G.R. Nos. 89095 & 89555 November 6, 1989
Sixto P. Crisostomo, petitioner, vs. Securities and Exchange Commission, Spouses Shoji Yamada and Michiyo Yamada and Spouses Tomotada Enatsu and Edita Enatsu, respondents.

FACTS

The United Doctors Medical Center, Inc. (UDMC), originally controlled by the Crisostomo group, faced foreclosure by the Development Bank of the Philippines due to a P55 million loan default. To avert this, UDMC’s officers solicited a P57 million investment from respondents, Japanese doctors Shoji Yamada and Tomotada Enatsu (whose wife is Filipina). This investment was formalized through a Stock Purchase Agreement and an Amended Memorandum of Agreement, granting the respondents an 82.09% controlling interest. These agreements received all necessary governmental approvals from the Board of Investments, Central Bank, and Securities and Exchange Commission (SEC), with the knowledge and involvement of petitioner Sixto Crisostomo, UDMC’s legal counsel.
Upon completion, shares were issued to the respondents, saving UDMC from foreclosure and releasing the Crisostomos from their suretyship liabilities. A special stockholders’ meeting was scheduled to reorganize the corporation. However, on the eve of the meeting, Crisostomo filed SEC Case No. 3420, seeking to enjoin the meeting, disqualify the foreign investors from holding controlling interest or corporate positions, and annul the investment agreements. Subsequently, he filed a nearly identical suit in the Regional Trial Court of Makati, which was dismissed for lack of jurisdiction and is pending appeal.

ISSUE

Whether the petitions filed by Crisostomo should be dismissed due to forum-shopping and lack of merit.

RULING

Yes, the petitions are dismissed. The Supreme Court found Crisostomo engaged in blatant forum-shopping. Forum-shopping occurs when a party, anticipating an unfavorable ruling in one forum, seeks a favorable opinion in another, other than through appeal or certiorari. Crisostomo’s filing of SEC Case No. 3420 and the subsequent civil case in the RTC, both seeking identical reliefs to nullify the investment and restrain corporate reorganization, constitutes a clear abuse of judicial and administrative processes. This practice is expressly prohibited under the Interim Rules of Court, as it trifles with the courts and undermines administrative proceedings.
The legal logic is grounded in judicial efficiency and the prevention of contradictory rulings. The Court emphasized that forum-shopping is a contemptuous act warranting the summary dismissal of the petitions. Beyond this procedural infirmity, the petitions lacked substantive merit. The investment transactions were conducted openly, with full regulatory scrutiny and approval, and Crisostomo, as corporate counsel, was intimately involved. His belated challenge was deemed an artful scheme to defraud the foreign investors after their capital infusion had already salvaged the corporation and discharged the Crisostomo group’s personal liabilities. Consequently, the Court dismissed the petitions, lifted the temporary restraining order, ordered the dismissal of the related Court of Appeals case, censured Crisostomo and his counsel, and imposed double costs.