G.R. No. 207914. January 18, 2017. FCD PAWNSHOP AND MERCHANDISING COMPANY, FORTUNATO C. DIONISIO, JR., and FRANKLIN C. DIONISIO, Petitioners, vs. UNION BANK OF THE PHILIPPINES, ATTY. NORMAN R. GABRIEL, ATTY. ENGRACIO M. ESCASINAS, JR., and THE REGISTRY OF DEEDS FOR MAKATI CITY, Respondents.
FACTS:

Petitioners Fortunato and Franklin Dionisio, co-owners of FCD Pawnshop, discovered that the title to their Makati property (TCT No. 168302 S-3664), which they had entrusted to an associate, was fraudulently used by Sunyang Mining Corporation as collateral for a loan from respondent Union Bank of the Philippines (UBP). Consequently, on February 9, 2011, they filed Civil Case No. 11-116 before the RTC Makati, Branch 57, seeking the annulment of the mortgage and damages. While that case was pending, UBP extrajudicially foreclosed the property. Alleging irregularities in the foreclosure proceedings, petitioners filed a second suit in December 2011, docketed as Civil Case No. 11-1192 before RTC Makati, Branch 133, seeking the annulment of the foreclosure sale and the certificate of sale.
Respondent UBP moved for the dismissal of the second case on the ground of forum shopping. The RTC, Branch 133, granted the motion and dismissed Civil Case No. 11-1192, ruling that the two cases arose from the same transaction, involved the same property, and presented a risk of conflicting rulings. The Court of Appeals affirmed this dismissal.

ISSUE

Whether the filing of Civil Case No. 11-1192 (annulment of foreclosure sale) constitutes forum shopping, warranting its dismissal, given the prior pendency of Civil Case No. 11-116 (annulment of mortgage).

RULING

Yes, the filing of the second case constitutes forum shopping. Forum shopping exists when a party repetitively avails of several judicial remedies in different courts, grounded on the same essential facts and circumstances, raising substantially the same issues. The Supreme Court affirmed the lower courts’ findings. While petitioners argued that the two cases involved different subject matters (validity of the mortgage vs. validity of the foreclosure sale) and required different evidence, a scrutiny of the Complaint in Civil Case No. 11-1192 reveals that it fundamentally reiterates and relies on the alleged illegality of the underlying mortgage. The causes of action, though ostensibly separate, are inextricably linked and stem from a single wrongful act—the fraudulent use of the title to secure the loan. Allowing both suits to proceed separately creates a palpable danger of conflicting judgments, as the court in the foreclosure case would be tempted to rule on the validity of the mortgage, an issue squarely pending in the first-filed case. This violates the rule against splitting a cause of action, which aims to prevent multiplicity of suits, protect defendants from vexation, and ensure the orderly administration of justice. The proper recourse for petitioners was to seek all available remedies, including the challenge to the foreclosure proceedings, within the pending annulment of mortgage case (Civil Case No. 11-116).