#7 ERIBERTO G. VALENCIA, substituted by his heirs: REBECCA S.

VDA. DE VALENCIA, MA. CAROLINA S. VALENCIA, MA.

ANTONETTE S. VALENCIA, PETER GELVIC S. VALENCIA, JOSE
THERONE S. VALENCIA and MA. SOPHEA S. VALENCIA, vs.
COURT OF APPEALS, RICARDO BAGTAS and MIGUEL BUNYE ;
G.R. No. 111401, 17 October 1996

The Facts:

The private respondents were lessees of a 24-hectare fishpond owned

by petitioner (as substituted by his heirs) located at Paombong, Bulacan. The
lease is covered by a lease contract by and between the said parties. The
lease [executed on March 1, 1982] was supposed to have expired on May
1987, but before the said date, (petitioner) filed [on June 25, 1984] a
complaint against private respondents for the rescission of the lease contract.
The Regional Trial Court of Malolos, Bulacan which took cognizance of
said case issued a writ of preliminary Mandatory Injunction ordering private
respondents to surrender to the petitioner possession of the fishpond. In view
whereof, private respondents filed a Petition for Certiorari with the
Intermediate Appellate Court (IAC). The said court on September 21, 1984
issued a restraining order enjoining petitioner and the Regional Trial Court
from enforcing the mandatory injunction.

At the hearing in the IAC the parties agreed to maintain a status quo
and the fishpond hut would be utilized by private respondents until the case
is resolved by the RTCof Malolos. However, despite said order of the
Appellate Court, petitioner filed an ex-parte motion for the designation of a
member of the Philippine Constabulary to maintain order in the place which
the RTC of Malolos granted. With said order, petitioner with the aid of PC
men was able to eject plaintiffs from the main hut. Petitioner and their men
also dried up a portion of the leased property where private respondents have
previously scattered chemicals and fertilizer to grow fish food. As a result no
fish food grew causing damage to private respondents. Further, these
resulted in death to many fishes which again caused damages to private
respondents. Subsequently, another person came to the fishpond and
introduced himself as the new lessee. The RTC of Malolos then issued
another order declaring that all the fishes located in the fishpond remain the
properties of private respondents subject to their disposal; however the same
was not honored by petitioner.

Private respondents then appealed again to the IAC which issued a

resolution enjoining petitioner to maintain and observe status quo and
subsequently another resolution categorically declaring petitioner Valencia
without right of possession under status quo, and to vacate the main hut of
the fishpond. It was only then that private respondents gained complete and
total control of the subject fishpond including its huts.

1
 Private respondents are now asking the RTC of Manila for exemplary
damages moral damages, attorney's fees and costs of suit. A Motion to
Dismiss was filed by petitioner on 8 April 1985. The Motion to Dismiss was
denied by the court on 4 March 1986.After petitioner filed his Answer, pre-
trial was set on November 14, 1986 and the same was terminated on
February 26, 1987. Trial on the merits was held on April 3, 1987. Instead of
presenting evidence, petitioner filed on 24 February 1989 a Second Motion
to Dismiss which was denied by the court on 13 April 1989

On 31 August 989, the petitioner Valencia testified, however his

testimony was not terminated in view of the objection of counsel for the
private respondents who claimed that the questions propounded to the
witness touched on matters which have been passed upon by the RTC of
Malolos. Petitioner contended that proceedings in the RTC of Manila should
be suspended until after the case in the RTC of Malolos which was appealed
to the CA is resolved, and filed a Motion to this effect, but the court denied
the same.

Issues:

1. Whether the denial orders and the decision of the Manila RTC and the
decision of respondent CA are not in accord with the law and constitute
decisions on litis pendentia.
2. Whether the case filed with the Manila court can even be considered as a
form of "forum shopping.

Ruling:
1. No. There is no litis pendentia in this case.
The Court has consistently held, in a long line of cases, that the
requisites for the existence of litis pendentia as a ground for dismissal of an
action are as follows:
1) identity of parties, or at least such parties as represent the
same interests in both actions;
2) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and
3) the identity with respect to the two preceding particulars in
the two cases is such that any judgment that may be rendered in
the pending case, regardless of which party is successful,
would amount to res judicata in the other case.

There may have been identity of parties in the two actions, but the
other two requisites are not similarly satisfied. The case in Bulacan was of
course founded upon alleged violations by the private respondents as lessees
of certain stipulations in their lease contract with petitioner, and therefore, it
cannot be gainsaid that the rights asserted (by petitioner as lessor) and relief
sought therein (i.e., rescission of the lease contract) were entirely different
from those asserted in Manila. The latter case stemmed from the prejudice
suffered by private respondents due to petitioner's violation of the IAC's

2
restraining orders for the observance of status quo between the parties, the
relief demanded therein consisting of actual, moral and exemplary damages.

Thus, considering the second requisite that the causes of action in the
two cases are not the same; they are founded on different acts; the rights
violated are different; and the reliefs sought are also different was not
satisfied.

As to the third requisite on test of res judicata when applied to the two
cases in question indicate is not obtaining in this case that regardless of
whoever will ultimately prevail in the Bulacan case, the final judgment
therein — whether granting or denying rescission of the lease contract —
will not be conclusive between the parties in the Manila case, and vice versa.
In other words, to our mind, the outcome of the Bulacan case has nothing to
do with whether petitioner should be held liable for the damage inflicted
upon private respondents as a result of his violating the IAC restraining
orders, the two cases having arisen from different acts and environmental
circumstances.

2. No. Forum-shopping is not present in this case. The established rule is

that for forum-shopping to exist, both actions must involve the same
transactions, same essential facts and circumstances and must raise identical
causes of actions, subject matter, and issues. The test for determining
whether a party violated the rule against forum shopping has been laid down
in the case of Buan vs. Lopez (1986),that is, forum shopping exists where
the elements of litis pendentia are present or where a final judgment in
one case will amount to res judicata in the other .

Thus, the allegation of forum-shopping must fail.

3. No. Petitioner erroneously insists that private respondents' claim for

damages should have been made through a compulsory counterclaim in the
same action for rescission. This could not have been done as the same
cannot be considered or treated as a compulsory counterclaim in the Bulacan
case. This Court, stated certain criteria or tests by which the compulsory or
permissive nature of specific counterclaims can be determined, summarized
as follows:
1. Are the issues of fact and law raised by the claim and
counterclaim largely the same?
2. Would res judicata bar a subsequent suit on defendant's
claim absent the compulsory counterclaim rule?
3. Will substantially the same evidence support or refute
plaintiffs claim as well as defendant's counterclaim?
4. Is there any logical relation between the claim and the
counterclaim?

In this instance, the answers to all four queries are in the negative.