G.R. No. 233852 , September 15, 2021
Western Sales Trading Company, Inc., Western Sales Trading Company (Phils.), Inc., and John Does, Petitioners, vs. 7D Food International, Inc., Respondent.

FACTS

Petitioner Western Sales Trading Company, Inc. (WSTC Guam) is a foreign corporation organized under Guam laws, with petitioner Western Sales Trading Company Philippines, Inc. (WSTC Philippines) as its wholly-owned subsidiary. Respondent 7D Food International, Inc. (7D) is a Philippine corporation engaged in processing dried mango products. In 2012, 7D filed a Complaint for Breach of Contract, Judicial Confirmation of Rescission, Nullity of Instrument, and Damages against petitioners, alleging they violated a verbal exclusive distributorship agreement for 7D’s products in Guam and Hawaii by purchasing from a competitor and interfering with 7D’s new distributor. Petitioners filed an Answer Ad Cautelam, questioning the RTC’s jurisdiction over WSTC Guam for not doing business in the Philippines and asserting improper service of summons. They contended the agreement was an isolated one-year written contract for Hawaii, denied selling competitor products, and claimed 7D terminated the contract, prompting WSTC Guam to file suits against 7D in Guam and Hawaii courts. Petitioners sought dismissal based on forum non conveniens and raised the defenses of litis pendentia and forum shopping due to the pending foreign cases. The RTC dismissed the complaint on grounds of forum shopping and litis pendentia, finding the main issue of alleged breach of contract was pending before Guam and Hawaii courts, and a judgment there would constitute res judicata. The RTC also ruled petitioners voluntarily appeared. 7D appealed to the CA. The CA reversed the RTC, finding the unverified allegations and machine copies of foreign court documents insufficient to prove the existence and authenticity of the pending foreign suits, as they failed to meet authentication requirements under the Rules. The CA held the RTC should not have determined litis pendentia and res judicata based on mere allegations and remanded the case for further proceedings to substantiate allegations, noting the application of forum non conveniens required evidence. Petitioners filed the present Petition, arguing procedural defects in 7D’s appeal and maintaining the CA erred in requiring authentication, asserting 7D judicially admitted the foreign proceedings.

ISSUE

Whether the Court of Appeals erred in reversing the Regional Trial Court’s dismissal of the complaint on grounds of litis pendentia and forum shopping, and in remanding the case for further proceedings.

RULING

The Supreme Court denied the petition and affirmed the CA Decision. The Court held that the CA correctly reversed the RTC’s dismissal. For litis pendentia to warrant dismissal, the following elements must concur: (1) identity of parties, or at least such parties as represent the same interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) 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. The burden of proving these elements rests on the party invoking it. The Court found petitioners failed to discharge this burden. The documents pertaining to the foreign cases were unauthenticated machine copies and thus inadmissible as evidence under Sections 24 and 25, Rule 132 of the Rules of Court. Authentication is a condition precedent to the admission of documents, and petitioners’ mere allegations and submission of copies were insufficient to establish the existence and authenticity of the foreign proceedings. The Court rejected petitioners’ claim that 7D’s references to the foreign cases in its pleadings constituted judicial admissions, as these statements were made to argue the absence of litis pendentia elements and were not clear, unequivocal admissions of the documents’ authenticity. Consequently, the RTC’s dismissal based on unsubstantiated allegations was premature. The CA correctly ordered remand for further proceedings to allow parties to present evidence on the pending foreign suits and to properly resolve the application of forum non conveniens, which requires a factual determination of private and public interest factors. On procedural issues, the Court found 7D’s appeal was timely filed, and any defect in its Appellant’s Brief regarding page references was not fatal to warrant dismissal.