G.R. No. 173331, December 11, 2013
FLORPINA BENAVIDEZ, Petitioner, v. NESTOR SALVADOR, Respondent.
D E C I S I O N
WHEREFORE, in view of the foregoing premises, defendant is hereby directed to pay plaintiff the following:Benavidez filed a motion for reconsideration but unfortunately for her, RTC-Antipolo, in its August 10, 2001 Order,6 denied her motion for lack of merit.
1. The amount of P4,810,703.21, covering the period from June 11, 1998 to January 11, 2000, exclusive of interest and penalty charges until the said amount is fully paid;
2. The amount of P50,000.00 as exemplary damages;
3. The sum of 25% of the total obligation as and by way of attorney’s fees; and,
4. Cost of suit.
WHEREFORE, the motion for reconsideration is PARTIALLY GRANTED. The Decision dated November 22, 2005 is MODIFIED by DELETING the award of exemplary damages and attorney’s fees.Still unsatisfied, Benavidez comes before the Court via a petition for review under Rule 45 of the Rules of Court, raising the following issues:14
1. Whether or not the present case is barred by Civil Case No. 00-05660 which is pending before the RTC-Morong, Rizal.In fine, the core issue is whether or not the present case should have been dismissed on the ground of litis pendentia.
2. Whether or not the case is dismissible because the certification against forum shopping was defective.
3. Whether or not the executed promissory note is void for being unconscionable and shocking to the conscience.
4. Whether or not the CA erred in holding that the order allowing respondent to present evidence ex-parte and submitting the case for decision is valid despite the fact that default judgment is looked upon with disfavor by this Court.
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.In the relatively recent case of Dotmatrix Trading v. Legaspi,24 the Court had the occasion to extensively discuss the various rules and consideration in determining which case to dismiss in such situations. It included its analysis of Abines. Thus:
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. [Underscoring supplied]
Early on, we applied the principle of Qui prior est tempore, potior est jure (literally, he who is before in time is better in right) in dismissing a case on the ground of litis pendentia. This was exemplified in the relatively early case of Del Rosario v. Jacinto where two complaints for reconveyance and/or recovery of the same parcel of land were filed by substantially the same parties, with the second case only impleading more party-plaintiffs. The Court held that "parties who base their contention upon the same rights as the litigants in a previous suit are bound by the judgment in the latter case." Without expressly saying so in litis pendentia terms, the Court gave priority to the suit filed earlier.In the complaint filed before RTC-Morong, Benavidez alleged, among others, that it was defendant Atty. Nepthalie Segarra (Atty. Segarra) who arranged the loan in the amount of P1,500,000.00 for her at his own initiative; that he was the one who received the amount for her on or about March 10, 1998 from defendant Salvador; that he paid Farmers Bank the amount of P1,049,266.12 leaving a balance of more than P450,000.00 in his possession; and that he made her sign a promissory note. Benavidez prayed, among others, that Atty. Segarra be ordered to give her the balance of the amount loaned and that the promissory note that Salvador allegedly executed be declared null and void because she was just duped into signing the said document through machinations and that the stipulated interest therein was shocking to the conscience. Salvador, on the other hand, filed the subject case for the collection of a sum of money before RTC-Antipolo to enforce his rights under the promissory note.
In Pampanga Bus Company, Inc. v. Ocfemia, complaints for damages arising from a collision of a cargo truck and a bus were separately filed by the owners of the colliding vehicles. The complaint of the owners of the cargo truck prevailed and the complaint of the owners of the bus had to yield, as the cargo truck owners first filed their complaint. Notably, the first and prevailing case was far advanced in development, with an answer with counterclaim and an answer to the counterclaim having been already filed, thus fully joining the issues.
In Lamis Ents. v. Lagamon, the first case was a complaint for specific performance of obligations under a Memorandum of Agreement, while the second case was a complaint for sums of money arising from obligations under a promissory note and a chattel mortgage, and damages. We dismissed the second case because the claims for sums of money therein arose from the Memorandum of Agreement sued upon in the first case.
Ago Timber Corporation v. Ruiz offered an insightful reason after both parties had each pleaded the pendency of another action between the same parties for the same cause. The Court ruled that the second action should be dismissed, "not only as a matter of comity with a coordinate and co-equal court (Laureta & Nolledo, Commentaries & Jurisprudence on Injunction, p. 79, citing Harrison v. Littlefield, 57 Tex. Div. A. 617, 619, 124 SW 212), but also to prevent confusion that might seriously hinder the administration of justice. (Cabigao, et al. v. Del Rosario, et al., 44 Phil. 182)."
In all these cases, we gave preference to the first action filed to be retained. The "priority-in-time rule," however, is not absolute.
In the 1956 case of Teodoro v. Mirasol, we deviated from the "priority-in-time rule" and applied the "more appropriate action test" and the "anticipatory test."
The "more appropriate action test" considers the real issue raised by the pleadings and the ultimate objective of the parties; the more appropriate action is the one where the real issues raised can be fully and completely settled. In Teodoro, the lessee filed an action for declaratory relief to fix the period of the lease, but the lessor moved for its dismissal because he had subsequently filed an action for ejectment against the lessee. We noted that the unlawful detainer suit was the more appropriate action to resolve the real issue between the parties - whether or not the lessee should be allowed to continue occupying the land under the terms of the lease contract; this was the subject matter of the second suit for unlawful detainer, and was also the main or principal purpose of the first suit for declaratory relief.
In the "anticipatory test," the bona fides or good faith of the parties is the critical element. If the first suit is filed merely to preempt the later action or to anticipate its filing and lay the basis for its dismissal, then the first suit should be dismissed. In Teodoro, we noted that the first action, declaratory relief, was filed by the lessee to anticipate the filing of the second action, unlawful detainer, considering the lessor’s letter informing the lessee that the lease contract had expired.
We also applied the "more appropriate action test" in Ramos v. Peralta. In this case, the lessee filed an action for consignation of lease rentals against the new owner of the property, but the new owner moved to dismiss the consignation case because of the quieting of title case he had also filed against the lessee. Finding that the real issue between the parties involved the right to occupy/possess the subject property, we ordered the dismissal of the consignation case, noting that the quieting of title case is the more appropriate vehicle for the ventilation of the issues between them; the consignation case raised the issue of the right to possession of the lessee under the lease contract, an issue that was effectively covered by the quieting of title case which raised the issue of the validity and effectivity of the same lease contract.
In University Physician Services, Inc. v. Court of Appeals, we applied both the "more appropriate action test" and "anticipatory test." In this case, the new owner of an apartment sent a demand letter to the lessee to vacate the leased apartment unit. When the lessee filed an action for damages and injunction against the new owner, the new owner moved for the dismissal of the action for damages on account of the action for ejectment it had also filed. We noted that ejectment suit is the more appropriate action to resolve the issue of whether the lessee had the right to occupy the apartment unit, where the question of possession is likewise the primary issue for resolution. We also noted that the lessee, after her unjustified refusal to vacate the premises, was aware that an ejectment case against her was forthcoming; the lessee’s filing of the complaint for damages and injunction was but a canny and preemptive maneuver intended to block the new owner’s action for ejectment.
We also applied the "more appropriate action test" in the 2003 case Panganiban v. Pilipinas Shell Petroleum Corp., where the lessee filed a petition for declaratory relief on the issue of renewal of the lease of a gasoline service station, while the lessor filed an unlawful detainer case against the lessee. On the question of which action should be dismissed, we noted that the interpretation of a provision in the lease contract as to when the lease would expire is the key issue that would determine the lessee’s right to possess the gasoline service station. The primary issue - the physical possession of the gasoline station - is best settled in the ejectment suit that directly confronted the physical possession issue, and not in any other case such as an action for declaratory relief.
A more recent case - Abines v. Bank of the Philippine Islands in 2006 - saw the application of both the "priority-in-time rule" and the "more appropriate action test." In this case, the respondent filed a complaint for collection of sum of money against the petitioners to enforce its rights under the promissory notes and real estate mortgages, while the petitioners subsequently filed a complaint for reformation of the promissory notes and real estate mortgages. We held that the first case, the collection case, should subsist because it is the first action filed and the more appropriate vehicle for litigating all the issues in the controversy. We noted that in the second case, the reformation case, the petitioners acknowledged their indebtedness to the respondent; they merely contested the amounts of the principal, interest and the remaining balance. We observed, too, that the petitioners’ claims in the reformation case were in the nature of defenses to the collection case and should be asserted in this latter case.
Under this established jurisprudence on litis pendentia, the following considerations predominate in the ascending order of importance in determining which action should prevail: (1) the date of filing, with preference generally given to the first action filed to be retained; (2) whether the action sought to be dismissed was filed merely to preempt the later action or to anticipate its filing and lay the basis for its dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the parties.25 [Underscoring supplied]
From the foregoing, it is clear that there was an amount of money borrowed from Salvador which was used in the repurchase of her foreclosed property. Whether or not it was Atty. Segarra who arranged the loan is immaterial. The fact stands that she borrowed from Salvador and she benefited from it. Her insistence that the remaining balance of P450,000.00 of the money loaned was never handed to her by Atty. Segarra is a matter between the two of them. As far as she and Salvador are concerned, there is admittedly an obligation. Whether the promissory note was void or not could have been proven by her during the trial but she forfeited her right to do so when she and her lawyer failed to submit a pre-trial brief and to appear at the pre-trial as will be discussed hereafter.
SECOND CAUSE OF ACTION
11. Defendant Atty. Nepthalie Segarra arranged a loan in the amount of ONE MILLION AND FIVE HUNDRED THOUSAND (P1,500,000.00) PESOS for plaintiff at his own initiative;
12. Defendant Atty. Nepthalie Segarra received the P1,500,000.00 on or about March 10, 1998 from defendant Nestor Salvador in behalf of and for delivery to plaintiff;
13. Defendant Atty. Nepthalie Segarra paid Farmers Bank the amount of P1,049,266.12 leaving a balance of more than P450,000.00 in his possession. A copy of the receipt evidencing payment is herewith attached as Annex “A” and made an integral part hereof;
14. Defendant Atty. Nepthalie Segarra made plaintiff sign a Promissory Note evidencing the loan of P1,500,000.00. A copy of said Promissory Note is herewith attached as Annex “B” and made an integral part hereof;26 [Underscoring supplied]
Sec. 5. Effect of failure to appear.- The failure of the plaintiff to appear when so required pursuant to the next preceding section shall be cause for dismissal of the action. The dismissal shall be with prejudice, unless otherwise ordered by the court. A similar failure on the part of the defendant shall be cause to allow the plaintiff to present his evidence ex parte and the court to render judgment on the basis thereof. [Emphasis supplied]Furthermore, Section 6 thereof provides:
Sec. 6. Pre-trial brief.-The parties shall file with the court and serve on the adverse party, in such manner as shall ensure their receipt thereof at least three (3) days before the date of the pre-trial, their respective pre-trial briefs which shall contain, among others:From the foregoing, it is clear that the failure of a party to appear at the pre-trial has adverse consequences. If the absent party is the plaintiff, then his case shall be dismissed. If it is the defendant who fails to appear, then the plaintiff is allowed to present his evidence ex parte and the court shall render judgment on the basis thereof. Thus, the plaintiff is given the privilege to present his evidence without objection from the defendant, the likelihood being that the court will decide in favor of the plaintiff, the defendant having forfeited the opportunity to rebut or present its own evidence.28
x x x
Failure to file the pre-trial brief shall have the same effect as failure to appear at the pre-trial.
1Rollo, pp. 27-37. Penned by Associate Justice Danilo B. Pine with Associate Justice Marina L. Buzon and Associate Justice Vicente S.E. Veloso, concurring.
2 Id. at 38-42. Penned by Associate Justice Marina L. Buzon with Associate Justice Lucas P. Bersamin and Vicente S.E. Veloso, concurring.
3 Id. at 24-30. Penned by Judge Francisco A. Querubin.
4 Id. at 106.
5 CA rollo, pp. 106-107.
6 Id. at 111.
7 Id. at 30.
8 Id. at 32.
9 Id. at 33.
10 Id. at 34.
11 Id. at 31.
12 Id. at 37.
13 Id. at 41.
14 Id. at 15.
15 Id. at 17.
16 Id. at 18.
17 Id. at 19.
18 Id. at 20.
19Marasigan v. Chevron Phil., Inc., G.R. No. 184015, February 08, 2012, 665 SCRA 499, 511.
20Umale v. Canoga Park Development Corporation, G.R. No. 167246, July 20, 2011, 654 SCRA 155, 161.
21Polanco v. Cruz, G.R. No. 182426, February 13, 2009, 579 SCRA 489, 495.
22 Id. at 495-496.
23 517 Phil. 609, 620 (2006), citing Compania General De Tabacos De Filipinas v. Court of Appeals, 422 Phil. 405, 425 (2001).
24 G.R. No. 155622, October 26, 2009,604 SCRA 431.
25 Id. at 437-442.
26Rollo, pp. 49.
27 Supra note 24, at 443.
28Tolentino v. Laurel, G.R. No. 181368, February 22, 2012, 666 SCRA 561, 569-570.
29Durban Apartments Corp. v. Pioneer Insurance and Surety Corp., G.R. No. 179419, January 12, 2011, 639 SCRA 441, 450.
30Suico Industrial Corp. v. Lagura-Yap, G.R. No. 177711, September 05, 2012, 680 SCRA 145, 159.
31Castro v. Tan, et al., G.R. No. 168940, November 24, 2009, 605 SCRA 231, 237-238.
32 G.R. No. 185368, October 11, 2012, 684 SCRA 168.
33 Id. at 178-179.
34Sps. Castro v. De Leon Tan, supra note 31.
35 G.R. No. 189871, August 13, 2013.