J & N Shipping Lines v. Technomarine
REITERATIONFacts
The Antecedents: Technomarine Co., Ltd., through its representative Philippine Nippon Kyoei Corporation, sold a vessel, the Ferry Tsuyoshi (later renamed ASKA Shuttle), to ASKA Shipping Corporation for US$300,000.00. ASKA agreed to mortgage the vessel to secure payment and issued postdated checks. However, ASKA refused to execute the mortgage and its checks were dishonored. Subsequently, ASKA sold the same vessel to J & N Shipping Lines, Inc. for P4 million, and the Maritime Industry Authority (MARINA) issued new ownership and registration documents in favor of J & N Shipping Lines, Inc. Procedural History: Technomarine and Philippine Nippon filed a complaint for annulment of sale and damages with replevin against J & N Shipping Lines, Inc., ASKA, and MARINA. The Regional Trial Court (RTC), Branch 24, Manila, dismissed this complaint, finding that the vessel was free from liens when sold to J & N Shipping Lines, Inc. and that Technomarine's lien was extinguished upon delivery of the vessel. Respondents appealed to the Court of Appeals, but later withdrew their appeal. Concurrently, respondents filed a second complaint for recovery of possession/replevin with damages against the same parties with the RTC, Branch 37, Manila. The RTC, Branch 37, issued a writ of replevin and seized the vessel. J & N Shipping Lines, Inc. moved to dismiss this second complaint on grounds of forum shopping, which the RTC granted, ordering the return of the vessel. Respondents then filed a petition for prohibition with the Court of Appeals, which set aside the RTC's dismissal order and reinstated the second complaint, finding grave abuse of discretion by the RTC judge. J & N Shipping Lines, Inc. filed a motion for reconsideration, which was denied. The Petition: J & N Shipping Lines, Inc. filed the instant Petition for Review on Certiorari under Rule 45 of the 1997 Rules of Civil Procedure, seeking to reverse the Decision and Resolution of the Court of Appeals. The petitioner argues that the respondents engaged in forum shopping by filing a second complaint with the RTC, Branch 37, after their first complaint was dismissed and their appeal was withdrawn. Petitioner also contends that the Court of Appeals erred in granting the petition for prohibition and finding grave abuse of discretion, asserting that the dismissal of the second complaint by the RTC, Branch 37, was proper due to forum shopping and the principle of res judicata, as the first case had already been decided on the merits and had become final and executory.
Issue(s)
Whether respondents resorted to forum shopping. Whether the Court of Appeals erred in granting the petition for prohibition and declaring that the RTC judge committed grave abuse of discretion.
Ruling
The petition is granted. The assailed Decision and Resolution of the Court of Appeals are reversed. The Order dated March 8, 2002, of the Regional Trial Court of Manila, Branch 24, dismissing respondents' complaint and ordering the return of the vessel to petitioner J & N Shipping Lines, Inc. is affirmed.
Ratio Decidendi
On the issue of forum shopping: The Court held that the respondents engaged in forum shopping. They filed a first complaint with RTC Branch 24, which was dismissed. They appealed this dismissal but subsequently withdrew the appeal because they had already filed a similar complaint with RTC Branch 37. These two cases involved the identity of parties, rights, causes of action, and reliefs sought. Section 5, Rule 7 of the 1997 Rules of Civil Procedure mandates certification against forum shopping, and failure to comply is a ground for dismissal. The respondents did not certify that they had not filed any complaint involving the same issues. Engaging in forum shopping degrades the administration of justice and congests court dockets. Therefore, the Presiding Judge of RTC Branch 37 did not gravely abuse his discretion in dismissing the second complaint. On the issue of the Court of Appeals' ruling: The Court found that the RTC, Branch 24, in its decision in the first case, had already determined that petitioner J & N was the owner of the vessel and that respondents' appropriate suit against ASKA was an action for damages. This decision attained finality when the respondents withdrew their appeal before the Court of Appeals, and the resolution granting the withdrawal became executory on July 3, 2002. Consequently, the doctrine of res judicata applied, barring the second case filed with RTC Branch 37. Res judicata provides that a final judgment on the merits by a competent court is conclusive as to the rights of the parties and an absolute bar to subsequent actions involving the same claim or cause of action. Since the dismissal of the second complaint was proper due to forum shopping and res judicata, the Presiding Judge of Branch 37 did not commit grave abuse of discretion. Therefore, the petition for prohibition filed by respondents with the Court of Appeals should not have been granted.
Main Doctrine
The filing of a second complaint involving the same parties, issues, and reliefs after a previous complaint was dismissed and its appeal withdrawn constitutes forum shopping, which warrants the dismissal of the second complaint. Furthermore, a final and executory judgment on the merits in a prior case bars a subsequent action between the same parties on the same cause of action under the doctrine of res judicata.