Mid-Pasig Land Development Corporation v.

Court of Appeals | October 8, 2003

PETITIONER: Mid-Pasig Land Development Corporation
RESPONDENTS: Court of Appeals, RTC Judge Lorenzo, and Rockland Construction Company,
Inc.
SUMMARY: Mid-Pasig Land Development Corp. leased a portion of its property to ECRM
Enterprises. Then, ECRM assigned to Rockland Construction Company all its rights under the lease
agreement. Later, Rockland verbally requested Mid-Pasig for a renewal of the lease for three years.
Meanwhile, Rockland erected a building on the leased area and subleased several portions thereof.
However, in the first week of January, Rockland received information that its sub-lessees were
notified by Mid-Pasig to vacate the property. Rockland requested Mid-Pasig to execute a formal
three-year lease contract in its favor, but Mid-Pasig claimed that it had not entered into any
agreement with Rockland and stated that it had already undertaken the necessary steps to evict
Rockland and its sub-lessees.
Thus, on January 11, 2001, Rockland filed a complaint for specific performance before the
RTC compelling Mid-Pasig to execute a lease contract in its favor. Mid-Pasig moved to dismiss
the complaint. When the parties failed to reach a compromise, Mid-Pasig filed a case for
unlawful detainer against Rockland before the Metropolitan Trial Court. Mid-Pasig also filed
before the RTC a supplemental motion seeking to dismiss the complaint for specific performance on
the ground of litis pendentia. However, the trial court refused to dismiss the complaint for specific
performance on the ground that there was no litis pendentia between the two cases and ruled that it
was the unlawful detainer case that should be dismissed.
The decision of the trial court was affirmed by the CA. Hence, Mid-Pasig elevated the case before
the SC via petition for certiorari.
ISSUES:
1. W/N there was litis pendentia between the cases of specific performance and unlawful detainer
2. W/N the unlawful detainer case should be dismissed

HELD:
1. Yes. The Court found that all the elements of litis pendentia were present in this case.
 The parties in the cases of specific performance and unlawful detainer are one and the
same.
 The rights asserted and the relief prayed for in the complaint for specific performance were
no different from those pleaded in the unlawful detainer case filed, such that a judgment in
one case would effectively bar the prosecution of the other case.
o The central issue to be resolved in the specific performance case is whether
Rockland has a right to continue its possession of the leased property, which is
essentially similar to the one raised in the unlawful detainer case.
o The main purpose of the complaint for specific performance was not really to compel
Mid-Pasig to formalize in a public instrument its lease agreement with Rockland, but
to prevent Mid-Pasig from filing a complaint for ejectment so that Rockland could
maintain its possession of the property.
 The two cases had the same subject matter, which was the leased site, and the same
issue, which was Rockwell’s right of possession over the leased property.
2. No. The Court held that it was the prior case for specific performance which should be
dismissed. According to the Court, the most appropriate suit in which the controversy between
the parties should be determined was the unlawful detainer case before the MeTC. The latter court
has exclusive original jurisdiction over the subject matter and could grant appropriate relief. In view
thereof, the Court dismissed the complaint for specific performance pending before the RTC on
FACTS:

Mid-Pasig Land Development Corporation leased a portion of its property to ECRM Enterprises
(ECRM). The leased area, which measures approximately one hectare, is part of the two lots.
ECRM intended to use the area as staging ground for its exhibition. Under the contract of lease,
ECRM agreed to pay Mid-Pasig the amount of ₱1.6M as rental for three months, inclusive of
tax, with option to renew.
Then, ECRM assigned to Rockland Construction Company, Inc. all its rights under the lease
agreement wherein it was stipulated that Rockland would have full control of the leased property
including the right to the extension of the leased period. Later, Rockland verbally requested Mid-
Pasig for a renewal of the lease for three years. Before the request was acted upon, Mid-Pasig
increased the monthly rental, in which Rockland agreed.
Meanwhile, Rockland erected a building on the leased area, also known as the “Payanig sa
Pasig” site, and subleased several portions thereof. However, in the first week of January 2001,
Rockland received information that its sub-lessees were served by Mid-Pasig with notices to
vacate the property. Even if it did not receive a similar notice, Rockland requested Mid-Pasig to
execute a formal three-year lease contract in its favor. However, Mid-Pasig claimed that it had
not entered into any agreement with Rockland and stated that it had “already undertaken the
necessary steps to evict Rockland and other possessors in the premises.” Mid-Pasig claimed
that the assignment of the lease to Rockland was not valid.
Thus, on January 11, 2001, Rockland filed a complaint for specific performance seeking
the issuance of an order from the RTC compelling Mid-Pasig to execute a lease contract
in its favor. Rockland contended that it had already entered a new leased contract with Mid-
Pasig for a three-year term despite the lack of any written agreement. By continuously accepting
rental payment and allowing Rockland to remain in the property, Mid-Pasig effectively accepted
and ratified its offer of a three-year lease; hence a lease contract was perfected. Mid-Pasig filed
a motion to dismiss, which was set for hearing on August 20, 2001, at which date Mid-Pasig
manifested that it will file a complaint for ejectment.
On August 22, 2001, Mid-Pasig filed a case for unlawful detainer against Rockland before
the Metropolitan Trial Court. Mid-Pasig also filed before the RTC a supplemental motion
seeking to dismiss the complaint for specific performance on the ground of litis pendentia.
However, the trial court refused to dismiss the complaint for specific performance on the ground
that there was no litis pendentia between the cases of specific performance and unlawful
detainer and ruled that it was the latter case that should be dismissed.
The decision of the trial court was affirmed by the CA. Hence, Mid-Pasig elevated the case
before the SC via petition for certiorari.
ISSUES:
1. Whether there was litis pendentia between the cases of specific performance and unlawful
detainer
2. Whether the unlawful detainer case should be dismissed
HELD:
1. Yes. In order to sustain a dismissal of an action on the ground of litis pendentia, the following
requisites must concur: (1) identity of parties, or at least such as representing the same interest
in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on
the same facts; and (3) identity in the two cases should be such that the judgment that may be
rendered in the pending case would amount to res judicata in the other.
In this case, all the elements of litis pendencia were present.

 First, the parties in the cases of specific performance and unlawful detainer are one
and the same.
 Second, a careful examination of the allegations of the complaint for specific
performance before the RTC revealed that the rights asserted and the relief prayed
for were no different from those pleaded in the unlawful detainer case filed before
the MeTC, such that a judgment in one case would effectively bar the prosecution of the
other case.
o The central issue to be resolved in the specific performance case is
whether Rockland has a right to continue its possession of the leased
property, which is essentially similar, if not identical, to the one raised in the
unlawful detainer case before the MeTC.
o The main purpose of the complaint for specific performance was not really to
compel Mid-Pasig to formalize in a public instrument its lease agreement with
Rockland, but to prevent Mid-Pasig from filing a complaint for ejectment so that
Rockland could maintain its possession of the property.
 Third, the two cases had the same subject matter, which was the leased site, and the
same issue, which was Rockwell’s right of possession over the leased property.
2. No. The Court held that it was the prior case for specific performance which should be
dismissed. According to the Court, the most appropriate suit in which the controversy
between the parties should be determined was the unlawful detainer case before the MeTC.
The latter court has exclusive original jurisdiction over the subject matter and could grant
appropriate relief.
The fact that the unlawful detainer suit was filed after is no bar to the dismissal of the action for
specific performance. When there are two pending cases, the general rule is that the second
case filed should be dismissed under the maxim qui prior est tempore, potior est jure, However,
the rule is not a hard and fast one, as the “priority-in-time rule” may give way to the criterion of
“more appropriate action.”
To determine which action should be dismissed when two actions are pending, the following are
taken into account: (1) the date of filing; (2) whether the action sought to be dismissed was filed
merely to preempt the latter action or to anticipate its filing and lay the basis for its dismissal;
and (3) whether the action is the appropriate vehicle for litigating the issues between the parties.
Here, it appears that at the time of the filing of the specific performance case before the RTC,
Mid-Pasig had communicated to Rockland that it filed an ejectment case against it. Thus, the
specific performance case is in reality a preemptive maneuver intended to block the complaint
for ejectment, considering that it was brought merely three days after Rockland received the
communication from Mid-Pasig.