GR 141602; (November, 2001) (Digest)
G.R. No. 141602; November 22, 2001
PACSPORTS PHILS., INC., petitioner, vs. NICCOLO SPORTS, INC., respondent.
FACTS
Pacsports Phils., Inc. (PPI) and Niccolo Sports, Inc. (NSI) entered into Exclusive Retail Agreements where PPI supplied golf products on consignment to NSI. The agreements stipulated a three-year term with provisions for termination upon a material breach, provided the breaching party is given 60 days to remedy it. PPI alleged NSI failed to pay obligations amounting to about P1.5 million and unilaterally terminated the contracts. Consequently, PPI filed a complaint for damages with an application for a writ of replevin before the Makati RTC (Branch 141) to recover the unsold inventory. The Makati court issued the writ, but PPI later applied for a preliminary injunction as NSI allegedly concealed the goods.
NSI, claiming PPI committed a material breach by intercepting its customers and underselling, filed its own complaint for breach and confirmation of contract termination before the Quezon City RTC (Branch 91). Each party then moved to dismiss or suspend the other’s case, invoking litis pendentia. The Makati RTC denied NSI’s motion and granted PPI’s application for a preliminary mandatory injunction. The Court of Appeals reversed, holding that the Quezon City case was the preferred action as it sought affirmative relief and was filed by the party who first violated the contract.
ISSUE
Whether the Court of Appeals erred in reversing the Makati RTC’s orders, specifically in finding that the Quezon City case should take precedence over the Makati case based on the rules of litis pendentia.
RULING
Yes, the Court of Appeals erred. The Supreme Court reversed its decision and reinstated the Makati RTC’s orders. The elements of litis pendentia are: (1) identity of parties, (2) identity of rights asserted and relief prayed for, and (3) identity of the two cases such that a judgment in one would constitute res judicata in the other. Here, the third element was absent. The Makati case (Civil Case No. 99-221) was primarily an action for replevin and damages arising from NSI’s alleged breach and wrongful detention of consigned goods. In contrast, the Quezon City case (Civil Case No. Q-99-36797) was an action for breach of contract and damages based on PPI’s alleged acts of customer interception. The causes of action and reliefs sought were not identical.
Furthermore, the Makati case was correctly deemed the preferred action. Jurisprudence establishes that where a replevin suit is filed to recover possession of property, it takes precedence over a later action seeking different reliefs concerning the same property. The consigned goods were in danger of being lost or impaired if left with NSI, justifying the Makati RTC’s issuance of the preliminary mandatory injunction to preserve their value for PPI, the owner. Therefore, the Quezon City case was ordered dismissed without prejudice to NSI pursuing its claims in the Makati proceedings.