G.R. No. 125571 July 22, 1998
PHILIPPINE WOMAN’S CHRISTIAN TEMPERANCE UNION, INC., petitioner, vs. ABIERTAS HOUSE OF FRIENDSHIP, INC., & RADIANCE SCHOOL, INC., respondents.

FACTS

Petitioner Philippine Woman’s Christian Temperance Union, Inc. (PWCTU) is the registered owner of a parcel of land in Quezon City, the title of which contained a restriction that the property shall be used as a site for an institution known as the Abiertas House of Friendship. On May 24, 1995, private respondents Abiertas House of Friendship, Inc. (AHFI) and Radiance School, Inc. (RSI) entered into a contract of lease for portions of the property to enable RSI to operate a grade school. Petitioner filed two actions: (1) a Petition with the Securities and Exchange Commission (SEC) on December 5, 1995, seeking to declare the lease contract void for being ultra vires and to prohibit AHFI from engaging in the school business; and (2) a Complaint for recovery of possession with damages before the Regional Trial Court (RTC) of Quezon City on April 1, 1996, alleging that AHFI had no right to lease the property it did not own, that the lease was without petitioner’s consent, and that the school operation violated the title restriction. Private respondents moved to dismiss the RTC complaint on grounds of litis pendentia and forum shopping, citing the pending SEC case. The RTC granted the motion to dismiss, ruling that the two cases raised the same issues. Petitioner’s motion for reconsideration was denied.

ISSUE

Was the RTC correct in dismissing the complaint on the grounds of litis pendentia and forum shopping?

RULING

No. The Supreme Court reversed the RTC’s dismissal. The requisites of litis pendentia are: (1) identity of parties; (2) identity of rights asserted and reliefs prayed for, founded on the same facts; and (3) identity such that any judgment in one case would amount to res judicata in the other. While there was identity of parties, there was no identity of rights asserted or reliefs prayed for. The SEC Petition focused on the corporate power of AHFI, assailing its act of operating a school through RSI and the lease contract as ultra vires acts beyond its corporate charter. The RTC Complaint focused on petitioner’s proprietary rights as owner, seeking to nullify the lease contract because AHFI was not the owner, to recover possession, and to claim damages and back rentals due to the alleged illegal use and violation of the title restriction. A judgment in the SEC case would not resolve the issues of possession, contract validity, and damages before the RTC, and vice versa. Consequently, there was no forum shopping as the issues were not identical. The Court noted that petitioner had manifested the withdrawal of its SEC petition, removing any impediment to the RTC case. The case was remanded to the RTC for further proceedings.