FIRST DIVISION
DEVELOPMENT BANK
OF THE PHILIPPINES,
Petitioner,
G.R.
No.
145908
January 22, 2004
-versus-
PINGOL LAND
TRANSPORT
SYSTEM COMPANY, INC.,
REMEDIOS D.
PINGOL,
JESUSITO L. PINGOL
AND
JOSEPHINE
PINGOL-SILO,
Respondents.
D E C I S I O N
YNARES-SANTIAGO,
J.:chanroblesvirtuallawlibrary
Assailed in this petition
for review on certiorari is
the September 7, 2000 Decision[1]
of the Court of Appeals in CA-G.R. SP No. 35189 which dismissed the
petition
for certiorari questioning the July 14, 1994 Order[2]
of the Regional Trial Court of Naga City, Branch 22 in Civil Case No.
94-3192
denying petitioner’s motion to dismiss.
The antecedent facts
show that on December 2, 1991 and September 2, 1992, respondent Pingol
Land Transport System Company, Inc. (PLTSCI), a domestic corporation,
obtained
loans from petitioner Development Bank of the Philippines in the total
amount of P20 Million.[3]
To secure the payment thereof, PLTSCI, represented by respondents
Remedios
D. Pingol, Jesusito L. Pingol, and Josephine Pingol-Silo, its Chairman
of the Board, President and Treasurer, respectively,[4]
executed, among others, a chattel mortgage over certain air-conditioned
buses[5]
in favor of petitioner.[6]
On August 17, 1993, after PLTSCI defaulted in the payment of its loans,
petitioner applied for the extra-judicial foreclosure of the mortgaged
properties before the Office of the Clerk of Court of Naga City.[7]chanrobles virtuallaw libraryred
On September 3, 1993,
PLTSCI filed[8]
with the Regional Trial Court of Makati, Branch 56, a complaint for
damages
with injunction, docketed as Civil Case No. 93-3121, against petitioner,[9]
seeking the annulment of the foreclosure and seizure of its buses and
the
issuance of a restraining order and/or injunction to prevent their sale
at public auction.cralaw:red
Meanwhile, the foreclosure
sale proceeded on September 10 and 13, 1993, wherein petitioner was
declared
the highest bidder.[10]
On November 4, 1993, PLTSCI filed with the RTC of Makati an Urgent
Motion
for the Issuance of a Preliminary Prohibitory Injunction and/or
Restraining
Order to prevent petitioner from conducting a public bidding of the
buses
it acquired at the foreclosure sale.[11]
On June 6, 1994, respondent
Jesusito Pingol, President of PLTSCI filed a "Motion to Withdraw
Complaint."[12]
On June 14, 1994, petitioner filed its answer with counterclaim and
received
on the same day a copy of Jesusito Pingol’s motion to withdraw the
complaint.[13]
On motion of petitioner, the court ordered Jesusito to show his
authority
to withdraw the complaint,[14]
but the latter failed to do so.chanrobles virtuallaw libraryred
On June 7, 1994, PLTSCI
filed another complaint against petitioner for annulment of foreclosure
and/or auction sale, replevin and damages before the Regional Trial
Court
of Naga City, Branch 22, docketed as Civil Case No. 94-3192.[15]
The complaint was based on the same facts alleged in Civil Case No.
93-3121
pending before the Makati RTC, except that in the latter complaint,
PLTSCI
prayed for the issuance of a writ of replevin to recover the buses
foreclosed
by petitioner. The officers of petitioner, the special and deputy
sheriffs
as well as the highest bidder were also impleaded as party-defendants
therein.cralaw:red
On June 10, 1994, Judge
Angel S. Malaya, then presiding Judge of Branch 22 of the Regional
Trial
Court of Naga City, issued an Order granting PLTSCI’s prayer for the
issuance
of a writ of replevin.[16]
Petitioner filed a motion to quash the writ of replevin, and
subsequently,
another motion to – (a) dismiss the complaint on the ground of forum
shopping;
(b) cite PLTSCI in contempt of court; and (c) lift and/or dissolve the
writ of replevin on the ground that the bond posted by PLTSCI was
fictitious.[17]
In support of the motion to dismiss, petitioner attached a certification[18]
issued by the Clerk of Court of Makati RTC attesting to the pendency of
Civil Case No. 93-3121 before the Regional Trial Court of Makati,
Branch
22.[19]
Likewise attached to the motion was a certification from Utility
Assurance
Corporation, the company which supposedly issued the bond for the writ
of replevin, stating that the bond posted by PLTSCI was fake.[20]
On July 14, 1994, Judge
Malaya, of the Naga court, issued the assailed Order annulling the writ
of replevin previously issued. He ruled that the replevin bond posted
by
PLTSCI was inefficacious because the officer of Utility Assurance
Corporation
who signed the replevin bond had no authority to do so. Nevertheless,
he
denied the motion to dismiss ratiocinating that no pending case exists
at the time PLTSCI filed the complaint with the Naga court considering
that the prior motion to withdraw the complaint filed by Jesusito
Pingol
terminated all the proceedings before the Makati court. Judge Malaya
held
that said complaint can be withdrawn as a matter of right because the
same
was filed before the petitioner filed its answer.[21]
The dispositive portion of his Order states:chanrobles virtuallaw libraryred
WHEREFORE, premises
considered, the writ of replevin issued by this Court is hereby SET
ASIDE
and NULLIFIED.cralaw:red
And directing Sheriff
Roque Angeles to repossess the subject nineteen (19) motor vehicles
units
and thereafter deliver the same nineteen (19) motor vehicle units to
the
herein defendant DBP.cralaw:red
And, the motion to dismiss
is hereby DENIED.cralaw:red
SO ORDERED.[22]
Petitioner filed a motion
for
reconsideration but the same was denied.[23]
Hence, it elevated the case to the Court of Appeals via a petition for
certiorari,[24]
contending, among others, that Judge Malaya gravely abused his
discretion
in not dismissing the complaint on the ground of forum shopping. The
petition
was docketed as CA-G.R. SP No. 35189.cralaw:red
In the meantime, the
Makati RTC denied Jesusito Pingol’s motion to withdraw the complaint
for
failure to submit a Board Resolution authorizing him to withdraw the
same.[25]
At the pre-trial, counsel for PLTSCI asked for the re-setting of the
proceedings,[26]
but failed to appear on the scheduled date. The complaint was thus
dismissed
and PLTSCI was declared as in default on the counterclaim of petitioner.[27]
In due time, the Makati RTC rendered a decision ordering PLTSCI to pay
petitioner the outstanding balance of its loan in the amount of
P2,678,982.35
plus interest, litigation expenses, attorney’s fees and cost of suit.[28]
The said decision was assailed on certiorari by PLTSCI to the Court of
Appeals,[29]
docketed as CA-G.R. SP No. 35077.chanrobles virtuallaw libraryred
On December 28, 1994,
CA-G.R. SP No. 35189 and CA-G.R. SP No. 35077 were consolidated and the
parties were ordered to maintain the status quo.[30]
On July 21, 2000, the
Court of Appeals issued a Resolution granting PLTSCI’s motion to
withdraw
its petition in CA-G.R. SP No. 35077. On the same date, said Resolution
became final and executory.[31]
Considering petitioner’s manifestation that it was still interested in
pursuing its petition in CA-G.R. SP No. 35189, the same was submitted
for
resolution.[32]
On September 7, 2000,
the Court of Appeals rendered the assailed decision in CA-G.R. SP No.
35189,
dismissing the petition for certiorari filed by petitioner. It ruled
that
assuming that the Naga court committed an error in not granting the
motion
to dismiss, said error is an error of judgment and not an error of
jurisdiction
correctible by certiorari.[33]
Hence, petitioner DBP
filed the instant petition. PLTSCI, however, continuously failed to
file
its comment despite orders of the Court. On September 10, 2003, PLTSCI
was declared to have waived its right to file comment and the case was
submitted for resolution on the basis of the pleadings filed by
petitioner.[34]
The issues here are
– (1) whether or not the Court of Appeals erred in sustaining the
denial
of petitioner’s motion to dismiss Civil Case No. 94-3192; and (2) if in
the affirmative, whether or not such an error is correctible by
certiorari.cralaw:red
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. This is a practice which ridicules the judicial
process,
plays havoc with the rules on orderly procedure, and is vexatious and
unfair
to the other parties of the case. It exists where the elements of litis
pendentia are present or where a final judgment in one case will amount
to res judicata in another.[35]
The three elements for
litis pendentia as a ground for dismissal of an action are: (a)
identity
of parties, or at least such parties who represent the same interest in
both actions; (b) identity of rights asserted and relief prayed for,
the
relief being founded on the same facts; and (c) the identity, with
respect
to the two preceding particulars in the two cases, is such that any
judgment
that may be rendered in the pending case, regardless of which party is
successful, would amount to res judicata in the other.[36]
In the case at bar,
the principal parties in the two complaints filed before the Makati and
Naga courts were the same, i.e., PLTSCI and petitioner DBP as well as
their
officers. Both cases arose from the same loan and mortgage contracts;
and
both complaints filed by PLTSCI seek to annul the foreclosure and sale
at public auction of the foreclosed buses, except that in the complaint
before the Naga court, PLTSCI included an additional prayer for the
issuance
of a writ of replevin. Evidently, this is a clear case of forum
shopping
as the judgment in the Makati RTC would constitute a bar to the suit
before
the Naga court.cralaw:red
What highlights the
error of the Court of Appeals in not dismissing the complaint before
the
Naga court is the fact that PLTSCI withdrew its appeal from the
decision
of the Makati RTC. Said withdrawal had the effect of rendering final
and
executory the decision of the Makati court which – (1) dismissed
PLTSCI’s
complaint to recover damages and to annul the foreclosure and sale of
its
buses; and (2) ordered PLTSCI to pay the balance of the loan plus
damages
for filing a clearly baseless and unfounded suit.[37]
This is obviously a species of res judicata, specifically, "bar by
former
judgment," which exists when, between the first case where the judgment
was rendered, and the second case where such judgment is invoked, there
is identity of parties, subject matter and cause of action. Since these
three identities are present in the instant case, the judgment on the
merits
rendered by the Makati court constitutes an absolute bar to subsequent
action before the Naga court. It is final as to the claim or demand in
controversy, including the parties and those in privity with them, not
only as to every matter which was offered and received to sustain or
defeat
the claim or demand, but as to any other admissible matter which might
have been offered for that purpose.[38]chanrobles virtuallaw libraryred
Rule 17, Section 1 of
the old Rules of Civil Procedure[39]
which allows the dismissal of the complaint by the plaintiff as a
matter
of right at any time before service of the answer, is not applicable in
the instant case because Jesusito Pingol who signed the motion to
withdraw
the complaint failed to present a Board Resolution authorizing him to
withdraw
the complaint filed by PLTSCI. Being a corporation, the latter has a
personality
separate and distinct from Jesusito Pingol and the other officers
composing
it,[40]
such that in the absence of a Board Resolution, the motion filed by
Jesusito
cannot be considered as a motion of PLTSCI itself. Inasmuch as no
service
of a proper "Motion to Withdraw Complaint" was made to petitioner prior
to its filing of an answer with counterclaim, the applicable provision
is Section 2 of Rule 17 of the old Rules. Under the said provision, if
a counterclaim has been pleaded by the defendant prior to the service
upon
him of the plaintiff’s motion to dismiss, the action shall not be
dismissed
against the defendant’s objection unless the counterclaim can remain
pending
for independent adjudication by the court. In the present case,
petitioner’s
claim is dependent on the validity of the sale and foreclosure which
PLTSCI
branded as illegal. Moreover, petitioner’s claim for damages, caused by
PLTSCI’s filing of a baseless suit, cannot be decided without going
through
the merits of the complaint filed by PLTSCI. Petitioner’s counterclaim
cannot therefore stand independently from PLTSCI’s complaint,
justifying
the Makati court’s denial of the motion to withdraw the complaint.cralaw:red
It is thus clear from
the above disquisition that PLTSCI was guilty of forum shopping and the
Court of Appeals erred in sustaining the trial court’s denial of
petitioner’s
motion to dismiss the complaint.chanrobles virtuallaw libraryred
Anent the second issue,
petitioner correctly resorted to the extra-ordinary writ of certiorari
in questioning the July 14, 1994 Order of the Naga court.cralaw:red
Basic is the doctrine
that the denial of a motion to dismiss or to quash, being
interlocutory,
cannot be questioned by certiorari; it cannot be the subject of appeal,
until final judgment or order is rendered. But this rule is not
absolute.
In Casil v. Court of Appeals,[41]
the Court held that -chanrobles virtuallaw libraryred
"[E]ven when appeal
is available and is the proper remedy, the Supreme Court has allowed a
writ of certiorari (1) where the appeal does not constitute a speedy
and
adequate remedy (Salvadades vs. Pajarillo, et al., 78 Phil. 77), as
where
33 appeals were involved from orders issued in a single proceeding
which
will inevitably result in a proliferation of more appeals (PCIB vs.
Escolin,
et al., L-27860 and 27896, Mar. 29, 1974); (2) where the orders were
also
issued either in excess of or without jurisdiction (Aguilar vs. Tan,
L-23600,
Jan. 30, 1970; Cf. Bautista, et al. vs. Sarmiento, et al., l-45137,
Sept.
23, 1985); (3) for certain special considerations, as public welfare or
public policy (See Jose vs. Zulueta, et al., L-16598, May 31, 1961 and
cases cited therein); (4) where in criminal actions, the court rejects
rebuttal evidence for the prosecution as, in case of acquittal there
could
be no remedy (People vs. Abalos, L-29039, Nov. 28, 1968); (5) where the
order is a patent nullity (Marcelo vs. De Guzman, et al., L-29077, June
29, 1982); and (6) where the decision in the certiorari case will avoid
future litigations (St. Peter Memorial Park, Inc. vs. Campos, et al.,
L-38280,
Mar. 21, 1975)."[42]
Indeed, where the questioned
order is a patent nullity, or where it was issued in excess or without
jurisdiction, resort to certiorari may be allowed. Here, the violation
of the rule on forum shopping is obvious. Disregarding such fact
constituted
grave abuse of discretion on the part of the trial court, amounting to
lack or excess of jurisdiction. The remedy of certiorari is therefore
proper
to assail the patently null order of the Naga court which denied
petitioner’s
motion to dismiss.chanrobles virtuallaw libraryred
WHEREFORE, in view of
all the foregoing, the petition is GRANTED. The September 7, 2000
Decision
of the Court of Appeals in CA G.R. SP No. 35189, is REVERSED and SET
ASIDE.
The complaint in Civil Case No. 94-3192 before the Regional Trial Court
of Naga City, Branch 22, is DISMISSED.cralaw:red
SO ORDERED.cralaw:red
Davide, Jr., C.J., (Chairman),
Panganiban, Carpio, and Azcuna, JJ.,
concur.
____________________________
Endnotes:
[1]
Penned by Associate Justice Martin S. Villarama, Jr. and concurred in
by
Associate Justices Salome A. Montoya and Romeo J. Callejo, Jr.; Rollo,
p. 39.
[2]
Penned by Judge Angel S. Malaya; Rollo, p. 73.chanrobles virtuallaw libraryred
[3]
Promissory Note Nos. 41 and 42, Rollo, pp. 79-84.
[4]
Respondent officers were residents of Naga City.
[5]
Decision, Rollo, p. 186.
[6]
List of Properties Mortgaged and Addendum To Chattel Mortgage, Rollo,
pp.
92-94.
[7]
Amended Complaint, Rollo, p. 99.chanrobles virtuallaw libraryred
[8]
Petition, Rollo, p. 40.
[9]
DBP’s principal office was located in Makati, Metro Manila; See
Complaint,
Rollo, p. 98.
[10]
Answer with Compulsory Counterclaim, Rollo, p. 113.
[11]
Id.; Opposition To Motion To Withdraw Complaint with Motion To Cite
Jesusito
Pingol in Contempt of Court, Rollo, p. 126.
[12]
Rollo, p. 122.
[13]
Id., p. 124.
[14]
Order dated June 24, 1994, Rollo, p. 151.
[15]
Rollo, p. 132. Entitled Pingol Land Transport System Company, Inc.,
Remedios
De Leon-Pingol, Jesusito L. Pingol, and Josephine Pingol-Silo v. Angel
P. Ancheta, Jr. (First Vice President of DBP), Guillermo V. Rabuel
(Branch
Head of DBP), Atty. Lauro Doble (Special Sheriff), Atty. Romulo A.
Badilla
(Bidder for and in behalf of DBP), Sheriff Anastacio P. Bongon and
Development
Bank of the Philippines.
[16]
Rollo, p. 145.
[17]
Id., p. 153; Filed on June 28, 1994.
[18]
Dated June 21, 1994.
[19]
Rollo, p. 161.chanrobles virtuallaw libraryred
[20]
Id., p. 149.
[21]
Order, Rollo, pp. 73-74.
[22]
Rollo, pp. 76-77.
[23]
Order dated August 23, 1994, Rollo, p. 78.
[24]
Filed on September 15, 1994.
[25]
Order dated November 8, 1994, Rollo, p. 178.
[26]
Order dated December 5, 1994, Rollo, p. 179.
[27]
Decision, Rollo, p. 186.
[28]
Decision dated January 7, 1998, Rollo, p. 188.
[29]
Filed on September 5, 1994.
[30]
Rollo of CA-G.R. SP No. 35077, p. 219.
[31]
CA Rollo of CA-G.R. SP No. 35189, p. 145.
[32]
Id., p. 143.chanrobles virtuallaw libraryred
[33]
Rollo, p. 44.
[34]
Resolution, Rollo, p. 260.
[35]
Spouses Hanopol v. Shoemart, Incorporated, G.R. Nos. 148185 and 137774,
4 October 2002, 390 SCRA 439, 456-457; citing Alejandrino v. Court of
Appeals,
356 Phil. 851 [1998]; Philippine Woman’s Christian Temperance Union,
Inc.
v. Abiertas House of Friendship, Inc., 354 Phil. 791 [1998]; Heirs of
Victorina
Motus Peñaverde v. Heirs of Mariano Peñaverde, G.R. No.
131141,
30 October 2000, 344 SCRA 69; Gatmaytan v. Court of Appeals, 335 Phil.
155 [1997]; Benguet Electric Coop., Inc. v. National Electrification
Administration,
G.R. No. 93924, 23 January 1991, 193 SCRA 250; Minister of Natural
Resources,
et al. v. Heirs of Orval Hughes, et al., G.R. No. L- 62664, 12 November
1987, 155 SCRA 566.
[36]
Spouses Hanopol v. Shoemart, Incorporated, supra, at p. 456, citing
Compania
General de Tabacos de Filipinas, et al. v. Court of Appeals, et al.,
G.R.
No. 130326, and Fieldman Agricultural Trading Corporation, et al. v.
Hon.
Court of Appeals, et al., G.R. No. 137868, 29 November 2001, 371 SCRA
95;
Ayala Land, Inc. v. Valisno, 381 Phil. 518 [2000]; Philippine Woman’s
Christian
Temperance Union, Inc. v. Abiertas House of Friendship, Inc., supra;
Investors’
Finance Corporation v. Ebarle, G.R. No. L-70640, 29 June 1988, 163 SCRA
60.
[37]
The dispositive portion thereof, reads:chanroblesvirtuallawlibrarychanrobles virtuallaw libraryred
WHEREFORE,
judgment is hereby rendered in favor of defendant Development Bank of
the
Philippines (DBP) and against the plaintiff ordering the latter to pay
the former the following:chanroblesvirtuallawlibrary
a.
The amount of P2,678.982.35 plus 17% interest per annum from September
30, 1993 until fully paid;
b.
The amount of P351,484.35 as litigation expenses;
c.
The sum equivalent to 10% of the total obligation as attorney’s fees;
d.
The costs of suit.chanrobles virtuallaw libraryred
SO
ORDERED. (Rollo, p. 188)
[38]
Mendiola v. Court of Appeals, 327 Phil. 1156, 1163 [1996]; citing Nabus
v. Court of Appeals, G.R. No. 91670, 7 February 1991, 193 SCRA 732.
[39]
The governing rule at the time PLTSCI filed the motion to withdraw the
complaint. It states - Section 1. Dismissal by the plaintiff. – An
action
may be dismissed by the plaintiff without order of the court by filing
a notice of dismissal at any time before service of the answer or of a
motion for summary judgment. Unless otherwise stated in the notice, the
dismissal is without prejudice, except that a notice operates as an
adjudication
upon the merits when filed by a plaintiff who has once dismissed before
a competent court an action based on or including the same claim. A
class
suit shall not be dismissed or compromised without the approval of the
court. (Rephrased but substantially the same under the 1997 Revised
Rules
of Civil Procedure)
[40]
Powton Conglomerate, Inc. v. Agcolicol, G.R. No. 150978, 3 April 2003.
[41]
349 Phil. 187 (1998).chanrobles virtuallaw libraryred
[42]
Id., p. 197. |