 49.  A similar
complaint had been filed earlier by the same party against appellant Narciso
Lansang.

After the corresponding
investigation the Director of Forestry rendered a decision upholding the
boundary of ap­pellee’s timber concession as set
forth in the aforesaid Timber License Agreement No. 49.  Appellant Ago Timber Cor­poration alone
appealed to the Secretary of Agriculture and Natural Resources, an appeal still
pending at the time the present case was submitted for decision.  As Lansang did not
take a similar appeal, the decision of the Director of Forestry became final as against
him.

In essence the litigation
between the parties herein is a boundary dispute.  To determine which of them is entitled to recover damages from the other; to decide who is entitled to
eject the other from the disputed area, this boundary
dispute must first be resolved by the competent authority before whom it was pending prior to the filing of the dismissed counterclaims.

With respect to the two
civil actions between the same parties and involving the same issue as the one
raised in the dismissed counterclaims, the following are pertinent con­siderations.

In Civil Case No. 1416 of
the Court of First Instance of Surigao del Sur appellee herein seeks to
recover damages from appellants Pastor Ago and Ago Timber Corporation mainly
upon the ground that, without any right whatsoever and by means of force and
intimidation, they had stopped its logging operations inside the timber
concession covered by its Timber License Agreement No. 49.  This area from which said operations were
allegedly suspended is adversely claimed by said defendants.

It has been alleged, and it has not been sufficiently controverted, that the disputed area involved in Civil Case
No. 1416 is the same as that involved in the administrative case pending in the
Department of Agriculture and Natural Resources.  Neither is it disputed that this civil action
was still pending in the Court of First Instance of Surigao
del Sur when the dismissed counterclaims were filed.

Upon the other hand, in relation to the second case, it appears
that appellant Ago Timber Corporation had filed a complaint for forcible entry
in the Justice of the Peace Court of Bah-Bah, Agusan
against herein appellee claiming that the latter had encroached upon the
forest concession of said corporation covered by Ordinary Timber License No.
1323-60 issued in its favor.  The
corporation, of course, also sought to recover damages for such encroachment.

Appellee herein (defendant in said case for forcible
entry) moved to dismiss the complaint, and said motion was granted.  In view thereof, Ago Timber Corporation
appealed to the Court of First Instance of Agusan
where the case was docketed as Civil Case No. 815 still pending at the time the
dismissed counterclaims were interposed. 
The damages claimed in this Civil Case No. 815 appear to be the same
involved in the dismissed counterclaims.

In view of the foregoing, We find that
the trial court committed no error in dismissing the counterclaims interposed
by defendants-appellants.

WHEREFORE, the order appealed from is hereby affirmed,
with costs.

Reyes, J.B.L., Acting
C.J., Makalintal, Zaldivar,
Sanchez, Fernando, Capistrano, Teehankee, and Barredo, JJ., concur.

Concepcion, C.J., and Ruiz
Castro, J., on
official leave.