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[G.R. No. 162516.� July 13, 2005]
DAVAO SUNRISE vs. PNB
THIRD DIVISION
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated JUL 13 2005.
G.R. No. 162516 (Davao Sunrise Investment and Development Corporation and Spouses Robert Alan Limso and Nancy Lee Limso, vs. Philippine National Bank.)
In our Resolution dated September 22, 2004, we denied petitioners' motion for reconsideration of our Resolution of May 24, 2004 denying the instant petition for review on certiorari for their failure to show that the Court of Appeals committed a reversible error in dismissing their petition for violation of the rule on non-forum shopping. In their motion for reconsideration, petitioners raised no substantial arguments to warrant a reconsideration of our Resolution denying their petition.
On October 29, 2004, petitioners filed a motion for leave to file and to admit their second motion for reconsideration, attaching therewith their "Imperative Second Motion for Reconsideration."
Section 2, Rule 52 of the 1997 Rules of Procedure, as amended, mandates that no second motion for reconsideration of a judgment or final resolution by the same party shall be entertained. However, because of petitioners' insistence that they did not violate the Rule on non-forum shopping, we find it imperative to discuss and explain the reasons for our conclusion.
Records show that on September 1, 1993, the Philippine National
Bank (PNB), respondent, extended in favor of spouses Robert Alan Limso and
Nancy Lee Limso and the Davao Sunrise Investment and Development Corporation
(DSIDC), petitioners, a revolving credit line in the sum of not more than P300,000,000.00
and a seven-year term loan of P400,000,000.00. The loans were secured by
a real estate mortgage over four (4) parcels of land covered by TCT Nos.
T-147820, T-147821, T-246386 and T-247012.
Petitioners had been religiously paying their obligation until 1999 when they encountered financial difficulty. By January 1999, their outstanding obligation amounted to P1.067 billion. The parties then agreed to a restructuring of the loans. On January 29, 1999, they executed an Extension, Restructuring and Conversion Agreement.
Pursuant thereto, petitioners signed two promissory notes, both
dated January 5, 1999, in the amounts of P583,183,333.34 and P483,811,798.93.
Petitioners failed to pay the amounts due on the restructured
loans, prompting respondent PNB to file with the Office of the Clerk of Court,
Regional Trial Court (RTC), Davao City, a petition for extrajudicial
foreclosure of the real estate mortgage. At the auction sale, the properties
were sold to respondent PNB, being the highest bidder, for the sum of P1.5
billion.
Thereafter, a series of court actions between the parties ensued.
On October 30, 2000, before a Sheriff's Certificate of Sale could be issued in favor of respondent PNB, petitioners, citing irregularities in the auction sale, filed with the RTC of Davao City, Branch 17, a complaint "For Declaration of Nullity of Interest Rates; Crediting of Illegal Interest Collected; Elimination of All Uncollected Illegal Interests; Reimposition of New Interest Rate at 12% Per Annum; Total Elimination of Penalties; Elimination/Reduction of Attorney's Fees; Declaration of Nullity of Auction Sale and the Foreclosure Proceedings; Reduction of Both Loan Accounts; Reformation/Annulment of Contract; Reconveyance; Damages; with Prayer for Temporary Restraining Order and/or Injunction." The case was docketed as Civil Case No. 28, 170-2000.
As prayed for by petitioners, the trial court issued a Temporary Restraining Order enjoining, among others, the Provincial Sheriff from registering the Certificate of Sale. It then proceeded to hear petitioners' application for injunctive relief. On November 20, 2000, the RTC issued an Order denying petitioners' application for the issuance of writ of preliminary injunction. However, on petitioners' motion for reconsideration, the said Order was set aside and a writ of preliminary injunction was issued an December 4, 2000. The trial court enjoined respondent PNB, the Provincial Sheriff and the Register of Deeds from confirming the Provisional Certificate of Sale and/or final deed of sale and/or taking immediate possession and from selling or mortgaging the properties involved.
After its motion for reconsideration was denied, respondent PNB filed a petition for certiorari with the Court of Appeals, docketed as CA-G.R. SP No. 63351.
In a Decision dated January 10, 2002, the Court of Appeals ordered the dissolution of the writ of preliminary injunction issued by the trial court. The petitioners then filed with this Court a petition for certiorari, docketed as G.R. No. 152812. However, it was dismissed on technical grounds. Petitioners did not file a motion for reconsideration.
Pursuant to the Court of Appeals Decision in CA-G.R. SP No. 63351 dissolving the trial court's writ of preliminary injunction in Civil Case No. 28, 170-2000, a Sheriff's Provisional Certificate of Sale was issued in favor of respondent PNB.
Respondent PNB presented the Certificate of Sale to the Register of Deeds of Davao City for registration but action thereon was held in abeyance of ground that at that time, the trial court's Decision in Civil Case No. 28, 170-2000 has not attained finality. Instead, the Register of Deeds referred the matter en consulta to the Land Registration Authority (LRA) on whether or not the Sheriff's Provisional Certificate of Sale presented by respondent PNB is registrable.
In a Resolution dated May 21, 2002, the LRA allowed the registration of the Sheriff's Provisional Certificate of Sale. It relied on our ruling in Intramuros Tennis Club, Inc. vs. Philippine Tourism Authority, [1] cralaw that "judgment in actions for injunction are not stayed by the pendency of an appeal taken therefrom" and in Santiago vs. Vasquez, [2] cralaw that "an order of dissolution of an injunction may be immediately effective, even though it is not final."
Petitioners' motion for reconsideration of the LRA Resolution was denied on July 5, 2002. They then filed a petition for review with the Court of Appeals. Initially, it was dismissed but on their motion for reconsideration, the petition was reinstated, docketed therein as CA-G.R. SP No. 74535.
In a Decision dated October 28, 2003, the Court of Appeals summarily dismissed the petition due to petitioners' violation of the Rule on non-forum shopping. This Decision is now being assailed in the instant petition.
Meanwhile, it appears that pending resolution of the consulta case, the parties herein figured in several suits primarily arising out of the foreclosure of the mortgage properties, thus:
"(1) Civil Case No. 29, 036-2002, entitled 'Spouses Robert Alan Limso and Nancy Limso vs. PNB, et al., for Declaratory Relief with prayer for TRO/injunction;
(2) Case No. 124-2002, entitled 'In the Matter of the Petition Ex-Parte for the Issuance of Writ of Possession Under LRC Record No. 12973; 180131 and LRC Record No. 37,' for issuance of a writ of possession under Act No. 3135, as amended, and Section 47 of RA8791;
(3) CA-G.R. SP No. 79500, entitled 'Davao Sunrise Development and Investment Corporation, et al. vs. Hon. Jesus B. Quitain, et al.' for Certiorari and Prohibition."
In the first case - Civil Case No. 29, 036-2002 filed with the RTC of Davao City, Branch 14, on March 25, 2002, petitioners sought a determination of their rights and duties under Republic Act No. 8791, otherwise known as General Banking Laws of 2000, specifically Section 47 thereof which provides that "the mortgagor or debtor whose real property has been sold. shall have the right within one year after the sale. to redeem the property." It likewise provides that juridical persons "shall have the right to redeem the property until, but not after, the registration of the certificate of sale with the register of deeds which in no case shall be not more than three (3) months after foreclosure, whichever is earlier."
In the same civil case, the trial court issued an Order dated May
3, 2002 granting the injunctive relief prayed for and enjoined the Provincial
Sheriff, the Register of Deeds of Davao City and respondent PNB from
registering the Sheriff's Provisional Certificate of Sale and, if already
registered, to refrain from consolidating title to the properties, provided
that petitioners post an injunction bond in the amount of P60,000,000.00.
Petitioners filed the required injunction bond. Accordingly, the trial court issued the writ of preliminary injunction on May 6, 2002.
Questioning the trial court's Orders dated May 3, 2002, and May 6, 2002, respondent PNB filed with the Court of Appeals a petition for "Certiorari, Prohibition and Mandamus with Prayer for Temporary Restraining Order and Writ of Preliminary Injunction," docketed as CA-G.R. SP No. 71527. On December 11, 2002, the Court of Appeals issued a Decision in Favor of respondent PNB, setting aside the trial court's May 3, 2002 order granting petitioners' application for an injunctive relief.
After their motion for reconsideration was denied, petitioners filed with this Court a petition for review on certiorari, docketed as G.R. No. 158622. This case is assigned to the Second Division.
Going back to the instant case - the issue posed is whether the Court of Appeals erred in dismissing CA-G.R. SP No. 74535 on the ground of forum-shopping.
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. 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. [3] cralaw
Litis pendencia, as a ground for the dismissal of a civil action, refers to that situation wherein another action is pending between the same parties for the same cause of action, such that the second action becomes unnecessary and vexatious. [4] cralaw
There is forum shopping when the following elements are present: "(a) identity of parties, or at least such parties as 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 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." [5] cralaw
We hold that petitioners violated the rule on forum-shopping. As correctly found by the Court of Appeals in CA-G.R. SP No. 74535 now being challenged by petitioners:
"The records clearly reveal that the petition for certiorari, prohibition and mandamus (CA-G.R. SP No. 71527) filed by PNB on July 9, 2002 was pending before the Third Division of the Court of Appeals when the instant petition was filed on August 29, 2002. It bears stressing that the former petition was filed against Judge William Layague, spouses Limso and the Register of Deeds seeking to register the Sheriff's Provisional Certificate of Sale in favor of PNB. In the same vein, the instant petition prays that respondent Bank and the Register of Deeds be enjoined from registering the Sheriff's Provisional Certificate of Sale and to further commit any other act of further disposition of the subject properties (p. 20, Rollo) and the LRA from enforcing its assailed Resolutions dated May 21, 2002 and July 5, 2002 declaring that the Sheriff's Provisional Certificate of Sale is registrable. Apparently, in both cases, the Court of Appeals is confronted with the same issue regarding the registrability or non-registrability of the Sheriff's Provisional Certificate of Sale. Notably, the Supreme Court held that when in the two or more cases pending there is identity of parties, rights or causes of action and reliefs sought, there is forum-shopping, which is precisely the situation in the case before us.
Furthermore, it is undisputed that petitioners had knowledge of the pendency of CA-G.R. SP No. 71527. By filing the instant petition for review on August 29, 2002 despite knowledge of the afore-mentioned petition in another Division of this Court, petitioners abused the judicial process and are undoubtedly guilty of forum-shopping. This is bolstered by the fact that on August 23, 2002, herein petitioners (private respondents therein) filed a Motion for Reconsideration with Prayers for the Dissolution of the TRO and to Post Counter Bond of the Resolution dated August 13, 2002 issued by Court of Appeals. Despite knowledge of the existence of such petition before another Division of this Court, petitioners opted not to inform this Court of such fact in its certification against forum-shopping. Clearly, no other conclusion can be deduced than that the instant petition was purposely resorted to by petitioners to obtain a favorable resolution, contrary to what was initially granted by the Special Third Division of this Court in CA-G.R. SP No. 71527."
The appellate Court further went on and held:
"Contrary to the assertion of petitioners, the Decision of the Court of Appeals in CA-G.R. SP No. 71527 directing the Register of Deeds to register the Sheriff's Provisional Certificate of Sale affects the outcome of the instant petition, which dwells on the registrability of the said Certificate of Sale. The fact that the said decision has not yet attained finality does not alter the fact that petitioners are guilty of forum-shopping. The existence of forum-shopping does not depend upon the finality of a decision in another case involving the same subject matter and issues as the one filed by petitioners. As long as there is a pending action involving the same parties, subject matter, issues and reliefs sought with the one filed by petitioner, there is forum-shopping. There is no question that in both cases the parties are the same or identical. There is likewise a similarity in the rights asserted and the relief prayed for in the two petitions, viz: the registrability of the Sheriff's Provisional Certificate of Sale.
Necessarily, the filing of the instant petition on August 29, 2002 amd the subsequent Resolution of the Third Division of this Court on December 11, 2002, in CA-G.R. SP No. 71527 annulling the May 3, 2002 and June 24, 2002 Orders of Judge Layague, which enjoined the Register of Deeds of Davao City from registering the Sheriff's Provisional Certificate of Sale, and directing respondent Register of Deeds to register said Certificate of Sale, and annotate the same on TCT Nos. T-147820, T-147821, T-246386 and T-247012 would amount to res judicata. Thus, the pertinent issue of registrability of the Sheriff's Provisional Certificate of Sale having been already determined by the Court of Appeals, this Court is now precluded from resolving the same issue. This is to avoid any possibility of two divisions of this Court rendering conflicting resolutions on the same issue and subject matter. Moreso that the said decision on the said issue is the subject of a petition for review on certiorari with the Supreme Court."
In denying that they are guilty of forum shopping, petitioners insists that it was not incumbent upon them to disclose the pendency of CA-G.R. SP No. 71527 because they were not the ones who filed the said case, nor was it commenced at their initiative. In interpreting Section 2, Rule 42 of the 1997 Rules of Procedure, as amended, petitioners limited themselves on the phrase "he has not theretofore commenced any other invoking the same issues in the Supreme Court," Obviously, there is an attempt on their part to mislead us by truncating the pertinent provision of the Rule. For it is clearly provided therein that should petitioner "thereafter learn that a similar action or proceeding has been filed or is pending before the Supreme Court, the Court of Appeals or different divisions thereof, or any other tribunal or agency, he undertakes to promptly inform the aforesaid courts and other tribunal or agency thereof, within five (5) days therefrom." The Rule does not require that the other case or cases should be filed by the same petitioner. Pursuant to our ruling in the consolidated cases of "Far Eastern Shipping Company vs. Court of Appeals and Philippine Ports Authority and Manila Pilots' Association vs. Philippine Ports Authority and Far Eastern Shipping Company," [6] cralaw it is incumbent upon a party to inform the Court of the Fact of the pendency of another similar proceeding filed by another party through its certification against forum shopping, and failure to make such a certification renders the certification defective and could be a ground for dismissal of the petition. In said cases, we held:
"In as mush as MPA's petition in G.R. No. 130150 was posted by registered mail on August 29, 1997 and taking judicial notice of the average period of time it takes local mail to reach its destination, by reasonable estimation, it would be fair to conclude that when FESC filed its petition in G.R. No. 130068 on September 26, 1997, it would already have received a copy of the former and would then have knowledge of the pendency of the other petition initially filed with the First Division. It was therefore incumbent upon FESC to inform the Court of that fact through its certificate against forum shopping. For failure to make such disclosure, it would appear that the aforequoted certification accompanying the petition in G.R. No. 130068 is defective and could have been a ground for dismissal thereof."
ACCORDINGLY, petitioners' second motion for reconsideration of our Resolution dated May 24, 2004 is DENIED. No further pleadings shall be entertained in this case.
SO ORDERED.
Very truly yours,
(Sgd.) LUCITA ABJELINA-SORIANO
Clerk of Court
Endnotes:
[1] cralaw G.R. No. 135630, September 26, 2000, 341 SCRA 90.
[2] cralaw G.R. Nos. 99289-90, January 27, 1993, 217 SCRA 633, 645.
[3] cralaw Mondragon Leisure and Resorts Corporation vs. United Coconut Planters Bank, G.R. No. 154187, April 14, 2004, 427 SCRA 585.
[4] cralaw Agilent Technologies Singapore (PTE) Ltd. vs. Integrated Silicon Technology Philippines Corporation, et al., G.R. No. 154618, April 14, 2004, 427 SCRA 593.
[5] cralaw Mondragon Leisure and Resorts Corporation vs. United Coconut Planters Bank, supra.
[6] cralaw G.R. Nos. 130068 & 130150, October 1, 1998, 297 SCRA 30.
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