2.

SPOUSES ROMEO PAJARES and IDA T. PAJARES vs. REMARKABLE LAUNDRY

AND DRY CLEANING, represented by ARCHEMEDES G. SOLIS
G.R. No. 212690
February 20, 2017

“Breach of contract may give rise to an action for specific performance or rescission
of contract.1 It may also be the cause of action in a complaint for damages filed
pursuant to Art. 1170 of the Civil Code.2 In the specific performance and rescission
of contract cases, the subject matter is incapable of pecuniary estimation; hence
jurisdiction belongs to the Regional Trial Court (RTC). In the case for damages,
however, the court that has jurisdiction depends upon the total amount of the
damages claimed.”

Facts:

Remarkable Laundry and Dry Cleaning filed a Complaint denominated as "Breach of

Contract and Damages" against spouses Romeo and Ida Pajares before the RTC of
Cebu City. Respondent alleged that it entered into a Remarkable Dealer Outlet
Contract with petitioners whereby the latter, acting as a dealer outlet, shall accept
and receive items or materials for laundry which are then picked up and processed
by the former in its main plant or laundry outlet; that petitioners violated Article IV
(Standard Required Quota & Penalties) of said contract, which required them to
produce at least 200 kilos of laundry items each week, when they ceased dealer
outlet operations on account of lack of personnel; that respondent made written
demands upon petitioners for the payment of penalties imposed and provided for in
the contract, but the latter failed to pay; and, that petitioners' violation constitutes
breach of contract. The RTC dismissed the case for lack of jurisdiction.
Respondent filed its Motion for Reconsideration to Court of Appeals. And the CA
rendered the assailed Decision setting aside the Order of the RTC and remanding
the case to the court a quo for further proceedings.
Petitioners sought to reconsider, but were denied. Hence, appealed the Petition.
Issue:
Whether or not the CA erred in declaring that the RTC had jurisdiction over
respondent's Complaint which, although denominated as one for breach of contract,
is essentially one for simple payment of damages.
Ruling:

The Court grants the Petition. The RTC was correct in categorizing Civil Case as an
action for damages seeking to recover an amount below its jurisdictional limit.

In ruling that respondent's Complaint is incapable of pecuniary estimation and that

the RTC has jurisdiction, the CA comported itself with the following ratiocination: A
case for breach of contract [sic] is a cause of action either for specific performance
or rescission of contracts. An action for rescission of contract, as a counterpart of an
action for specific performance, is incapable of pecuniary estimation, and therefore
falls under the jurisdiction of the RTC.

Then in Administrative Circular No. 09-94 this Court declared that "where the claim
for damages is the main cause of action, or one of the causes of action, the amount
of such claim shall be considered in determining the jurisdiction of the court." In
other words, where the complaint primarily seeks to recover damages, all claims for
damages should be considered in determining which court has jurisdiction over the
subject matter of the case regardless of whether they arose from a single cause of
action or several causes of action.

3. HEIRS OF GENEROSO SEBE, GR No. 174497, 2009-10-12

Facts:

spouses Generoso and Aurelia Sebe and their daughter, Lydia Sebe, (the
Sebes) filed with the RTC... complaint against defendants Veronico
Sevilla and Technology and Livelihood Resources Center

Annulment of

Document, Reconveyance and Recovery of Possession of two lots, which

had a total assessed value of P9,910.00, plus damages.

The Sebes claimed that they owned the subject lots but, through fraud,
defendant Sevilla got them to sign documents conveying the lots to him.

the RTC dismissed the case for lack of jurisdiction over the subject
matter considering that the ultimate relief that the Sebes sought was the
reconveyance of title and possession over two lots that had a total
assessed value of less than P20,000.00.

The RTC concluded that... the Sebes should have filed their action with
the Municipal Trial Court (MTC) of Dipolog City.
the Sebes filed a motion for reconsideration.[15] They pointed out that
the RTC mistakenly classified their action as one involving title to or
possession of real property when, in fact, it was a case for the annulment
of the documents... and titles that defendant Sevilla got. Since such an
action for annulment was incapable of pecuniary estimation

Sevilla caused the Sebes to sign documents entitled affidavits of

quitclaim.[24] Being illiterate, they relied on Sevilla's explanation that
what they signed were "deeds of real estate mortgage" covering a loan
that they got from... him.[25] And, although the documents which turned
out to be deeds conveying ownership over the two lots to Sevilla...
defendant Sevilla applied for[28] and obtained free patent titles covering
the two lots on September 23, 1991.[29] Subsequently, he mortgaged the
lots to defendant Technology and Livelihood Resource Center... the Sebes
signed deeds of confirmation of sale covering the two lots.[31] Upon
closer examination, however, their signatures had apparently been
forged.

Issues:

But was the Sebes's action one involving title to, or possession of, real
property or any interest in it or one the subject of which is incapable of
pecuniary estimation?

Ruling:

Whether a court has jurisdiction over the subject matter of a particular

action is determined by the plaintiff's allegations in the complaint and the
principal relief he seeks in the light of the law that apportions the
jurisdiction of courts.[

But, with the amendment of Batas Pambansa 129 by Republic Act 7601,
the distinction between these two kinds of actions has become pivotal.
The amendment expanded the exclusive original jurisdiction of the first
level courts to include real actions involving property with... an assessed
value of less than P20,000.00.

The power of the RTC under Section 19 of Batas Pambansa 129,[45] as

amended,[46] to hear actions involving title to, or possession of, real
property or any interest in it now covers only real properties with
assessed value in... excess of P20,000.00. But the RTC retained the
exclusive power to hear actions the subject matter of which is not
capable of pecuniary estimation.

The Sebes claim ownership because according to them, they never

transferred ownership of the same to anyone. Such title, they insist, has
remained with them untouched throughout the years, excepting only that
in 1991 they constituted a real estate mortgage over it in defendant

Sevilla's favor. The Sebes alleged that defendant Sevilla violated their
right of ownership by tricking them into signing documents of absolute
sale, rather than just a real estate mortgage to secure the loan that they
got from him.

The present action is, therefore, not about the declaration of the nullity of
the documents or the reconveyance to the Sebes of the certificates of
title covering the two lots. These would merely follow after the trial court
shall have first resolved the issue of which between... the contending
parties is the lawful owner of such lots, the one also entitled to their
possession. Based on the pleadings, the ultimate issue is whether or not
defendant Sevilla defrauded the Sebes of their property by making them
sign documents of conveyance rather than just a... deed of real mortgage
to secure their debt to him. The action is, therefore, about ascertaining
which of these parties is the lawful owner of the subject lots, jurisdiction
over which is determined by the assessed value of such lots.

Here, the total assessed value of the two lots subject of the suit is
P9,910.00. Clearly, this amount does not exceed the jurisdictional
threshold value of P20,000.00 fixed by law. The other damages that the
Sebes claim are merely incidental to their main action and, therefore,...
are excluded in the computation of the jurisdictional amount.

Principles:

Whether a court has jurisdiction over the subject matter of a particular

action is determined by the plaintiff's allegations in the complaint and the
principal relief he seeks in the light of the law that apportions the
jurisdiction of courts.

4.

SURVIVING HEIRS OF ALFREDO R. BAUTISTA VS. LINDO 

G.R. No. 208232, March 10, 2014

Facts:

Alfredo R. Bautista (Bautista), petitioner’s predecessor, inherited in 1983 a free-patent land

located in Davao Oriental and covered by OCT No. (1572) P-6144.A few years later, he
subdivided the property and sold it to several vendees, herein respondents, via a notarized deed
of absolute sale dated May 30, 1991. Two months later, OCT No.(1572) P-6144 was canceled
and Transfer Certificates of Title (TCTs) were issued in favor of the vendees.

On August 1994, Bautista filed a complaint for repurchase against respondents before the RTC,
anchoring his cause of action on Section 119 of Commonwealth Act No. (CA) 141, otherwise
known as the “Public Land Act,” which reads:

“SECTION 119. Every conveyance of land acquired under the free patent or homestead
provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal
heirs, within a period of five years from the date of the conveyance.”

During the pendency of the action, Bautista died and was substituted by petitioner, Efipania.
Respondents, Sps. Lindo entered into a compromise agreement with petitioners, whereby they
agree to cede to Epifania 3,230 sq.m..portion of the property as well as to waive, abandon,
surrender, and withdraw all claims and counterclaims against each other. RTC approve the
compromise agreement on January 2011.

Other respondents, filed a Motion to Dismissed on February 2013 alleging lack of jurisdiction of
the RTC on the ground that the complaint failed to state the value of the property sought to be
recovered and alleges that the total value of the properties in issue is only P16,500 pesos. RTC
ruled in favor of the respondent dismissing the case.

Issue: 
Whether or not the RTC erred in granting the motion for the dismissal of the case on the ground
of lack of jurisdiction over the subject matter.

Ratio:

Yes. Jurisdiction of courts is granted by the Constitution and pertinent laws. Jurisdiction of
RTCs, as may be relevant to the instant petition, is provided in Sec. 19 of BP 129.

Issue:
Whether the action filed by petitioners is one involving title to or possession of real property or
any interest therein or one incapable of pecuniary estimation.

Ratio: 
The Court rules that the complaint to redeem a land subject of a free patent is a civil action
incapable of pecuniary estimation.

It is a well-settled rule that jurisdiction of the court is determined by the allegations in the
complaint and the character of the relief sought. In this regard, the Court, in Russell v. Vestil,
wrote that "in determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the
principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim
is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts
or in the RTCs would depend on the amount of the claim." But where the basic issue is
something other than the right to recover a sum of money, where the money claim is purely
incidental to, or a consequence of, the principal relief sought, this Court has considered
such actions as cases where the subject of the litigation may not be estimated in terms of money,
and, hence, are incapable of pecuniary estimation.

Decision:
WHEREFORE, premises considered, the instant petition is hereby GRANTED. The April 25,
2013 and July 3, 2013 Orders of the Regional Trial Court in Civil Case No. (1798)-021 are
hereby REVERSED and SET ASIDE.
The Regional Trial Court, Branch 32 in Lupon, Davao Oriental is ORDERED to proceed with
dispatch in resolving Civil Case No. (1798)-021.
No pronouncement as to costs. 

5.
LOLITA B. COPIOSO, Petitioner, v. LAURO, DOLORES, RAFAEL, ESTEBAN, and CORAZON, all
surnamed COPIOSO, and COURT OF APPEALS, Respondents

FACTS : On 4 July 2000 respondents Lauro, Dolores, Rafael, Esteban and Corazon, all surnamed
Copioso, filed a complaint2 for reconveyance of two (2) parcels of coconut land situated in Banilad,
Nagcarlan, Laguna, against Lolita B. Copioso, spouses Bernabe and Imelda Doria, and the estate of
deceased Antonio Copioso, as well as vendees Dolores Reduca, Mercedes Reduca, Rosario Pascua,
Elvira Bombasi and Federico Casabar. Respondents alleged that they together with their deceased
brother Antonio Copioso were co-owners of the subject property having inherited the same from their
parents, and that through fraud and machination Antonio had the property transferred to his name and
that of spouses Bernabe and Imelda Doria who subsequently sold the same to third parties. When
respondents claimed in a manifestation with motion for bill of particulars that the assessed value of the
subject property was P3,770.00, petitioner Lolita Copioso and spouses Bernabe and Imelda Doria
separately moved to dismiss the complaint on the ground that it was the Municipal Trial Court (MTC) and
not the Regional Trial Court (RTC) that had jurisdiction over the case considering that the assessed value
of the property was lower than P20,000.00. The trial court in its twin orders of 5 and 12 September 2000
denied the motions to dismiss holding that since the subject matter of the action was beyond pecuniary
estimation it was properly within its jurisdiction.3 Lolita Copioso's Motion for Reconsideration was
denied,4 hence, she filed with the Court of Appeals a petition for certiorari and prohibition praying for the
annulment of the twin orders of the trial court. The appellate court denied the petition thus affirming the
jurisdiction of the RTC over the complaint for reconveyance. Motion for reconsideration thereon was
similarly denied by the appellate court, hence this petition.
ISSUE :

HELD : The law on jurisdiction of trial courts over civil cases is neither ambiguous nor confusing. Sec. 33,
par. (3), in relation to Sec. 19 par. (2) of B.P. 129 as amended by RA 7691, deals with civil cases capable
of pecuniary estimation. On the other hand, Sec. 33, par. (3), in relation to Sec. 19, par. (1), applies to
cases incapable of pecuniary estimation

Sec. 33, par. (3), in relation to Sec. 19, par. (2), of B.P. 129, as amended by RA 7691, provides that in
civil cases involving sum of money or title to, possession of, or any interest in real property, jurisdiction is
determined on the basis of the amount of the claim or the assessed value of the real property involved,
such that where the sum of money or the assessed value of the real property does not exceed
P20,000.00, or P50,000.00 in Metro Manila, jurisdiction lies with the MTC; and where it exceeds that
amount, jurisdiction is vested with the RTC

Indeed, the present dispute pertains to the title, possession and interest of each of the contending parties
over the contested property the assessed value of which falls within the jurisdictional range of the MTC.
Nonetheless, the nature of the action filed, the allegations set forth, and the reliefs prayed for, forestall its
cognizance by the MTC

Clearly, this is a case of joinder of causes of action which comprehends more than the issue of title to,
possession of, or any interest in the real property under contention but includes an action to annul
contracts, reconveyance or specific performance, and a claim for damages, which are incapable of
pecuniary estimation and thus properly within the jurisdiction of the RTC.

As correctly opined by the appellate court, if the only issue involved herein is naked possession or bare
ownership, then petitioner Lolita Copioso would not be amiss in her assertion that the instant complaint
for reconveyance, considering the assessed value of the disputed property, falls within the exclusive
jurisdiction of the MTC. But as herein before stated, the issue of title, ownership and/or possession
thereof is intertwined with the issue of annulment of sale and reconveyance hence within the ambit of the
jurisdiction of the RTC. The assessed value of the parcels of land thus becomes merely an incidental
matter to be dealt with by the court, when necessary, in the resolution of the case but is not determinative
of its jurisdiction.

6.

Pryce Corporation v PAGCOR 

GR No. 157480 
May 6, 2005  

RESCISSION OR TERMINATION  

FACTS: PAGCOR set up a casino in Pryce Plaza Hotel for a period of 3 years. However, there
has been interruptions in the operations which ultimately caused the operations to cease
prematurely upon order of the Office of the President.   

ISSUE: 
(1) Whether or not Pryce is entitled to future rentals as provided in the contract even if
PAGCOR contends, as the CA ruled, that Article 1659 of the Civil Code governs; hence, PPC
is allegedly no longer entitled to future rentals, because it chose to rescind the Contract. 
(2) Whether or not PAGCOR should be exempt from complying with its contractual
obligations due to fortuitous events 
(3) Whether or not the future rentals constitute a penalty clause  

CA: The CA ruled that the PAGCOR'S pretermination of the Contract of Lease was
unjustified. The appellate court explained that public demonstrations and rallies could not be
considered as fortuitous events that would exempt the gaming corporation from complying
with the latter's contractual obligations. Therefore, the Contract continued to be effective
until PPC elected to terminate it on November 25, 1993.  

Regarding the contentions of PPC, the CA held that under Article 1659 of the Civil Code, PPC
had the right to ask for (1) rescission of the Contract and indemnification for damages; or
(2) only indemnification plus the continuation of the Contract. These two remedies were
alternative, not cumulative, ruled the CA.  

As PAGCOR had admitted its failure to pay the rentals for September to November 1993,
PPC correctly exercised the option to terminate the lease agreement.  

-------------------------------------------------------------------------------------------------------
-------- APPLICABLE LAW/S: • Art. 1659. If the lessor or the lessee should not comply with
the obligations set forth in Articles 1654 and 1657, the aggrieved party may ask for the
rescission of the contract and indemnification for damages, or only the latter, allowing the
contract to remain in force. (1556)  

• Art. 1654. The lessor is obliged:     (1) To deliver the thing which is the object of the
contract in such a condition as to render it fit for the use intended;     (2) To make on the
same during the lease all the necessary repairs in order to keep it suitable for the use to
which it has been devoted, unless there is a stipulation to the contrary;     (3) To maintain
the lessee in the peaceful and adequate enjoyment of the lease for the entire duration of
the contract. (1554a)  

• Art. 1159. Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith. (1091a)  

• Art. 1226. In obligations with a penal clause, the penalty shall substitute the indemnity for
damages and the payment of interests in case of noncompliance, if there is no stipulation to
the contrary. Nevertheless, damages shall be paid if the obligor refuses to pay the penalty
or is guilty of fraud in the fulfillment of the obligation.  

The penalty may be enforced only when it is demandable in accordance with the provisions
of this Code. (1152a)  

• Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has
been partly or irregularly complied with by the debtor. Even if there has been no
performance, the penalty may also be reduced by the courts if it is iniquitous or
unconscionable.  

• Art. 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be

equitably reduced if they are iniquitous or unconscionable.  

-------------------------------------------------------------------------------------------------------
------- 
HELD: (1) Pryce is entitled to future rentals as the provisions are not contrary to law,
morals, public order, or public policy.  

The above provisions leave no doubt that the parties have covenanted 1) to give PPC the
right to terminate and cancel the Contract in the event of a default or breach by the lessee;
and 2) to make PAGCOR fully liable for rentals for the remaining term of the lease, despite
the exercise of such right to terminate. Plainly, the parties have voluntarily bound
themselves to require strict compliance with the provisions of the Contract by stipulating
that a default or breach, among others, shall give the lessee the termination option, coupled
with the lessor's liability for rentals for the remaining term of the lease. Article XX (c)
provides that, aside from the payment of the rentals corresponding to the remaining term of
the lease, the lessee shall also be liable "for any and all damages, actual or consequential,
resulting from such default and termination of this contract." Having entered into the
Contract voluntarily and with full knowledge of its provisions, PAGCOR must be held bound
to its obligations. It cannot evade further liability for liquidated damages.  

(2) PAGCOR is not exempt from complying with the provisions as rallies and demonstrations
are not considered fortuitous events.  

In this case, PAGCOR's breach was occasioned by events that, although not fortuitous in
law, were in fact real and pressing. From the CA's factual findings, which are not contested
by either party, we find that PAGCOR conducted a series of negotiations and consultations
before entering into the Contract. It did so not only with the PPC, but also with local
government officials, who assured it that the problems were surmountable. Likewise,
PAGCOR took pains to contest the ordinances before the courts, which consequently
declared them unconstitutional. On top of these developments, the gaming corporation was
advised by the Office of the President to stop the games in Cagayan de Oro City, prompting
the former to cease operations prior to September 1993.  

Also worth mentioning is the CA's finding that PAGCOR's casino operations had to be
suspended for days on end since their start in December 1992; and indefinitely from July
15, 1993, upon the advice of the Office of President, until the formal cessation of operations
in September 1993. Needless to say, these interruptions and stoppages meant that PAGCOR
suffered a tremendous loss of expected revenues, not to mention the fact that it had fully
operated under the Contract only for a limited time.  

(3) Pryce's right to penalty is affirmed but proved iniquitous.  

While petitioner's right to a stipulated penalty is affirmed, we consider the claim for future
rentals to the tune of P7,037,835.40 to be highly iniquitous. The amount should be
equitably reduced. Under the circumstances, the advanced rental deposits in the sum of
P687,289.50 should be sufficient penalty for respondent's breach.  

Accordingly, respondent is ordered to pay petitioner the additional amount of P687,289.50

as penalty, which may be set off or applied against the former's advanced rental deposits.  

OTHER NOTES: 
In legal contemplation, the termination of a contract is not equivalent to its rescission.
When an agreement is terminated, it is deemed valid at inception. Prior to termination, the
contract binds the parties, who are thus obliged to observe its provisions. However, when it
is rescinded, it is deemed inexistent, and the parties are returned to their status quo ante.
Hence, there is mutual restitution of benefits received. The consequences of termination
may be anticipated and provided for by the contract. As long as the terms of the contract
are not contrary to law, morals, good customs, public order or public policy, they shall be
respected by courts. The judiciary is not authorized to make or modify contracts; neither
may it rescue parties from disadvantageous stipulations. Courts, however, are empowered
to reduce iniquitous or unconscionable liquidated damages, indemnities and penalties
agreed upon by the parties.  

DIFFERENCE BETWEEN RESCISSION & TERMINATION RESCISSION (OR RESOLUTION)

 • Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of
the obligors should not comply with what is incumbent upon him.  

The injured party may choose between the fulfillment and the rescission of the obligation,
with the payment of damages in either case. He may also seek rescission, even after he has
chosen fulfillment, if the latter should become impossible.  

The court shall decree the rescission claimed, unless there be just cause authorizing the
fixing of a period.  

This is understood to be without prejudice to the rights of third persons who have acquired
the thing, in accordance with Articles 1385 and 1388 and the Mortgage Law. (1124)  

• Art. 1659. If the lessor or the lessee should not comply with the obligations set forth in
Articles 1654 and 1657, the aggrieved party may ask for the rescission of the contract and
indemnification for damages, or only the latter, allowing the contract to remain in force.
(1556)  

• To rescind is to declare a contract void in its inception and to put an end to it as though it
never were. It is not merely to terminate it and release parties from further obligations to
each other but to abrogate it from the beginning and restore the parties to relative positions
which they would have occupied had no contract ever been made.  

• Rescission has likewise been defined as the "unmaking of a contract, or its undoing from
the beginning, and not merely its termination." Rescission may be effected by both parties
by mutual agreement; or unilaterally by one of them declaring a rescission of contract
without the consent of the other, if a legally sufficient ground exists or if a decree of
rescission is applied for before the courts  

TERMINATION (OR CANCELLATION) 

• The termination or cancellation of a contract would necessarily entail enforcement of its
terms prior to the declaration of its cancellation in the same way that before a lessee is
ejected under a lease contract, he has to fulfill his obligations thereunder that had accrued
prior to his ejectment. However, termination of a contract need not undergo judicial
intervention.
 •  "end in time or existence; a close, cessation or conclusion." With respect to a lease or
contract, it means an ending, usually before the end of the anticipated term of such lease or
contract, that may be effected by mutual agreement or by one party exercising one of its
remedies as a consequence of the default of the other

7.
Lajave vs. Javellana (2018)
Petitioners: Lajave Agricultural Management and Development Enterprises, lnc.
Respondents: Spouses Agustin Javellana and Florence Apilis-Javellana
Ponente: Peralta (Third Division)
Topic: Remedial Law

SUMMARY: Lessor Javellanas filed a complaint for unlawful detainer against lessee Lajave
invoking the expiration of the lease contract. During the pendency of such case, Javellanas filed
a complaint for collection of sum of money against Lajave to recover deficiency in rentals prior
to the demand made by Javellanas for Lajave to vacate.
DOCTRINE: It must be emphasized anew that in forcible entry or unlawful detainer cases, the
only damage that can be recovered is the fair rental value or the reasonable compensation for
the use and occupation of the leased property. The reason for this is that in such cases, the only
issue raised in ejectment cases is that of rightful possession; hence, the damages which could
be recovered are those which the plaintiff could have sustained as a mere possessor, or those
caused by the loss of the use and occupation of the property, and not the damages which he
may have suffered but which have no direct relation to his loss of material possession.
Moreover, in unlawful detainer, the recoverable damages are reckoned from the time the
possession of the property becomes unlawful.
FACTS:
On July 7, 1987, Agustin Javellana's (Agustin) father, the late Justice Luis Javellana,
executed a Deed of Absolute Sale transferring ownership of a property containing an area of
forty-nine (49) hectares located in Silay City, Negros Occidental in favor of Agustin and his six
(6) siblings. The ownership over the remaining area of the Silay City property was transferred to
Agustin and his co-owners through intestate succession when the late Justice Javellana passed
away on August 25, 1993 without leaving any last will and testament.
On May 13, 1998, for the purpose of planting sugarcane and other agricultural crops,
petitioner Lajave Agricultural Management and Development Enterprises, Inc. (Lajave) entered
into a Contract of Lease4 with Agustin for the lease of the latter's portion of the property,
consisting of seven (7) hectares of sugar land in Hacienda San Isidro, Silay City for a period of
ten (10) years, beginning with the crop year 1988-1989 to 1997-1998. The property is covered
by Transfer Certificate of Title No. T-7203 of the Register of Deeds of Silay City. Lajave agreed
that it shall pay Agustin an annual rental of thirteen (13) piculs of sugar per hectare of the land.
It was also agreed therein that upon the expiration of the term of the lease or any extension and
renewals thereof, Lajave would peaceably and voluntarily surrender to Agustin the land leased
without need of demand.
After the death of Agustin's father, Lajave continued to lease the said property in Silay
City and even expanded the coverage of the lease to include the other shares of Agustin in
other properties he inherited from his father located in Barangay Matab-ang, Talisay City,
Negros Occidental, and covered by Transfer Certificate of Title No. T-14212 of the Register of
Deeds of Negros Occidental. No new contract of lease was executed for these additional areas.
 When the contract of lease expired after the crop year 1997-1998, Lajave continued to
use and occupy the sugar farms in Hacienda San Isidro in Silay City without any renewal or
extension of the contract. Agustin alleged that Lajave's occupancy was merely tolerated. Lajave
paid Agustin the annual compensation for the use and occupancy of the said properties, but the
latter alleged that they were never apprised of how the annual rental was determined and the
payment of lease rentals was more often delayed.
Thus, on March 1, 2010, Agustin sent a demand letter6 to Lajave to vacate the property
in Silay City. The same demand to vacate was reiterated in a letter dated March 5, 2012.
Subsequently, on March 5, 2012, Agustin also sent a demand letter to Lajave to vacate the
property in Talisay City. However, despite demands to vacate the subject properties, Lajave
continued to occupy the latter.
Thus, on March 26, 2012, spouses Javellana filed a Complaint for unlawful detainer in
the Municipal Trial Court in Cities (MTCC), Silay City, docketed as Civil Case No. 1149-C,
involving the property in Hacienda San Isidro, Silay City. On July 16, 2012, Agustin filed another
Complaint for unlawful detainer in the MTCC, Talisay City, docketed as Civil Case No. (12)-925,
pertaining to the property in Hacienda Sta. Maria, Talisay City. Both cases were dismissed for
lack of jurisdiction to try the case (Civil Case No. 1149-C) and lack of cause of action and
jurisdiction (Civil Case No. 12-925).
Agustin also claimed that from January 22, 2003 to June 25, 2010, Lajave paid the total
amount of P928,928.27 only as rentals for the use and occupancy of the leased property in
Silay City. However, Agustin averred that based on the statistics provided by the Sugar
Regulatory Administration on the national average millsite composite price of sugar, Lajave
should have paid the total amount of P1,253,423.15, thus, there is still an unpaid balance of
P324,494.88.
On September 24, 2012, albeit the pendency of the unlawful detainer cases, Agustin and
his wife also filed a Complaint for collection of sum of money, docketed as Civil Case No. 12-
41648 representing the deficiency in rentals paid for Lajave's use and occupancy of the
properties covering the period 2000-2001 up to 2008-2009. ·
The MeTC dismissed the complaint for collection of sum of money as it would violate the
rule on splitting of cause of action. The RTC affirmed. The CA reversed.
ISSUES:

 WoN the complaint for collection of sum of money violated the rule on forum shopping
o NO. However, in determining whether a party violated the rule against forum
shopping, the most important factor to consider is whether the elements of litis
pendentia concur, to reiterate: "(a) [there isJ identity of parties, or at least, such
parties who represent the same interests in both actions; (b) [there is] identity of
rights asserted and relief prayed for, the relief being founded on the same facts;
and (c) [that] the identity with respect to the two preceding particulars in the two
cases is such that any judgment that may be rendered in the pending case,
regardless of which party is successful, would amount to res judicata in the other
case."
 o A perusal of the records shows that the second and third requirements are
lacking. While the complaints appear to involve the the same parties and
properties, we find, however, no identity of causes of action. In the unlawful
detainer cases filed by Agustin, in view of Lajave's failure to vacate the subject
properties and non-payment of rentals, his cause of action stemmed from the
prejudice he suffered due to the loss of possession of his properties and the
damages incurred after the dispossession.
o Meanwhile, in the complaint for collection of sum of money, the same was
founded upon alleged violation of Lajave, as lessee, of certain stipulations with
regard to payment of the lease, i.e., whether' Lajave correctly paid the rental fees
for the subject period as stipulated in the lease agreement.
o It must be emphasized anew that in forcible entry or unlawful detainer cases, the
only damage that can be recovered is the fair rental value or the reasonable
compensation for the use and occupation of the leased property. The reason for
this is that in such cases, the only issue raised in ejectment cases is that of
rightful possession; hence, the damages which could be recovered are those
which the plaintiff could have sustained as a mere possessor, or those caused by
the loss of the use and occupation of the property, and not the damages which
he may have suffered but which have no direct relation to his loss of material
possession.
o Moreover, in unlawful detainer, the recoverable damages are reckoned from the
time the possession of the property becomes unlawful. In the instant case, the
initial demand to vacate was only made on March 1, 2010, thus, it was only after
said demand that Lajave's continued possession of the leased properties
became unlawful. Prior to the lapse of the fifteen-day period to vacate the
property as stated in the demand letter, the damages sustained from January
2003 to February 2010 do not have a direct relation to Agustin's loss of material
possession since they do not result from Lajave's refusal to vacate the leased
premises. These damages must be claimed in an ordinary action, as in the
subject complaint for collection of sum of money.
 WoN the complaint for collection of sum of money violated the rule against splitting a
single cause of action
o NO. An action for collection of sum of money may not be properly joined with the
action for ejectment. The former is an ordinary civil action requiring a full-blown
trial, while an action for unlawful detainer is a special civil action which requires a
summary procedure.
o Agustin's filing of a complaint for collection of sum of money other than those
sustained as a result of their dispossession or those caused by the loss of their
use and occupation of their properties could not thus be considered as splitting of
a cause of action. The cause of action is different. There is no splitting of action
because the complaint for collection of money prays for the payment of the
differential amount representing the unpaid balance in rental fees after the
deduction of the actual payment made by Lajave. Since the damages prayed for
in the collection case before the MeTC pertain to deficiency in the rental
 payments for the contested period before the dispossession, the claims have no
direct relation to the loss of possession of the premises. Insofar as the collection
case is concerned, Agustin's claim had to do with Lajave's deficiency in the
payment of rentals only, without regard to the unlawfulness of the occupancy.
This cannot be litigated in the ejectment suits before the MeTC by reason of
misjoinder of causes of action
 WoN the complaint for collection of sum of money violated the rule on litis pendentia
o NO. As to the third requisite of litis pendentia - that the identity between the
pending actions, with respect to the parties, rights asserted and reliefs prayed
for, is such that any judgment rendered on one action will, regardless of which is
successful, amount to res judicata in the action under consideration - the same is
not present, hence, litis pendentia may not be invoked to dismiss Agustin's
complaint for collection of sum of money.
o Res judicata will not apply because the court in an unlawful _detainer case has
no jurisdiction over claims for damages other than the use and occupation of the
premises and attorney's fees. Agustin's filing of an independent action for
collection of sum of money other than those sustained as a result of their
dispossession or those caused by the loss of their use and occupation of their
properties could not thus be considered as splitting of a cause of action. The
causes of action in the subject cases are not the same; the rights violated are
different; and the reliefs sought are also different. Hence, Civil Case No. 12-
41648 stands to be reinstated and remanded to the Metropolitan Trial Court of
Quezon City for further proceedings.

NOTES: Petition DENIED.