G.R. No. 178271 October 31, 2008
BANCO DE ORO-EPCI, INC. (formerly known as EQUITABLE PCI BANK INC.), Petitioner, vs. HON. ZENAIDA R. DAGUNA, in her capacity as Presiding Judge, Regional Trial Court of Manila, Br. 19, AND PHILIPPINE DEVELOPMENT AND INDUSTRIAL CORPORATION, Respondents.

FACTS

In 1996, PCI Bank approved a credit line for Philippine Development and Industrial Corporation (PDIC). PDIC defaulted and executed a Repayment Agreement secured by real estate mortgages over 29 condominium units and a property in Bulacan. After another default, the bank (which had merged into Equitable PCIBank/EPCIB) initiated foreclosure. PDIC filed a complaint for “Cancellation of Mortgage, Restitution of Titles and Damages” (later amended to “Release of Mortgage and Damages”) before the Makati RTC. The Makati RTC dismissed the amended complaint without prejudice for lack of jurisdiction, finding the principal cause of action was for annulment of a real estate mortgage over a property in Manila, making it an action in rem. PDIC moved for reconsideration and later moved to withdraw its “Release of Mortgage” action to limit it to “Damages,” submitting a Second Amended Complaint. Without awaiting resolution, PDIC filed a new complaint for “Annulment of Mortgage and the Foreclosure Sale with Application for TRO and Preliminary Injunction” before the Manila RTC. In its Verification/Certification, PDIC stated it had not commenced any other action involving the same issues, except an action for “Damages” pending in Makati RTC, which it claimed involved a separate and distinct cause of action. EPCIB moved to dismiss the Manila complaint, alleging forum shopping and a false certification. The Manila RTC denied the motion, ruling the Makati case was for damages while the Manila case was for annulment of mortgage. The Makati RTC later granted PDIC’s motion to withdraw the “Release of Mortgage” action and admitted the Second Amended Complaint for “Damages.” EPCIB’s petition to the Court of Appeals was denied, leading to this petition.

ISSUE

Whether respondent Philippine Development and Industrial Corporation resorted to forum shopping.

RULING

No, respondent did not resort to forum shopping. The Court held that while the complaints in Makati and Manila shared significantly similar factual antecedents, the causes of action were different, requiring different bodies of evidence. The Makati action (for Damages) was predicated on the bank’s alleged malicious refusal to release funds under the credit line, causing losses. The Manila action (for Annulment of Mortgage and Foreclosure Sale) was based on alleged vitiated consent, fraud, lack of consideration, and irregularities in the mortgage and foreclosure. The test for identity of causes of action is whether the same evidence would support both; here, different evidence would be required. The Makati action is in personam (for damages), while the Manila action is in rem (for annulment of mortgage). Furthermore, the Court found that respondent did not split a cause of action, as the two actions involved different periods, subject matter, and issues, and venues were properly laid. The petition was denied.