Mondragon Leisure and Resorts Corp v. United Coconut pLanters Bank :
154187 : April 14, 2004 : J. Panganiban : First Division : Decision
[G.R. NO. 154187 : April 14, 2004]
MONDRAGON LEISURE AND RESORTS CORPORATION,
UNITED COCONUT PLANTERS
D E C I S I O N
An order denying a motion to dismiss is interlocutory.To remedy the denial, a party has to file an
answer and interpose as a defense the objections raised in the motion, and then
to proceed to trial.A Petition for Certiorari
is appropriate only when an order has been issued without or in excess of
jurisdiction or with grave abuse of discretion amounting to lack or excess of
jurisdiction.In the instant case, no
such ground has been established by petitioner.
Before us is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to set aside the February 18, 2002
Decision2 and the July 2, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR SP No. 61046.The assailed Decision disposed as follows:chanroblesvirtua1awlibrary
premises considered, this petition is denied
due course and accordingly DISMISSED.4 cralawred
The July 2, 2002 Resolution denied reconsideration.
The facts of the case are narrated by the appellate court as
On February 28, 1994, Mondragon International Philippines (MIPI),
Mondragon Securities Corporation (MSC) and petitioner x x x entered into a
Lease Agreement with the Clark Development Corporation (CDC) for the
development of what is now known as the Mimosa Leisure Estate.The parties also subsequently executed
Supplemental Lease Agreements for additional smaller areas.
x x x
Over the years, petitioner poured more than
P5 Billion in
investments to develop the 232-hectare Mimosa Leisure Estate.Among others, petitioner put up the Holiday
Inn Hotel, the Mimosa Regency Casino, the Monte Vista Hotel, the Mimosa Golf
and Country Club with its 36-hole golf course and other world-class facilities
On November 23, 1995, the parties herein executed an Omnibus
Credit and Security Agreement (Omnibus Agreement) whereby respondent bank has
agreed, among others, to provide financing to petitioner to be used for the
development, operation and management of the leased properties covered by the
Lease Agreement, consisting of a Term Loan in the principal amount of Three
Hundred Million Pesos (
P300,000,000.00) .In the said Omnibus Agreement, petitioner has agreed, among others, to
constitute an assignment of its leasehold rights accruing from the Lease
Agreement, in favor of respondent x x x, up to the extent of the value of such
leasehold rights in the amount of Six Hundred Million Pesos ( P600,000,000.00).
In order to secure the repayment of the loan which petitioner had
obtained from the respondent bank, petitioner agreed to provide as collateral
the assignment of the leasehold rights granted pursuant to the Lease Agreement.
Likewise, petitioner executed in favor of respondentx x x Promissory Note PN 573595040194 on
December 21, 1995 in the amount of Three Hundred Million Pesos (
Petitioner likewise executed a Deed of Assignment also dated
November 23, 1995, over its leasehold rights, in favor of respondent x x x.
On April 24, 1996,
the parties executed an Amendment to Omnibus Credit and Security Agreement
(Amendment) whereby the collateral under the Omnibus Agreement was limited to
that of the leasehold right covering the Holiday
Inn Hotel Building.
x x x
x x x [B]ecause of the impact of the Asian economic crisis which
started in July 1997 and x x x differences with [Philippine Amusement and
Gaming Corporation (PAGCOR)] and CDC which eventually led to the untimely
temporary closure of the Mimosa Regency Casino, petitioner experienced severe
financial setbacks.x x x
x x x
[On August 12, 1999,
respondent filed Civil Case No. 9510, entitled United Coconut Planters Bank v. Mondragon Leisure and Resorts Corporation, at the Regional
Trial Court of
for foreclosure of real estate mortgage.The case was raffled to Branch 61.]On September 27, 1999,
petitioner filed a Motion to Dismiss x x x on the following grounds:chanroblesvirtua1awlibrary
1) [T]he Certification of Non-Forum
Shopping appended to the Complaint is fatally defective;chanroblesvirtuallawlibrary
2) Respondent bank has deliberately
engaged in forum-shopping in filing the instant Complaint; andcralawlibrary
3) A condition precedent for the filing
of the Complaint has not been complied with and/or the instant Complaint fails
to state a cause of action against petitioner or is otherwise premature.
[Petitioner claimed that] [t]he Complaint was filed, verified and
certified by a certain Enrique L. Gana and Milaflor S. Guieb, in violation of
the mandatory requirement of certification on non-forum shopping.[It claimed that] Mr. Gana and Ms. Guieb
deliberately failed to mention the pendency of Civil Case No. 99-1171 which is
required under the Rules.x x x.
In its opposition dated November 1999, respondentx x x alleged that there is no
forum-shopping since Civil Case No. 99-1171 involves different facts,
transactions, issues and causes of action.
On March 9, 2000,
[the trial court] issued an Order [denying the motion to dismiss].
Petitioner moved for the reconsideration of the aforesaid order
[which was denied].5
Ruling of the Court of Appeals
On appeal, the CA ruled that respondent bank was not guilty of
forum shopping in instituting Civil Case No. 9510.The appellate court noted that although the
subject matter in Civil Case No. 99-1171 involved the same parties, it dealt
with an entirely different set of facts, transactions, issues and causes of
action.6 Moreover, the CA found that an event of default under the Omnibus Agreement and
the corresponding written notice required under it were the bases for
respondents Complaint.7 cralawred
Hence, this Petition.8
In its Memorandum, petitioner assigns the following errors for
I.The [Court of Appeals]
committed a serious error of law and acted with grave abuse of discretion
amounting to lack or excess of jurisdiction x x x in not holding that
respondent x x x deliberately engaged in forum shopping [in filing the
complaint in Civil Case No. 9510].
II.The [Court of Appeals]
committed a serious error of law and acted with grave abuse of discretion
amounting to lack or excess of jurisdiction in not holding that a condition
precedent for filing Civil Case No. 9510 has not been complied, or that is
otherwise premature, and /or that the complaint fails to state a cause of
To simplify, these are the issues in the present suit: (1)
whether respondent engaged in forum shopping; and (2) whether respondents
Complaint failed to state a cause of action.
The Courts Ruling
The Petition has no merit.
Petitioner contends that respondent deliberately engaged in forum
shopping by filing the present suit.The
former points out that there is already a pending case at the Regional Trial
Court, Branch 134, Makati City,
docketed as Civil Case No. 99-1171 and entitled United Coconut Planters Bank v. Mondragon Leisure and Resorts Corporation, et al.
To begin with, 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.10 A party violates the rule against forum shopping if the elements of litis pendentia are present; or if a
final judgment in one case would amount to res judicata in the other.11 cralawred
Thus, there is forum shopping when the following elements are
present: (a) identity of parties, or at least such parties as represent the
same interests in both actions[;] (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts[;] and (c) the identity
of the two preceding particulars[,] such that any judgment rendered in the
other action will, regardless of which party is successful, amount to res judicata in the action under
consideration; said requisites [are] also constitutive of the requisites for auter action pendant or lis pendens.12 cralawred
Prubankers Association v. Prudential Bank & Trust Company13 elucidates the consequence of forum
shopping as follows:chanroblesvirtua1awlibrary
[W]here a litigant sues the same party against whom another action
or actions for the alleged violation of the same right and the enforcement of
the same relief is/are still pending, the defense of litis pendentia in one case is a bar to the others; and, a final
judgment in one would constituteres judicataand thus would cause the dismissal of the rest.14 cralawred
Applying the foregoing principles to the case before us in relation
to Civil Case No. 99-1171, it is obvious that forum shopping does not
exist.The allegations in the two
Complaints show that, although there is an identity of parties, there is no
identity of rights asserted and reliefs prayed for.The civil cases involve different credit
Civil Case No. 99-1171 is a collection case to recover amounts
drawn by petitioner from a
P100 million omnibus line with P60
million excess availments, a US$5 million FCDU promissory note line, and a
postdated checks discounting line.15 On the other hand, Civil Case No. 9510 is a collection case for the recovery of
money availed from a P300 million term loan, with an action for
foreclosure in case petitioner fails to pay.16 It should further be noted that the credit accommodations involved in the two
cases are covered by different promissory notes.
No doubt, the elements of litis
pendentia are absent, and a final judgment in either case will not amount
to res judicata in the other.Petitioners claim of forum shopping is evidently
Cause of Action
It should be stressed that in determining whether a complaint
fails to state a cause of action, only the allegations therein may be properly
considered.17 Moreover, a defendant who moves to dismiss the complaint on this ground
hypothetically admits all the averments thereof.18 cralawred
The test of the sufficiency of the facts alleged in a petition is
whether, admitting the facts alleged, the court may render a valid judgment
upon them in accordance with the prayer of the complaint.19 If the allegations in the complaint furnish sufficient basis on which it can be
maintained, it should not be dismissed regardless of the defense that may be
presented by the defendants.20 If the trial court finds the allegations to be sufficient, but doubts their
veracity, it must deny the motion to dismiss and then require the defendant to
answer, and proceed to try the case on the merits.21 cralawred
A complaint states a cause of action when it contains these three
essential elements:(1) the legal right
of the plaintiff, (2) the correlative obligation of the defendant, and (3) the
act or the omission of the defendant in violation of the said legal right.22 cralawred
In the instant case, respondents Complaint sufficiently
establishes a cause of action.Assuming
the facts to be true, (a) petitioner and respondent executed an Omnibus Credit
and Security Agreement for
P300 million, from which the former obtained
a loan in the same amount covered by a promissory note; (b) petitioner executed
an assignment of leasehold rights over the Holiday Inn Hotel to the extent of P600
million in favor of respondent to secure the repayment of the loan; (c)
petitioner failed to pay the principal and interest payments on the due dates;
(d) respondent made formal demands and gave notices to the former, which was
subsequently declared in default; and (e) under the Omnibus Agreement,
respondent may avail itself of the remedies under the existing contracts and
the law and may thus seek judicial foreclosure of the collateral.23 On the basis of these allegations, the trial court may render a valid
judgment.The Complaint, therefore,
passes the test of sufficiency of the facts alleged.
Petitioner raises other matters that cannot be determined in a
motion to dismiss.Those are purely
factual issues that should be the subject of further proceedings, even a
full-dress trial in the RTC.24 Hence, they will not be taken up in this Decision.
Petition is DENIED.The Regional
Trial Court of
is DIRECTED to continue with
deliberate speed the proceedings in Civil Case No. 9510.Costs against petitioner.
Davide, Jr., C.J.,
(Chairman), Ynares-Santiago, Carpio, and Azcuna, JJ., concur.
., pp. 60-73. Fourteenth
Division.Penned by Justice Mercedes
Gozo-Dadole, with the concurrence of Justices Salvador J. Valdez Jr. (Division
chairman) and Juan Q. Enriquez Jr. (member).
CA Decision, p. 14; rollo
, p. 73.
This case was deemed submitted for resolution on May 22, 2003, upon this Courts receipt of petitioners
Memorandum, signed by Atty. Ernesto B. Francisco Jr.Respondents Memorandum, signed by Atty. Ma.
Cecilia B. Macatangay-Avila, was received by this Court on April 8, 2003.(Another copy of this Memorandum was filed on April 25, 2003.)
Petitioners Memorandum, pp. 2-3.
Nails and Wires Corporation v. Malayan Insurance Company, Inc.,
SCRA 431, 443, February 14, 2003; First
Philippine International Bank v. Court of Appeals,
322 Phil. 280, 306,
January 24, 1996; Solid Homes, Inc. v. Court of Appeals
, 337 Phil. 605, 615, April 11, 1997.
12 Saura v. Saura Jr.,
372 Phil. 337,
349, September 1, 1999, per
361 Phil. 744, January 25, 1999.
., p. 755, per
Respondents Complaint, Civil Case No. 99-1171, pp. 5-11, 14-15; rollo
, pp. 149-155, 158-159.
Respondents Complaint, Civil Case No. 9510, pp. 6-8; rollo
20 Vda. de Daffon v. Court of Appeals
; Boncato v. Siason
, 138 SCRA 414, 419, September 5, 1985.
21 Dimayuga v. Dimayuga
, 96 Phil. 859,
862, April 29, 1955; Pi?ero v. Enriquez
, 84 Phil. 774,
777, October 25, 1949.
Respondents Complaint, Civil Case No. 9510, supra
24 Socorro v. Vargas
, 134 Phil. 641,
645, October 26, 1968.
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