The first case was filed by Ines based on the lease contract she signed with the Intramuros Administration (Lessor) for a five year lease of the premises where Ines would put up a fastfood and restaurant business. It was filed barely two years into the contract when the Lessor threatened to close the premises because of Ines’s failure to pay the rentals.Ines alleged that shortly after the lease went into effect, the Lessor did not comply with its commitment to evict the sidewalk vendors outside the leased premises, thus resulting in losses to her restaurant business. Besides according to Ines, the inadequate facilities in the premises resulted in the cancellation of her license and denial of the permit to operate. Thus she was constrained to rehabilitate the premises to increase her sales before she could pay the stipulated rentals of P36,000 per month. She therefore asked the Court(RTC) that the Lessor be ordered to (1) desist from enforcing the closure order; (2) offset all expenses she incurred or might incur as a result of making the leased premises fit for its intended use; (3) reduce the monthly rental from P36,000 to P18,000 a month; and (4) pay her actual and exemplary damages, attorney’s fees and cost of suit.
After due proceedings the RTC issued the writ of preliminary injunction. ordering the Lessor to reopen the leased premises, reconnect the water and electrical services and allow Ines to operate pending decision of the case on the merits. So Ines continued her restaurant business until she vacated it upon the expiration of the lease contract on January 31, 1998.At that time, her case had not yet been decided.
On September 17, 1998, with Ines’ case not yet resolved, the Lessor filed its own action against Ines and her husband Jerry in another branch of the RTC. The Lessor alleged that Ines occupied the premises for the entire period of the lease but defaulted in payment, not only of the rentals from May 1995 until January 31, 1998 when she vacated the premises, but also the water and electric bills. The Lessor thus asked the court that Ines and her husband Jerry be ordered to pay (1) P3,069,225.13 representing unpaid rentals, electric and water bills with penalty, surcharges and interest; (2) P500,000 exemplary damages; (3) attorney’s fees and interests.
Ines and Jerry asked the RTC to dismiss this action of the Lessor on the ground of "litis pendencia" They contended that the filing of this later case by the Lessor is barred by the pendency of the case they earlier filed against the same Lessor because both cases flow from the same contract of lease and are based on the demand of both parties against each other to perform their obligations under the contract.
Were they correct?
No.
To grant a motion to dismiss on the ground of "litis pendencia", the following requisites must concur: (a) there must be identity of parties, or at least such parties as representing the same interests in both actions; (b) there must be identity of the rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (c) the identity of the two preceding particulars is such that any judgment rendered in the other action will, regardless of which party is successful, be conclusive of the rights of the parties or their privies in all later suits on points and matters determined in the former suit (res judicata).
In this case, only the identity of the parties is apparent and uncontroverted. As between the two actions, there is no identity of rigts asserted and reliefs prayed for, as well as of the facts from which the reliefs are founded.It is not therefore likely that the Lessor’s defense in the first case, which was filed by Ines and Jerry, would be in pursuit of its theory in the second case it has filed.
There is more to determining the identity of the causes of action than an identity of contract. More fundamental is whether the cause of action in the second case existed at the time of the filing of the complaint or answer with counterclaim as the case may be, in the first case.
When a lease provides for the payment of rent in installments, each failure to pay an installment is a separate cause of action. The lessor is not therefore barred from claiming installments that were not paid after the filing of the first action for the simple reason that the cause of action did not exist at the time. So, in this case, the Lessor’s claim of back rentals after its filing of an answer with counterclaim in the first case, constitutes distinct causes of action and cannot be barred by "litis pendencia" (Intramuros Administration vs. Yvette Contacto et.al. G.R. 152576, My 5, 2003).
In this case, the Supreme Court also mentioned in passing that the more prudent and efficient move of the lessor should have been to file a supplemental answer in the first case, with the permission of the court, pursuant to Section 6 of Rule 10 and Section 9, Rule 11 of the 1997 Rules of Court.