G.R. No. 128349 September 25, 1998
BACHRACH CORPORATION, petitioner, vs. THE HONORABLE COURT OF APPEALS and PHILIPPINE PORTS AUTHORITY, respondents.

FACTS

Petitioner Bachrach Corporation entered into two 99-year lease contracts with the Philippine government for areas at the Manila Port Area. President Corazon Aquino issued Executive Order No. 321 transferring the management of the Port Area to respondent Philippine Ports Authority (PPA). PPA increased Bachrach’s rental rates by 1,500%, which Bachrach refused to pay. On March 23, 1992, PPA filed an unlawful detainer case (Civil Case No. 138838) against Bachrach for non-payment of rent. The Metropolitan Trial Court (MeTC) ordered Bachrach’s eviction on April 27, 1993. The Regional Trial Court (RTC) affirmed this decision on September 21, 1993, and the Court of Appeals affirmed it on July 29, 1994. The decision became final and executory on May 20, 1995. Meanwhile, on March 25, 1995, while a motion for reconsideration was pending in the Court of Appeals, Bachrach filed a complaint for specific performance (Civil Case No. 95-73399) against PPA before the Manila RTC, alleging that a compromise agreement was perfected on February 4, 1994, superseding the ejectment case. On June 9, 1995, Bachrach applied for a temporary restraining order/preliminary injunction to enjoin the MeTC from issuing a writ of execution/garnishment in the ejectment case. The RTC granted the writ of preliminary injunction on July 13, 1995. PPA filed a petition for certiorari and prohibition (CA-G.R. SP No. 36508) before the Court of Appeals, which was dismissed on September 28, 1995, for being insufficient in form and substance. PPA refiled the petition (CA-G.R. SP No. 38673) on October 11, 1995. On November 12, 1996, the Court of Appeals rendered the assailed decision nullifying the RTC orders and ordering the dismissal of the specific performance case. Bachrach filed the present petition.

ISSUE

Whether the specific performance case (Civil Case No. 95-73399) should be held barred by the unlawful detainer case on the ground of res judicata.

RULING

No. The Supreme Court granted the petition, reversed the decision of the Court of Appeals, and reinstated Civil Case No. 95-73399 and the assailed RTC orders. The Court held that res judicata does not apply because there is no identity of causes of action between the unlawful detainer case and the specific performance case. In the unlawful detainer case, the subject matter is the lease contract and the cause of action is Bachrach’s breach (non-payment of rentals). In the specific performance case, the subject matter is the alleged compromise agreement and the cause of action is PPA’s refusal to comply with it. The evidence required to establish each cause of action is different. The Court also held that the issuance of the writ of preliminary injunction by the RTC was not an improper interference with the final judgment in the ejectment case, as exceptions exist when facts and circumstances transpire that would render execution inequitable or unjust, or when there is a change in the situation of the parties, to prevent the case from being mooted.