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PHILIPPINE SUPREME COURT DECISIONS

SECOND DIVISION

[G.R. No. 178591 : July 26, 2010]

SM SYSTEMS CORPORATION (FORMERLY SPRINGSUN MANAGEMENT SYSTEMS CORPORATION), PETITIONER, VS. OSCAR CAMERINO, EFREN CAMERINO, CORNELIO MANTILE, DOMINGO ENRIQUEZ, AND HEIRS OF NOLASCO DEL ROSARIO, RESPONDENTS.

R E S O L U T I O N


NACHURA, J.:

This is a petition for review on certiorari of the Court of Appeals (CA) Decision1 dated October 23, 2006, and its Resolution2 dated June 29, 2007, in CA-G.R. SP No. 92994.

The facts of the case, as summarized in Springsun Management Systems Corporation v. Camerino,3 and as found by the CA, are as follows:

Victoria Homes, Inc. (Victoria Homes) was the registered owner of three (3) lots (subject lots), covered by Transfer Certificate of Title (TCT) Nos. (289237) S-6135, S-72244, and (289236) S-35855, with an area of 109,451 square meters, 73,849 sq m, and 109,452 sq m, respectively. These lots are situated in Barrio Bagbagan, Muntinlupa, Rizal (now Barangay Tunasan, Muntinlupa City, Metro Manila).

Since 1967, respondents Oscar Camerino, Efren Camerino, Cornelio Mantile, Domingo Enriquez, and Nolasco del Rosario (herein represented by his heirs) were farmers-tenants of Victoria Homes, cultivating and planting rice and corn on the lots.

On February 9, 1983 and July 12, 1983, Victoria Homes, without notifying respondents, sold the subject lots to Springsun Management Systems Corporation (Springsun), the predecessor-in-interest of petitioner SM Systems Corporation.4  The Deeds of Sale were registered with the Registry of Deeds of Rizal.  Accordingly, TCT Nos. (289237) S-6135, (289236) S-35855, and S-72244 in the name of Victoria Homes were cancelled and, in lieu thereof, TCT Nos. 120541, 120542, and 123872 were issued in the name of Springsun. Springsun subsequently mortgaged the subject lots to Banco Filipino Savings and Mortgage Bank (Banco Filipino) as security for its various loans amounting to P11,545,000.00. When Springsun failed to pay its loans, the mortgage was foreclosed extra-judicially. At the public auction sale, the lots were sold to Banco Filipino, being the highest bidder, but they were eventually redeemed by Springsun.

On March 7, 1995, respondents filed with the Regional Trial Court (RTC), Branch 256, Muntinlupa City, a complaint against Springsun and Banco Filipino for Prohibition/Certiorari, Reconveyance/Redemption, Damages, Injunction with Preliminary Injunction and Temporary Restraining Order or, simply, an action for Redemption.5  On January 25, 2002, the RTC rendered a decision6 in favor of respondents, authorizing them to redeem the subject lots from Springsun for the total price of P9,790,612.00.  On appeal to the CA, the appellate court affirmed the RTC decision with a modification on the award of attorney's fees.7

Aggrieved, Springsun elevated the matter to this Court via a petition for review on certiorari.  The case was docketed as G.R. No. 161029.  On January 19, 2005, we affirmed the CA Decision.8 With the denial of Springsun's motion for reconsideration, the same became final and executory; accordingly, an entry of judgment was made.9  Respondents thus moved for the execution of the Decision.10

Petitioner11 instituted an action for Annulment of Judgment with prayer for the issuance of a Temporary Restraining Order before the CA, docketed as CA-G.R. SP No. 90931.12 Petitioner sought the annulment of the RTC decision allowing respondents to redeem the subject property. Petitioner argued that it was deprived of the opportunity to present its case on the ground of fraud, manipulations and machinations of respondents.  It further claimed that the Department of Agrarian Reform, not the RTC, had jurisdiction over the redemption case.  The CA, however, dismissed the petition on October 20, 2005.13  Its motion for reconsideration was also denied for lack of merit.14 The matter was elevated to this Court via a petition for review on certiorari in G.R. No. 171754, but the same was denied on June 28, 2006.15  After the denial of its motion for reconsideration, the Decision became final and executory; and an entry of judgment was subsequently made.16

Meanwhile, on December 18, 2003, respondents executed an Irrevocable Power of Attorney in favor of Mariano Nocom (Nocom), authorizing him, among other things, to comply with our January 19, 2005 Decision by paying the redemption price to Springsun and/or to the court.17 Respondents, however, challenged the power of attorney in an action for revocation with the RTC.  In a summary judgment, the RTC annulled the Irrevocable Power of Attorney for being contrary to law and public policy. The RTC explained that the power of attorney was a disguised conveyance of the statutory right of redemption that is prohibited under Republic Act No. 3844.  The CA affirmed the RTC decision.  However, this Court, in G.R. No. 182984, set aside the CA Decision and concluded that the RTC erred in rendering the summary judgment. The Court thus remanded the case to the RTC for proper proceedings and proper disposition, according to the rudiments of a regular trial on the merits and not through an abbreviated termination of the case by summary judgment.

On August 4, 2005, as petitioner refused to accept the redemption amount of P9,790,612.00, plus P147,059.18 as commission, respondents deposited the said amounts, duly evidenced by official receipts, with the RTC. The RTC further granted respondents' motion for execution and, consequently, TCT Nos. 120542, 120541, and 123872 in the name of petitioner were cancelled and TCT Nos. 15895, 15896, and 15897 were issued in the names of respondents.  It also ordered that the "Irrevocable Power of Attorney," executed on December 18, 2003 by respondents in favor of Nocom, be annotated in the memorandum of encumbrances of TCT Nos. 15895, 15896, and 15897.18

On August 20, 2005, petitioner and respondents (except Oscar Camerino) executed a document, denominated as Kasunduan,19 wherein the latter agreed to receive P300,000.00 each from the former, as compromise settlement. Petitioner then filed a Motion to Hold Execution in Abeyance on the Ground of Supervening Event.20

On September 7, 2005, the RTC denied petitioner's motion, thus:

WHEREFORE, in view of the foregoing, defendant's Motion to Hold in Abeyance Execution on Ground of Supervening Event is denied and the Kasunduan separately entered into by Efren Camerino, Cornelio Mantile, Domingo Enriquez, and the Heirs of Nolasco del Rosario are hereby disapproved.

SO ORDERED.21

Aggrieved by the aforesaid Order and the denial of its motion for reconsideration, petitioner elevated the matter to the CA. On May 8, 2006, counsel for respondents moved that they be excused from filing the required comment, considering that only Oscar Camerino was impleaded as private respondent in the amended petition; and also because respondents already transferred pendente lite their contingent rights over the case in favor of Nocom.22  Nocom, in turn, filed a Motion for Leave of Court to Admit Attached Comment to the Petition.23

On October 23, 2006, the appellate court rendered the assailed Decision, finding petitioner guilty of forum shopping. The CA concluded that the present case was substantially similar to G.R. No. 171754. It further held that the compromise agreement could not novate the Court's earlier Decision in G.R. No. 161029 because only four out of five parties executed the agreement.

Undaunted, petitioner comes before us in this petition for review on certiorari, raising the following issues:

  1. Whether or not the Kasunduan effectively novated the judgment obligation.
  2. Whether or not the Court should rule on the Motion to Expunge the Comment of Mariano Nocom filed by the Petitioner.
  3. Whether or not Mariano Nocom should be allowed to participate in the instant case on the basis of the null and void Irrevocable Power of Attorney.
  4. Whether or not the (sic) there is grave abuse of discretion when Judge Lerma denied the Motion to inhibit filed by Petitioner despite Judge Lerma's clear showing of partiality for the other party.
  5. Whether or not there is forum-shopping.24

Contrary to the conclusion of the CA, we find petitioner not guilty of forum shopping.

Forum shopping is the act of a litigant who repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and on the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some other court, to increase his chances of obtaining a favorable decision if not in one court, then in another.25

The rationale against forum shopping is that a party should not be allowed to pursue simultaneous remedies in two different fora.  Filing multiple petitions or complaints constitutes abuse of court processes, which tends to degrade the administration of justice, wreaks havoc upon orderly judicial procedure, and adds to the congestion of the heavily burdened dockets of the courts.  Thus, the rule proscribing forum shopping seeks to promote candor and transparency among lawyers and their clients in the pursuit of their cases before the courts to promote the orderly administration of justice, to prevent undue inconvenience upon the other party, and to save the precious time of the courts.  It also aims to prevent the embarrassing situation of two or more courts or agencies rendering conflicting resolutions or decisions upon the same issue.26

To determine whether a party violated the rule against forum shopping, the most important question to ask is whether the elements of litis pendentia are present or whether a final judgment in one case will result to res judicata in another.27

It is true that after the finality of this Court's Decision in G.R. No. 161029 dated January 19, 2005, petitioner instituted and filed various petitions and motions which essentially prevented the execution of the aforesaid Decision. Yet, we do not agree with the CA that the instant case is dismissible because it earlier filed an action for annulment of judgment that involved substantially the same set of facts, issues, and reliefs sought. While petitioner's goal in filing the instant case is the same as that in G.R. No. 171754 (which stemmed from the petition for annulment of judgment), that is to prevent the execution of the January 19, 2005 Decision, still, there is no forum shopping.

In the action for annulment of judgment, petitioner sought the nullification of the January 19, 2005 Decision on the ground that it was deprived of its opportunity to present its case and that the RTC had no jurisdiction to decide the case.  While in the instant case, petitioner prays that the execution of the January 19, 2005 Decision be held in abeyance in view of the compromise agreement entered into by petitioner and four respondents.  In short, the issue threshed out in the annulment case was the validity of the 2005 Decision, while in this case, the issue is focused on the effect of the compromise agreement entered into after the finality of the Decision sought to be executed. Clearly, therefore, there is no identity of issues in the two cases.

In view of the foregoing, a review of the assailed Decision is in order, particularly on the effect of the compromise agreement entered into after final judgment has been rendered.

Once a case is terminated by final judgment, the rights of the parties are settled; hence, a compromise agreement is no longer necessary.28 Though it may not be prudent to do so, we have seen in a number of cases that parties still considered and had, in fact, executed such agreement. To be sure, the parties may execute a compromise agreement even after the finality of the decision.29 A reciprocal concession inherent in a compromise agreement assures benefits for the contracting parties.  For the defeated litigant, obvious is the advantage of a compromise after final judgment as the liability decreed by the judgment may be reduced.  As to the prevailing party, it assures receipt of payment because litigants are sometimes deprived of their winnings because of unscrupulous mechanisms meant to delay or evade the execution of a final judgment.30

As much as we would like to settle the issues raised in this petition, we cannot make a definitive conclusion on the validity of the compromise agreement because of some facts that complicate the present case.

We must recall that, in our January 19, 2005 Decision, we upheld respondents' right to redeem the subject lots for P9,790,612.00. On December 18, 2003, respondents executed an Irrevocable Power of Attorney in favor of Nocom, authorizing him to redeem the subject lots. Pursuant to the aforesaid authority, Nocom deposited with the court the redemption money plus commission on August 4, 2005.  Consequently, the certificates of title in the name of petitioner were cancelled, and new ones were issued in the name of respondents.  It was only on August 20, 2005 that petitioner and respondents executed the Kasunduan or the compromise agreement.  Although we could have easily declared that the agreement was invalid as there was nothing  more  to compromise at  that time with the redemption  of  the property  by Nocom, yet, as  narrated  earlier, respondents assailed  in  a  separate case the validity of the  Irrevocable  Power of Attorney

allegedly executed by them in favor of Nocom. The case had reached this Court in G.R. No. 182984, but we remanded it to the RTC of Muntinlupa City, Branch 203, for further proceedings and in accordance with the rudiments of a regular trial, with the instruction not to dispose of the case through a summary judgment.

The Court notes that respondents herein are the farmers-tenants, but records show that the pleadings in answer to the petition were filed by Nocom for and in his own behalf.  Nocom is actively participating herein on the basis of the questioned Irrevocable Power of Attorney. But to date, the authority of Nocom to exercise the right of redemption is still in issue in a separate case.

With the foregoing discussion, the resolution of the issues herein have to be held in abeyance, pending the settlement of the questions raised in the other action.31 We are not unmindful of the right of every party to a speedy disposition of his case,32  but the rights of the parties herein cannot be properly determined until the resolution of the issues in the other action.

The court in which an action is pending may, in the exercise of sound discretion, hold the action in abeyance to abide by the outcome of another case pending in another court.33 Undeniably, the power to stay proceedings is an incident to the power inherent in every court to control the disposition of the cases on its dockets, considering its time and effort, and those of counsel and litigants.34  Every order suspending proceedings must be guided by the following precepts: it shall be done in order to avoid multiplicity of suits and to prevent vexatious litigations, conflicting judgments, confusion between litigants and courts, or when the rights of parties to the second action cannot be properly determined until the questions raised in the first action are settled.35

WHEREFORE, premises considered, the resolution of this petition is hereby SUSPENDED or HELD IN ABEYANCE until after the proceedings in Civil Case No. 05-172 shall have been terminated.

Let a copy of this Resolution be furnished the Regional Trial Court of Muntinlupa City, Branch 203, where the above-cited case is pending.  The said court is hereby directed to resolve the case pending before it with dispatch.

SO ORDERED.

Carpio, (Chairperson), Peralta, Abad, and Mendoza, JJ., concur.

Endnotes:


1 Penned by Associate Justice Magdangal M. de Leon, with Associate Justices Rebecca de Guia-Salvador and Ramon R. Garcia, concurring; rollo, pp. 61-77.

2 Id. at 79-80.

3 489 Phil. 769 (2005).

4 Victoria sold the lots covered by TCT Nos. (289237) S-6135 and (289236) S-35855 for P7,223,799.00; and the lot covered by TCT No. S-72244 for P2,566,813.00.

5 Rollo, pp. 93-100.

6 Penned by Presiding Judge Alberto Lerma; id. at 111-117.

7 Embodied in a Decision dated September 23, 2003; penned by Associate Justice Renato C. Dacudao, with Presiding Justice Cancio C. Garcia (now a retired member of this Court) and Associate Justice Danilo B. Pine, concurring; id. at 133-153.

8 Embodied in a Decision penned by Associate Justice Angelina Sandoval-Gutierrez (ret.), with former Chief Justice Artemio V. Panganiban and Associate Justices Renato C. Corona (now Chief Justice) and Conchita Carpio Morales, concurring; 489 Phil. 769.

9 Rollo, p. 64.

10 Id. at 178-185.

11 At this point, Springsun already changed its name to SM Systems Corporation, as shown in its Amended Articles of Incorporation.

12 Rollo, pp. 188-220.

13 Embodied in a Resolution penned by Associate Justice Arcangelita M. Romilla-Lontok, with Associate Justices Marina L. Buzon and Danilo B. Pine, concurring; id. at 221-229.

14 Id. at 230.

15 Embodied in a Minute Resolution of the First Division; id. at 279.

16 Id. at 419.

17 Nocom  v. Camerino, G.R. No. 182984, February 10, 2009, 578 SCRA 390.

18 Id. at 397.

19 Rollo, pp. 869-875.

20 Id. at 431-436.

21 Id. at 458.

22 CA rollo, pp. 171-174.

23 Id. at 175-218.

24 Rollo, pp. 1090-1091.

25 Briones v. Henson-Cruz, G.R. No. 159130, August 22, 2008, 563 SCRA 69, 84.

26 Huibonhoa v. Concepcion, G.R. No. 153785, August 3, 2006, 497 SCRA 562, 570.

27 Id.

28 Magbanua v. Uy, 497 Phil. 511 (2005).

29 Cosmos Bottling Corporation v. Nagrama, Jr., G.R. No. 164403, March 4, 2008, 547 SCRA 571.

30 Magbanua v. Uy, supra note 28, at 196.

31 Before the RTC of Muntinlupa City, Branch 203.

32 SM Prime Holdings, Inc. v. Madayag, G.R. No. 164687, February 12, 2009, 578 SCRA 552, 558.

33 Magestrado v. People, G.R. No. 148072, July 10, 2007, 527 SCRA 125.

34 SM Prime Holdings, Inc. v. Madayag, supra note 32, at 557-558; id. at 141.

35 SM Prime Holdings, Inc. v. Madayag, supra, at 558.
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