Madara v. Perello
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the rightful leadership and control of Provident International Resources Corporation (PIRC). Two factions claimed to be the legitimate directors and officers of PIRC. One faction, led by Lazaro Madara, Alfredo D. Roa III, and Joaquin T. Venus (petitioners), asserted they were the newly elected directors and officers. The opposing faction, comprising Constancio D. Francisco, Edward T. Marcelo, and others (private respondents), claimed to be the bona fide directors and officers. This internal corporate dispute led to two separate amended complaints filed with the Regional Trial Court (RTC) of Muntinlupa City, one against the Philippine Amusement and Gaming Corporation (PAGCOR) for the remittance of lease rentals, and another against the private respondents for unlawfully exercising corporate powers. 2. Procedural History: The two amended complaints were consolidated and initially assigned to Branch 256 of the RTC, which issued a temporary restraining order. The presiding judge of Branch 256 later inhibited himself, and the consolidated cases were transferred to Branch 276. The RTC issued a preliminary prohibitory injunction in favor of the private respondents. After trial, the RTC ruled in favor of the private respondents, finding them to be the true directors and officers of PIRC and the petitioners to be unqualified. The RTC ordered the petitioners to return rental payments and pay damages and attorney's fees. The petitioners filed a Notice of Appeal, which the private respondents argued was the wrong mode of review. The petitioners then filed a Petition for Review with the Court of Appeals (CA), which they later withdrew. Subsequently, they filed a Petition for Relief from Judgment, which the RTC denied. The RTC also issued a writ of execution. The petitioners then filed a Petition for Certiorari with the CA (docketed as CA-G.R. SP No. 90821), assailing various RTC orders and sheriff's notices. The CA dismissed this petition for lack of merit and forum shopping. The petitioners moved for reconsideration, which the CA denied. They also filed another Petition for Certiorari with the CA (docketed as CA-G.R. SP No. 91950) assailing earlier RTC orders. 3. The Petition: The petitioners filed the present Petition for Review on Certiorari under Rule 45 of the Revised Rules of Court with the Supreme Court, assailing the Court of Appeals' Decision dated December 20, 2005, and its Resolution dated April 24, 2006, in CA-G.R. SP No. 90821. The primary issues raised are whether the CA erred in not finding that the respondent judge acted with grave abuse of discretion in holding the petitioners personally liable despite not being parties to the case, and whether the CA erred in finding the petitioners guilty of forum shopping. The petitioners argue they were not parties to the consolidated civil cases and thus cannot be bound by the RTC decision or have their properties levied. They also contend that their subsequent pleadings were merely reactions to being held liable post-judgment and did not constitute voluntary submission to jurisdiction. Regarding forum shopping, they claim their motion for reconsideration was rendered moot by subsequent execution proceedings, justifying their resort to the CA. The Supreme Court ultimately dismissed the petition, finding that the petitioners committed forum shopping before the CA and with the Supreme Court itself, and that the CA did not err in holding them personally liable.
Issue(s)
Whether the Court of Appeals erred in not finding that the respondent Judge acted with grave abuse of discretion or without jurisdiction in holding petitioners personally liable despite their not being parties to the case. Whether the Court of Appeals erred in finding petitioners guilty of forum shopping.
Ruling
The Supreme Court dismissed the petition for forum shopping and for lack of merit. The Court held that the petitioners committed forum shopping before the Court of Appeals and also with the Supreme Court by filing a false certification of non-forum shopping. Furthermore, the Court found no reversible error in the Court of Appeals' decision holding the petitioners individually liable under the RTC decision, as they actively pursued their interests, misrepresented themselves as corporate officers, and their actions militated against their claim for protection.
Ratio Decidendi
On the issue of personal liability: The Supreme Court found no reversible error in the Court of Appeals' decision holding the petitioners individually liable. The Court reasoned that the petitioners pursued their individual interests, not those of PIRC, by filing the consolidated complaints under the guise of PIRC's name. Their interests were evident from the complaints and various pleadings filed. Therefore, no genuine issue of due process arose as they had the opportunity to be heard on their individual interests and admitted initiating the consolidated cases. The Court further noted that the petitioners misrepresented themselves as stockholders, directors, and officers of PIRC, using the corporation's separate personality as a shield against personal liability. They could not use their own active misrepresentations to shield themselves from individual liability, as this would grant them an undeserved privilege rather than a right. The Court also recognized the RTC's finding that the private respondents, not the petitioners, were the bona fide stockholders and officers of PIRC, which, coupled with other findings, provided a sufficient basis to hold the petitioners personally liable for the return of wrongfully remitted lease rentals and for damages to the real PIRC. On the issue of forum shopping: The Supreme Court agreed with the Court of Appeals that the petitioners engaged in clear forum shopping. The Court explained that forum shopping involves instituting multiple actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively, to obtain a favorable disposition. The test is the identity of parties, rights or causes of action, and reliefs sought. The petitioners filed a petition for certiorari with the Court of Appeals (CA-G.R. SP No. 90821) while a motion for reconsideration of the assailed RTC order was still pending before the RTC. This constituted forum shopping because they sought the same relief from two different judicial venues. The Court clarified that the exception for petitions for certiorari does not apply when a motion for reconsideration is still pending. The petitioners' excuse that their motion was impliedly denied was weakened by their subsequent filing of another petition for certiorari (CA-G.R. SP No. 91950) assailing the same order after the motion was formally denied. This demonstrated a disregard for procedural orderliness and a tendency to file actions based on convenience. The Court also found that the petitioners committed forum shopping with the Supreme Court by filing a false certification of non-forum shopping and failing to disclose the pendency of CA-G.R. SP No. 91950. The Court stated that for these reasons alone, the petition before it must be summarily dismissed.
Main Doctrine
The filing of multiple petitions seeking the same relief from different judicial venues, even if one is a petition for certiorari, constitutes forum shopping, especially when a motion for reconsideration is still pending before the lower court. Furthermore, individuals who actively misrepresent themselves as corporate officers and initiate legal actions in the name of the corporation, despite not being duly elected officers, cannot later claim to be non-parties to escape individual liability, as their actions demonstrate a design to use the corporation's separate personality as a shield and they have effectively submitted to the court's jurisdiction.