G.R. No. 79983




Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 79983 August 10, 1989 BUGNAY CONSTRUCTION AND DEVELOPMENT CORPORATION, petitioner, vs. HON. CRISPIN C. LARON Judge of the Court of First Instance (RTC), Branch 44, Dagupan City, P AND M AGRO-DEVELOPMENT CORPORATION and REGINO RAVANZO, JR., respondents. Rodolfo Q. Agbayani for petitioner. Regino R. Ravanzo, Jr. for respondents. REGALADO, J.: Respondent judge is taken to task in this special civil action for certiorari for having issued the following orders and writ, viz: (1) order, dated August 5, 1987, denying the motion to dismiss filed in Civil Case No. D-8696; (2) order, dated August 7,1987, denying the motion for reconsideration of the preceding order; (3) order of August 12, 1987 for the issuance of a writ of preliminary injunction; and (4) writ of preliminary injunction issued on August 14, 1987. The records show that on March 3,1978, the City of Dagupan (City, for short) awarded a lease contract 1 in favor of respondent P and M Agro-Development Corporation (hereinafter, P and M) over a city lot called the Magsaysay Market Area with an approximate area of three thousand six hundred ninety-two (3,692) square meters. By reason of P and M's failure to comply with the conditions of the contract, the City filed on May 25, 1982 an action to rescind the lease contract with the Regional Trial Court of Pangasinan in Dagupan City, Branch 41, and docketed therein as Civil Case No. D-6157. 2 This case was decided on January 16,19853 in favor of the City on the basis of a "Joint Manifestation" of both parties, dated September 20, 1984.4 Upon motion of the City, a writ of execution was issued on September 26, 19855 ordering the immediate delivery of the possession of the premises to the movant City. Thereafter, on November 5, 1985, P and M filed a motion for the reconsideration of the aforesaid decision. However, it was only on August 17,1987 when the incident was resolved 6 by the court which set aside the decision previously rendered on the ground that the joint manifestation on which it was based is not in the nature of a compromise agreement for the following reasons: (1) the joint manifestation was not signed by the party plaintiff; (2) the said pleading did not pray that a decision be rendered based thereon; (3) if the parties really intended it to be a compromise agreement, they should have entitled it as such; (4) the parties agreed that the joint manifestation is without prejudice to the continuance of the case, which is contrary to the very nature of a compromise agreement in that it terminates the case upon the court's approval thereof ; (5) the joint manifestation did not specify the "proposed terms and conditions" offered by P and M, hence it cannot be a valid basis for a judgment on compromise which requires that the terms and conditions be spelled out clearly in order that the court may determine whether they are in accordance with law, public policy, public order, and good customs; and (6) the alleged proposals are subject to the review of the proper government agencies, which is not allowed in a judgment on compromise wherein only the court may determine the legality thereof.7 The City's motion for the reconsideration of said resolution which set aside the decision rendered in Civil Case No. D-6157 was denied by said trial court in an order dated October 26, 1987. 8 It appears, however, that on April 20, 1987, during the pendency of the resolution on the motion for reconsideration filed by P and M in Civil Case No. D-6157, the Sangguniang Panlungsod of the City of Dagupan adopted Resolution No. 1462-87 "Authorizing the City Mayor, Honorable Liberate Ll. Reyna, Sr., to Enter Into a Contract of Lease with Bugnay Construction and Development Corporation over that Parcel of Lot owned by the City of Dagupan.9 On April 27, 1987, pursuant to said resolution, herein petitioner entered into a contract of lease 10 with the City over the Magsaysay Market Area, wherein petitioner agreed to finance, establish, construct, develop, manage, operate, maintain, control and supervise a commercial center and a modern public market building, paying a monthly rental of eight pesos (P8.00) per square meter, for a period of twenty (20) years to begin from the date when the stallholders in the area aforementioned shall be relocated, with the obligation to turn over, without demand, the entire market building and all attached appurtenances to the lessor City upon the expiration of the lease period. Upon the fulfillment of the condition for the commencement of the term of the lease, i.e., the relocation of the stallholders in the area, petitioner immediately started its construction work. On June 15, 1987, P and M, through its counsel, herein private respondent Regino R. Ravanzo, Jr., filed an action 11 for "Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order, Annulment of Contract, and Damages" against the City, its officials and herein petitioner, which case was docketed as Civil Case No. D-8664 and assigned to Branch 43 of the Regional Trial Court in Dagupan City. In its complaint, P and M averred that inasmuch as Civil Case No. D-6157 was still pending, its lease contract with the City continued to exist, hence the lease contract executed by the City with herein petitioner is allegedly null and void ab initio and an ultra vires act. P and M consequently prayed that petitioner be enjoined from continuing with the construction of the market building. A temporary restraining order12 initially issued by said Branch 43 on June 19, 1987 was subsequently dissolved in its order dated June 30, 1987, 13 on the ground that no great or irreparable injury would result to the therein applicant P and M if no restraining order will be issued. Thereafter, the defendants therein filed their respective pleadings. On July 17, 1987, private respondent Regino R. Ravanzo, Jr., professedly in his capacity as a resident and taxpayer of Dagupan City, filed with the Regional Trial Court in Dagupan City the present action for "Injunction with Preliminary Injunction and Temporary Restraining Order and Damages" against the City of Dagupan, the City Mayor and herein petitioner which was docketed as Civil Case No. D-8696, and, this time, was assigned to Branch 44 of said court presided over by herein respondent judge. 14 As party plaintiff therein and, on the basis of the very same facts alleged in Civil Case No. D-8664, herein private respondent Ravanzo attacked the legality of the contract of lease entered into between the City and petitioner, alleging thirty (30) reasons in his complaint why the contract should be declared null and void, and prayed for the issuance of a writ of injunction directing petitioner to desist from continuing with the questioned construction. On July 24, 1 987, respondent judge issued a restraining order 15 enjoining herein petitioner from continuing with the construction of the Magsaysay Market building. On July 28,1987, the City and its Acting Mayor filed a motion to dismiss 16 on the grounds that therein plaintiff Ravanzo is not the real party in interest; the complaint states no cause of action; there is another action (Civil Case No. D-8664) pending between the same parties involving the same subject matter, issues, purpose and prayer; and, in effect, there was forum-shopping. On August 5,1987, respondent judge issued an order 17 denying the motion to dismiss. The motion for reconsideration, 18 filed by the City was likewise denied in an order dated August 7,1987. 19 Thereafter, respondent judge granted the filing of a bond by respondent Ravanzo in the amount of one hundred thousand pesos (Pl00,000.00), in his order of August 12, 1987 20 as a consequence of which a writ of preliminary injunction 21 was issued on August 14,1987. Hence, this petition. We have recast, for brevity, the following determinative issues raised by petitioner for resolution, viz: 1. Whether or not the respondent judge committed grave abuse of discretion, when, instead of dismissing the alleged taxpayer's suit (Civil Case No. D-8696), he instead issued the writ of preliminary injunction prayed for by respondent Ravanzo, in spite of the clear pendency of another action between the same parties for the same cause; 2. Whether or not the respondent judge committed a grave abuse of discretion when he denied the motion to dismiss Civil Case No. D-8696, by refusing to recognize that the herein respondent Ravanzo does not have any personality to file a taxpayer's suit hence he has no cause of action against the defendants in the court a quo; and 3. Whether or not under the facts of this case the private respondents were guilty of forum-shopping. We find for the petitioner. This petition is a proper recourse from the assailed orders of respondent judge. While generally an order denying a motion to dismiss is interlocutory and not appealable, where such denial was issued with grave abuse of discretion or is without or in excess of jurisdiction, the extraordinary writs of certiorari and prohibition will lie. 22 It is readily apparent from ajudicious perusal and evaluation of the pleadings filed in Civil Case No. D-8696 that duly raised in issue therein was the pendency of another case between the same parties for the same cause; that in said Civil Case No. D-8696, therein plaintiff Ravanzo was neither a real party in interest nor could he have validly maintained said case as a so-called taxpayer's suit; and that these considerations, in tandem, virtually dictated that said case should have been dismissed outright. On the pendency of another action between the same parties for the same cause, or litis pendentia as a ground for dismissal, there must be between the action under consideration and the other action (1) identity of the parties or at least such as represent the same interest in both actions, (2) identity of the rights asserted and prayed for, the relief being founded on the same facts, (3) the identity in both cases is such that the judgment which may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case. 23 This ground is also referred to as lis pendens or auter action pendant. 24 In the case at bar, while it may superficially appear that there are two different plaintiffs in the prior case and in the present action, namely, P and M in Civil Case No. D-8664 and Regino R. Ravanzo, Jr. in Civil Case No. D-8696, there can be no dispute that both represent the same interest. It is admitted that Ravanzo is the counsel of record of P and M in Civil Case No. D-8664. As seen earlier, after the restraining order in said case was lifted and P and M's prayer for preliminary injunction to restrain herein petitioner from continuing with the construction of the market building in the aforesaid case was not acted upon, Ravanzo personally applied for another temporary restraining order and another writ of preliminary injunction to enjoin the very same act of construction, this time under the guise of a taxpayer suit with himself as the plaintiff in Case No. D-8696. It is all too ludicrously transparent and readily apparent that respondent Ravanzo merely sought in another branch of the same court, figuratively using the hat of a taxpayer, what he failed to obtained in one branch, under the hat of a representing counsel. His allegation that he has no interest in common whatsoever with P and M is an affront to the credulity and patience of this Court. He even belied his own misrepresentation in the present proceedings before this Court wherein he appeared and filed common pleadings for and behalf of himself and P and M. P and M, through its said counsel, respondent Ravanzo, alleged in Civil Case No. D-8664 that it is the holder of the previous lease award for the Magsaysay Market; that on May 25, 1982, the City of Dagupan filed a suit to rescind such contract, the case having been docketed as Civil Case No. D-6157 in Branch 41 of the Regional Trial Court in Dagupan City; that a decision was promulgated in the said case on January 16, 1985 but it filed a motion to set aside such decision on November 5, 1985, which motion had not been resolved; that on April 20,1987, the Sangguniang Panlungsod of Dagupan City passed Resolution No. 1462-87 authorizing City Mayor Liberato Ll. Reyna to enter into a contract of lease over the Magsaysay Market with petitioner Bugnay Construction and Development Corporation and on April 27, 1987 the City represented by Mayor Reyna, and petitioner entered into a contract of lease over the Magsaysay Market; that inasmuch as Civil Case No. D-6157 was still pending, the previous lease contract in favor of P and M was still subsisting, hence the City could not lease the premises to another party; that the enactment of Resolution No. 1462-87, the execution of the lease contract with petitioner corporation and the construction by petitioner of the commercial center all constitute an unwarranted and abusive exercise of power that deprives P and M of its property without due process and is an ultra vires act. These are basically the same allegations raised in Civil Case No. D-8696 with respondent Ravanzo as plaintiff. There is regrettable vacuity in respondent Ravanzo's insistence that he is suing for "Injunction with Prayer for Preliminary Injunction and Temporary Restraining Order" whereas P and M's action is for "Injunction with Prayer for Preliminary Injunction, Annulment of Contract and Temporary Restraining Order" which actions, so he claims, seek distinct and different reliefs. Indeed, it is empty verbiage to deny that in Case No. D-8696 Ravanzo is actually asking for the declaration of the nullity of the lease contract executed by the City and petitioner, which is also what is prayed for by P and M in Case No. D-8664. Undeniably, whatever judgment may be rendered in Case No. D-8664 will necessarily constitute res judicata in Case No. D-8696. And, it is too entrenched a rule brooking no dissent that a party cannot, by varying the form of action or adopting a different method of presenting his case, escape theation of the principle that one and the same cause of action shall not be twice litigated. 25 The trial court, in taking cognizance of the purported taxpayer's suit, declared that respondent Ravanzo has the legal capacity to sue since his interest as a taxpayer is directly affected by the alleged ultra vires act of the City of Dagupan, invoking the doctrine enunciated in City Council of Cebu City, etc., et al. vs. Carlos J. Cuizon etc., et al., 26 to wit: Plaintiffs' right and legal interest as taxpayers to file the suit below and seek judicial assistance to prevent what they believe to be an attempt to unlawfully disburse public funds of the city and to contest the expenditure of public funds under contracts and commitments with defendant bank and Tropical which they assert to have been entered into by the mayor without legal authority and against the express prohibition of law have long received the Court's sanction and recognition. In Gonzales vs. Hechanova, the Court through the now Chief Justice dismissed the challenge against the sufficiency of therein petitioner's interest to file the action, stating that 'since the purchase of said commodity will have to be effected with public funds mainly raised by taxation, and as a rice producer and landowner petitioner must necessarily be a taxpayer, it follows that he has sufficient personality and interest to seek judicial assistance with a view to restraining what he believes to be an attempt to unlawfully disburse said funds. Contrarily, it thus results that the trial court's reliance is self-defeating since the very doctrine cited holds that only when the act complained of directly involves an illegal disbursement of public funds raised by taxation win the taxpayer's suit be allowed. The essence of a taxpayer's right to institute such an action hinges on the existence of that requisite pecuniary or monetary interest. We accordingly held in Gonzales vs. Marcos, etc., et al .27 that: It may not be amiss though to consider briefly both the procedural and substantive grounds that led to the lower court's order of dismissal. It was therein pointed out as 'one more valid reason' why such an outcome was unavoidable that the funds administered by the President of the Philippines came from donations (and) contributions (not) by taxation. Accordingly, there was that absence of the requisite pecuniary or monetary interest.'. . . It is only to make clear that petitioner, judged by orthodox legal learning, has not satisfied the elemental requisite for a taxpayer's suit. ... Objections to a taxpayer's suit for lack of sufficient personality standing or interest are procedural matters. Considering the importance to the public of a suit assailing the constitutionality of a tax law, and in keeping with the Court's duty, specially explicated in the 1987 Constitution, to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them, the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. 28 However, for the above rule to apply, it is exigent that the taxpayer-plaintiff sufficiently show that he would be benefited or injured by the judgment or entitled to the avails of the suit as a real party in interest. 29 Before he can invoke the power of judicial review, he must specifically prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation 30 and that he wig sustain a direct injury as a result of the enforcement of the questioned statute or contract. 31 It is not sufficient that he has merely a general interest common to an members of the public. 32 On its face, and there is no evidence to the contrary, the lease contract entered into between petitioner and the City shows that no public funds have been or will be used in the construction of the market building. The terms of the contract reveal that petitioner shall finance the project, the capital investment to be recovered from the rental fees due from the stallholders. Furthermore, petitioner undertook, at its own expense, to insure the building, to have the site cleared for construction, and to hire personnel necessary to prevent unfair competition to its stallholders. It was likewise agreed that suits arising from and in connection with said construction shall be at the expense of petitioner without right of reimbursement. Finally, the building shall be turned over at the end of the lease period to the City of Dagupan as its exclusive owner, also without right of reimbursement. No disbursement of public funds, legal or otherwise, being involved in the challenged transaction, the locus stand claimed by plaintiff in Civil Case No. D-8696 is non-existent. Forum-shopping, an act of malpractice, is proscribed and condemned as trifling with the courts and abusing their processes. It is improper conduct that degrades the administration of justice. The rule has been formalized in Paragraph 17 of the Interim Rules and Guidelines issued by this Court on January 11, 1983, in connection with the implementation of the Judiciary Reorganization Act. Thus, said Paragraph 17 provides that no petition may be filed in the then Intermediate Appellate Court, now the Court of Appeals "if another similar petition has been filed or is still pending in the Supreme Court' and vice-versa. The Rule ordains that "(a) violation of the rule shall constitute a contempt of court and shall be a cause for the summary dismissal of both petitions, without prejudice to the taking of appropriate action against the counsel or party concerned. 33 This rule has been equally applied in the recent case of Limpin, Jr., et al. vs. Intermediate Appellate Court, et al., 34 where the party having filed an action in one branch of the regional trial court shops for the same remedies of a restraining order and a writ of preliminary injunction in another branch of the same court. We ruled therein that: So, too, what has thus tar been said more than amply demonstrates Sarmiento's and Basa's act of forum shopping. Having failed to obtain the reliefs to which they were not entitled in the first place from the "Solano Court," the Court of Appeals, and the Supreme Court, they subsequently instituted two (2) actions in the 'Beltran Court' for the same purpose, violating in the process the ruling against splitting causes of action. The sanction is inescapable: dismissal of both actions, for gross abuse of judicial processes. That both actions ought to be dismissed is further bolstered by the fact that Branch 43 hearing Civil Case No. D-8664 also acted on the belief that the first action filed by the City against P and M, Civil Case No. D-6157, constitutes a prejudicial question to Civil Case No. D-8664 as stated in its resolution of June 30,1987: .....It is the considered opinion of this Court that the matter of Restraining Order, Writ of Preliminary Injunction and other forms of redress to the plaintiff could be better treated upon the result of the (sic) Civil Case No. D-6157 because should the above-mentioned be ultimately decided in favor of the City of Dagupan, all matters to be treated in the instant case will become moot and academic. In the event, however, that the P and M Agro Development prevailed in that case then may be some of the matter (sic) raised in this case should have been treated in that aforementioned case. Or some remedies are available to the prevailing party. Since the Court believes that there is some sort of a prejudicial question involved in Civil Case No. D-6157, which may affect this case to a certain extent, then it would not be naive to discreetly wait for the final determination of Civil Case No. D-6157 and therefore the parties here should be treated in their previous positions status quo anti (sic) bellum. 35 Hence, as earlier seen, said branch dissolved the restraining order it had previously issued and does not appear to have taken any further action in the case before it. On all the foregoing considerations, the dismissal of both Civil Cases Nos. D-8664 and D-8696 is definitely in order. Respondent Judge Laron in issuing the writ of preliminary injunction, supposedly relied on the doctrine enunciated in Sabado, et al. vs. Cristina Gonzales, Inc., et al, 36 that a judge of a branch of the former court of first instance, now the regional trial court, has jurisdiction to issue a writ of preliminary injunction in a case pending in that branch, although a similar writ had been denied by another branch of the same court. This is a specious invocation since in said case the parties involved did not engage in forum shopping by filing two cases based on the same cause of action in two different branches of the same court. Involved therein were two actions with two different causes of action, the first being usurpation of real rights by the defendants therein and the second based on violations of a leasehold grant by the plaintiff in the first action. In the present controversy, as already demonstrated, the same reliefs of a restraining order and preliminary injunction were sought apparently in two separate cases which, however, are in a procedural situation of litis pendentia as to each other, with the same cause of action and the other elements thereof. However, equitable considerations and the practical desirability of and necessity for the resolution of the issues raised in both Civil Cases Nos. D-8664 and D-8696 persuade Us that the dismissal thereof shall be without prejudice to whatever principal or ancillary remedies private respondents may deem proper to protect their rights by filing or availing thereof in Civil Case No. D-6157, or to be consolidated therein or jointly decided therewith, as the proper forum for the adjudication of all the respective rights and liabilities of the parties concerned. Consequently, and considering the public purpose of the subject matter in litigation, the presiding judge of Branch 41 is hereby directed to act with all practicable dispatch towards the early and judicious termination of the proceedings in Civil Case No. D-6157 pending therein and all such other incidents as may hereafter be filed or involved in said case for the complete determination thereof. Private respondent Regino R. Ravanzo Jr. is hereby reprimanded for engaging in conduct equivalent to forum shopping with a stern warning that a repetition of the same or similar acts in the future will be severely dealt with. For permitting such a state of affairs to take place in his court, public respondent Judge Crispin C. Laron is hereby strictly admonished to be more perceptive and circumspect in his judicial appreciation and conduct of cases assigned to him, with the same warning in the event of a repetition of his actuations herein complained of. WHEREFORE, the Court hereby: 1. ORDERS the dismissal of Civil Cases Nos. D-8664 and D-8696 in Branches 43 and 44, respectively, of the Regional Trial Court, Dagupan City, without prejudice to the filing or availment of such remedies the parties may deem proper in Civil Case No. D-6157 in Branch 41 of the same court; 2. DISSOLVES the writ of preliminary injunction issued in the aforesaid Civil Case No. D-8696; and 3. DIRECTS presiding judge of Branch 41 of the aforesaid court to expedite and terminate the trial and adjudication of Civil Case No. D-61 57 and all other remedies and incidents that the parties may properly file and consolidate for determination therein. SO ORDERED. Melencio-Herrera, (Chairperson), Paras, Padilla and Sarmiento, JJ., concur. Footnotes 1 Annex 1, Memorandum for Respondents: Rollo, 495. 2 Annex 2, Id.; Rollo, 499. 3 Annex 3, Id.; Rollo, 504. 4 Rollo, 206-207, 5 Annex B, Motion for Reconsideration of the Lifting of Restraining Order; Rollo, 409. 6 Annex 4, Memorandum for Respondents; Rollo, 506. 7 Annex 23, Id.; Rollo, 587. 8 Annex 24, Id.; Rollo, 603. 9 Annex 5, Id.; Rollo, 508. 10 Annex 6, Id.; Rollo, 510. 11 Annex M, Id.; Rollo, 515. 12 Annex 8, Id.; Rollo, 522. 13 Annex 1 1, Id.; Rollo, 535. 14 Annex 12, Id.; Rollo, 537. 15 Annex 13, Id.; Rollo, 547. 16 Annex 14, Id.; Rollo, 547-A. 17 Annex 17, Id.; Rollo, 558. 18 Annex 18, Id.; Rollo, 565. 19 Annex 19, Id.; Rollo, 571. 20 Annex 20, Id.; Rollo, 572. 21 Annex 21, Id.; Rollo, 580. 22 Ablan vs. Madarang et al., 41 SCRA 213 (1971); Van Dorn vs. Romillo, et al., 139 SCRA 139 (1985); Newsweek, Inc. vs. Intermediate Appellate Court, 142 SCRA 171 (1986). 23 Del Rosario, et al. vs. Jacinto, et al., 15 SCRA 15 (1965); Pampanga Bus Co. vs. Ocfemia et al., 18 SCRA 407 (1966); Drilon vs. Guarana et al., 149 SCRA 342 (1987). 24 Buan, et al, vs. Lopez, Jr., 145 SCRA 34 (1986). 25 Ibabao vs. Intermediate Appellate Court, et al., 150 SCRA 76 (1987); Sangalang vs. Caparas, et al., 151 SCRA 53 (1987). 26 47 SCRA 325 (1972). 27 65 SCRA 624 (1975). 28 Kapatiran vs. Tan, G.R. No. 81311, June 30, 1988. 29 Estate of George Litton vs. Mendoza, G.R. No. 49120, June 30, 1988. 30 Am. Jur. 761; Dumlao, et al. vs. Commission on Elections, 95 SCRA 392 (1980). 31 Sanidad, et al. vs. Commission on Elections, et al., 73 SCRA 333 (1976). 32 Ex Parte Levitt, 302 U.S. 633, cited in 15 SCRA 497, Annotation. 33 E. Razon, Inc. et al. vs. Philippine Port Authority, et al., G.R. No. 75197, Resolution, July 31, 1986. 34 161 SCRA 83 (1988). 35 Rollo, 39. 36 53 Phil. 770 (1928). The Lawphil Project - Arellano Law Foundation