GR 167900; (February, 2006) (Digest)
G.R. No. 167900 ; February 13, 2006
SPOUSES CRISOLOGO ABINES and PRISCILLA O. ABINES, Petitioners, vs. BANK OF THE PHILIPPINE ISLANDS and BPI FAMILY BANK, Respondents.
FACTS
Respondent Bank of the Philippine Islands (BPI) filed a collection case against petitioners Spouses Abines for a deficiency claim after the extrajudicial foreclosure of their mortgaged properties. BPI alleged the spouses defaulted on two loans secured by real estate mortgages. Subsequently, the spouses filed a separate reformation case against BPI, assailing the genuineness of the loan documents and the validity of the foreclosure, and seeking an accounting and annulment. BPI moved to dismiss the reformation case on grounds of forum shopping, arguing identity of parties and issues with the pending collection case.
The Regional Trial Court denied BPI’s motion for consolidation, granted the spouses’ application for a preliminary injunction, and later issued the writ. The Court of Appeals reversed, finding grave abuse of discretion. It ruled that the reformation case constituted forum shopping, as both cases involved the same parties, transactions, and core issues regarding the loan validity and foreclosure. It also nullified the injunction for an inadequate bond. The spouses’ motion for reconsideration was denied.
ISSUE
Whether the Court of Appeals correctly ordered the dismissal of the reformation case on the ground of forum shopping.
RULING
Yes, the Court of Appeals correctly ordered the dismissal. The Supreme Court affirmed that the reformation case filed by the spouses constituted forum shopping. The elements of litis pendentia, which underpin the prohibition against forum shopping, were present: identity of parties, rights asserted, and reliefs sought. Both the collection and reformation cases involved the same parties and arose from the identical loan transactions and foreclosure. The reliefs sought, though phrased differently, were fundamentally inconsistent and required adjudication of the same core issues—the validity and enforcement of the promissory notes, mortgages, and foreclosure sale.
The trial court’s omnibus order, which denied consolidation and effectively ruled the cases involved different issues, was a definitive resolution against the claim of forum shopping. Thus, a remand for a formal ruling on the motion to dismiss was unnecessary. The Court also rejected the petitioners’ estoppel argument, stating estoppel does not apply to questions of law like forum shopping, and public policy against forum shopping prevails. Allowing the second case to proceed would violate the doctrine of litis pendentia, burden the courts, risk conflicting judgments, and enable vexatious litigation. The preliminary injunction was properly annulled as it was based on a void proceeding (the dismissed reformation case).