JOSE L. LOPEZ, AS JUDICIAL ADMINISTRATOR OF INTESTATE ESTATE OF THE LATE MAGDALENA JIMENEA AND HIS OWN BEHALF AND LOLITA V. LOPEZ, PLAINTIFFS-APPELLANTS, VS. ENRIQUE L. S. VILLA…

Lopez versus Villaruel

The Case

This is a civil action for specific performance and damages, brought by the spouses Domingo Lopez and Magdalena Jimenea, as lessees, against Enrique, Javier, and Maria Luisa Villaruel, as lessors, over three subdivision lots in Bacolod City. The lessees asked the court to compel the lessors to grant a ten-year extension of the lease, or in the alternative to buy the theater building they had constructed on the lots. The case matters because it is the Supreme Court's clean statement of the rule against multiplicity of suits and of the requisites of litis pendentia, the pendency of another action, in the setting of an ejectment suit that had already become final.

Procedural History

The lessors first filed an ejectment case before the Municipal Court of Bacolod City, which ruled for the lessors and ordered the lessees to vacate. On appeal, the Court of First Instance of Negros Occidental tried the case anew and, on 12 July 1968, affirmed the municipal judgment, holding that no extension of the contract had been perfected, expressly or impliedly. The Court of Appeals affirmed that decision, and the judgment became final and executory on 29 March 1972.

Meanwhile, on 26 November 1970, the lessees filed the present action for specific performance and damages before the Court of First Instance of Negros Occidental. The lessors moved to dismiss on the ground of the pendency of another action. The trial court granted the motion and dismissed the case. The lessees challenged that dismissal before the Court of Appeals, which certified the case to the Supreme Court on pure questions of law. The Supreme Court upheld the dismissal.

Facts

In 1955 the spouses Domingo Lopez and Magdalena Jimenea, as lessees, entered into a contract of lease with the Villaruels, as lessors, over three subdivision lots. Paragraph 4 of the contract fixed the term at ten years from the date the lessees commenced business in the building they were to construct. It then provided that after that period the lessees would continue in possession, subject to whatever terms on rental and other conditions the parties would then agree upon, and that at the end of the extension the lessors would have the right to buy the building at a price based on the lessees' original expenditure less reasonable depreciation. The extension would be for another ten years.

The lessees paid rentals of 600 pesos a month for ten years, until September 1965. After that date the lessors repeatedly asked for a conference to fix the rental rate for the extension. The lessees offered 1,000 pesos monthly, but the lessors demanded 1,500 pesos per lot per month, and nothing was agreed. The lessees paid 1,800 pesos for October, November, and December 1965 at the old rate, and the lessors' employee issued a temporary receipt. Notices to vacate were sent in January and February 1966, and the lessees refused to vacate.

The lessors then filed the ejectment case, which was decided in their favor and became final. The lessees thereafter filed the specific performance case, praying for a ten-year extension to expire on 30 September 1975, or in the alternative for the lessors to buy the building for 500,000 pesos less 50,000 pesos depreciation, plus damages and attorney's fees. The trial court dismissed that case on the ground of the pendency of the ejectment suit.

Issues

• Whether or not the ejectment case is a bar to the subsequent action for specific performance and damages.
• Whether or not the requisites of litis pendentia are present between the two actions.
• Whether or not the judgment in the ejectment case amounts to res judicata on the issue of the extension of the lease.

Applicable Provisions

Section 1, Rule 16 of the Rules of Court, on the grounds for a motion to dismiss, provides:

Within the time fixed by these rules, the defending party may file a motion to dismiss the action on any of the following grounds: x x x (e) That there is another action pending between the same parties for the same cause.

This is the ground the lessors invoked and on which the dismissal rests.

Paragraph 4 of the lease contract, which the lessees sought to enforce, provides:

That the term of this lease shall be for a period of TEN (10) years, counted from the date LESSEES commence business upon the building which, under the terms of Par. 'Second' hereof, they will construct on the lots herein described and leased. Provided, however, that after said ten-year period above provided, the LESSEES shall continue in possession and lease of the said lots and building, subject to whatever terms regarding the rate of rental and other conditions which the parties hereto shall then agree upon. Provided further that at the end of this period of extension, the LESSORS shall have the right to buy the building from the LESSEES at a price which shall be fixed and computed on the basis of the LESSEES' original expenditure in putting up the said building deducting reasonable depreciation. The extension will be for another period of ten years.

The Court read this clause as giving the lessors a mere right, not an obligation, to buy the building, and as requiring a new agreement before any extension could arise.

Ruling

On the first issue, the Court ruled that the ejectment case is a bar to the specific performance case, and sustained the dismissal. The pendency of another action between the same parties for the same cause is a ground for dismissal.

On the second issue, the Court held that all the requisites of litis pendentia are present: identity of parties, identity of rights asserted and relief prayed for founded on the same facts, and a judgment in the other action that would amount to res judicata regardless of which party succeeds. The pivotal issue in both cases is whether the lessees may continue occupying the premises under the lease. The claim for damages of about 125,000 pesos is merely an incident to that main question, as is the purchase of the building.

On the third issue, the Court held that the judgment in the ejectment case settled the very issue raised in the specific performance case, since the Court of First Instance had already found that no extension was perfected, expressly or impliedly. The Court also noted that the lease contract did not obligate, but merely gave, the lessors the right to purchase the building, which they chose not to exercise. Filing the second case thus violated the principle prohibiting multiplicity of suits. As the Court put it:

A party cannot, by varying the form of actions, or adopting a different method of presenting his case, escape the operation of the principle that the same cause of action shall not be twice litigated between the same parties or their privies.

Doctrine

For the bar of litis pendentia to arise, there must be identity of parties, or at least such as represent the same interest; identity of rights asserted and relief prayed for, the relief being founded on the same facts; and identity on these two particulars such that any judgment in the other action will, regardless of which party succeeds, amount to res judicata in the action under consideration. A party cannot escape this rule by varying the form of the action or presenting the case differently. The issue of whether a lessee has a right to occupy the land as against the lessor's demand belongs in an ejectment suit, not in a later action for specific performance and damages.

Disposition

The Supreme Court affirmed the order of dismissal, with costs against the lessees, the plaintiffs-appellants.

Remember This

Memorize the three requisites of litis pendentia and the line that a party cannot, by varying the form of actions, escape the rule that the same cause of action shall not be twice litigated. Examiners use this case to test whether a later specific performance suit is barred by a final ejectment judgment, and to test the rule against multiplicity of suits.