Progressive Development Corp., Inc. vs. Court of Appeals and Westin Seafood Market, Inc.

A claim for damages arising from forcible entry or unlawful detainer must be asserted in the same action for restoration of possession before the Metropolitan Trial Court, and cannot be made the subject of a separate subsequent suit. The unlawful taking of possession constitutes a single cause of action that gives rise to multiple remedies — recovery of possession and recovery of damages — but they must be pursued in one proceeding; otherwise, the second action is barred by litis pendentia, res judicata, and the rule against splitting a single cause of action.

On 27 May 1991, petitioner Progressive Development Corporation, Inc. (PDC) leased a commercial building in Araneta Center, Cubao, Quezon City, to respondent Westin Seafood Market, Inc. for a period of over nine years at a monthly rental of approximately P600,000.00. The contract contained automatic termination and repossession clauses empowering the lessor, upon default, to retake possession without court action and to sell the lessee’s movable properties found on the premises. Westin failed to pay rentals; arrears reached P8,608,284.66 as of 19 October 1992. Pursuant to the lease provisions, PDC repossessed the premises on 31 October 1992, inventoried Westin’s movable properties, and scheduled a public auction sale on 19 August 1993.

• The Lease and Default: Petitioner PDC leased to private respondent Westin Seafood Market, Inc. a commercial building at Araneta Center, Cubao, Quezon City, for a term of nine years and three months (2 January 1989 to 30 April 1998) at a monthly rent of approximately P600,000.00. The contract contained automatic termination and repossession provisions (§§ 25-26) authorizing the lessor, upon breach, to repossess the premises without court action, to take inventory and possession of the lessee’s movable properties, and to sell them at public auction to satisfy unpaid obligations. Westin defaulted; as of 19 October 1992 the rental arrearages totaled P8,608,284.66.

• Repossession and Scheduled Auction: On 31 October 1992, acting under the express contractual authority, PDC repossessed the leased premises, inventoried Westin’s movable goods, and scheduled a public auction sale for 19 August 1993, with prior notice to Westin.

• First Action — Forcible Entry with Damages (MeTC): On 26 November 1992, Westin filed a complaint for forcible entry with damages against PDC before the MeTC of Quezon City, docketed as Civil Case No. 6589. The complaint alleged that PDC, with about forty armed security guards and policemen, forcibly entered the premises by means of force, threat, strategy, and intimidation, and sought restoration of possession, damages for loss of use and deterioration of perishable goods, and attorney’s fees. The MeTC issued a temporary restraining order halting the auction sale. After several inhibitions and re-raffles, the case ended up in Branch 36. On 22 December 1992, the parties agreed in open court that Westin would deposit P8,000,000.00 to guarantee back rentals, PDC would defer the sale, and negotiations for restoration would ensue; the agreement was embodied in a court order that effectively terminated the incident on the preliminary injunction. Westin did not comply with the deposit undertaking.

• Second Action — Damages (RTC): While Civil Case No. 6589 remained pending, Westin filed on 9 June 1993 a separate complaint for damages against PDC with the RTC of Quezon City, docketed as Civil Case No. Q-93-16409. The complaint was subsequently amended to allege that PDC’s repossession was “gestapo-like” and high-handed, constituting a violation of the lessor’s obligation under Article 1654 of the Civil Code to maintain the lessee in peaceful enjoyment, thereby entitling Westin to damages under Article 1659. The amended complaint prayed for moral damages of P500,000.00, exemplary damages of P500,000.00, actual damages of P20,000,000.00, compensatory damages of P1,000,000.00 for unrealized profits, and attorney’s fees of P200,000.00 — all anchored on the same repossession incident of 31 October 1992. The RTC eventually issued a temporary restraining order in this second case.

• Certification against Forum Shopping: Westin’s complaint before the RTC contained no certification of non-forum shopping. The amended complaint stated that there was no other pending action between the parties involving the same causes of action, despite the pendency of the MeTC forcible entry case in which Westin had also sought damages.

• Litis Pendentia: Petitioner argued that Civil Case No. Q-93-16409 should be dismissed because a forcible entry action (Civil Case No. 6589) involving the same parties and the same cause of action was already pending before the MeTC. The pendency of the prior suit constitutes litis pendentia under Section 1(e), Rule 16 of the Rules of Court.

• Forum Shopping: Petitioner maintained that Westin engaged in forum shopping by filing a second action before the RTC to obtain a second temporary restraining order and additional damages that it could not secure from the MeTC after the injunction incident had been closed, and by failing to disclose the pendency of the MeTC case and the damages sought therein.

• Distinct Causes of Action: Respondent Westin contended that the cause of action in the MeTC was forcible entry for recovery of possession, while the cause of action in the RTC was the lessor’s violation of its obligation under Article 1654 in relation to Article 1659 of the Civil Code, giving rise to a claim for damages independent of the loss of physical possession. The RTC action thus involved a different subject matter and relief.

• Different Damages Recoverable: Respondent argued, and the Court of Appeals agreed, that the damages recoverable in the MeTC were limited to those directly caused by the loss of use and occupation, whereas the damages claimed before the RTC — moral, exemplary, and additional actual damages resulting from the high-handed manner of repossession — were beyond the MeTC’s cognizance, so the RTC had jurisdiction.

• Motion for Reconsideration: Whether the petition for certiorari with the Court of Appeals was properly dismissed for petitioner’s failure to file a prior motion for reconsideration with the RTC.

• Litis Pendentia and Splitting a Cause of Action: Whether the separate action for damages filed with the Regional Trial Court should be dismissed on grounds of litis pendentia and splitting of a single cause of action, given the pendency of the forcible entry case with damages before the Metropolitan Trial Court.

• Forum Shopping: Whether respondent Westin committed forum shopping by maintaining two suits arising from the same repossession incident.

• Motion for Reconsideration: The Court of Appeals erred in dismissing the petition outright for failure to file a motion for reconsideration. The rule requiring a prior motion for reconsideration before certiorari is not absolute; it admits exceptions where the issue is purely one of law, where the error is patent or the order is void, or where the same issues have already been squarely presented to and passed upon by the lower court. Here, petitioner’s motion to dismiss squarely raised the grounds of litis pendentia and forum shopping, and the RTC had already rejected them in its order of 14 September 1993. Any further motion for reconsideration would have been a pointless exercise.

• Litis Pendentia and Splitting a Cause of Action: The separate damage suit in the RTC was barred and must be dismissed. Section 1, Rule 70 of the Rules of Court mandates that all cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial Court and shall include not only the plea for restoration of possession but also all claims for damages and costs arising therefrom. The taking of possession by means of force, threat, strategy, or stealth — the single delict or wrong alleged in both complaints — constitutes one cause of action, even though it may give rise to multiple remedies (recovery of possession and recovery of various types of damages). A party may not split a single cause of action by filing multiple suits; those rights and remedies not included in the first complaint are barred forever. The elements of litis pendentia and res judicata were present: identity of parties, identity of rights asserted and reliefs sought being founded on the same operative facts (the alleged illegal repossession of 31 October 1992), and identity such that a judgment in the MeTC forcible entry case would amount to res judicata on the damages claims. The prayer in the MeTC case already included actual and compensatory damages; the additional claims for moral and exemplary damages merely augmented the reliefs arising from the same wrongful act and could not be pursued in a separate action. The invocation of Articles 1654 and 1659 of the Civil Code as a different legal basis did not create a distinct cause of action, as the factual substratum remained identical. The rule against splitting a cause of action is designed to prevent repeated litigation between the same parties over the same subject matter.

• Forum Shopping: Westin committed forum shopping. It filed the second action in anticipation of an unfavorable outcome in the MeTC, obtained a second temporary restraining order after the injunction incident in the MeTC had been closed, and did not truthfully certify the non-existence of a related pending action. The absence of the required certification against forum shopping, and the subsequent misrepresentation in the amended complaint, provided additional compelling grounds for dismissal.

• Litis Pendentia — For a second action to be dismissed on the ground of litis pendentia, there must be: (a) identity of parties or at least such as representing the same interest in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity in the two preceding particulars such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration. Here, both the MeTC forcible entry case and the RTC damage suit involved the same parties, the same repossession incident, and identical claims for actual damages; a judgment in one would constitute res judicata in the other.

• Splitting a Single Cause of Action — When a single delict or wrong is committed, there is but one single cause of action regardless of the number of rights that may have been violated; all such rights must be alleged in a single complaint. The rule prohibits dividing a claim so that a part of the damages is recovered in one case and the rest in another. A judgment obtained in a suit for a part of a claim precludes a second action for the residue, extending to every matter which the parties might have litigated in the first case. In forcible entry, the unlawful taking of possession is a single cause of action giving rise to remedies for restoration of possession and for damages, but both must be pursued in one proceeding.

• Forum Shopping — Forum shopping exists whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another. It occurs when the actions involve the same transactions, the same essential facts and circumstances. The proscription is grounded on the need to prevent unnecessary burden on courts, wastage of judicial resources, and trifling with judicial processes. The filing of multiple suits arising from the same cause of action without full disclosure of the pendency of the first case constitutes forum shopping warranting dismissal.

• Damages in Ejectment Cases (Rule 70, §1) — In forcible entry and unlawful detainer cases, the Municipal Trial Court has jurisdiction over the claim for possession together with all claims for damages and costs arising from the unlawful deprivation or withholding of possession. No claim for damages arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim for restoration of possession.

• “The mandate under this rule is categorical: that all cases for forcible entry or unlawful detainer shall be filed before the Municipal Trial Court which shall include not only the plea for restoration of possession but also all claims for damages and costs arising therefrom. Otherwise expressed, no claim for damages arising out of forcible entry or unlawful detainer may be filed separately and independently of the claim for restoration of possession.”

• “Jurisprudence is unequivocal that when a single delict or wrong is committed — like the unlawful taking or detention of the property of another — there is but one single cause of action regardless of the number of rights that may have been violated, and all such rights should be alleged in a single complaint as constituting one single cause of action.”

• “Since the rule is that all such rights should be alleged in a single complaint, it goes without saying that those not therein included cannot be the subject of subsequent complaints for they are barred forever.”

• “A claim cannot be divided in such a way that a part of the amount of damages may be recovered in one case and the rest, in another.”

• “The reason behind the proscription of forum shopping is obvious. This unnecessarily burdens our courts with heavy caseloads, unduly taxes the manpower and financial resources of the judiciary and trifles with and mocks our judicial processes, thereby adversely affecting the efficient administration of justice.”

• Peñalosa v. Tuason, 22 Phil. 303 (1912) — Cited as the foundational authority that a party cannot, by varying the form of action or adopting a different method of presentation, evade the principle that the same cause of action shall not be litigated twice between the same parties or their privies.

• Municipality of Hagonoy v. Secretary of Agriculture and Natural Resources, No. L-27595, 26 October 1976, 73 SCRA 507; Lopez v. Villaruel, G.R. No. 54323, 19 August 1988, 164 SCRA 616 — Enumerated the requisites of res judicata required for litis pendentia to apply.

• David v. de la Cruz, No. L-11656, 18 April 1958 — Applied the rule that tenants illegally ejected have but one cause of action against their landlord, their illegal ejectment, which entitles them to two remedies — reinstatement and damages — that must be alleged in a single complaint.

• Bachrach v. Icarangal, 68 Phil. 287 (1939) — Explained that the rule against splitting a cause of action aims at preventing repeated litigations between the same parties over the same subject of controversy and to protect the defendant from unnecessary vexation, embodying the maxim Nemo debet bis vexari pro una et eadem causa.

• Crisostomo v. Securities and Exchange Commission, G.R. Nos. 89095 and 89555, 6 November 1989, 179 SCRA 147 — Defined forum shopping as the act of seeking a favorable opinion in another forum as a result of an adverse opinion in one forum, and applied the principle to suits filed in different courts.

• New Pangasinan Review, Inc. v. National Labor Relations Commission, G.R. No. 77356, 15 July 1991, 199 SCRA 212 — Held that there is forum shopping when the actions involve the same transactions, the same essential facts and circumstances.

• Corro v. Lising, G.R. No. 69899, 15 July 1985, 137 SCRA 545; NEA v. Court of Appeals, No. L-32490, 29 December 1983, 126 SCRA 394; Central Bank v. Cloribel, No. L-26971, 11 April 1972, 44 SCRA 307 — Recognized the exceptions to the requirement of filing a motion for reconsideration prior to certiorari.

• Section 1, Rule 70, Rules of Court — Provides that an action for forcible entry or unlawful detainer is brought in the proper Municipal Trial Court against the person unlawfully withholding or depriving of possession, together with damages and costs. The provision mandates that all claims for damages arising from the unlawful deprivation or withholding of possession must be joined in the ejectment suit; they cannot be pursued independently.

• Section 1(e), Rule 16, Rules of Court — States that the pendency of another action between the same parties for the same cause is a ground for dismissal. Applied as the statutory basis for litis pendentia.

• Sections 2, 3, and 4, Rule 2, Revised Rules of Court — Section 2 defines “cause of action” as the act or omission by which a party violates a right of another. Section 3 prohibits the institution of more than one suit for a single cause of action. Section 4 provides that if two or more suits are instituted on the basis of the same cause of action, the filing of one or a judgment upon the merits in any one is available as a ground for dismissal of the others.

• Articles 1654 and 1659, New Civil Code — Article 1654 obliges the lessor to maintain the lessee in peaceful and adequate enjoyment of the lease for the entire duration of the contract. Article 1659 provides that if the lessor or lessee does not comply with the obligations set forth in Articles 1654 and 1657, the aggrieved party may ask for rescission and indemnification for damages, or only the latter, allowing the contract to remain in force. Westin invoked these provisions as a distinct basis for its RTC damage suit, but the Court held they did not create a separate cause of action independent of the forcible entry.

Justices Puno, Mendoza, Quisumbing, and Buena concurred. No separate opinions were filed.

N/A — The decision was unanimous; no dissenting opinions were registered.