G.R. No. 223785 - Lajave Agricultural Management and Development Enterprises, Inc. vs. Spouses Javellana

Case Summary (G.R. No. 223785)

Factual Background

Agustin Javellana acquired a share in a forty-nine hectare property in Silay City by a Deed of Absolute Sale executed July 7, 1987, and later obtained additional co-ownership by intestate succession upon the death of his father on August 25, 1993. On May 13, 1998, Lajave Agricultural Management and Development Enterprises, Inc. executed a Contract of Lease with Agustin for seven hectares in Hacienda San Isidro for a ten-year term covering crop years 1988–1989 to 1997–1998, and agreed to pay an annual rental of thirteen piculs of sugar per hectare. After the death of the lessor’s father, Lajave continued to occupy the Silay property and expanded its operation to other inherited shares in Talisay City without executing a new written lease for those additional areas.

Notices, Alleged Defaults, and Initial Court Actions

Agustin alleged that upon the contract’s expiration after the 1997–1998 crop year, Lajave remained in possession without renewal or extension and that payments of rentals were untimely and inadequately explained. Agustin sent a demand to vacate the Silay property dated March 1, 2010, and reiterated demands on March 5, 2012, including a demand concerning the Talisay property. Despite demands, Lajave continued occupancy. Thereafter, Agustin and his wife filed unlawful detainer complaints in the MTCC of Silay City (Civil Case No. 1149-C) and in the MTCC of Talisay City (Civil Case No. (12)-925); both actions were later dismissed on jurisdictional grounds.

Claim for Deficiency in Rental Payments and Trial-Court Dismissal

On September 24, 2012, Agustin and his wife filed before the MeTC of Quezon City an ordinary civil action for collection of sum of money (Civil Case No. 12-41648) alleging that, from January 22, 2003 to June 25, 2010, Lajave had underpaid rentals by PHP 324,494.88 based on Sugar Regulatory Administration composite price data. Lajave moved to dismiss on October 29, 2012, asserting splitting of a cause of action, litis pendentia, and forum shopping, because the same parties had pending unlawful detainer actions involving the same properties. The MeTC granted the motion and dismissed the collection suit on December 10, 2012, reasoning that the deficiency in rentals should be recovered in the ejectment suits and that the present suit violated the rule against splitting a cause of action.

RTC Appeal and Ruling

On appeal, the RTC of Quezon City, Branch 84 affirmed the MeTC’s dismissal in a Decision dated October 14, 2013 but modified the dismissal to be without prejudice. The RTC denied petitioner’s motion for reconsideration in an Order dated March 5, 2014. Lajave then pursued a petition for review under Rule 42 before the Court of Appeals.

Court of Appeals' Decision

The Court of Appeals reviewed the matter and, by Decision dated August 28, 2015, set aside the RTC Decision and the denial of reconsideration. The appellate court ordered the MeTC of Quezon City, Branch 38, to conduct further proceedings in Civil Case No. 12-41648 with deliberate dispatch, thereby reinstating the collection complaint for full trial.

Issues Presented to the Supreme Court

The principal issue before the Supreme Court was whether Agustin committed forum shopping, violated litis pendentia, or unlawfully split a cause of action when he filed an independent action for collection of sum of money during the pendency of his unlawful detainer cases; and whether arrears in rentals for the lease period prior to the accrual of unlawful possession must be recovered exclusively in ejectment proceedings under Rule 70.

Parties' Contentions on Appeal

Lajave contended that the collection suit duplicated matters already pending in the unlawful detainer actions and thus violated the rule against splitting of a cause of action, litis pendentia, and forum shopping. Agustin maintained that the collection action sought recovery of a different injury—alleged underpayment of rentals for crop years prior to the time possession became unlawful—and that those claims required a full-blown trial and had no direct relation to the loss of material possession litigated in the unlawful detainer cases.

Legal Standards on Litis Pendentia, Splitting Causes, and Unlawful Detainer

The Court reiterated that litis pendentia requires concurrence of three requisites: identity of parties; identity of rights asserted and reliefs prayed for founded on the same facts; and that any judgment in one case would operate as res judicata in the other. The Court further recalled that an action for unlawful detainer is a special civil action governed by Rule 70 and a summary procedure in which recoverable damages are limited to fair rental value or reasonable compensation for use and occupation, measured from the time the defendant’s possession became unlawful, typically from the demand to vacate.

Supreme Court's Analysis and Application to the Facts

The Court held that the second and third requisites of litis pendentia were lacking. It found no identity of causes of action because the unlawful detainer suits sought damages arising from the loss of possession after the demand to vacate—i.e., damages accruing after March 1, 2010—whereas the MeTC collection complaint alleged underpayments occurring from crop years 2000–2001 to 2008–2009, which were incurred before possession became unlawful. The Court emphasized that recovery of alleged deficiencies in rent for periods prior to the accrual of unlawful possession required a full evidentiary trial to determine proper computation, contractual terms, and intent of the parties, matters unsuitable for summary unlawful detainer proceedings. The Court also observed that joinder of an ordinary action for collection with an ejectment proceeding was barred b

Case Syllabus (G.R. No. 223785)

Parties and Posture

Lajave Agricultural Management and Development Enterprises, Inc. was the petitioner in a Rule 45 petition seeking relief from the Court of Appeals' decision and resolution in CA-G.R. SP No. 134659.
Spouses Agustin Javellana and Florence Apilis-Javellana were the respondents and original complainants in the trial courts' actions for unlawful detainer and in the separate complaint for collection of sum of money.
The petitioner sought to nullify the Court of Appeals' August 28, 2015 Decision and its March 21, 2016 Resolution through a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure.
The present decision was rendered by the Supreme Court's Third Division with Justice Peralta as the author of the decision.

Facts

The late Justice Luis Javellana executed a Deed of Absolute Sale on July 7, 1987 transferring portions of a forty-nine hectare property in Silay City to his son Agustin and six siblings, and Agustin later acquired additional shares by intestate succession upon his father's death on August 25, 1993.
On May 13, 1998, Lajave and Agustin entered into a Contract of Lease for Agustin's seven-hectare portion in Hacienda San Isidro, Silay City, for a ten-year period described as crop years 1988-1989 to 1997-1998, with annual rental set at thirteen piculs of sugar per hectare and an agreement that the lessee would peaceably surrender the land upon expiration.
After the lessor's death and the alleged expiration of the written lease, Lajave continued occupancy and expanded use to other inherited shares in Barangay Matab-ang, Talisay City without executing a new written lease for those additional areas.
Lajave continued to occupy the premises after the crop year 1997-1998 without renewal or extension and made periodic rental payments which Agustin alleged were untimely and not transparent in computation.
Agustin served a demand letter to vacate on March 1, 2010 and reiterated demands on March 5, 2012, after which he and his wife filed unlawful detainer complaints in the MTCC of Silay City and MTCC of Talisay City.
Agustin alleged that Lajave paid P928,928.27 as rentals from January 22, 2003 to June 25, 2010 but that, based on Sugar Regulatory Administration data, the correct amount should have been P1,253,423.15, leaving an alleged deficiency of P324,494.88.
On September 24, 2012, Agustin and his wife filed Civil Case No. 12-41648 for collection of a sum of money representing the alleged rental deficiency for crop years 2000-2001 to 2008-2009.
Lajave filed a Motion to Dismiss on October 29, 2012 alleging splitting of a single cause of action, litis pendentia, and forum shopping because of the pending unlawful detainer suits.

Procedural History

The Metropolitan Trial Court (MeTC) of Quezon City, Branch 38, granted the Motion to Dismiss and dismissed Civil Case No. 12-41648 on December 10, 2012.
The Regional Trial Court (RTC) of Quezon City, Branch 84, affirmed the dismissal with modification on October 14, 2013 and expressly stated that the dismissal was without prejudice.
The Court of Appeals, in CA-G.R. SP No. 134659, set aside the RTC Decision and ordered the MeTC to conduct further proceedings in Civil Case No. 12-41648 on August 28, 2015.