G.R. No. 218731 - Augusto vs. Dy

The controversy originated from the lease contract entered into by the National Government with the Philippine National Bank (PNB) on 9 June 1978 for a 21,727-square meter government-owned land at Numancia Street, corner Urbiztondo, Binondo, Manila.
The lease was for 25 years (from 1 August 1978 to 31 July 2003) and was renewable upon mutual agreement.
On 17 October 1994, PNB sublet 8,530.16 square meters of the property to Mandy Commodities Co., Inc. (respondent), who constructed a two-storey warehouse and leased it out to tenants.

As the lease expiration approached, DENR Secretary Heherson Alvarez, acting on behalf of the government, initially issued a Memorandum Order on 6 May 2002 approving the renewal of PNB’s lease for another 25 years.
A subsequent Memorandum on 6 August 2002 revoked the previous approval to revisit the terms and assess the qualifications and role of the sub-lessees.
On 29 November 2002, Secretary Alvarez reversed his earlier revocation by issuing a Final Endorsement approving the renewal and including the respondent as one of the sub-lessees.
However, the newly appointed DENR Secretary Elisea Gozun, through a Memorandum dated 27 May 2003, withdrew the renewal of the lease contract with PNB, thereby nullifying the sub-lease with respondent.

On 25 July 2003, the Land Management Bureau (LMB), acting on behalf of the National Government, informed PNB of a planned take over of the subject property after the lease’s termination.
On 30 July 2003, to forestall the takeover, PNB filed a complaint for injunction (the “PNB Injunction Case”) with a prayer for a Temporary Restraining Order (TRO) before the RTC of Pasay, Branch 118, alleging that the renewed lease (as approved in the 29 November 2002 endorsement) entitled it to retention of possession.
The Pasay RTC, on 28 August 2003, denied the TRO and ordered the LMB to secure and take over the property.
Acting on the RTC order, the LMB took possession of the property on 29 August 2003.

On 18 September 2003, the Court of Appeals in the PNB Injunction Case nullified the RTC order and granted PNB’s TRO, though this TRO became moot as the LMB had already assumed possession.
The Office of the Solicitor General (OSG), in its opinion dated 23 September 2003, indicated that the TRO was moot and advised that provisional permits for property occupancy could be issued to qualified applicants.
Relying on the OSG opinion, LMB issued a provisional permit to petitioner Gloria S. Dy, enabling her to install her own guards and post notices on 10 October 2003, asserting her right over the property.

On 15 October 2003, respondent, being the sub-lessee, filed a complaint for damages with prayer for injunction and TRO (the “Respondent’s Injunction Case”) in the Manila RTC, Branch 25, reacting to petitioner’s entry and occupation of the property.
On 21 October 2003, respondent, through its security personnel, regained possession of the premises.
Despite the earlier interventions, on 7 November 2003, petitioner managed to wrest possession from respondent.

On 4 December 2003, respondent initiated a forcible entry case (the “Respondent’s Forcible Entry Case”) before the Metropolitan Trial Court (MeTC) of Manila, Branch 20 (Civil Case No. 176953-CV), seeking mandatory injunction against petitioner.
On 6 April 2004, the MeTC ruled against respondent, stating that with the expiration of PNB’s lease, respondent’s right to possess the property had lapsed; however, respondent appealed.
On 12 July 2004, the RTC of Manila, Branch 30, reversed the MeTC ruling by ordering petitioner to vacate, recognizing respondent’s continued actual possession as the basis for a better right to the property.
The RTC subsequently granted respondent’s motion for immediate execution, issuing a writ on 7 September 2004, while petitioner’s motion for reconsideration was denied.

Petitioner elevated the case to the Court of Appeals (CA-G.R. SP No. 86478), while simultaneously, the OSG filed an Omnibus Motion to intervene (CA-G.R. SP No. 86307) in connection with the Respondent’s Forcible Entry Case.
On 8 November 2004, petitioner moved for consolidation of the two cases, which was granted.
On 15 May 2005, petitioner filed a separate Unlawful Detainer case before the MeTC of Manila, Branch 15 (Civil Case No. 00000004-CV), based on similar facts, asserting her right of possession.

On 15 September 2005, the Court of Appeals dismissed CA-G.R. SP No. 86478 on the grounds of forum shopping and lack of merit, determining that petitioner’s filing of two actions involving identical issues and parties amounted to abusing judicial process.
Petitioner filed a Motion for Reconsideration on 6 October 2005, which was denied in the Resolution dated 3 March 2006.
Petitioner contended that no forum shopping was committed because the causes of action were allegedly distinct; however, the Court underscored that the issues in both cases were identical—centered on the right of physical possession of the property.

Whether petitioner’s simultaneous filing of a Respondent’s Forcible Entry Case and an Unlawful Detainer Case, both asserting the right to possess the disputed property, amounted to forum shopping.
Whether the application of the rules against forum shopping—mandating the dismissal of cases with identical parties, issues, and reliefs—is proper in dismissing petitioner’s appeal and her lower court action.
Whether, aside from the forum shopping issue, petitioner established a valid and legally tenable basis to claim superior right of possession over the subject property.