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 case involves United Doctors Medical Center, Inc. (UDMC), originally controlled by the Crisostomo group. In 1988, UDMC faced foreclosure by the Asset Privatization Trust due to a P55 million loan default. To avert this, UDMC officers persuaded Japanese investors, the Yamada and Enatsu spouses, to invest P57 million. This investment was formalized through a Stock Purchase Agreement and an Amended Memorandum of Agreement, granting the investors an 82.09% controlling interest. These agreements received all necessary government approvals from the BOI, Central Bank, and SEC, with the knowledge of petitioner Sixto Crisostomo, who served as UDMC’s legal counsel. The infusion saved UDMC and discharged the Crisostomos’ suretyship liabilities.
Subsequently, a special stockholders’ meeting was scheduled to reorganize UDMC’s board. On the eve of this meeting, Sixto Crisostomo filed SEC Case No. 3420, seeking to stop the meeting, disqualify the foreign investors from control, and annul the investment agreements. Two weeks later, he filed an identical suit (Civil Case No. 88-1823) in the Regional Trial Court of Makati. The SEC en banc later issued a resolution and orders to proceed with the corporate meeting, which the Court of Appeals affirmed. Crisostomo then elevated the matter to the Supreme Court via these consolidated petitions.

ISSUE

The primary issue is whether the petitioner engaged in forum-shopping, warranting the dismissal of his petitions.

RULING

The Supreme Court dismissed the petitions, primarily due to forum-shopping. The legal logic is clear: 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. Here, Crisostomo filed two substantially identical actions—one before the SEC and another before the RTC—seeking the same reliefs to annul the investment agreements and restrain the corporate reorganization. This was a deliberate tactic to defeat administrative processes after the SEC began proceedings. The Court emphasized that this practice trifles with judicial and administrative processes, constitutes contempt, and is a ground for summary dismissal under the Interim Rules. The RTC case was correctly dismissed for lack of jurisdiction, as the SEC has primary jurisdiction over intra-corporate disputes. Consequently, the petitions were dismissed for lack of merit, the temporary restraining order was lifted, and the petitioner and his counsel were censured. The Court also ordered the dismissal of the related Court of Appeals case and imposed double costs.