GR 155099; (August, 2005) (Digest)
G.R. No. 155099 . August 31, 2005.
SECURITY BANK CORPORATION, Petitioner, vs. JUDGE MANUEL D. VICTORIO, Regional Trial Court, Makati City, Branch 141; THE TRADE AND INVESTMENT DEVELOPMENT CORPORATION OF THE PHILIPPINES, and THE MAR FISHING COMPANY, INC., Respondents.
FACTS
MAR Fishing Company, Inc. (MFCI) obtained a loan from PISO Development Bank. To secure this, Security Bank Corporation (SBC) extended a Standby Credit Line to PISO Bank for MFCI’s account, with MFCI mortgaging its vessel “Southward Ho” to SBC. When MFCI defaulted, PISO Bank demanded payment from SBC under the credit line. SBC refused, leading PISO Bank to file Civil Case No. 17563 for specific performance against SBC (the FIRST CASE). Subsequently, the Trade and Investment Development Corporation of the Philippines (TIDCORP), as PISO Bank’s successor, and MFCI filed Civil Case No. 99-1581 against SBC (the SECOND CASE) for the release of a sinking fund related to the mortgaged vessel and for damages. SBC moved to suspend the SECOND CASE, arguing it involved a prejudicial question because its obligation to pay under the Standby Credit Line in the FIRST CASE must first be resolved. The RTC denied the motion.
ISSUE
Whether the RTC committed grave abuse of discretion in denying SBC’s motion to suspend the proceedings in Civil Case No. 99-1581 on the ground of a prejudicial question.
RULING
No. The Supreme Court affirmed the denial, holding that no prejudicial question existed. A prejudicial question arises when a previously instituted civil action involves an issue so intimately related to an issue in a subsequent criminal action that the resolution of the former determines whether the latter may proceed. The concept does not apply to two civil actions. The FIRST CASE (for specific performance) and the SECOND CASE (for release of sinking fund and damages) are distinct. The FIRST CASE concerns SBC’s alleged direct contractual obligation to pay PISO Bank/TIDCORP under the Standby Credit Line. The SECOND CASE concerns SBC’s alleged obligation as mortgagee to release a sinking fund established from the vessel’s earnings and claims for damages from alleged vessel mismanagement. The resolution of SBC’s liability in the FIRST CASE is not determinative of its obligations regarding the sinking fund in the SECOND CASE. These are separate causes of action. The issues are not so intertwined that the outcome of the first case would be conclusive on the second. SBC’s remedy was not suspension but to raise its defenses, such as the alleged prematurity of the second suit, in its Answer within the second case itself. The RTC did not gravely abuse its discretion.