G.R. No. 173331; December 11, 2013
FLORPINA BENAVIDEZ, Petitioner, vs. NESTOR SALVADOR, Respondent.

FACTS

Sometime in February 1998, petitioner Florpina Benavidez obtained a loan of ₱1,500,000.00 from respondent Nestor Salvador to repurchase her foreclosed property. To secure the loan, Benavidez executed a promissory note dated March 11, 1998, and was required to submit a special power of attorney from her daughter, the vendee of the repurchased property. Benavidez failed to deliver the required SPA and defaulted on her obligation, with all her postdated checks for interest payments being dishonored. After a demand letter was ignored, Salvador filed a complaint for sum of money with damages before the Regional Trial Court of Antipolo City (RTC-Antipolo), docketed as Civil Case No. 00-5660.
Benavidez moved to dismiss the complaint on the ground of litis pendentia, alleging she had previously filed a Complaint for Collection for Sum of Money, Annulment of Contract and Checks against Salvador before the RTC of Morong, Rizal (RTC-Morong). The RTC-Antipolo denied the motion. During the pre-trial, Benavidez and her counsel failed to appear despite due notice, leading the court to allow Salvador to present evidence ex parte. The RTC-Antipolo rendered a decision in favor of Salvador, ordering Benavidez to pay ₱4,810,703.21 (covering principal and interests/penalties from June 11, 1998, to January 11, 2000, with interest until fully paid), ₱50,000.00 as exemplary damages, attorney’s fees equivalent to 25% of the total obligation, and costs.
Benavidez appealed to the Court of Appeals (CA), arguing that the RTC-Antipolo should have dismissed the case due to litis pendentia and a defective certification against forum shopping, and that it erred in proceeding with an ex parte presentation of evidence. The CA initially affirmed the RTC decision in toto but, upon Benavidez’s motion for reconsideration, issued an Amended Decision deleting the awards for exemplary damages and attorney’s fees for lack of factual, legal, and equitable justification. Benavidez then filed the present petition for review.

ISSUE

The core issue is whether the complaint for sum of money before the RTC-Antipolo should have been dismissed on the ground of litis pendentia due to the prior filing of a complaint for annulment of the promissory note before the RTC-Morong. Corollary issues are: (1) whether the certification against forum shopping was defective; (2) whether the promissory note is void for being unconscionable; and (3) whether the CA erred in upholding the ex parte proceedings.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Amended Decision of the Court of Appeals.
1. On Litis Pendentia: The Court held that litis pendentia was not present. For litis pendentia to exist, there must be: (a) identity of parties, or at least such as representing the same interests in both actions; (b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (c) identity of the two cases such that the judgment in one would amount to res judicata in the other. While there was identity of parties, there was no identity of causes of action or reliefs sought. The case before the RTC-Morong was for the annulment of the promissory note, while the case before the RTC-Antipolo was for the collection of a sum of money based on the same note. The causes of action and the reliefs prayed for were distinct. A ruling in the annulment case would not necessarily be determinative of the collection case, as the latter could proceed on other possible bases for the obligation. Therefore, the RTC-Antipolo correctly refused to dismiss the case.
2. On Forum Shopping: The Court ruled that the certification against forum shopping was not defective. Forum shopping exists when a party repetitively avails of multiple judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and essential facts and circumstances, and raising identical causes of action, subject matter, and issues. Since there was no identity of causes of action or reliefs between the two cases, Salvador’s certification that he was not aware of a similar pending case was not false or defective.
3. On the Validity of the Promissory Note: The Court found that Benavidez’s claim that the promissory note was void for being unconscionable and shocking to the conscience was a factual issue that was not raised in the proceedings before the RTC-Antipolo. As a petition for review under Rule 45, the Supreme Court’s jurisdiction is limited to reviewing errors of law, not re-examining factual findings. The factual findings of the trial court, affirmed by the CA, are binding and conclusive.
4. On the Ex Parte Proceedings: The Court upheld the validity of the ex parte presentation of evidence. Section 5, Rule 18 of the Rules of Court allows the plaintiff to present evidence ex parte when the defendant fails to appear at the pre-trial conference. Benavidez and her counsel were absent at the pre-trial despite due notice. The negligence of counsel binds the client. The Court found no compelling reason to deviate from this rule, as Benavidez’s absence was not excusable, and her counsel’s negligence did not constitute a valid ground for new trial or reconsideration. The proceedings were not a default judgment but a valid trial on the merits where the plaintiff was allowed to present his evidence due to the defendant’s non-appearance at a critical stage.
In fine, the Supreme Court found no reversible error in the CA’s Amended Decision, which correctly affirmed the RTC’s judgment on the merit of the collection case but deleted the unsupported awards for exemplary damages and attorney’s fees.