GUARANTEED
HOTELS, INC., represented by
URMA BALTAO CHIONGBIAN,
Petitioner,
-versus-
G.R.
No. 164338
January
17, 2005
JOSEFINA S. BALTAO, ROCIO P. BALTAO,
GARY BALTAO and GINO BALTAO,
Respondents.
D
E C I S I O N
YNARES-SANTIAGO,
J.:
Before
us is a Petition for Review on
Certiorari
under Rule 45 of the Rules of Court seeking a reversal of the Court of
Appeals’ April 6, 2004 Decision[1] and its June 30, 2004 Resolution[2]
in CA-G.R. SP No. 74154, which reversed and set aside the Regional
Trial Court of Manila, Branch 46, September 23, 2002 Order[3] and its
February 17, 2004 Partial Decision[4] in Civil Case No. 02-102705.
On
November 4, 1996, Sta. Lucia Realty and Development, Inc. (“Sta.
Lucia”) and Guaranteed Homes, Inc. entered into a Joint Venture
Agreement (JVA)[5] for the purpose of developing a resort complex in
Cabituagan, Zambales. The JVA included a parcel of land
covered by TCT No. 11391[6] which was allegedly registered in the name
of Guaranteed Hotels, Inc.
On
August 28, 2001, the Testate Estate of Eugenio S. Baltao represented by
Mariano Alejandro L. Baltao, Eugenio L. Baltao III and Urma Chiongbian,
and Guaranteed Hotels, Inc., represented by Urma Chiongbian, in her
capacity as a stockholder, filed before the Regional Trial Court of
Olongapo City a derivative suit[7] (“OLONGAPO CASE”) against Sta. Lucia
and Guaranteed Homes, Inc. for Injunction, Annulment of Document and
Damages with Application for a Temporary Restraining Order and a Writ
of Preliminary Prohibitory and Mandatory Injunction.
The
OLONGAPO CASE sought the annulment of the JVA insofar as the inclusion
of TCT No. 11391 is concerned because it was allegedly made without the
consent or knowledge of Guaranteed Hotels, Inc.
On
June 21, 2002, during the pendency of the OLONGAPO CASE, Guaranteed
Hotels, Inc., represented by Urma Chiongbian filed a second derivative
suit before the Regional Trial Court of Manila (“MANILA CASE”) against
Rocio, Josefina, Gary, Jaime and Gino, all surnamed Baltao as alleged
stockholders and directors of Guaranteed Hotels, Inc., and Alicia
Pantig and Jane and John Does.[8] The MANILA CASE, docketed as Civil
Case No. 02-102705 and raffled to Branch 46[9] of the Regional Trial
Court of Manila, sought to annul and set aside all resolutions,
corporate acts, and transactions of the defendants, herein respondents,
from 1990 up to the present, including but not limited to those where
the respondents allegedly authorized Guaranteed Hotels, Inc. to enter
into joint venture agreements with Sta. Lucia and other corporations
for the development of the properties of Guaranteed Hotels, Inc.[10]
The
respondents filed their answer[11] in the MANILA CASE on August 16,
2002, raising petitioner’s violation of the rules on forum shopping as
one of their defenses. On September 3, 2002, they filed a Motion
to Conduct Preliminary Hearing on the special and affirmative defenses
which they raised in their answer but the same was denied by the trial
court in its Order[12] dated September 23, 2002.
On
December 2, 2002, respondents filed with the Court of Appeals a
Petition for Certiorari[13] claiming that the trial court gravely
abused its discretion in denying their motion to conduct a preliminary
hearing. This petition was docketed as CA-G.R. SP No. 74154.
On
February 13, 2003, the Seventh Division of the Court of Appeals, upon
motion of respondents, temporarily restrained the Regional Trial Court
of Manila, Branch 46 from taking further proceedings on the MANILA CASE
until pending issues on the petitioners’, the respondents herein,
special and affirmative defenses are resolved.[14]
Finding
petitioner guilty of violating the rules on forum shopping, the Court
of Appeals, in its decision dated April 6, 2004, reversed and set aside
the September 23, 2002 Order and February 17, 2004 Partial Decision of
the Regional Trial Court of Manila, Branch 46 and dismissed Civil Case
No. 02-102705.
The
dispositive portion of the Court of Appeals’ decision stated:
WHEREFORE,
premises considered, the petition is GRANTED and the assailed September
23, 2002 Order and February 17, 2004 Partial Decision are hereby
REVERSED, SET ASIDE. FINDING willful and deliberate forum
shopping by private respondent, Civil Case No. 02102705, the second
derivative suit, in the Regional Trial Court of Manila Branch 46, is
hereby DISMISSED pursuant to Section 5, Rule 7 of the 1997 Rules of
Civil Procedure. DISMISSAL of Civil Case No. 406-0-2001, the
first derivative suit, in the Regional Trial Court of Olongapo City
Branch 74, has become MOOT and ACADEMIC, the same having been DISMISSED
at the instance of herein private respondent’s counsel who filed a
Notice of Dismissal for its dismissal.
Costs
against private respondent.
SO
ORDERED.[15]
Petitioner
moved for reconsideration but the same was denied.
In the
instant petition, petitioner maintains that it did not engage in forum
shopping since there is no identity of parties or causes of action
between the OLONGAPO CASE and MANILA CASE.
We are
not persuaded.
Forum
shopping consists of filing multiple suits involving the same parties
for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment.[16]
There
is forum shopping where there exist: (a) identity of parties, or at
least such parties as represent the same interests in both actions; (b)
identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and (c) the identity of the two preceding
particulars is such that any judgment rendered in the pending case,
regardless of which party is successful would amount to res judicata in
the other.[17]
The
case of Buan v. Lopez[18] laid down the test for determining whether
there has been a violation of the rule against forum shopping.
Thus, forum shopping exists where the elements of litis pendentia are
present or where a final judgment in one case will amount to res
judicata in the other. Litis pendentia as a ground for the
dismissal of a civil action refers to that situation wherein another
action is pending between the same parties for the same cause of
action, such that the second action becomes unnecessary and
vexatious. For litis pendentia to be invoked, the concurrence of
the following requisites is necessary:
(a)
identity of parties or at least such as represent the same interest in
both actions;
(b)
identity of rights asserted and reliefs prayed for, the reliefs being
founded on the same facts; and
(c)
the identity in the two cases should be such that the judgment that may
be rendered in one would, regardless of which party is successful,
amount to res judicata in the other.[19]
The
practice of forum shopping is proscribed because it unnecessarily
burdens our courts with heavy caseloads, unduly taxes the manpower and
financial resources of the judiciary and trifles with and mocks our
judicial processes thereby affecting the efficient administration of
justice. This condemnable conduct has prompted the issuance of
circulars[20] penalizing violators with the dismissal of the case or
cases without prejudice to the taking of appropriate action against the
counsel or party concerned.[21]
Petitioner,
in filing the OLONGAPO and MANILA cases engaged in forum
shopping. The elements of litis pendentia are present between the
two derivative suits filed by petitioner.
Petitioner
maintains that there is no identity of parties because in the OLONGAPO
CASE, the plaintiffs are the Testate Estate of Eugenio S. Baltao,
represented by Urma Chiongbian and the petitioner herein, also
represented by Urma Chiongbian, while in the MANILA CASE, the plaintiff
is Guaranteed Hotels, Inc. alone, represented by Urma Chiongbian.
In TF
Ventures, et al. v. Yoshitsugu Matsuura, et al.,[22] we reiterated the
well settled rule that lis pendens requires only substantial, and not
absolute identity of parties.[23] There is substantial identity
of parties where there is a community of interest between a party in
the first case and a party in the second case. Undeniably, the
OLONGAPO and MANILA cases were purportedly filed to protect the
interests of Guaranteed Hotels, Inc. Such constitutes a community
of interest that makes the parties identical thereby making it within
the purview of the first requisite of litis pendentia.
We
agree with the Court of Appeals in ruling that the rights being
asserted and the reliefs prayed for in the two derivative suits are
identical.
In the
OLONGAPO CASE, petitioner sought the nullification of the JVA entered
into by Guaranteed Homes, Inc. and Sta. Lucia insofar as the inclusion
of TCT No. 11391 is concerned. On the other hand, the MANILA CASE
sought for the annulment of the corporate acts of herein respondents
including the resolution authorizing the execution of the JVA.
While
the reliefs prayed for in the two derivative suits were not similarly
worded, it cannot be denied that their objective is to bring about the
annulment of the JVA. The OLONGAPO CASE directly attacked the
JVA. Petitioner, however, adopted another mode in the MANILA
CASE. It indirectly assailed the JVA by putting in issue the
authority of the respondents to execute the same in the hope that, once
established that the same is ultra vires, the nullification of the JVA
would follow as a matter of course. Plainly, the identity of the
two derivative suits is such that the judgment that may be rendered in
one would amount to res judicata in the other.
We
cannot allow the possibility of two regional trial courts ruling
differently on the reliefs prayed for by the petitioner. Consider
this: If the trial court in the OLONGAPO CASE uphold the validity
of the JVA while the trial court in the MANILA CASE rules on the
contrary, these two incompatible decisions will wreak havoc on our
judicial system.
The
grave evil sought to be avoided by the rule against forum shopping is
the rendition by two competent tribunals of two separate, and
contradictory decisions. Unscrupulous party litigants, taking advantage
of a variety of competent tribunals, may repeatedly try their luck in
several different fora until a favorable result is reached. To avoid
the resultant confusion, we adhere strictly to the rules against forum
shopping, and any violation of these rules results in the dismissal of
a case.[24]
WHEREFORE,
premises considered, the instant petition for review on certiorari is
DENIED and the Decision of the Court of Appeals dated April 6, 2004 and
its Resolution dated June 30, 2004 in CA-G.R. SP No. 74154, are
AFFIRMED.
SO
ORDERED.
Davide,
Jr., C.J., (Chairman),
Quisumbing, Carpio, and Azcuna, JJ.,
concur.
[1]
Penned by Associate Justice Vicente Q. Roxas and concurred in by
Associate Justices Rodrigo V. Cosico and Mariano C. Del Castillo;
Rollo, pp. 298-317.
[2]
Rollo, pp. 376-377.
[3]
Id., pp. 193-194.
[4]
Id., pp. 262-292.
[5]
Id., pp. 52-62.
[6]
Id., p. 124.
[7]
Docketed as Civil Case No. 406-0-2001 and raffled to Branch 74, Judge
Ramon S. Caguioa, Presiding; Rollo, pp. 63-75.
[8]
Rollo, pp. 76-111.
[9]
Presided by Judge Artemio S. Tipon.
[10]
Rollo, pp. 76-77.
[11]
CA Rollo, pp. 148-157.
[12]
See note 3.
[13]
Rollo, pp. 196-217.
[14]
Penned by Associate Justice Remedios Salazar Fernando and concurred in
by Associate Justices Ruben T. Reyes and Edgardo F. Sundiam; CA Rollo,
pp. 197-198.
[15]
Rollo, p. 316.
[16]
Leyson, Jr. v. Office of the Ombudsman, 387 Phil. 241, 250 (2000).
[17]
Jimmy L. Barnes, aka James L. Barnes v. Judge Ma. Luisa Quijano
Padilla, et al., G.R. No. 160753, 30 September 2004.
[18]
229 Phil. 65, 69-70 (1986).
[19]
Republic v. Carmel Development, Incorporated, G.R. No. 142572, 20
February 2002, 377 SCRA 459, 470-471.
[20]
See Administrative Circular No. 4-94, ADDITIONAL REQUISITES FOR CIVIL
COMPLAINTS, PETITIONS AND OTHER INITIATORY PLEADINGS FILED IN ALL
COURTS AND AGENCIES, OTHER THAN THE SUPREME COURT AND THE COURT OF
APPEALS, TO PREVENT FORUM SHOPPING OR MULTIPLE FILING OF SUCH PLEADINGS.
[21]
Riano, Fundamentals of Civil Procedure, 2003 Edition, pp. 395-396,
citing Progressive Development Corporation, Inc. v. Court of Appeals,
361 Phil. 566, 584 (1999).
[22]
G.R. No. 154177, 9 June 2004, p. 7.
[23]
See also T’Boli Agro-Industrial Development, Inc. v. Solilapsi, A.C.
No. 4766, 27 December 2002, 394 SCRA 269, 279.
[24]
Supra, note 22, pp. 4-5.
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