UNITED OVERSEAS BANK G.R.
Nos. 159669 &
PHILS. (formerly
BANK),
Petitioner, Present:
QUISUMBING,
J.,
- versus
- Chairperson,
CARPIO,
CARPIO
MORALES,
TINGA,
and
ROSEMOORE MINING & DEVE- VELASCO, JR., JJ.
LOPMENT CORP. and DRA.
Respondents. Promulgated:
________________
x----------------------------------------------------------------------------x
Tinga, J.:
We resolve these two consolidated
cases, which though with distinct courts of origin, pertain to issues stemming from
the same loan transaction.
The antecedent facts follow.
Respondent Rosemoor Mining and
Development Corporation (Rosemoor), a Philippine mining corporation with
offices at Quezon City, applied for and was granted by petitioner Westmont Bank[1]
(Bank) a credit facility in the total amount of P80 million consisting of
P50,000,000.00
as long term loan and P30,000,000.00
as revolving credit line.[2]
To secure the credit facility, a lone
real estate mortgage agreement was executed by Rosemoor and Dr. Lourdes Pascual
(Dr. Pascual), Rosemoor’s president, as mortgagors in favor of the Bank as
mortgagee in the City of
Rosemoor
subsequently opened with the Bank four (4) irrevocable Letters of Credit (LCs)
totaling US$1,943,508.11.[8] To
cover payments by the Bank under the LCs, Rosemoor proceeded to draw against
its credit facility and thereafter executed promissory notes amounting collectively
to P49,862,682.50.[9] Two (2) other promissory notes were also
executed by Rosemoor in the amounts of P10,000,000.00
and P3,500,000.00,
respectively, to be drawn from its
revolving credit line.[10]
Rosemoor defaulted in the payment of
its various drawings under the LCs and promissory notes. In view of the default,
the Bank caused the extra-judicial foreclosure of the Nueva Ecija properties on
On
The
foregoing facts led to Rosemoor’s filing of separate complaints against the
Bank, one before the Regional Trial Court of Manila (Manila RTC) and the other
before the Regional Trial Court of Malolos, Bulacan (Malolos RTC).
The
On
The
Bank moved for the dismissal of the original and amended complaints on the
ground that the venue had been improperly laid.[17]
The motion was denied by the trial court through an Omnibus Resolution dated
Rosemoor’s
prayer in the Second Amended Complaint, which was filed in November of 1999, reads
as follows:
WHEREFORE, plaintiff
Rosemoor Mining & Development Corporation respectfully prays that, after
trial of the issues, this court promulgate judgment –
1. Directing Westmont to render an accounting of the loan
account of Rosemoor under the Long Term Loan Facility and the Revolving Credit Line
at least up to the dates of foreclosure of Rosemoor’s mortgaged properties on
May 22, 1998 and August 18, 1998, showing among others (a) the sums of money
paid by Rosemoor or otherwise debited from its deposit account in payment of
the loans it had obtained from Westmont to cover the cost of the machinery to
be imported under the Unpaid LCs and under LC No. 97-058 for the tiling plant,
as well as for working capital, and (b) all interests, penalties and charges
imposed on the loans pertaining to the Unpaid LCs and LC No. 97-058 and for
which Westmont had foreclosed Rosemoor’s and Dra. Pascual’s real estate
mortgage; (c) the amount of import and customs duties, demurrage, storage and
other fees which Rosemoor had paid or which was otherwise debited from Rosemoor’s
deposit account, in connection with the importation of the tiling plant and as
a consequence of the non-release thereof by Westmont;
2. Ordering all the defendants jointly and severally to
pay to Rosemoor, by way of actual damages, the dollar equivalent of the amounts
in (1) (a), (b) and (c) at the exchange rate prevailing at the time of the
opening of the LCs;
3. Ordering defendants jointly and severally to pay to
Rosemoor actual damages for operational losses suffered by Rosemoor due to its
failure to use the tiling plaint which Westmont had refused to release to
Rosemoor, in such amount as may be proven at the trial;
4. Directing the
defendants jointly and severally to pay, by way of correction for the public
good, exemplary damages in the amount of P
500,000.00 each;
5. Ordering defendants jointly and severally to
indemnify Rosemoor in the sum of P350,000.00,
representing attorney’s fees and litigation expenses incurred by Rosemoor for
the protection and enforcement of its rights and interests.
Plaintiff prays for further and other
relief as may be just and equitable under the circumstances. [19]
On
Manila
RTC denied the motion to dismiss.[22] It also
denied the
Bank’s
motion for reconsideration of the order of denial.[23]
The
Bank challenged the Manila RTC’s denial of the Bank’s second motion to dismiss
before the Court of Appeals, through a petition for certiorari. The appellate court dismissed the petition in
a Decision dated
In
the Petition for Review on Certiorari in G.R. No. 163521, the Bank argues that
the Court of Appeals erred in holding that no forum-shopping attended the
actions brought by Rosemoor.[26]
The
Malolos Case (G.R. No. 159669)
After
the complaint with the Manila RTC had been lodged, on
with
Urgent Prayer for Temporary Restraining Order and/or Preliminary Injunction.[27]
In
the Malolos case, Rosemoor and Dr. Pascual alleged that the redemption period
for the Bulacan properties would expire on P80
million and the other for P48
million, when the total approved loan was only for P80 million. The Bank later
released only the amount of P10
million out of the P30
million revolving credit line, to the prejudice of Rosemoor, they added.[29]
The
Petition’s prayer reads as follows:
WHEREFORE, premises considered, it
is most respectfully prayed that this Honorable Court –
1. Issue ex-parte
a temporary restraining order before the matter could be heard on notice to
restrain and enjoin respondent BANK from proceeding with its threatened
consolidation of its titles over the subject properties of petitioner Rosemoor
in San Miguel, Bulacan covered by TCT Nos. 42132; 42133; 42134; 42135; 42136
and RT 34569 (T-222448) on March 16, 2002 or at any time thereafter; that the
respondent Register of Deeds for the Province of Bulacan be enjoined and
restrained from registering any document(s) submitted and/or to be submitted by
respondent BANK consolidating its titles over the above-named properties of
petitioner Rosemoor in San Miguel, Bulacan; and likewise, that the Register of
Deeds for the province of Bulacan be restrained and enjoined from canceling the
titles of Rosemoor over its properties, namely, TCT Nos. 42132; 42133; 42134;
42135; 42136 and RT 34569 (T-222448);
2. That after due
notice, a writ of preliminary injunction be issued upon the posting of a bond
in such amount as may be fixed by this Court;
3. That after due
hearing and trial, judgment be rendered in favor of petitioners and against
respondent BANK –
a.
Permanently
enjoining respondent BANK from proceeding with the consolidation of its titles
to the subject properties of Rosemoor covered by TCT Nos. 42132; 42133; 42134;
42135; 42136 and RT 34569 (T-222448); and permanently restraining respondent
Register of Deeds for the Province of Bulacan from registering any document(s)
submitted and/or to be submitted by respondent BANK consolidating its titles
over the above-named properties of petitioner Rosemoor in San Miguel, Bulacan;
and likewise, that the Register of Deeds for the province of Bulacan be
restrained and enjoined from cancelling the titles of Rosemoor over its
properties, namely, TCT Nos. 42132; 42133; 42134; 42135; 42136 and RT 34569
(T-222448);
b. Declaring the foreclosures
of Real Estate Mortgages on the properties of petitioners Rosemoor and
Dra. Pascual to be null and void;
c. Recognizing the ownership in
fee simple of the petitioners over their properties above-mentioned;
d. Awarding to petitioners the
damages prayed for, including attorney’s fees and costs and expenses of
litigation.
Petitioners pray for such
other reliefs and remedies as may be deemed just and equitable in the premises.[30]
As
it did before the Manila RTC, the Bank filed a motion to dismiss on
Despite
receipt of the Order on
Hence,
the Bank filed a second petition for certiorari before the Court of Appeals, where
it assailed the Orders dated
The
two petitions before this Court have been consolidated. We find one common issue
in G.R. No. 159669 and G.R. No. 163521 – whether Rosemoor committed forum-shopping
in filing the two cases against the Bank. The other issues for resolution were
raised in G.R. No. 159669, pertaining as they do to the orders issued by the
Malolos RTC. These issues are whether the
action to invalidate the foreclosure sale was properly laid with the Malolos
RTC even as regards the Nueva Ecija properties; whether it was proper for the Malolos
RTC to declare the Bank in default; and whether it was proper for the Malolos
RTC to deny the Bank’s motion to dismiss through a minute resolution.[40]
Forum-Shopping
The
central issue in these consolidated cases is whether Rosemoor committed forum-shopping
in filing the Malolos case during the pendency of the
The
essence of forum-shopping is the filing of multiple suits involving the same
parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment.[41]
The elements of forum-shopping are: (a) identity of parties, or at least such
parties as represent the same interests in both actions; (b) identity of rights
asserted and reliefs prayed for, the reliefs being founded on the same facts;
and (c) the identity with respect to the two preceding particulars in the two
cases is such that any judgment rendered
in the pending cases, regardless of which party is successful, amount to res
judicata in the other case.[42]
As
to the existence of identity of parties, several bank officers and employees
impleaded in the Amended Complaint in the
As
regards the identity of rights asserted and reliefs prayed for, the main
contention of Rosemoor in the
Moreover, the Malolos case is an
action to annul the foreclosure sale that is necessarily an action affecting
the title of the property sold.[45] It is therefore a real
action which should be commenced and
tried in the province where the
property or part thereof lies.[46] The
It was subsequent to the filing of
the
Clearly, with the foregoing premises,
it cannot be said that respondents committed forum-shopping.
Action to nullify foreclosure sale of
mortgaged properties in Bulacan and
Nueva Ecija before the Malolos RTC
The
Bank challenges the Malolos RTC’s jurisdiction over the action to nullify the foreclosure
sale of the Nueva Ecija properties along with the Bulacan properties. This
question is actually a question of venue and not of jurisdiction,[50]
which if improperly laid, could lead to the dismissal of the case.[51]
The rule on venue of real actions is provided
in Section 1, Rule 4 of the 1997 Rules of Civil Procedure, which reads in part:
Section 1. Venue of Real Actions. Actions affecting
title to or possession of real property, or interest therein, shall be
commenced and tried in the proper court which has jurisdiction over the area
wherein the real property involved, or a portion thereof, is situated.
x x x
The
venue of the action for the nullification of the foreclosure sale is properly
laid with the Malolos RTC although two of the properties together with the
Bulacan properties are situated in Nueva Ecija. Following the above-quoted
provision of the Rules of Court, the venue of real actions affecting properties found in
different provinces
is determined by the singularity or plurality
of the transactions involving said parcels of land. Where said parcels are the object of one and
the same transaction, the venue is in the court of any of the provinces wherein
a parcel of land is situated.[52]
Ironically,
the Bank itself correctly summarized the applicable jurisprudential rule in one
of the pleadings before the Court.[53]
Yet the Bank itself has provided the noose on which it would be hung. Resorting
to deliberate misrepresentation, the Bank stated in the same pleading that “the
Bulacan and Nueva Ecija [p]roperties were not the subject of one single real
estate mortgage contract.”[54]
In the present case, there is only
one proceeding sought to be nullified and that is the extra-judicial mortgage
foreclosure sale. And there is only one initial transaction which served as the
basis of the foreclosure sale and that is the mortgage contract. Indeed,
Rosemoor, through Dr. Pascual, executed a lone mortgage contract where it
undertook to “mortgage the land/real property situated in Bulacan and Nueva Ecija,”
with the list of mortgaged properties annexed thereto revealing six (6)
properties in Bulacan and two (2) properties in Nueva Ecija subject of the
mortgage.
This apparent deliberate
misrepresentation cannot simply pass without action. The real estate mortgage form
supplied to Rosemoor is the Bank’s standard pre-printed form. Yet the Bank
perpetrated the misrepresentation. Blame must be placed on its doorstep. But as
the Bank’s pleading was obviously prepared by its counsel, the latter should
also share the blame. A lawyer shall not do any falsehood, nor consent to the
doing of any in court; nor shall he mislead, or allow the Court to be misled by
any artifice.[55] Both
the Bank’s president and counsel should be made to explain why they should not
be sanctioned for contempt of court.
Propriety of Default Order
The
Court of Appeals did not touch upon the soundness or unsoundness of the order
of default although it is one of the orders assailed by the Bank. However, the
silence of the appellate court on the issue does not improve the legal
situation of the Bank.
To
recall, the Bank filed a motion to dismiss the Malolos case. The Malolos RTC denied
the motion in an Order dated
its
answer to the petition within five (5) days from the receipt of the Order.[57]
The Bank received a copy of the Order on
The
motion for reconsideration[59]
could not have tolled the running of the period to answer for two reasons. One,
it was filed late, nine (9) days after the due date of the answer. Two, it was
a mere rehash of the motion to dismiss; hence, pro forma in nature. Thus, the Malolos RTC did not err in
declaring the Bank in default.
Deviation
from the Prescribed
Content
of an Order
Denying
a Motion to Dismiss
Finally,
the Bank questions the Malolos RTC’s Order dated
The
Bank adverts to the content requirement of an order denying a motion to dismiss
prescribed by Sec. 3, Rule 16 of the Rules of Court. The Court in Lu Ym v.
Nabua[60]
made a thorough discussion on the matter, to quote:
Sec. 3, Rule 16
of the Rules provides:
Sec. 3. Resolution of motion.—After
the hearing, the court may dismiss the action or claim, deny the motion or
order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason
that the ground relied upon is not indubitable.
In every case, the resolution shall state clearly and distinctly the
reasons therefor.
x
x x x
Further,
it is now specifically required that the resolution on the motion shall clearly
and distinctly state the reasons therefor. This proscribes the common practice
of perfunctorily dismissing the motion
for “lack of
merit.” Such cavalier dispositions can
often pose difficulty and misunderstanding on the part of the
aggrieved party in taking recourse therefrom and likewise on the higher court
called upon to resolve the same, usually on certiorari.[61]
The
questioned order of the trial court denying the motion to dismiss with a mere
statement that there are justiciable questions which require a full blown trial
falls short of the requirement of Rule 16 set forth above. Owing to the
terseness of its expressed justification, the challenged order ironically
suffers from undefined breadth which is a hallmark of imprecision. With
its unspecific and amorphous thrust, the issuance is inappropriate to the
grounds detailed in the motion to dismiss.
While the requirement to state clearly and distinctly the reasons for the trial court’s resolutory order under Sec. 3, Rule 16 of the Rules does call for a liberal interpretation, especially since jurisprudence dictates that it is decisions on cases submitted for
decision that
are subject to the stringent requirement of specificity of
rulings under Sec. 1, Rule 36[62]
of the Rules, the trial court’s order in this case leaves too much to the
imagination. (Emphasis supplied.)[63]
The
assailed order disposed of the motion to dismiss in this wise:
x x x x
After a careful scrutiny of
the grounds cited in the Motion to Dismiss and the arguments en contra contained in the Opposition
thereto and finding the Motion to Dismiss to be not well taken as grounds cited
are not applicable to the case at bar, the Court hereby DENIES the instant Motion to
Dismiss.
x x x x[64]
Clearly,
the subject order falls short of the content requirement as expounded in Lu
Ym v. Nabua. Despite the
aberration, however, the Bank was not misled, though it could have encountered
difficulties or inconvenience because of it. Comprehending, as it did, that the
Malolos RTC did not share its position that Rosemoor had engaged in forum-shopping,
it went to great lengths to impress upon
the Court of
Appeals that there was indeed forum-shopping on
Rosemoor’s part. But the appellate court did not likewise agree with the Bank
as it soundly debunked the forum-shopping charge. In
fact, the same forum-shopping argument has been fully ventilated before the
Court but we are utterly unimpressed as we made short shrift of the argument
earlier on. In the ultimate analysis,
therefore, the trial court’s blunder may be overlooked as it proved to be
harmless.
WHEREFORE, considering the foregoing,
the Decision of the Court of Appeals in G.R. 163521 dated
SO ORDERED.
DANTE O. TINGA Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T. CARPIO CONCHITA CARPIO MORALES
Associate
Justice Associate Justice
PRESBITERO J. VELASCO,
JR.
Associate Justice
ATTESTATION
I attest that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson,
Second Division
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, and the Division Chairperson’s Attestation, it is hereby
certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Court’s Division.
REYNATO S. PUNO
Chief Justice
[3]
[16]Impleaded as defendants in
the Second Amended Complaint were Florido Casuela, Avelina Dela Cruz,
Proserfina Cruz, and Rolando Castro. Casuela was included as a former Vice
President of the Bank while Dela Cruz, Cruz, and Castro were impleaded as
incumbent Vice President, Manager, and Senior Officer, respectively, of the
Bank. See Rollo, (G.R. No.
163521), pp.
267-268.
[22]
The
pertinent portion of the Order reads:
There is no forum shopping.
There is forum shopping when in two
or more cases pending there is identity of (a) parties, (b) rights or causes of
action and (c) relief sought, (Buan v.
Lopez, 145 SCRA 34). These requisites are not present in the Bulacan case,
the action is for Injunction with damages, while the case before this Court is
for Accounting, Specific Performance and Damages. Thus, the case of Denville Maritime, Inc. v. Commission on
Audit, 175 SCRA 701 cited[,] by the defendants does not apply.
WHEREFORE, the Motion to Dismiss is
DENIED for lack of merit.
SO ORDERED.
[24]
[37]
WHEREFORE, premises considered, judgment is
hereby rendered in favor of petitioners and against respondents, to wit:
1.
The Writ of Preliminary Injunction issued by this Court on
2.
Declaring as null and void the Real Estate Mortgage
executed by petitioner corporation in favor of respondent Bank (Exhibits “D” and “E”) and the subsequent
foreclosures of such mortgages;
3.
Ordering the respondent United Overseas Bank
·
P2,000,000.00
as moral and exemplary damages unto Dra. Lourdes Pascual (P1,000,000.00
as moral damages; P1,000,000.00
as exemplary damages);
·
P13,000,000.00
unto petitioner Rosemoor Mining and Development Corporation as moral and
exemplary damages (P3,000,000.00
as moral damages and P10,000,000.00
as exemplary damages); and
·
P100,000.00
unto petitioner as attorney’s fees, plus cost of litigation.
SO
ORDERED.
[38]
[39]
[41]Mondragon Leisure and Resorts Corporation v.
United Coconut Planters Bank, G.R. No.
154187,
[44]
[45]Fortune
Motors, (Phils.), Inc. v. Court
of Appeals G.R. No. 76431,
[47]A
personal action is one brought for the recovery of personal property or for the
enforcement of some contract or for the recovery of damages for its breach, or
the recovery of damages for the commission of an injury to the person or
property. See Asset Privatization Trust
v. Court of Appeals, 381 Phil. 530, 550 (2000) citing The Dial Corporation v. Soriano, G.R. No. L-82330,
[51]Rules of Court, Rule 16, Sec. 1(c).
[52]Regalado, Remedial Law Compendium, Vol. 1 (1999 ed.), p. 105, citing El Hogar Filipino v. Seva, 57 Phil. 573 (1932).
[53]Rollo, (G.R. No. 159669), p. 597. Vide Petitioner’s Memorandum. The Bank stated:
“Where the subject matter of
the action involves various parcels of land situated in different provinces,
the venue is determined by the singularity or plurality of the transactions
involving said parcels of land. Thus, where said parcels are the objects of one
and the same transaction, the venue was in the then CFI of any of the provinces
wherein a parcel of land is situated” (Regalado, Remedial Law Compendium, Vol. 1, p. 105). As enunciated by
the Supreme Court in El Hogar Filipino v. Seva (G.R. No. 36627, 19 November
1932), it is only “when various parcels of land or real property situated
in different provinces, are included in one mortgage contract, (that) the Court
of First Instance of the province wherein they are situated or a part thereof
is situated, has jurisdiction to take cognizance of an action for the
foreclosure of said mortgage, and the judgment therein rendered may be executed
in all the other provinces wherever the mortgaged real property may be found.”
[61]Pefianco v. Moral, 379 Phil. 468 (2000);
Intramuros Administration v. Contacto,
450 Phil. 765 (2003).
[62]SECTION
1. Rendition of judgments and final
orders.—A judgment or final order determining the merits of the case shall
be in writing personally and directly prepared by the judge, stating clearly
and distinctly the facts and the law on which it is based, signed by him, and
filed with the clerk of the court.