SPOUSES
CRISOLOGO ABINES G.R. No. 167900
and
PRISCILLA O. ABINES,
Petitioners, Present:
Panganiban, C.J. (Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr.,
and
Chico-Nazario, JJ.
BANK OF THE PHILIPPINE
ISLANDS and BPI FAMILY BANK, Promulgated:
Respondents.
February 13, 2006
x
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x
YNARES-SANTIAGO,
J.:
This petition for review on
certiorari assails the
On
BPI alleged in the complaint that on
April 23, 1999 and May 26, 2000, petitioners obtained from respondents BPI and
BPI Family Bank a loan in the amount of P22,935,200.00 and P23,162,959.42,
respectively, as evidenced by BPI Promissory Note Nos. 5012531-00 and
1120000014, and secured by two deeds of real estate mortgage. When the petitioners defaulted on their loan
payments, the mortgaged properties were extrajudicially foreclosed and sold at public
auction where BPI emerged as the highest bidder. The bid price of P35,730,184.00, however, did
not cover the total amount owed by petitioners to respondents, hence, BPI sought
the collection of the deficiency amount plus interest.
On the other hand, petitioners filed on
May 13, 2002, a complaint against respondents for accounting in order to determine
the correct amount of principal and outstanding obligations, annulment of foreclosure,
annulment or reformation of documents, annulment of registration of certificate
of sale, redemption, specific performance, injunction, and damages, with an
application for preliminary injunction before the RTC of Cebu City, which was docketed
as Civil Case No. 27700 (REFORMATION CASE).
In their complaint, petitioners assailed
the genuineness and due execution of the promissory notes and deeds of real
estate mortgage. They alleged that the
principal amount and interest on the loan as reflected in these documents are
inaccurate which made the subsequent foreclosure sale invalid.
In their answer, respondents asserted
that the filing of the REFORMATION CASE constituted forum shopping because of
the similarity of the parties and issues with the COLLECTION CASE previously filed
by BPI against petitioners. Respondents thus sought the consolidation of the
two cases or the outright dismissal of the REFORMATION CASE.
On
Respondents’
motion for reconsideration from the omnibus order and a motion to lift
preliminary injunction was denied by the trial court in an order issued on
Respondents appealed to the Court of
Appeals through a petition for certiorari. On
Petitioners’ motion for
reconsideration having been denied, hence, the instant petition on the
following issues: (1) whether the REFORMATION CASE should be dismissed on the
ground of forum shopping; and (2) whether the issuance of the writ of
preliminary injunction was proper.
The petition lacks merit.
Petitioners contend that the issue of
forum shopping was not the proper subject of the petition for certiorari filed by
respondents before the Court of Appeals. They claim that the omnibus order dated June
14, 2002 issued by the trial court did not touch on the issue of forum shopping
but merely resolved petitioners’ application for the writ of preliminary
injunction and respondents’ motion for consolidation. They assert that it is respondents’ motion to
dismiss which squarely touches on the issue of forum shopping which should have
been resolved first.
We
are not persuaded.
The omnibus order categorically
stated that the REFORMATION CASE and the COLLECTION CASE involved different issues
and parties.[7] In
effect, the trial court ruled that there was no forum shopping. Thus, to
require the trial court in the REFORMATION CASE to rule on the issue of forum
shopping in the pending motion to dismiss, as suggested by the petitioners, would
be a puerile exercise. No useful purpose
will be served if the determination of the issue of forum shopping is remanded
to the trial court which has already shown its predisposition to rule that
there was none.
Petitioners next contend that
respondents are estopped from raising the issue of forum shopping because they
have already argued in the COLLECTION CASE that the two cases have no identity
of causes of action. Relying on the
equitable doctrine of estoppel, petitioners posit that respondents should not
be allowed to assert that there is forum shopping in the subject REFORMATION
CASE.
Petitioners’ contention is untenable.
The doctrine of estoppel applies only
to questions of fact and not of law.[8]
Evidently, the determination of whether petitioners are liable for forum
shopping is a question of law that properly belongs to the courts. Moreover, if
we were to uphold petitioners’ contention, then we would effectively allow the
parties to determine for themselves when forum shopping exists, in violation of
the basic precept that estoppel cannot give validity to an act that is
prohibited by law or is against public policy.[9] Undoubtedly,
the public policy considerations behind forum shopping are superior to that of
petitioners’ claim of estoppel.
Petitioners claim that when they
filed the REFORMATION CASE, they were not aware of the pending COLLECTION CASE
filed by respondents against them. Thus,
they posit that they did not misrepresent when they stated in the certificate
of no forum shopping that they were not aware of any pending action involving
the same parties and issues in another court.
Forum shopping is the act of a party
against whom an adverse judgment has been rendered in one forum, of seeking
another opinion in another forum other than by appeal or the special civil
action of certiorari, or the institution of two or more actions or proceedings
grounded on the same cause on the supposition that one or the other court would
make a favorable disposition.[10] The practice of forum shopping is proscribed
because it unnecessarily burdens our courts with heavy caseloads, unduly taxes
the manpower and financial resources of the judiciary and trifles with and
mocks our judicial processes thereby affecting the efficient administration of
justice.[11]
In the case at bar, the records
reveal that the COLLECTION CASE was filed by BPI against petitioners on February
27, 2002, which was subsequently amended on May 6, 2002, while petitioners
filed the REFORMATION CASE against respondents on May 13, 2002. However, petitioners were served with the
summons in the COLLECTION CASE through substituted service only on
An action may be dismissed when there
is another action pending between the same parties for the same cause.[13] This
ground for dismissal is commonly known as litis
pendentia, the requisites of which are: (a) identity of parties or at least
such as representing the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the relief being founded on the same facts;
and (c) the identity in the two cases should be such that the judgment that may
be rendered in one would, regardless of which party is successful, amounts to res judicata in the other.[14]
As to the first requisite,
petitioners and respondents are the same parties in both cases. BPI is the plaintiff while petitioners are the
defendants in the COLLECTION CASE. With
respect to the REFORMATION CASE, petitioners are the plaintiffs while BPI and
BPI Family Bank are the defendants therein. It is of no moment that BPI Family Bank is not
a party-plaintiff in the COLLECTION CASE because what the rule requires is not
absolute identity of parties but merely substantial identity of parties or such
as representing the same interests in both actions. In the case at bar, it is not disputed that
BPI Family Bank represents the same interests as BPI.
As to the second requisite, the
rights asserted by both parties are based on the same promissory notes and real
estate mortgages. In the COLLECTION CASE,
respondents seek to enforce its rights under the promissory notes and real
estate mortgages and would thus have to prove that they are valid and
enforceable; that the subsequent foreclosure is likewise valid; and that there is
still a deficiency after deducting the proceeds of the foreclosure sale from petitioners’
loan obligation.
On the other hand, in the REFORMATION
CASE, petitioners seek to diminish their liability under the promissory notes
and real estate mortgages by proving that the terms do not reflect the correct
amount of principal and interest; that the deficiency amount being demanded by
respondents is erroneous; and that the subsequent foreclosure is void.
Clearly then, the resolution of both
cases revolve on the validity and enforceability of the promissory notes and
real estate mortgages and foreclosure proceedings. A judgment in the COLLECTION CASE will be res judicata in the REFORMATION CASE and
vice versa. The same evidence would be presented and the
same subject matter would be litigated. Thus, in Casil v. Court of Appeals,[15] where
the petitioner filed a case against private respondent for the enforcement of their
agreement while private respondent subsequently filed a case against petitioner
for the rescission of this same agreement, we ruled that the first case would
constitute res judicata in the second
case:
Furthermore,
any judgment in the First Case will serve as res adjudicata to the Second Case.
The requisites of res adjudicata
are as follows:
“(a) The former judgment or order must be
final;
(b) It must be a judgment or order on the
merits, that is, it was rendered after a consideration of the evidence or
stipulations submitted by the parties at the trial of the case;
(c) It must have been rendered by a court
having jurisdiction over the subject matter and the parties; and
(d) There must be, between the first and
second actions, identity of parties, of subject matter and of cause of
action. This requisite is satisfied if
the two actions are substantially between the same parties.”
The
Court of Appeals held that there can be no res
adjudicata, because there is no
identity of causes of action between the two cases. We do not agree. In the
two cases, both petitioner and private respondent brought to fore the validity
of the agreement dated
“The
similarity between the two causes of action is only too glaring. The
test of identity of causes of action lies not in the form of an action but on
whether the same evidence would support and establish the former and the
present causes of action. The difference of actions in the aforesaid
cases is of no moment. In Civil Case
No. 58713, the action is to enjoin PNB from foreclosing petitioner’s
properties, while in Civil Case No. 60012, the action is one to annul the
auction sale over the foreclosed properties of petitioner based on the same
grounds. Notwithstanding a difference in the forms of the two actions, the
doctrine of res judicata still applies considering that the parties were
litigating for the same thing, i.e. lands covered by TCT No. 27307, and more
importantly, the same contentions and evidence as advanced by herein petitioner
in this case were in fact used to support the former cause of action.” (Italics
supplied.)
In
this light, there is identity of subject matter and of causes of action, for
the same evidence presented in the First Case will necessarily be presented in
the Second Case, and the judgment sought in the Second Case will either
duplicate or contradict any judgment in the First Case. It is beyond dispute, therefore, that a
judgment in the First Case will constitute res
adjudicata to bar the Second Case.[16] (Emphasis
supplied)
Similarly, in Victronics Computers, Inc. v. Regional Trial Court, Branch 63,
x x x [A] careful
reading of the allegations in the parties’ respective complaints and motions to
dismiss in the two (2) civil actions below reveals that both assert rights
founded on an identical set of facts which give rise to one basic issue – the validity of the contract in question,
x x x. Civil Case No. 91-2069 actually involves an action for specific
performance; it thus upholds the contract and assumes its validity. Civil Case
No. 91-2192, on the other hand, is for the nullification of the contract on the
grounds of fraud and vitiated consent. While
ostensibly the cause of action in one is opposite to that in the other, in the
final analysis, what is being determined is the validity of the contract.
It would not have been unlikely that in its answer filed in Civil Case No.
91-2192, the petitioner would merely reiterate its allegations in the complaint
in Civil Case No. 91-2069 sustaining and invoking the validity of the purchase
order and setting up lis pendens as a
defense. This is what it exactly did. It would not have been likewise unlikely
that the defense of the private respondents in Civil Case No. 91-2069 would be
one in pursuit of their theory, as plaintiffs, in Civil Case No. 91-2192. Thus,
the identity of rights asserted cannot be disputed. Howsoever viewed, it is beyond cavil that regardless of the decision
that would be promulgated in Civil Case No. 91-2069, the same would constitute
res judicata on Civil Case No. 91-2192 and vice-versa. (Emphasis supplied)
Based on the foregoing, there is no
doubt that a judgment in the COLLECTION CASE will be res judicata in the REFORMATION CASE and vice versa.
The only question that remains to be
resolved is which case should be dismissed. In Compania
General De Tabacos De Filipinas v. Court of Appeals,[18]
we had occasion to summarize the rules in determining which case to dismiss
when litis pendentia arises:
There
is no hard and fast rule in determining which of the actions should be abated
on the ground of litis pendentia, but
through time, the Supreme Court has endeavored to lay down certain criteria to
guide lower courts faced with this legal dilemma. As a rule, preference is given to the first
action filed to be retained. This is in accordance with the maxim Qui prior est tempore, potior est jure.
There are, however, limitations to this rule.
Hence, the first action may be abated if it was filed merely to pre-empt
the later action or to anticipate its filing and lay the basis for its
dismissal. Thus, the bona fides or
good faith of the parties is a crucial element.
A later case shall not be abated if not brought to harass or vex; and
the first case can be abated if it is merely an anticipatory action or, more
appropriately, an anticipatory defense against an expected suit – a clever move
to steal the march from the aggrieved party.
Another
exception to the priority in time rule is the criterion of the more appropriate
action. Thus, an action, although filed later, shall not be dismissed if it is
the more appropriate vehicle for litigating the issues between the parties.
The records of this case show that when
petitioners filed the REFORMATION CASE, they were not aware of the pending
COLLECTION CASE, thus, it does not appear that the REFORMATION CASE was filed
to vex or harass respondents.
The COLLECTION CASE should subsist because
it is the first action filed and the more appropriate vehicle for litigating all
the issues in controversy. In the
REFORMATION CASE, petitioners acknowledge their indebtedness to respondents but
they contest the amounts of the principal, interest and the remaining balance. Clearly, these claims are in the nature of
defenses to the COLLECTION CASE and should be asserted in that case and not in
a separate action. Accordingly, the
subject REFORMATION CASE should be dismissed on the ground of litis pendentia.
Finally,
it may not be amiss to point out that on
WHEREFORE, the
petition is DENIED. The October 7, 2004 Decision of the Court of
Appeals in CA-G.R. SP No. 73606 setting aside the June 14, 2002 Omnibus Order
and September 18, 2002 Order of the Regional Trial Court of Cebu City, Branch
16 in Civil Case No. CEB-27700 and ordering the dismissal of Civil Case No.
CEB-27700, as well as the
SO ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
WE
CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Rollo, pp. 35-47. Penned by Associate Justice Isaias P.
Dicdican and concurred in by Associate Justices Elvi John S. Asuncion and Ramon
M. Bato, Jr.
[2]
[3]
[4]
[5] An
amended complaint was filed on
[6] Rollo, pp. 87-90.
[7]
[8] Tańada v. Cuenco, 103 Phil. 1051, 1093
(1957).
[9] Auyong Hian (Hong Whua Hang) v. Court of Tax
Appeals, G.R. No. L-28782,
[10] Ortigas & Company Limited Partnership v.
Velasco, G.R. Nos. 109645 & 112564, July 25, 1994, 234 SCRA 455, 500.
[11] Progressive Development Corp. Inc. v. Court
of Appeals, 361 Phil. 566, 584 (1999).
[12] Rollo, p. 53.
[13]
RULES OF COURT, Rule 16, Sec. 1(e).
[14] Olayvar v. Olayvar, 98 Phil. 52, 54
(1955).
[15]
349 Phil. 187 (1998).
[16]
[17]
G.R. No. 104019,
[18]
422 Phil. 405, 425 (2001).
[19] Rollo, p. 125. Penned by Judge Gabriel T. Ingles.