GR 182311; (August, 2009) (Digest)
G.R. No. 182311 ; August 19, 2009
FIDEL O. CHUA and FILIDEN REALTY AND DEVELOPMENT CORPORATION, Petitioners, vs. METROPOLITAN BANK & TRUST COMPANY, ATTY. ROMUALDO CELESTRA, ATTY. ANTONIO V. VIRAY, ATTY. RAMON MIRANDA and ATTY. POMPEYO MAYNIGO, Respondents.
FACTS
Petitioners obtained loans from respondent Metrobank, secured by a real estate mortgage. After failing to pay, a Debt Settlement Agreement was executed. Upon subsequent default, Metrobank initiated extrajudicial foreclosure. Petitioners filed a Complaint for Injunction with Damages (Civil Case No. CV-01-0207) before the Regional Trial Court (RTC) of Parañaque, Branch 257, to enjoin the foreclosure sale. The RTC issued a Temporary Restraining Order (TRO). After the TRO expired and no injunction was issued, the auction was rescheduled. On the sale date, the RTC issued an order to reset the sale again. Despite alleged service of this order, the auction proceeded, and a Certificate of Sale was issued to Metrobank.
Petitioners then filed an Amended Complaint in the same case (CV-01-0207), alleging the Certificate of Sale was falsified or, alternatively, the sale was void for disobedience of a court order. They also prayed for damages. The RTC later denied the injunction as moot. Subsequently, petitioners filed a separate action for damages (Civil Case No. CV-05-0402) before RTC Parañaque, Branch 258, based on the same factual nucleus—the allegedly wrongful foreclosure and the issuance of the Certificate of Sale. Respondents moved to dismiss this second case on the ground of forum shopping.
ISSUE
Whether the filing of the separate action for damages (Civil Case No. CV-05-0402) constitutes forum shopping, warranting its dismissal.
RULING
Yes, the filing of the second case constitutes forum shopping. Forum shopping exists when a party institutes two or more actions in different courts, based on the same cause of action, with the hope of securing a favorable judgment. The Supreme Court affirmed the dismissal by the Court of Appeals. The core test is whether the two cases share an identity of parties, rights or causes of action, and reliefs sought. Here, both the original amended complaint in CV-01-0207 and the subsequent complaint in CV-05-0402 arose from the same foreclosure event and the issuance of the Certificate of Sale. The relief for damages sought in the second case was already included and could have been adjudicated in the first case. By splitting their cause of action and filing a separate suit for damages, petitioners engaged in forum shopping. The law prohibits this to prevent multiplicity of suits, avoid conflicting decisions, and conserve judicial resources. The dismissal of the second action was therefore proper, as the claims should be litigated in the initially filed proceeding where the matter was already pending.