G.R. No. 150986 . March 2, 2007.
CLARK DEVELOPMENT CORPORATION, Petitioner, vs. MONDRAGON LEISURE AND RESORTS CORPORATION, MONDRAGON INTERNATIONAL PHILIPPINES, INCORPORATED and MONDRAGON SECURITIES CORPORATION, Respondents.

FACTS

Petitioner Clark Development Corporation (CDC) and respondents Mondragon group entered into a Lease Agreement for the Mimosa Leisure Estate. After a dispute over rental arrears, Mondragon filed an action for specific performance (Civil Case No. 9242) to compel arbitration and obtained injunctive relief. The Court of Appeals nullified the injunction. The parties subsequently executed a Compromise Agreement, which was approved by the Supreme Court in a Resolution. The agreement stipulated a schedule for Mondragon to pay its arrears and provided that failure to comply would entitle CDC to cancel the agreement after a 30-day demand period.
Mondragon failed to pay the initial installment and to provide a required letter of credit. CDC made a demand and, upon non-compliance, notified Mondragon of the agreement’s termination. CDC then moved for the issuance of a writ of execution of the compromise judgment in the first case. Before the court could rule, Mondragon filed a second action (Civil Case No. 9596) for declaratory relief and specific performance, seeking a declaration that the termination was void and that it had substantially complied. The Regional Trial Court dismissed the second case, finding it constituted forum shopping. The Court of Appeals reversed, ordering the trial to proceed.

ISSUE

Whether the filing of the second action for declaratory relief and specific performance by Mondragon constitutes forum shopping, warranting its dismissal.

RULING

Yes, the filing of the second action constitutes forum shopping. Forum shopping exists when a party, seeking the same relief, institutes two or more actions in different courts based on the same cause of action. Here, the cause of action in both the first and second cases is fundamentally identical: the enforcement, interpretation, and consequences of the Compromise Agreement. The relief sought in the second case—a declaration of the agreement’s continued validity and an order for specific performance—is inherently inconsistent with and subversive of the relief CDC sought in the first case, which was the execution of the same agreement due to Mondragon’s breach. A compromise agreement, once judicially approved, attains the force of res judicata and is immediately executory. Mondragon cannot, by filing a new action, relitigate the very agreement whose execution was already being sought in the prior case. This tactic is a clear attempt to secure a favorable ruling in another forum after anticipating an unfavorable outcome in the original case. Consequently, the second action was a mere ploy to delay the execution of a final judgment. The Supreme Court reinstated the trial court’s dismissal and referred the respondents to the Office of the Bar Confidant for possible disciplinary action for forum shopping.