GR 114951; (July, 2003) (Digest)
G.R. No. 114951; July 18, 2003
PHILIPPINE COMMERCIAL INTERNATIONAL BANK, ET AL., petitioners, vs. COURT OF APPEALS, LEY CONSTRUCTION & DEVELOPMENT CORP., ET AL., respondents.
FACTS
Private respondents obtained loans from petitioner PCIB, secured by real and chattel mortgages. Upon default, PCIB initiated extrajudicial foreclosure proceedings. Before the scheduled auctions, private respondents filed a complaint for injunction and damages with the RTC of Makati, alleging that PCIB had agreed to a loan extension with a moratorium until March 1992, and that the notices for the chattel mortgage foreclosure were defective. The RTC issued a writ of preliminary injunction, enjoining the foreclosure sales.
While PCIB’s petition to annul this injunction was pending before the Court of Appeals, private respondents, through new counsel, filed a separate complaint for annulment of mortgage and foreclosure with damages before the RTC of Pasig. This second suit raised identical issues and sought the same relief—to stop the foreclosure—based on the same loan transactions.
ISSUE
Whether the filing by private respondents of a second complaint in Pasig, while the first injunction case in Makati and the related certiorari petition in the CA were pending, constitutes forum shopping warranting the dismissal of their actions.
RULING
Yes. The Supreme Court found that private respondents committed willful and deliberate forum shopping. Forum shopping exists when a party, seeking a more favorable ruling, institutes two or more actions in different courts based on the same cause, involving the same parties, and raising identical issues and prayers. Here, the two complaints filed by private respondents involved the same loans, the same securities, the same parties, and essentially the same objective: to enjoin the foreclosure sales and restructure the obligations. The filing of the second case in Pasig, while actively pursuing relief in Makati and the CA, was a blatant attempt to secure a favorable injunction from another court. This act violates the rule against forum shopping, which is designed to prevent multiplicity of suits, protect the courts from being misused, and promote judicial efficiency. Consequently, the Supreme Court reversed the CA decision and dismissed the complaints in both the Makati and Pasig courts for willful forum shopping.