803 Phil. 493
DEL CASTILLO, J.:
The instant case involves the Annulment of Extra-Judicial Foreclosure Sale and Certificate of Sale with Prayer for Temporary Restraining Order and Preliminary Injunction, and Damages. However, a case for Annulment of Mortgage is still pending before the Regional Trial Court Makati City, Branch 57. The Annulment of Extra-Judicial Foreclosure Sale and the Annulment of Mortgage involves (sic) the same subject property described in the Transfer Certificate of Title No. (168302)-S-3664. While the plaintiffs alleged that the issue in the case before RTC 57 deals with the validity of the mortgage and the issue in the instant case deals with the validity of the foreclosure sale, this Court finds the same to be interrelated. The ruling on the validity of the Foreclosure Sale would also deal with the validity of the mortgage. Thus, there would be a possibility that the ruling on the said validity by this Court would be in conflict with ruling on the Annulment of Mortgage case which is now pending before the RTC Makati Branch 57.Fortunato and Franklin moved to reconsider, but the trial court, in a June 14, 2012 Order, held its ground, stating among others that -
As the Supreme Court consistently held x x x there is forum shopping 'when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some other court,' Hence, there is a clear showing of forum shopping which is a ground for the dismissal of this case.
WHEREFORE, in view of the foregoing[,] the instant case is hereby DISMISSED on the ground of forum shopping.
In the present case, there is no dispute that the plaintiffs clearly violated Section 4, Rule 2, of the Rules of Court apparrently for splitting a cause of action by filing separately and independently the instant action which can be best pleaded in the annulment of mortgage earlier lodged.Ruling of the Court of Appeals
Certainly, it would be for the best interest and benefit of the parties herein if the present action (annulment of foreclosure proceeding) is just pleaded as plaintiff's cause of action in the annulment of mortgage first lodged and now pending before RTC Branch 57, instead of being filed separately to save time and effort. x x xx x x x x x x x x
In the final analysis, although it may seem that the two cases contain two separate remedies that are both available to the plaintiffs, it cannot be said that the two remedies which arose from one wrongful act can be pursued in two different cases.
The rule against splitting a cause of action is intended to prevent repeated litigation between the same parties in regard to the same subject of controversy, to protect the defendant from unnecessary vexation; and to avoid the costs and expenses incident to numerous suits. It comes from the old maxim nemo debet bis vexari, pro una et eadem causa (no man shall be twice vexed for one and the same cause).
In sum, the lone issue to be resolved is whether petitioners Fortunato and Franklin were guilty of forum-shopping when they successively filed the Annulment of Mortgage case and Annulment of Foreclosure Sale case.A Motion for Reconsideration was filed, but the same was denied in a June 28, 2013 Resolution of the CA. Hence, the present Petition.x x x x x x x x x
Given the foregoing considerations, We hold that petitioners Fortunato and Franklin clearly violated the rule on forum-shopping as the elements of litis pendentia are present in the case at bench. Consider the following;
Firstly, it is undisputed that there is identity of parties representing the same interests in the two cases, both involving petitioners x x x and private respondent Bank. Notwithstanding that in the first case, FCD Pawnshop x x x was not indicated as a party and respondent Sunyang was not impleaded therein, it is evident that the primary litigants in the two actions are the same.
Secondly, in finding that the other elements of litis pendentia were present in the instant case, We deem it necessary to apply the case of Goodland Company, Inc. vs. Asia United Bank et al.
In Goodland, petitioner initially filed a Complaint for Annulment of Mortgage on the ground that the Real Estate Mortgage (REM) contract was falsified and irregularly executed. Subsequently, it filed a second case where it prayed for injunctive relief and/or nullification of the extrajudicial foreclosure sale by reason of, among others, defective publication of the Notice of Sale and falsification of the REM contract which was the basis of foreclosure, thus, rendering the latter as similarly null and void. The High Court found petitioner guilty of forum shopping ratiocinating that there can be no detem1ination of the validity of the ex1:n"!judicial foreclosure and the propriety of the injunction in the Injunction case without necessarily ruling on the validity of the REM.
We stress, however, that unlike the Goodland case, the instant controversy involved a situation wherein the allegations in the Complaint for Annulment of Foreclosure did not explicitly and categorically raise the falsification of the REM contract as one of the grounds for declaring the annulment of the said foreclosure sale. Here, petitioners anchored their arguments on the alleged irregularities in the foreclosure proceedings, i.e., different title numbers in the documents used or issued in the auction sale and that the Petition for Extrajudicial Foreclosure Sale was filed without authority. Nonetheless, after a careful study of the Goodland case, We are ever more convinced that the same is still instructive on the issue at hand. Consider the following pertinent portions of the case:'x x x There can be no dispute that the prayer for relief in the two cases was based on the same attendant facts in the execution of REMs over petitioner's properties in favor of AUB. While the extrajudicial foreclosure of mortgage, consolidation of ownership in AUB and issuance of title in the latter's name were set forth only in the second case x x x, these were simply the expected consequences of the REM transaction in the first case x x x. These eventualities are precisely what petitioner sought to avert when it filed the first case. Undeniably then, the injunctive relief sought against. the extrajudicial foreclosure, as well as the cancellation of the new title in the name of the creditor-mortgagee AUB, were all premised on the alleged nullity of the REM due to its allegedly fraudulent and irregular execution and registration - the same facts set forth in the first case. In both cases, petitioner asserted its right as owner of the property subject of the REM, while AUB invoked the rights of a foreclosing creditor-mortgagee, x x xWhile in the instant case, the Annulment of Foreclosure Sale was merely founded on irregularities in the foreclosure proceedings, without deliberately raising the alleged nullity of the REM, the foregoing clearly suggests that in resolving the said Annulment of Foreclosure Sale case, its determination will still be anchored upon and premised on the issue of the validity of REM. Parenthetically, should it be found that the mortgage contract is null and void, the proceedings based thereon shall likewise become ineffectual. The resolution of the Annulment of Foreclosure Sale case, therefore, is inevitably dependent on the effectivity of the REM transaction, thus, it can be said that both cases shall be substantially founded on the same transactions, same essential facts and circun1stanccs.
x x x In the first case, petitioner alleged the fraudulent and irregular execution and registration of the REM which violated its right as owner who did not consent thereto, while in the second case petitioner cited further violation of its right as owner when AUB foreclosed the property, consolidated its ownership and obtained a new TCT in its name. Considering that the aforesaid violations of petitioner's right as owner in the two cases both hinge on the binding effect of the REM, i.e., both. cases will rise or fall on the issue of the validity of the REM, it follows that the same evidence will support and establish the first and second causes of action. The procedural infirmities or non compliance with legal requirements for extrajudicial foreclosure raised in the second case were but additional grounds in support of the injunctive relief sought against the foreclosure which was, in the first place, illegal on account of the mortgage contract's nullity. Evidently, petitioner never relied solely on the alleged procedural irregularities in the extrajudicial foreclosure when it sought the reliefs in the second case. x x x'
In addition, as correctly pointed out by the private respondent Bank, a careful scrutiny of the Complaint for Annulment of Foreclosure shows petitioners Fortunato and Franklin's repeated reference to the subject property as unlawfully and fraudulently mortgaged. As such, insofar as the determination of the validity of foreclosure proceedings is concerned, same evidence will have to be utilized as the antecedent facts that gave rise to both cases were the same.x x x x x x x x x
Thirdly, a judgment in the Annulment of Mortgage case will amount to res judicata in the Annulment of Foreclosure Sale case. It is a principle in res judicata that once a final judgment has been rendered, the prevailing party also has an interest in the stability of that judgment. To allow relitigation creates the risk of inconsistent results and presents the embarrassing problem of determining which of two conflicting decisions is to be preferred. Here, conflicting decisions may result should the Annulment of Foreclosure case be allowed to proceed.
To stress once again, should RTC Br. 57 rule that the REM contract is null and void, the proceedings based thereon shall likewise become ineffectual. Considering that both RTC Brs. 57 and 133 will be confronted (sic) to discuss or make any pronouncement regarding the validity of the REM, the possibility of conflicting rulings or decisions may be rendered with respect to the said issue. With that. We deem it proper that petitioners Fortunato and Franklin should have just amended their Complaint for Annulment of Mortgage, pleading therein the subsequent extrajudicial foreclosure and include in the prayer the nullification of the said extrajudicial foreclosure.
In view of the foregoing, no grave abuse of discretion can be imputed to public respondent RTC Br. 133 in finding that petitioners Fortunato and Franklin committed forum-shopping. The instant petition, therefore, indubitably warrants denial.
WHEREFORE, the petition is DENIED. The assailed Orders dated March 26, 2012 and June 14, 2012 of the x x x Regional Trial Court of Makati City, Branch 133, in Civil Case No. 11-1192, are hereby AFFIRMED.
Costs against petitioners.
SO ORDERED. (Emphasis in the original)
There is forum shopping 'when a party repetitively avails of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and the same essential facts and circumstances, and all raising substantially the same issues either pending in or already resolved adversely by some other court.' The different ways by which forum shopping may be committed were explained in Chua v. Metropolitan Bank & Trust Company:The foregoing view was reiterated in a subsequent pronouncement, which happens to form the underlying premise of the CA's disposition.Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause of action and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based on the same cause of action but with different prayers (splitting causes of action, where the ground for dismissal is also either litis pendentia or res judicata).Common in these types of forum shopping is the identity of the cause of action in the different cases filed. Cause of action is defined as 'the act or omission by which a party violates the right of another.'
The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its allegedly falsified or spurious nature) which is allegedly violative of Goodland's right to the mortgaged property. It serves as the basis for the prayer for the nullification of the REM. The Injunction Case involves the same cause of action, inasmuch as it also invokes the nullity of the REM as the basis for·the prayer for the nullification of the extrajudicial foreclosure and for injunction against consolidation of title. While the main relief sought in the Annulment Case (nullification of the REM) is ostensibly different from the main relief sought in the Injunction Case (nullification of the extrajudicial foreclosure and injunction against consolidation of title), the cause of action which serves as the basis for the said reliefs remains the same - the alleged nullity of the REM. Thus, what is involved here is the third way of committing forum shopping, i.e., filing multiple cases based on the same cause of action, but with different prayers. As previously held by the Court, there is still forum shopping even if the reliefs prayed for in the two cases are different, so long as both cases raise substantially the same issues.
There can be no determination of the validity of the extrajudicial foreclosure and the propriety of injunction in the Injunction Case without necessarily ruling on the validity of the REM, which is already the subject of the Annulment Case. The identity of the causes of action in the two cases entails that the validity of the mortgage will be ruled upon in both, and creates a possibility that the two rulings will conflict with each other.This is precisely what is sought to be avoided by the rule against forum shopping.
The substantial identity of the two cases remains even if the parties should add different grounds or legal theories for the nullity of the REM or should alter the designation or form of the action. The well-entrenched rule is that 'a party cannot, by varying the form of action, or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated.' (Emphasis supplied)