Chua v. Viray
Chua v. Viray
THIRD DIVISION
[ G.R. No. 182311, August 19, 2009 ]
FIDEL O. CHUA AND FILIDEN REALTY AND DEVELOPMENT
CORPORATION, PETITIONERS, VS. METROPOLITAN BANK &
TRUST COMPANY, ATTY. ROMUALDO CELESTRA, ATTY. ANTONIO
V. VIRAY, ATTY. RAMON MIRANDA AND ATTY. POMPEYO
MAYNIGO, RESPONDENTS.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
Decision,[1] dated 31 January 2008, later upheld in a Resolution[2] dated 28 March 2008, both
rendered by the Court of Appeals in CA-G.R. CV No. 88087. The Court of Appeals, in its
assailed Decision, affirmed the Order[3] dated 3 July 2006 of Branch 258 of the Regional Trial
Court of Parañaque City (RTC-Branch 258), dismissing the action for damages, docketed as
Civil Case No. CV-05-0402, filed by petitioners Fidel O. Chua (Chua) and Filiden Realty and
Development Corporation (Filiden), on the ground of forum shopping.
Having failed to fully pay their obligations, petitioners entered into a Debt Settlement
Agreement[8] with respondent Metrobank on 13 January 2000, whereby the loan obligations of
the former were restructured. The debt consisted of a total principal amount of P79,650,000.00,
plus unpaid interest of P7,898,309.02, and penalty charges of P552,784.96. Amortization
payments were to be made in accordance with the schedule attached to the agreement.
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In a letter[9] dated 28 February 2001, the lawyers of respondent Metrobank demanded that
petitioners fully pay and settle their liabilities, including interest and penalties, in the total
amount of P103,450,391 as of 16 January 2001, as well as the stipulated attorney's fees, within
three days from receipt of said letter.
When petitioners still failed to pay their loans, respondent Metrobank sought to extra-judicially
foreclose the REM constituted on the subject properties. Upon a verified Petition for
Foreclosure filed by respondent Metrobank on 25 April 2001, respondent Atty. Romualdo
Celestra (Atty. Celestra) issued a Notice of Sale dated 26 April 2001, wherein the mortgage debt
was set at P88,101,093.98, excluding unpaid interest and penalties (to be computed from 14
September 1999), attorney's fees, legal fees, and other expenses for the foreclosure and sale.
The auction sale was scheduled on 31 May 2001.[10] On 4 May 2001, petitioners received a
copy of the Notice of Sale.[11]
On 28 May 2001, petitioner Chua, in his personal capacity and acting on behalf of petitioner
Filiden, filed before Branch 257 of the Regional Trial Court of Parañaque (RTC-Branch 257), a
Complaint for Injunction with Prayer for Issuance of Temporary Restraining Order (TRO),
Preliminary Injunction and Damages,[12] against respondents Atty. Celestra, docketed as Civil
Case No. CV-01-0207. Upon the motion of petitioners, RTC-Branch 257 issued a TRO
enjoining respondents Metrobank and Atty. Celestra from conducting the auction sale of the
mortgaged properties on 31 May 2001.[13]
After the expiration of the TRO on 18 June 2001, and no injunction having been issued by RTC-
Branch 257, respondent Atty. Celestra reset the auction sale on 8 November 2001. On 8
November 2001, the rescheduled date of the auction sale, RTC-Branch 257 issued an Order
directing that the said sale be reset anew after 8 November 2001. The Order was served on 8
November 2001, on respondent Atty. Celestra's daughter, Arlene Celestra, at a coffee shop
owned by the former's other daughter, Grace Celestra Aguirre. The auction sale, however,
proceeded on 8 November 2001, and a Certificate of Sale was accordingly issued to respondent
Metrobank as the highest bidder of the foreclosed properties. [14]
On 13 February 2002, petitioners filed with RTC-Branch 257 a Motion to Admit Amended
Complaint[15] in Civil Case No. CV-01-0207. The Amended Verified Complaint,[16] attached to
the said Motion, impleaded as additional defendant the incumbent Register of Deeds of
Parañaque City. Petitioners alleged that the Certificate of Sale was a falsified document since
there was no actual sale that took place on 8 November 2001. And, even if an auction sale was
conducted, the Certificate of Sale would still be void because the auction sale was done in
disobedience to a lawful order of RTC-Branch 257. Relevant portions of the Amended
Complaint of petitioners read:
12-E. There was actually no auction sale conducted by [herein respondent] Atty.
Celestra on November 8, 2001 and the CERTIFICATE OF SALE (Annex "K-2") is
therefore a FALSIFIED DOCUMENT and for which the appropriate criminal
complaint for falsification of official/public document will be filed against the said
[respondent] Celestra and the responsible officers of [herein respondent] Metrobank,
in due time;
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12-F. But even granting that an auction sale was actually conducted and that the said
Certificate of Sale is not a falsified document, the same document is a nullity simply
because the auction sale was done in disobedience to a lawful order of this Court and
that therefore the auction sale proceeding is null and void ab initio.[17]
Petitioners additionally prayed in their Amended Complaint for the award of damages given the
abuse of power of respondent Metrobank in the preparation, execution, and implementation of
the Debt Settlement Agreement with petitioners; the bad faith of respondent Metrobank in
offering the subject properties at a price much lower than its assessed fair market value; and the
gross violation by respondents Metrobank and Atty. Celestra of the injunction.
Petitioners also sought, in their Amended Complaint, the issuance of a TRO or a writ of
preliminary injunction to enjoin respondent Atty. Celestra and all other persons from proceeding
with the foreclosure sale, on the premise that no auction sale was actually held on 8 November
2001.
In an Order dated 6 March 2002, RTC-Branch 257 denied petitioners' application for injunction
on the ground that the sale of the foreclosed properties rendered the same moot and academic.
The auction sale, which was conducted by respondents Metrobank and Atty. Celestra, after the
expiration of the TRO, and without knowledge of the Order dated 8 November 2001 of RTC-
Branch 257, was considered as proper and valid.[18]
Petitioners filed a Motion for Reconsideration of the 6 March 2002 Order of RTC-Branch 257.
When RTC-Branch 257 failed to take any action on said Motion, petitioners filed with the Court
of Appeals a Petition for Certiorari, docketed as CA-G.R. No. 70208. In a Decision dated 26
July 2002, the Court of Appeals reversed the 6 March 2002 Order of RTC-Branch 257 and
remanded the case for further proceedings. The Supreme Court dismissed the appeal of
respondents with finality. Thus, on 27 September 2005, RTC-Branch 257 set the hearing for the
presentation of evidence by respondent Metrobank for the application for preliminary injunction
on 9 November 2005.[19]
On 2 November 2005, petitioners sought the inhibition of Acting Executive Judge Rolando
How of RTC-Branch 257, who presided over Civil Case No. CV-01-0207. Their motion was
granted and the case was re-raffled to RTC-Branch 258.[20]
On 28 October 2005, petitioners filed with Branch 195 of the Regional Trial Court of Parañaque
(RTC-Branch 195) a Verified Complaint for Damages against respondents Metrobank, Atty.
Celestra, and three Metrobank lawyers, namely, Atty. Antonio Viray, Atty. Ramon Miranda and
Atty. Pompeyo Maynigo. The Complaint was docketed as Civil Case No. CV-05-0402.
Petitioners sought in their Complaint the award of actual, moral, and exemplary damages
against the respondents for making it appear that an auction sale of the subject properties took
place, as a result of which, the prospective buyers of the said properties lost their interest and
petitioner Chua was prevented from realizing a profit of P70,000,000.00 from the intended sale.
[21]
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Petitioners filed with RTC-Branch 195 a Motion to Consolidate[22] dated 27 December 2005,
seeking the consolidation of Civil Case No. CV-05-0402, the action for damages pending before
said court, with Civil Case No. CV-01-0207, the injunction case that was being heard before
RTC-Branch 258, based on the following grounds:
3. Since the subject matter of both cases are the same properties and the parties of
both cases are almost the same, and both cases have the same central issue of
whether there was an auction sale, then necessarily, both cases should be
consolidated.
In an Order dated 23 January 2006, RTC-Branch 195 granted the Motion to Consolidate, and
ordered that Civil Case No. CV-05-0402 be transferred to RTC-Branch 258, which was hearing
Civil Case No. 01-0207.[24]
After the two cases were consolidated, respondents filed two motions before RTC-Branch 258:
(1) Motion for Reconsideration of the Order dated 23 January 2006 of RTC-Branch 195, which
granted the Motion to Consolidate of petitioners; and (2) Manifestation and Motion raising the
ground of forum shopping, among the affirmative defenses of respondents.[25] RTC-Branch 258
issued an Order on 3 July 2006, granting the first Motion of respondents, thus, dismissing Civil
Case No. CV-05-0402 on the ground of forum shopping,[26] and consequently, rendering the
second Motion of respondents moot. RTC-Branch 258 declared that the facts or claims
submitted by petitioners, the rights asserted, and the principal parties in the two cases were the
same. RTC-Branch 258 held in its 3 July 2006 Order[27] that:
It is, therefore, the honest belief of the Court that since there is identity of parties and
the rights asserted, the allegations of the defendant are found meritorious and with
legal basis, hence, the motion is GRANTED and this case is DISMISSED due to
forum shopping.
As regards the second motion, the same has already been mooted by the dismissal of
this case.
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Manifestation and Motion likewise filed by the defendants has already been
MOOTED by the said dismissal.
From the foregoing Order of RTC-Branch 258, petitioners filed a Petition for Review on
Certiorari with the Court of Appeals, docketed as CA-G.R. CV No. 88087.
In a Decision dated 31 January 2008, the Court of Appeals affirmed the 3 July 2006 Order of
RTC-Branch 258. The appellate court observed that although the defendants in the two cases
were not identical, they represented a community of interest. It also declared that the cause of
action of the two cases, upon which the recovery of damages was based, was the same, i.e., the
feigned auction sale, such that the nullification of the foreclosure of the subject properties,
which petitioners sought in Civil Case No. CV-01-0207, would render proper the award for
damages, claimed by petitioners in Civil Case No. CV-05-0402. Thus, judgment in either case
would result in res judicata. The Court of Appeals additionally noted that petitioners admitted
in their Motion for Consolidation that Civil Case No. CV-01-0207 and Civil Case No. CV-05-
0402 involved the same parties, central issue, and subject properties.[28] In its Decision,[29] the
appellate court decreed:
All told, the dismissal by the RTC-Br. 258 of the "second" case, Civil Case No. CV-
05-0402, on the ground of forum shopping should be upheld as it is supported by
law and jurisprudence.
Petitioners filed a Motion for Reconsideration of the afore-mentioned Decision, which the Court
of Appeals denied in a Resolution dated 28 March 2008.[30]
Hence, the present Petition, in which the following issues are raised[31]:
WHETHER OR NOT THE "FIRST" AND THE "SECOND" CASES HAVE THE
SAME ULTIMATE OBJECTIVE, I.E., TO HAVE THE AUCTION SALE BE
DECLARED AS NULL AND VOID.
II
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The only issue that needs to be determined in this case is whether or not successively filing
Civil Case No. CV-01-0207 and Civil Case No. CV-05-0402 amounts to forum shopping.
The proscription against forum shopping is found in Section 5, Rule 7 of the 1997 Rules of
Court, which provides that:
Failure to comply with the foregoing requirements shall not be curable by mere
amendment of the complaint or other initiatory pleading but shall be cause for the
dismissal of the case without prejudice, unless otherwise provided, upon motion and
after hearing. The submission of a false certification or non-compliance with any of
the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the
party or his counsel clearly constitutes willful and deliberate forum shopping, the
same shall be ground for summary dismissal with prejudice and shall constitute
direct contempt, as well as a cause for administrative sanctions.
Forum shopping exists when a party repeatedly avails himself of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same
transactions and the same essential facts and circumstances, and all raising substantially the
same issues either pending in or already resolved adversely by some other court.[32]
Ultimately, what is truly important in determining whether forum shopping exists or not is the
vexation caused the courts and party-litigant by a party who asks different courts to rule on the
same or related causes and/or to grant the same or substantially the same reliefs, in the process
creating the possibility of conflicting decisions being rendered by the different fora upon the
same issue.[33]
Forum shopping can be committed in three ways: (1) filing multiple cases based on the same
cause of action and with the same prayer, the previous case not having been resolved yet (where
the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of
action and the same prayer, the previous case having been finally resolved (where the ground
for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action,
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but with different prayers (splitting of causes of action, where the ground for dismissal is also
either litis pendentia or res judicata).[34]
In the present case, there is no dispute that petitioners failed to state in the Certificate of Non-
Forum Shopping, attached to their Verified Complaint in Civil Case No. CV-05-0402 before
RTC-Branch 195, the existence of Civil Case No. CV-01-0207 pending before RTC-Branch
258. Nevertheless, petitioners insist that they are not guilty of forum shopping, since (1) the two
cases do not have the same ultimate objective - Civil Case No. CV-01-0207 seeks the annulment
of the 8 November 2001 public auction and certificate of sale issued therein, while Civil Case
No. CV-05-0402 prays for the award of actual and compensatory damages for respondents'
tortuous act of making it appear that an auction sale actually took place on 8 November 2001;
and (2) the judgment in Civil Case No. CV-01-0207, on the annulment of the foreclosure sale,
would not affect the outcome of Civil Case No. CV-05-0402, on the entitlement of petitioners to
damages. The Court, however, finds these arguments refuted by the allegations made by
petitioners themselves in their Complaints in both cases.
Petitioners committed forum shopping by filing multiple cases based on the same cause of
action, although with different prayers.
Sections 3 and 4, Rule 2 of the Rules of Court proscribe the splitting of a single cause of action:
Section 3. A party may not institute more than one suit for a single cause of action.
Section 4. Splitting a single cause of action; effect of.--If two or more suits are
instituted on the basis of the same cause of action, the filing of one or a judgment
upon the merits in any one is available as a ground for the dismissal of the others.
Forum shopping occurs although the actions seem to be different, when it can be seen that there
is a splitting of a cause of action. [35] A cause of action is understood to be the delict or
wrongful act or omission committed by the defendant in violation of the primary rights of the
plaintiff. It is true that a single act or omission can violate various rights at the same time, as
when the act constitutes juridically a violation of several separate and distinct legal obligations.
However, where there is only one delict or wrong, there is but a single cause of action
regardless of the number of rights that may have been violated belonging to one person.[36]
Petitioners would like to make it appear that Civil Case No. CV-01-0207 was solely concerned
with the nullification of the auction sale and certification of sale, while Civil Case No. CV-05-
0402 was a totally separate claim for damages. Yet, a review of the records reveals that
petitioners also included an explicit claim for damages in their Amended Complaint[37] in Civil
Case No. CV-01-0207, to wit:
The "abovementioned acts" on which petitioners anchored their claim to recover damages were
described in the immediately preceding paragraph in the same Amended Complaint, as follows
[38]:
20. To reiterate, the [herein respondent] is fully aware that the assessed fair market
value of the real properties they seek to foreclose and sell at public auction yet they
have knowingly offered the said properties for sale at the amount of EIGHTY
EIGHT MILLION ONE HUNDRED ONE THOUSAND NINETY THREE PESOS
AND 98/100 (PhP88,101,093.98), obviously because they know that the
[petitioners] or any other third person would not be able to seasonably raise the said
amount and that said [respondent] Bank would be the winner by default at the said
sale at public auction.
Petitioners averred in their Amended Complaint in Civil Case No. CV-01-0207 that the assessed
fair market value of the subject properties was P176,117,000.00.[39]
The Court observes that the damages being claimed by petitioners in their Complaint in Civil
Case No. CV-05-0402 were also occasioned by the supposedly fictitious 8 November 2001
foreclosure sale, thus [40]:
24. The acts of [herein respondents] in making it appear that there was an auction
sale conducted on 8 November 2001 and the subsequent execution of the
fictitious Certificate of Sale is TORTIOUS, which entitles the [herein
petitioners] to file this instant action under the principles of Human Relations,
more particularly Articles 19, 20 and 21 of the Civil Code which provide that:
xxxx
26. The aborted sale of the [petitioner's] mortgaged properties for the said amount
of not less than P175,000,000.00 could have paid off [petitioners'] loan
obligation with [respondent] Metrobank for the principal amount of
P79,650,000.00 or even the contested restructured amount of P103,450,391.84
(as stated in the petition for foreclosure), which would have thus enabled the
plaintiff to realize a net amount of not less than SEVENTY MILLION PESOS,
more or less;
27. By reason of the aforesaid acts of [respondents], [petitioners] suffered and will
continue to suffer actual or compensatory, moral and exemplary or corrective
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damages, the nature, extent and amount of compensation of which will (sic)
proven during the trial but not less than SEVENTY MILLION PESOS.
There is no question that the claims of petitioners for damages in Civil Case No. CV-01-0207
and Civil Case No. CV-05-0402 are premised on the same cause of action, i.e., the purportedly
wrongful conduct of respondents in connection with the foreclosure sale of the subject
properties.
At first glance, said claims for damages may appear different. In Civil Case No. CV-01-0207,
the damages purportedly arose from the bad faith of respondents in offering the subject
properties at the auction sale at a price much lower than the assessed fair market value of the
said properties, said to be P176,117,000.00. On the other hand, the damages in Civil Case No.
CV-05-0402, allegedly resulted from the backing out of prospective buyers, who had initially
offered to buy the subject properties for "not less than P175,000,000.00," because respondents
made it appear that the said properties were already sold at the auction sale. Yet, it is worthy to
note that petitioners quoted closely similar values for the subject properties in both cases,
against which they measured the damages they supposedly suffered. Evidently, this is due to the
fact that petitioners actually based the said values on the single appraisal report of the Philippine
Appraisal Company on the subject properties. Even though petitioners did not specify in their
Amended Complaint in Civil Case No. CV-01-0207 the exact amount of damages they were
seeking to recover, leaving the same to the determination of the trial court, and petitioners
expressly prayed that they be awarded damages of not less than P70,000,000.00 in their
Complaint in Civil Case No. CV-05-0402, petitioners cannot deny that all their claims for
damages arose from what they averred was a fictitious public auction sale of the subject
properties.
Petitioners' contention that the outcome of Civil Case No. CV-01-0207 will not determine that
of Civil Case No. CV-05-0402 does not justify the filing of separate cases. Even if it were
assumed that the two cases contain two separate remedies that are both available to petitioners,
these two remedies that arose from one wrongful act cannot be pursued in two different cases.
The rule against splitting a cause of action is intended to prevent repeated litigation between the
same parties in regard to the same subject of controversy, to protect the defendant from
unnecessary vexation; and to avoid the costs and expenses incident to numerous suits. It comes
from the old maxim nemo debet bis vexari, pro una et eadem causa (no man shall be twice
vexed for one and the same cause).[41]
3. Since the subject matter of both cases are the same properties and the parties of
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both cases are almost the same, and both cases have the same central issue of
whether there was an auction sale, then necessarily, both cases should be
consolidated.
If the forum shopping is not considered willful and deliberate, the subsequent case shall be
dismissed without prejudice, on the ground of either litis pendentia or res judicata. However,
if the forum shopping is willful and deliberate, both (or all, if there are more than two) actions
shall be dismissed with prejudice..[43] In this case, petitioners did not deliberately file Civil
Case No. CV-05-0402 for the purpose of seeking a favorable decision in another forum.
Otherwise, they would not have moved for the consolidation of both cases. Thus, only Civil
Case No. CV-05-0402 is dismissed and the hearing of Civil Case No. CV-01-0207 before RTC-
Branch 258 will be continued.
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The Decision dated 31
January 2008 and Resolution dated 28 March 2008 of the Court of Appeals in CA-G.R. CV No.
88087, affirming the Order dated 3 July 2006 of Branch 258 of the Regional Trial Court of
Parañaque City, dismissing Civil Case No. CV-05-0402, is AFFIRMED, without prejudice to
the proceedings in Civil Case No. CV-01-0207. Costs against petitioners.
SO ORDERED.
*Associate Justice Renato C. Corona was designated to sit as additional member replacing
Associate Justice Diosdado M. Peralta per Raffle dated 13 May 2009.
** Per Special Order No. 679 dated 3 August 2009, signed by Chief Justice Reynato S. Puno,
designating Associate Justice Conchita Carpio Morales to replace Associate Justice Consuelo
Ynares-Santiago, who is on official leave.
*** Per Special Order No. 681 dated 3 August 2009, signed by Chief Justice Reynato S. Puno,
designating Associate Justice Minita V. Chico-Nazario as Acting Chairperson to replace
Associate Justice Consuelo Ynares-Santiago, who is on official leave.
[1]Penned by Associate Justice Normandie Pizarro with Associate Justices Edgardo P. Cruz and
Fernanda Lampas Peralta, concurring. Rollo, pp. 39-52.
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