G.R. No. 70403 July 7, 1989
SANTIAGO SYJUCO, INC., petitioner, vs. HON. JOSE P. CASTRO, AS PRESIDING JUDGE OF THE REGIONAL TRIAL COURT OF THE NATIONAL CAPITAL JUDICIAL REGION, BRANCH LXXXV, QUEZON CITY, THE CITY SHERIFF OF THE CITY OF MANILA, THE CITY REGISTER OF DEEDS OF THE CITY OF MANILA, EUGENIO LIM, ARAMIS LIM, MARIO LIM, PAULINO LIM, LORENZO LIM, NILA LIM and/ or THE PARTNERSHIP OF THE HEIRS OF HUGO LIM and ATTORNEY PATERNO P. CANLAS, respondents.

FACTS

In 1964, the Lim siblings obtained loans from Santiago Syjuco, Inc., secured by a real estate mortgage. By 1967, the aggregate loan amounted to P2,460,000.00, exclusive of interest. Upon the Lims’ default, Syjuco initiated extrajudicial foreclosure. To obstruct the sale, the Lims filed Civil Case No. 75180 in 1968, alleging usury. After protracted litigation through the Court of Appeals and the Supreme Court (G.R. No. L-45752), a final and executory judgment was rendered on September 24, 1977, upholding the validity of the mortgage and authorizing foreclosure.
Despite finality, the Lims, through new counsel Atty. Paterno Canlas, filed a fresh action, Civil Case No. 112762, in 1977, re-litigating the usury issue and seeking to annul the mortgage. This case was eventually dismissed for forum-shopping. Undeterred, the Lims filed a third case, Civil Case No. Q-33119, in 1979 before the RTC of Quezon City, Branch 85, presided by respondent Judge Jose P. Castro. This complaint again sought annulment of the mortgage and the prior final judgment, on grounds of fraud and lack of jurisdiction.

ISSUE

Whether the respondent judge committed grave abuse of discretion in taking cognizance of Civil Case No. Q-33119 and issuing a temporary restraining order against the foreclosure, despite the existence of a final and executory judgment in a prior case involving identical parties, subject matter, and causes of action.

RULING

Yes. The Supreme Court granted the petition for certiorari and prohibition, annulling the respondent judge’s orders. The Court held that the principle of res judicata squarely applied. The final judgment in Civil Case No. 75180, which had been affirmed up to the Supreme Court, constituted a bar to the subsequent action, Civil Case No. Q-33119. The parties were identical, the subject matter concerned the same mortgage and loan obligation, and the cause of action—the validity of the mortgage—had been conclusively settled. The filing of the new case was a blatant act of forum-shopping designed to delay the enforcement of a final judgment. The respondent judge’s act of entertaining the suit and issuing injunctive relief, in defiance of the conclusive effect of the prior final judgment, constituted grave abuse of discretion amounting to lack or excess of jurisdiction. The Court emphasized that such manipulative use of judicial processes to forestall a simple foreclosure for over twenty years was a gross abuse that the courts must firmly prevent to uphold the integrity of final judgments and the orderly administration of justice.