GR 114928; (January, 1997) (Digest)
G.R. No. 114928 January 21, 1997
THE ANDRESONS GROUP, INC., petitioner, vs. COURT OF APPEALS, SPOUSES WILLIE A. DENATE and MYRNA LO DENATE, respondents.
FACTS
Private respondent Willie Denate entered into an agency agreement with petitioner The Andresons Group, Inc. for the sale of distilled spirits. On November 18, 1991, the Denates filed a collection case against Andresons in the Regional Trial Court (RTC) of Davao City, claiming unpaid commissions. A month later, on December 19, 1991, Andresons filed its own collection case against the Denates in the RTC of Kalookan City, alleging that the Denates owed it money for unremitted sales proceeds after deducting commissions.
The Denates moved to dismiss the Kalookan case on the ground of lis pendens, citing the prior Davao case. The Kalookan RTC denied the motion, reasoning that it had acquired jurisdiction over the parties through earlier service of summons, whereas the Davao court had not yet effected service. The Court of Appeals reversed this ruling, prompting Andresons to elevate the matter to the Supreme Court.
ISSUE
Should the action in the Kalookan RTC be dismissed on the ground of lis pendens?
RULING
Yes. The Supreme Court affirmed the Court of Appeals and ordered the dismissal of the Kalookan case on the ground of lis pendens. For lis pendens to apply, the actions must involve the same parties, a substantial identity in the causes of action and reliefs sought, and a situation where a judgment in one case would constitute res judicata in the other. All these requisites are present here. Both cases involve the same parties and arise from the same agency contract, with each party claiming monetary entitlements from the other based on the same set of transactions. A decision in either case would settle the entire contractual dispute, barring the other under res judicata.
The Court rejected Andresons’ argument that lis pendens was inapplicable because the Davao court had not yet acquired jurisdiction via summons. The rule requires merely that another action be pending, which commences upon the filing of the complaint, not upon service of summons. The policy is to prevent multiplicity of suits, vexatious litigation, and conflicting judgments. Furthermore, while priority in filing is a factor, the determinative criterion is which court is in a better position to serve justice. Here, since the transactions, collections, and likely witnesses were based in the Davao region, the Davao RTC was the more appropriate and convenient forum to hear the case.