Goodland Company v. Asia United Bank
REITERATIONFacts
The Antecedents: Petitioner Goodland Company, Inc. (Goodland) executed Third Party Real Estate Mortgages (REMs) over its Laguna and Makati properties to secure loans of RMNSI/Smartnet, Inc. (RMNSI) to Asia United Bank (AUB). Goodland later repudiated the REMs, claiming they were unlawfully filled up from blank forms and falsified. RMNSI defaulted on its loan obligations. Procedural History: - Laguna Properties: Goodland filed two cases: one for annulment of mortgage (Civil Case No. B-6242) and another to annul the foreclosure sale and enjoin consolidation of title (Civil Case No. B-7110). The RTC dismissed both cases with prejudice due to forum shopping and litis pendentia. The CA reversed these dismissals, but the Supreme Court, in G.R. No. 190231 and G.R. No. 191388, reinstated the RTC's dismissal orders, finding Goodland guilty of forum shopping. - Makati Property: Goodland filed two cases: one for annulment of the REM (Civil Case No. 03-045) and another for injunctive relief and/or nullification of the extrajudicial foreclosure sale (Civil Case No. 06-1032). The RTC dismissed both cases with prejudice due to forum shopping. The CA affirmed the dismissal on the ground of forum shopping, despite disagreeing with the RTC's dismissal of Civil Case No. 06-1032 for non-payment of docket fees. The Petition: Goodland filed consolidated petitions for review on certiorari assailing the CA's Decision and Resolution that dismissed its appeals, affirming the RTC's dismissal of the cases involving the Makati property on the ground of forum shopping.
Issue(s)
Whether petitioner Goodland Company, Inc. was guilty of forum shopping when it successively filed Civil Case No. 03-045 and Civil Case No. 06-1032. Whether a judgment in Civil Case No. 03-045 would amount to res judicata in Civil Case No. 06-1032, and vice versa.
Ruling
The petitions are denied. The Decision dated September 15, 2010 and Resolution dated January 31, 2011 of the Court of Appeals in CA-G.R. CV No. 90418 are affirmed. The cases are dismissed with prejudice.
Ratio Decidendi
On the issue of forum shopping: The Court held that forum shopping exists when there is an identity of parties, identity of rights asserted and relief prayed for, founded on the same facts, such that any judgment rendered in one action will amount to res judicata in the other. All these elements were present in the consolidated petitions. The two cases filed by Goodland concerning the Makati property, one for annulment of the REM and the other for injunction against foreclosure, were based on the same core issue: the alleged falsity and invalidity of the REM. The extrajudicial foreclosure and subsequent consolidation of ownership were merely consequences of the REM transaction, which Goodland sought to prevent from the outset. Therefore, the same evidence would support both causes of action, and a judgment in one would necessarily constitute res judicata in the other. The Court reiterated that the essence of forum shopping is the filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, to obtain a favorable judgment. The Court found that Goodland's disclosure of the pendency of Civil Case No. 03-045 in its Certificate of Non-Forum Shopping for Civil Case No. 06-1032 was misleading, as it implied that the related cases did not involve the same issues, when in fact, the nullity of the REM was the principal issue in both. Furthermore, Goodland failed to report the filing of the second case to the court handling the first case, a clear violation of its undertaking and indicative of willful and deliberate forum shopping. The Court noted that this issue of forum shopping had already been decided with finality in previous related cases involving the same parties and transactions concerning the Laguna properties, establishing a pattern of behavior by the petitioner. On the issue of res judicata: The Court held that because the two cases filed by Goodland concerning the Makati property, one for annulment of the REM and the other for injunction against foreclosure, were based on the same core issue: the alleged falsity and invalidity of the REM, a judgment in one would necessarily constitute res judicata in the other.
Main Doctrine
The filing of multiple suits involving the same parties for the same cause of action, either simultaneously or successively, for the purpose of obtaining a favorable judgment, constitutes forum shopping. This is present when there is identity of parties, identity of rights asserted and relief prayed for, founded on the same facts, such that any judgment rendered in one action will amount to res judicata in the other.