G.R. No. L-43677. April 30, 1976.
TEOFILA MARCELO and LOPE DEL CARMEN, plaintiffs-appellants, vs. MERCHANTS BANKING CORPORATION OF THE PHILIPPINES, EMILIA K. GUARIN FERRERAS, EUFEMIO FERRERAS and THE PROVINCIAL SHERIFF OF BULACAN, defendants-appellees.

FACTS

Plaintiffs-appellants Teofila Marcelo and Lope del Carmen, registered owners of land in Bulacan, filed this complaint on July 15, 1969, for annulment of contract with damages and a prayer for preliminary injunction. They sought to annul a real estate mortgage over their property executed in favor of defendant Merchants Banking Corporation by defendant Emilia K. Guarin Ferreras, who acted under a special power of attorney from the plaintiffs. The action aimed to enjoin the bank’s impending foreclosure due to non-payment of the mortgage obligation.
The parties submitted stipulations of facts revealing critical developments. First, on September 8, 1970, the plaintiffs paid the bank in full the entire mortgage obligation, leading the bank to execute a “Cancellation of Real Estate Mortgage.” Second, prior to this instant action, the plaintiffs had already filed a separate complaint (Civil Case No. 421-V) on January 17, 1968, against the same Ferreras spouses in the Court of First Instance of Bulacan. In that prior case, a decision dated January 21, 1970, was rendered in favor of the plaintiffs, ordering the Ferreras spouses to pay them the amount of the mortgage debt, plus liquidated damages and attorney’s fees. That judgment was pending appeal before the Court of Appeals at the time of the instant case.

ISSUE

Whether the trial court correctly dismissed the instant action on the ground of lis pendens or the pendency of another action between the same parties for the same cause.

RULING

Yes, the Supreme Court affirmed the dismissal. The legal logic rests on the principle against multiplicity of suits and the doctrine of res judicata. The lower court correctly found a substantial identity of parties, cause of action, and relief sought between the two cases. The plaintiffs and the Ferreras spouses are identical parties in both actions. The core cause of action arose from the same transaction: the mortgage executed by Emilia Ferreras using the plaintiffs’ property as collateral. The relief sought was ultimately the same—to hold the Ferreras spouses liable for the mortgage debt to clear the plaintiffs’ title.
Although the bank and sheriff were additional parties in the second case, the plaintiffs’ full payment to the bank and the consequent cancellation of the mortgage rendered the action against them moot and academic. The pivotal consideration is that a judgment had already been rendered in the first action (Civil Case No. 421-V), and it was pending appeal. Regardless of the eventual outcome of that appeal, the final judgment therein would constitute res judicata in the instant case. Allowing the second case to proceed would be unnecessary and vexatious, as it could lead to the possibility of double recovery for the plaintiffs on a single cause of action or to conflicting decisions. The dismissal under Rule 16, Section 1(e) of the Rules of Court was therefore proper.