[G.R. No. 184015 : February 08, 2012]
SPOUSES MARIANO P. MARASIGAN AND JOSEFINA LEAL, PETITIONERS, VS. CHEVRON PHILS., INC., ACCRA INVESTMENTS, CORP., AND ANGARA ABELLO CONCEPCION REGALA & CRUZ, RESPONDENTS.
D E C I S I O N
MENDOZA, J.:
Challenged in this petition is the January 31, 2008 Decision1 of the Court of Appeals (CA), in CA-G.R. CV No. 85223, which reversed and set aside the January 4, 2005 Decision2 of the Regional Trial Court, Branch 61, Gumaca, Quezon (RTC-Gumaca), in Civil Case No. 2448-G, declaring the subject foreclosure sale and the consequent certificate of sale null and void and ordering the petitioners, Spouses Mariano P. Marasigan and Josefina Leal (Spouses Marasigan) to pay respondent Chevron Phils., Inc. (Chevron [formerly Caltex Philippines, Inc.]), moral damages, attorney’s fees and costs of suit.cralaw
The Facts
Records disclose Spouses Marasigan were operators of a gasoline station in Montalban, Rizal, while Chevron is a corporation engaged in the business of refining, manufacturing, storing, distributing, and marketing of fuels, lubricants and other petroleum products. Spouses Marasigan and Chevron entered into a dealership and distributorship agreement wherein the former can purchase petroleum products from the latter on credit. To complete said agreement, Spouses Marasigan executed deeds of real estate mortgage over their properties, as collateral, in favor of Chevron.
Records further show that by September 30, 1993, Spouses Marasigan exceeded their credit line and owed Chevron the amount of P12,075,261.02. Spouses Marasigan failed to pay the obligation despite oral and written demands from Chevron. Thus, Chevron through its counsel, the Angara Abello Concepcion Regala and Cruz (ACCRALAW), initiated foreclosure proceedings by filing a petition for extrajudicial foreclosure against the real estate mortgages executed by Spouses Marasigan in favor of Chevron.
Chevron, through ACCRALAW, was able to foreclose all the real estate mortgages on Spouses Marasigan’s subject properties. Chevron, however, was only able to recover the total amount of P4,925,000.00 from the public auction sales of the mortgaged properties including the sale of the 167.1597 hectare coconut farm property located in Mulanay, Quezon, which was sold for P130,000.00 to the only bidder, ACCRA Investments,Corp. (ACCRAIN).
Subsequently, on November 7, 1995, Chevron filed a complaint (Civil Case No. 95-1619 for Sum of Money entitled “Caltex Philippines, Inc. v. Sps. Mariano P. Marasigan and Mareal Corporation”) against Spouses Marasigan before the RTC, Branch 136, Makati City (RTC-Makati) to recover the deficiency in the amount of P7,667,188.10. Chevron basically alleged therein that Spouses Marasigan’s outstanding obligation as of October 15, 1995 was P7,667,188.10 and that said obligation remained unpaid.
In their Answer, Spouses Marasigan mainly alleged that they were greatly prejudiced because the foreclosure sales on the subject mortgaged properties were illegal and that the bid price of the Mulanay property in particular was shockingly low.
On February 8, 1996, Spouses Marasigan filed a complaint [Civil Case No. 2448-C for Declaration of Nullity and/or Annulment of Foreclosure with Damages entitled “Sps. Mariano P. Marasigan and Josefina Leal Marasigan v. Caltex (Philippines), Inc., ACCRA Investment Corporation, Angara Abello Concepcion Regala & Cruz and Romeo N. Villafranca”] against Chevron, ACCRAIN and ACCRALAW and Sheriff Romeo Villafranca before the RTC-Gumaca. Spouses Marasigan principally alleged therein that the bid price was grossly inadequate and shockingly low which rendered the foreclosure sale fatally defective and the foreclosure proceedings invalid and illegal. Chevron, ACCRAIN and ACCRALAW filed a motion to dismiss citing as ground Spouses Marasigan’s failure to disclose in their certification against forum shopping the pending case filed before the RTC-Makati and the consequent violation of the rule on litis pendentia.
On August 21, 1996, the RTC issued an order3 denying the motion to dismiss, and ruling that there was no forum shopping because there was no decision yet in the RTC-Makati case (Civil Case No. 95-1619) when the RTC-Gumaca case (Civil Case No. 2448-G) was filed and that there were parties in the former who were not parties in the latter.
Chevron, ACCRAIN and ACCRALAW then filed their Answer with Compulsory Counterclaim alleging, among others, that the foreclosure sale was conducted in accordance with law and that the complaint in Civil Case No. 2448-G violated the rule on forum shopping and litis pendentia.
On January 4, 2005, the RTC-Gumaca rendered a decision in favor of Spouses Marasigan and against Chevron, ACCRAIN and ACCRALAW, the dispositive portion of which reads, as follows:
Chevron, ACCRAIN and ACCRALAW appealed to the CA which summed up the issues to be resolved as follow:
On January 31, 2008, the CA rendered a decision reversing and setting aside the RTC decision. The CA ruled that Spouses Marasigan committed forum shopping and that all the elements of litis pendentia are present. Accordingly, Civil Case No. 2448-G, filed by Spouses Marasigan in the RTC-Gumaca was dismissible on the grounds of forum shopping and litis pendentia. The CA ruled as follows:
Aggrieved by the CA decision, Spouses Marasigan filed this petition praying for its reversal and setting aside anchored on the following
Spouses Marasigan argue that the RTC-Gumaca properly denied the respondents’ motion to dismiss on the ground of forum shopping and litis pendentia. Citing the decision of the RTC-Gumaca, Spouses Marasigan claim that Civil Case No. 95-1619 filed by Chevron in the RTC-Makati was for collection with preliminary attachment with prayer for preliminary injunction, and that Mareal Co., Inc. and themselves are the defendants therein. On the other hand, Civil Case No. 2448-G filed by them before the RTC-Gumaca was for declaration of nullity and/or annulment of foreclosure with damages against Chevron, ACCRALAW and ACCRAIN. They further claim that in the Makati RTC case, Chevron endeavored to collect the deficiency arising from the foreclosure of mortgage on the properties of Spouses Marasigan, including their Gumaca property, while in the RTC-Gumaca case, they sought a court declaration that the foreclosure sale, specially the Mulanay property, was a nullity.
Spouses Marasigan also insist that there is no forum shopping because of the diversity of parties in the RTC-Makati case and the RTC-Gumaca case. They argue that in the RTC-Gumaca case, only the Spouses Marasigan stand as plaintiffs while Chevron, ACCRAIN and ACCRALAW are the defendants. They likewise aver that Mareal Co., Inc. is not a party plaintiff in the RTC-Gumaca case and ACCRAIN, ACCRALAW and Romeo Villafranca are not parties in the RTC-Makati case.
The petitioners state that ACCRAIN, ACCRALAW and Villafranca did not join Chevron in the RTC-Makati case. Neither did they participate in, nor claim responsibility for, the acts complained of against Chevron. Said defendants had nothing to do with the deficiency claim and the application, issuance and implementation of the writ of attachment which pertain solely to Chevron. Hence, any judgment that may be rendered in the RTC-Makati case cannot be legally enforced against said defendants because they cannot be held responsible for the acts of Chevron.
Further, according to Spouses Marasigan, the rights alleged to have been violated in the two (2) cases arose out of separate sources. They claim that in the RTC-Makati case, the legal basis for the claim of damages was the application, issuance and implementation of a writ of attachment which resulted in damage to said defendants consisting of damaged reputation, credit standing before the banks and their creditors and the business community; that, in effect, the issues in the RTC-Makati case were basically anchored on the applicability of the legal provisions on damages defined in Articles 2195 to 2232 of the Civil Code and the pertinent provisions of the Rules of Court; that, on the other hand, the issues in the RTC-Gumaca case were based on the application of Article 1491 of the Civil Code which relates to the validity of the acquisition of real property at public or judicial action by officers of the court; and that since the issues in the two (2) civil actions were distinct, they did not engage in forum shopping.
Thus, Spouses Marasigan are adamant that litis pendentia is not a valid ground for the dismissal of the RTC-Gumaca case because a judgment in the RTC-Makati case or vice versa, will not be res judicata on the other.
Spouses Marasigan further argue that the CA violated the rule on venue and jurisdiction when it ruled that the RTC-Makati was the appropriate vehicle for litigating the annulment of foreclosure of the Mulanay property. They add that the RTC-Gumaca is the appropriate vehicle for it because the subject property is located there.
Finally, Spouses Marasigan assert that the CA erred in not appreciating the finding of an anomaly in the conduct of the foreclosure by the respondents; that the respondents did not include the Sheriff of Gumaca in their appeal before the CA; that the Sheriff is an indispensable party to the RTC-Gumaca case; and that Article 1461 of the Civil Code was violated by the acquisition of the Mulanay property by ACCRAIN, an investment arm of ACCRALAW, and controlled by the latter.
On the other hand, the respondents counter, among others, that the petition should have been dismissed outright considering that the petitioners failed to comply with the most basic and express requirements of the Rules of Court; that despite being given the opportunity to do so, the petitioners failed to submit a Verification and Certification and an Affidavit of Service that complies with the 2004 Rules on Notarial Practice; that the petitioners failed to attach material portions of the record, such as their Amended Answer to the complaint in the RTC-Makati case; that the petitioners’ repeated non-compliance with procedural rules, absent special and compelling circumstances to justify the same, is undeserving of a liberal application of the rules; that the petition raises questions of facts; that the petitioners committed forum-shopping in instituting the RTC-Gumaca Case notwithstanding the pendency of the RTC-Makati Case; that the petitioners prayed for the same relief in their complaint in the RTC-Gumaca Case and in their Answer in the Makati Case; that the petitioners are estopped from questioning the jurisdiction of the court in the RTC-Makati case considering that they were the ones who submitted the issues before said court, and prayed for relief from said court; that the petitioners failed to appeal the decision of the Makati RTC rejecting their claim that the foreclosure sale violated Article 1491 of the Civil Code, thus, they are bound by such ruling and that, in any case, there was no violation of Article 1491 by ACCRALAW and ACCRAIN and that the petitioners have no personality to question the foreclosure sale on the ground of Article 1491; and that the foreclosure sale was valid and complied strictly with the requirements of Act No. 3135 and that inadequacy of the bid price is not a ground to annul the foreclosure sale.
THE COURT’S RULING
The petition cannot prosper.
This Court shall first tackle the issue of whether or not the CA correctly ordered the dismissal of the complaint in Civil Case No. 2448-G filed by Spouses Marasigan before the RTC-Gumaca on the grounds of forum shopping and litis pendentia. Simply put, the determinative questions in this petition are: (1) is litis pendentia present? and (2) did petitioners violate the rules on forum shopping? An affirmative answer to these particular questions would necessarily mean that there would be no need to discuss, much less, resolve all the other issues raised in this petition.
The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one forum, seeking another and possibly favorable opinion in another suit other than by appeal or special civil action for certiorari. It is the act of 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. Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the action under consideration.5
Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred to in some decisions as lis pendens and auter action pendant. As a ground for the dismissal of a civil action, it refers to the situation where two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against multiplicity of suits.6
Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties as those representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, 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.
What is pivotal in determining whether forum shopping exists or not is the vexation caused to the courts and parties-litigants by a party who asks different courts and/or administrative agencies to rule on the same or related cases and/or grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different courts and/or administrative agencies upon the same issues.7
In the case at bench, all the requisites of litis pendentia are present. The first element, identity of parties, or at least representing the same interest in both actions, exists. The Court agrees with the ruling of the CA that Chevron and Spouses Marasigan are the same parties in the RTC-Makati Case and the RTC-Gumaca Case. Unquestionably, the plaintiff and the defendants in the RTC-Makati Case are Chevron and Spouses Marasigan as well as Mareal Co., Inc., respectively. On the other hand, the plaintiffs in the RTC-Gumaca Case are the Spouses Marasigan and the defendants therein are Chevron, ACCRAIN and ACCRALAW. The absence of ACCRAIN and ACCRALAW as party plaintiffs in the RTC-Makati case and their additional presence as party defendants in the RTC-Gumaca case would not unfavorably affect the respondents because the rule does not require absolute identity of parties. A substantial identity of parties is enough to qualify under the first requisite. What is important here is that the principal parties - Chevron and Spouses Marasigan - are the same in both cases. The Court held:
The second element, identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts, likewise subsists here. It cannot be denied that the complaint filed in the RTC-Makati was for a Sum of Money while that filed in the RTC-Gumaca was for Declaration of Nullity and/or Annulment of Foreclosure with Damages. Although both cases differ in form or nature, the same facts would be alleged and the same evidence would be presented considering that the resolution of both cases would be based on the validity and enforceability of the same credit lines, real estate mortgages and foreclosure proceedings. Indeed, the true test in determining the identity of causes of action lies not in the form or nature of the actions but rather in the evidence that would be presented.
In this regard, the CA aptly explained this matter, as follows:
Finally, the presence of the third element, that the identity of the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other, cannot be disputed either.
Spouses Marasigan do not deny the fact that the affirmative defense that they raised in the RTC-Makati case was the illegality of the foreclosure sale of the Mulanay property.10 They raised the same issue in the RTC-Gumaca case.11 As correctly ruled by the CA, the judgment in the RTC-Makati with regard to the validity of the foreclosure sale of the Mulanay property will constitute res judicata in the case, and vice versa. The Court also agrees with its ruling that the RTC-Makati case should be the priority case because it was filed earlier and, therefore, the appropriate vehicle for litigating all issues in this case.
The Court having ruled that the CA properly dismissed the petitioners’ complaint due to the presence of litis pendentia and the violation of the rule on forum shopping, there is no need to rule further on the other issues raised by the petitioners and the respondents in this case.cralaw
WHEREFORE, the petition is DENIED.
SO ORDERED.
Velasco, Jr., (Chairperson), Brion,* Peralta, and Abad, JJ., concur.
The Facts
Records disclose Spouses Marasigan were operators of a gasoline station in Montalban, Rizal, while Chevron is a corporation engaged in the business of refining, manufacturing, storing, distributing, and marketing of fuels, lubricants and other petroleum products. Spouses Marasigan and Chevron entered into a dealership and distributorship agreement wherein the former can purchase petroleum products from the latter on credit. To complete said agreement, Spouses Marasigan executed deeds of real estate mortgage over their properties, as collateral, in favor of Chevron.
Records further show that by September 30, 1993, Spouses Marasigan exceeded their credit line and owed Chevron the amount of P12,075,261.02. Spouses Marasigan failed to pay the obligation despite oral and written demands from Chevron. Thus, Chevron through its counsel, the Angara Abello Concepcion Regala and Cruz (ACCRALAW), initiated foreclosure proceedings by filing a petition for extrajudicial foreclosure against the real estate mortgages executed by Spouses Marasigan in favor of Chevron.
Chevron, through ACCRALAW, was able to foreclose all the real estate mortgages on Spouses Marasigan’s subject properties. Chevron, however, was only able to recover the total amount of P4,925,000.00 from the public auction sales of the mortgaged properties including the sale of the 167.1597 hectare coconut farm property located in Mulanay, Quezon, which was sold for P130,000.00 to the only bidder, ACCRA Investments,Corp. (ACCRAIN).
Subsequently, on November 7, 1995, Chevron filed a complaint (Civil Case No. 95-1619 for Sum of Money entitled “Caltex Philippines, Inc. v. Sps. Mariano P. Marasigan and Mareal Corporation”) against Spouses Marasigan before the RTC, Branch 136, Makati City (RTC-Makati) to recover the deficiency in the amount of P7,667,188.10. Chevron basically alleged therein that Spouses Marasigan’s outstanding obligation as of October 15, 1995 was P7,667,188.10 and that said obligation remained unpaid.
In their Answer, Spouses Marasigan mainly alleged that they were greatly prejudiced because the foreclosure sales on the subject mortgaged properties were illegal and that the bid price of the Mulanay property in particular was shockingly low.
On February 8, 1996, Spouses Marasigan filed a complaint [Civil Case No. 2448-C for Declaration of Nullity and/or Annulment of Foreclosure with Damages entitled “Sps. Mariano P. Marasigan and Josefina Leal Marasigan v. Caltex (Philippines), Inc., ACCRA Investment Corporation, Angara Abello Concepcion Regala & Cruz and Romeo N. Villafranca”] against Chevron, ACCRAIN and ACCRALAW and Sheriff Romeo Villafranca before the RTC-Gumaca. Spouses Marasigan principally alleged therein that the bid price was grossly inadequate and shockingly low which rendered the foreclosure sale fatally defective and the foreclosure proceedings invalid and illegal. Chevron, ACCRAIN and ACCRALAW filed a motion to dismiss citing as ground Spouses Marasigan’s failure to disclose in their certification against forum shopping the pending case filed before the RTC-Makati and the consequent violation of the rule on litis pendentia.
On August 21, 1996, the RTC issued an order3 denying the motion to dismiss, and ruling that there was no forum shopping because there was no decision yet in the RTC-Makati case (Civil Case No. 95-1619) when the RTC-Gumaca case (Civil Case No. 2448-G) was filed and that there were parties in the former who were not parties in the latter.
Chevron, ACCRAIN and ACCRALAW then filed their Answer with Compulsory Counterclaim alleging, among others, that the foreclosure sale was conducted in accordance with law and that the complaint in Civil Case No. 2448-G violated the rule on forum shopping and litis pendentia.
On January 4, 2005, the RTC-Gumaca rendered a decision in favor of Spouses Marasigan and against Chevron, ACCRAIN and ACCRALAW, the dispositive portion of which reads, as follows:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant:
- Declaring the foreclosure sale of Mulanay property conducted by Provincial Sheriff of Gumaca on September 12, 1995 as well as the certificate of sale dated September 18, 1995 issued thereto as null and void and hereby ordered the same cancelled and set aside.
- Ordering defendants jointly and severally to pay plaintiffs the amount of Php25,000.00 as moral damages, and the amount of Php50,000.00 as attorney’s fees and costs of the suit.
The defendants counterclaim being merely the result of the filing of the plaintiff’s complaint is hereby dismissed.
SO ORDERED.4
Chevron, ACCRAIN and ACCRALAW appealed to the CA which summed up the issues to be resolved as follow:
1) Whether or not the instant case is dismissible on the grounds of forum shopping and litis pendentia;
2) Whether or not the foreclosure sale can be declared null and void for gross inadequacy of the price;
3) Whether or not appellees are entitled to moral damages, attorney’s fees and costs of suit; and
4) Whether or not the appellants are entitled to their counterclaims.
On January 31, 2008, the CA rendered a decision reversing and setting aside the RTC decision. The CA ruled that Spouses Marasigan committed forum shopping and that all the elements of litis pendentia are present. Accordingly, Civil Case No. 2448-G, filed by Spouses Marasigan in the RTC-Gumaca was dismissible on the grounds of forum shopping and litis pendentia. The CA ruled as follows:
On the other hand, forum shopping is the act of the 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. We find that the appellees committed forum shopping which is cause for the dismissal of the case. Under the last part of Section 5, Rule 7 of the Rules, if the acts of the party or his counsel clearly constitute willful and deliberate forum shopping, the same shall be ground for summary dismissal with prejudice and shall constitute direct contempt as well as cause for administrative sanctions. Forum shopping is an act of malpractice because it abuses court processes.
The test for determining whether a party violates the rule against forum shopping is where a final judgment in one case will amount to res judicata in the action under consideration or where the elements of litis pendentia are present: The requisites of litis pendentia are the following: (a) identity of parties, or at least such as representing the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief founded on the same facts; and (c) identity of the two cases such that judgment in one, regardless of which party is successful, would amount to res judicata in the other.
In the instant case, We find the elements of litis pendentia present. On identity of parties, appellant Chevron and the appellees are the same parties in both cases. Appellant Chevron is the plaintiff while the appellees and Mareal Co., Inc. are the defendants in the Makati RTC case. On the other hand, in the instant case, the appellees are the plaintiffs while appellants Chevron, ACCRALAW and ACCRAIN are the defendants. It is of no moment that ACCRALAW and ACCRAIN are not party-plaintiffs in the Makati RTC case because the rule does not require absolute identity of parties; substantial identity of parties is sufficient. The fact that there are additional parties in the present case is not material as long as the principal parties - Chevron and the Spouses Marasigan -remain.
As to subject matter, the rights asserted by both parties are based on the same credit lines and real estate mortgages. In the Makati RTC case, appellant Chevron has to prove that deliveries of Chevron products were made pursuant to the credit lines and the real estate mortgages securing the same; and that the subsequent foreclosure are valid but there is still a deficiency after conducting the proceeds of the foreclosure sale from appellees’ obligation. In the instant case, appellees seek to evade or diminish their liability under the credit lines and real estate mortgages by either having the foreclosure sale of the Mulanay property annulled or by collecting the alleged discrepancy between the market value of the property and the bid price offered by ACCRAIN. Thus, although the instant case pertains only to the Mulanay property, the resolution of both cases would require a determination of the validity and enforceability of the deliveries made by Chevron, of the real estate mortgages and foreclosure proceedings. In both cases, the same evidence would be presented and the same subject matter would be litigated. The difference in the form of the actions is of no moment as 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.
Xxx
It must be stressed that the appellees raised an affirmative defense in their amended answer in the Makati RTC case the illegality of the foreclosure sale of the Mulanay property; appellees raise the same issue in the instant complaint. There is no doubt that a judgment in the Makati RTC case as regards the validity of the foreclosure sale of the Mulanay property will constitute res judicata in the instant case, and vice versa.
Accordingly, the instant case is dismissible on the litis pendentia pursuant to Section 1 (e). Rule 16 of the Rules of Civil Procedure. The case is also dismissible on the ground of forum shopping since forum shopping exists where the elements of litis pendentia are present.
The Makati case should subsist because it was filed ahead and is an appropriate vehicle for litigating all issues in this controversy.
Xxx
We find no need to expound on the other issues raised in this case. Indeed, to do so would preempt the judgment of the RTC in Civil Case No. 95-1619 which is still pending with Branch 136, and result in the miscarriage of justice.
Aggrieved by the CA decision, Spouses Marasigan filed this petition praying for its reversal and setting aside anchored on the following
GROUNDS: I
THE CA ERRED IN RULING THAT THE RTC-GUMACA ERRED WHEN IT DENIED RESPONDENTS’ MOTION TO DISMISS ON THE GROUND OF FORUM SHOPPING AND LITIS PENDENTIA.II
THE CA ERRED IN RULING THAT THE MAKATI CASE (CIVIL CASE NO. 95-1619) SHOULD SUBSIST BECAUSE IT WAS FILED AHEAD AND IS AN APPROPRIATE VEHICLE FOR LITIGATING ALL THE ISSUES IN THE CONTROVERSY.III
THE COURT OF APPEALS GROSSLY ERRED IN NOT APPRECIATING THE DECISION OF ITS FIFTEENTH DIVISION DATED MAY 21, 1999 FINDING ANOMALY IN THE CONDUCT OF FORECLOSURE BY RESPONDENTS. RESPONDENTS DELIBERATELY OMITTED THE DECISION OF THE FIFTEENTH DIVISION IN ITS APPELLANTS’ BRIEF IN CA G.R. NO. C.V. NO. 85223.IV
RESPONDENTS CHEVRON, ACCRALAW AND ACCRAIN DID NOT INCLUDE RESPONDENT SHERIFF OF GUMACA (QUEZON) IN THEIR APPEAL BEFORE THE COURT OF APPEALS. SHERIFF IS INDISPENSABLE PARTY TO THE GUMACA CASE (CIVIL CASE NO. 2448-G).V
RESPONDENTS ACCRALAW AND ACCRAIN VIOLATED ARTICLE 1461 OF THE CIVIL CODE.
Spouses Marasigan argue that the RTC-Gumaca properly denied the respondents’ motion to dismiss on the ground of forum shopping and litis pendentia. Citing the decision of the RTC-Gumaca, Spouses Marasigan claim that Civil Case No. 95-1619 filed by Chevron in the RTC-Makati was for collection with preliminary attachment with prayer for preliminary injunction, and that Mareal Co., Inc. and themselves are the defendants therein. On the other hand, Civil Case No. 2448-G filed by them before the RTC-Gumaca was for declaration of nullity and/or annulment of foreclosure with damages against Chevron, ACCRALAW and ACCRAIN. They further claim that in the Makati RTC case, Chevron endeavored to collect the deficiency arising from the foreclosure of mortgage on the properties of Spouses Marasigan, including their Gumaca property, while in the RTC-Gumaca case, they sought a court declaration that the foreclosure sale, specially the Mulanay property, was a nullity.
Spouses Marasigan also insist that there is no forum shopping because of the diversity of parties in the RTC-Makati case and the RTC-Gumaca case. They argue that in the RTC-Gumaca case, only the Spouses Marasigan stand as plaintiffs while Chevron, ACCRAIN and ACCRALAW are the defendants. They likewise aver that Mareal Co., Inc. is not a party plaintiff in the RTC-Gumaca case and ACCRAIN, ACCRALAW and Romeo Villafranca are not parties in the RTC-Makati case.
The petitioners state that ACCRAIN, ACCRALAW and Villafranca did not join Chevron in the RTC-Makati case. Neither did they participate in, nor claim responsibility for, the acts complained of against Chevron. Said defendants had nothing to do with the deficiency claim and the application, issuance and implementation of the writ of attachment which pertain solely to Chevron. Hence, any judgment that may be rendered in the RTC-Makati case cannot be legally enforced against said defendants because they cannot be held responsible for the acts of Chevron.
Further, according to Spouses Marasigan, the rights alleged to have been violated in the two (2) cases arose out of separate sources. They claim that in the RTC-Makati case, the legal basis for the claim of damages was the application, issuance and implementation of a writ of attachment which resulted in damage to said defendants consisting of damaged reputation, credit standing before the banks and their creditors and the business community; that, in effect, the issues in the RTC-Makati case were basically anchored on the applicability of the legal provisions on damages defined in Articles 2195 to 2232 of the Civil Code and the pertinent provisions of the Rules of Court; that, on the other hand, the issues in the RTC-Gumaca case were based on the application of Article 1491 of the Civil Code which relates to the validity of the acquisition of real property at public or judicial action by officers of the court; and that since the issues in the two (2) civil actions were distinct, they did not engage in forum shopping.
Thus, Spouses Marasigan are adamant that litis pendentia is not a valid ground for the dismissal of the RTC-Gumaca case because a judgment in the RTC-Makati case or vice versa, will not be res judicata on the other.
Spouses Marasigan further argue that the CA violated the rule on venue and jurisdiction when it ruled that the RTC-Makati was the appropriate vehicle for litigating the annulment of foreclosure of the Mulanay property. They add that the RTC-Gumaca is the appropriate vehicle for it because the subject property is located there.
Finally, Spouses Marasigan assert that the CA erred in not appreciating the finding of an anomaly in the conduct of the foreclosure by the respondents; that the respondents did not include the Sheriff of Gumaca in their appeal before the CA; that the Sheriff is an indispensable party to the RTC-Gumaca case; and that Article 1461 of the Civil Code was violated by the acquisition of the Mulanay property by ACCRAIN, an investment arm of ACCRALAW, and controlled by the latter.
On the other hand, the respondents counter, among others, that the petition should have been dismissed outright considering that the petitioners failed to comply with the most basic and express requirements of the Rules of Court; that despite being given the opportunity to do so, the petitioners failed to submit a Verification and Certification and an Affidavit of Service that complies with the 2004 Rules on Notarial Practice; that the petitioners failed to attach material portions of the record, such as their Amended Answer to the complaint in the RTC-Makati case; that the petitioners’ repeated non-compliance with procedural rules, absent special and compelling circumstances to justify the same, is undeserving of a liberal application of the rules; that the petition raises questions of facts; that the petitioners committed forum-shopping in instituting the RTC-Gumaca Case notwithstanding the pendency of the RTC-Makati Case; that the petitioners prayed for the same relief in their complaint in the RTC-Gumaca Case and in their Answer in the Makati Case; that the petitioners are estopped from questioning the jurisdiction of the court in the RTC-Makati case considering that they were the ones who submitted the issues before said court, and prayed for relief from said court; that the petitioners failed to appeal the decision of the Makati RTC rejecting their claim that the foreclosure sale violated Article 1491 of the Civil Code, thus, they are bound by such ruling and that, in any case, there was no violation of Article 1491 by ACCRALAW and ACCRAIN and that the petitioners have no personality to question the foreclosure sale on the ground of Article 1491; and that the foreclosure sale was valid and complied strictly with the requirements of Act No. 3135 and that inadequacy of the bid price is not a ground to annul the foreclosure sale.
The petition cannot prosper.
This Court shall first tackle the issue of whether or not the CA correctly ordered the dismissal of the complaint in Civil Case No. 2448-G filed by Spouses Marasigan before the RTC-Gumaca on the grounds of forum shopping and litis pendentia. Simply put, the determinative questions in this petition are: (1) is litis pendentia present? and (2) did petitioners violate the rules on forum shopping? An affirmative answer to these particular questions would necessarily mean that there would be no need to discuss, much less, resolve all the other issues raised in this petition.
The essence of forum shopping is the filing by a party against whom an adverse judgment has been rendered in one forum, seeking another and possibly favorable opinion in another suit other than by appeal or special civil action for certiorari. It is the act of 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. Forum shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the action under consideration.5
Litis pendentia is a Latin term, which literally means "a pending suit" and is variously referred to in some decisions as lis pendens and auter action pendant. As a ground for the dismissal of a civil action, it refers to the situation where two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious. It is based on the policy against multiplicity of suits.6
Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties as those representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, 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.
What is pivotal in determining whether forum shopping exists or not is the vexation caused to the courts and parties-litigants by a party who asks different courts and/or administrative agencies to rule on the same or related cases and/or grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different courts and/or administrative agencies upon the same issues.7
In the case at bench, all the requisites of litis pendentia are present. The first element, identity of parties, or at least representing the same interest in both actions, exists. The Court agrees with the ruling of the CA that Chevron and Spouses Marasigan are the same parties in the RTC-Makati Case and the RTC-Gumaca Case. Unquestionably, the plaintiff and the defendants in the RTC-Makati Case are Chevron and Spouses Marasigan as well as Mareal Co., Inc., respectively. On the other hand, the plaintiffs in the RTC-Gumaca Case are the Spouses Marasigan and the defendants therein are Chevron, ACCRAIN and ACCRALAW. The absence of ACCRAIN and ACCRALAW as party plaintiffs in the RTC-Makati case and their additional presence as party defendants in the RTC-Gumaca case would not unfavorably affect the respondents because the rule does not require absolute identity of parties. A substantial identity of parties is enough to qualify under the first requisite. What is important here is that the principal parties - Chevron and Spouses Marasigan - are the same in both cases. The Court held:
In this case, the first requisite, identity of parties or at least such as represent the same interest in both actions, is present. The Court of Appeals correctly ruled that the fact that there is no absolute identity of parties in both cases will not preclude the application of the rule of litis pendentia, since only substantial and not absolute identity of parties is required for litis pendentia to lie.8 [Emphasis supplied]
The second element, identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts, likewise subsists here. It cannot be denied that the complaint filed in the RTC-Makati was for a Sum of Money while that filed in the RTC-Gumaca was for Declaration of Nullity and/or Annulment of Foreclosure with Damages. Although both cases differ in form or nature, the same facts would be alleged and the same evidence would be presented considering that the resolution of both cases would be based on the validity and enforceability of the same credit lines, real estate mortgages and foreclosure proceedings. Indeed, the true test in determining the identity of causes of action lies not in the form or nature of the actions but rather in the evidence that would be presented.
The test to determine identity of causes of action is to ascertain whether the same evidence necessary to sustain the second cause of action is sufficient to authorize a recovery in the first, even if the forms or the nature of the two (2) actions are different from each other. If the same facts or evidence would sustain both, the two (2) actions are considered the same within the rule that the judgment in the former is a bar to the subsequent action; otherwise, it is not. This method has been considered the most accurate test as to whether a former judgment is a bar in subsequent proceedings between the same parties. It has even been designated as infallible.9
In this regard, the CA aptly explained this matter, as follows:
As to subject matter, the rights asserted by both parties are based on the same credit lines and real estate mortgages. In the Makati RTC case, appellant Chevron has to prove that deliveries of Chevron products were made pursuant to the credit lines and the real estate mortgages securing the same; and that the subsequent foreclosure are valid but there is still a deficiency after deducting the proceeds of the foreclosure sale from appellees’ obligation. In the instant case, appellees seek to evade or diminish their liability under the credit lines and real estate mortgages by either having the foreclosure sale of the Mulanay property annulled or by collecting the alleged discrepancy between the market value of the property and the bid price offered by ACCRAIN. Thus, although the instant case pertains only to the Mulanay property, the resolution of both cases would require a determination of the validity and enforceability of the deliveries made by Chevron of the real estate mortgages and foreclosure proceedings. In both cases, the same evidence would be presented and the same subject matter would be litigated. The difference in the form of actions is of no moment as 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.
Finally, the presence of the third element, that the identity of the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other, cannot be disputed either.
Spouses Marasigan do not deny the fact that the affirmative defense that they raised in the RTC-Makati case was the illegality of the foreclosure sale of the Mulanay property.10 They raised the same issue in the RTC-Gumaca case.11 As correctly ruled by the CA, the judgment in the RTC-Makati with regard to the validity of the foreclosure sale of the Mulanay property will constitute res judicata in the case, and vice versa. The Court also agrees with its ruling that the RTC-Makati case should be the priority case because it was filed earlier and, therefore, the appropriate vehicle for litigating all issues in this case.
The Court having ruled that the CA properly dismissed the petitioners’ complaint due to the presence of litis pendentia and the violation of the rule on forum shopping, there is no need to rule further on the other issues raised by the petitioners and the respondents in this case.cralaw
WHEREFORE, the petition is DENIED.
SO ORDERED.
Velasco, Jr., (Chairperson), Brion,* Peralta, and Abad, JJ., concur.
Endnotes:
* Designated as additional member in lieu of Associate Justice Estela M. Perlas-Bernabe, per Raffle dated February 6, 2012.
1 Rollo, pp. 42-58. [Penned by Associate Justice Portia Aliño-Hormachuelos and concurred in by Associate Justices Lucas P. Bersamin (now Supreme Court Justice) and Estela M. Perlas-Bernabe (now Supreme Court Justice)].
2 Id. at 92-140.
3 Id. at 463-464.
4 Id. at 139-140.
5 Roberto S. Benedicto v. Manuel Lacson, G.R. No. 141508, May 5, 2010, 620 SCRA 82, 97-98.
6 DotMatrix Trading v. Rommel B. Legaspi, G.R. No. 155622, October 26, 2009, 604 SCRA 431, 436.
7 Philip S. Yu v. Hernan G. Lim, G.R. No. 182291, September 22, 2010, 631 SCRA 172, 184.
8 City of Makati v. Municipality (Now City) of Taguig, G.R. No. 163175, June 27, 2008, 556 SCRA 218, 228.
9 Roberto S. Benedicto v. Manuel Lacson, supra note 5.
10 Rollo, pp. 435-438.
11 Id. at 76-89.
