Daswani v. Banco De Oro
REITERATIONFacts
The Antecedents: Petitioner Surendra Gobindram Daswani (Daswani) filed a complaint against Banco De Oro Universal Bank (BDO) for the declaration of nullity of foreclosure proceedings and cancellation of the certificate of sale's registration. Daswani alleged that he and two others mortgaged five condominium units to secure loans from Dao Heng Bank, which BDO acquired. BDO foreclosed the mortgage after the loan remained unpaid, and BDO emerged as the highest bidder in the public auction. Daswani questioned BDO's standing as an original party to the mortgage. Procedural History: Daswani amended his complaint to include the cancellation of new Certificates of Title (CCTs) issued to BDO. The Regional Trial Court of Makati City, Br. 133 (RTC Br. 133) dismissed the amended complaint without prejudice for failure to pay additional docket fees required for a reconveyance claim. Instead of filing a motion for reconsideration, Daswani filed a motion to admit his amended complaint, claiming payment of fees, which BDO opposed. Subsequently, Daswani filed a motion to withdraw his amended complaint, intending to re-file it. He then re-filed his complaint (second complaint) with the Regional Trial Court of Makati City, Br. 61 (RTC Br. 61), which was docketed as Civil Case No. 09-843. BDO moved to dismiss the second complaint, alleging forum shopping, misrepresentation in the certification against forum shopping, and failure to pay docket fees. The RTC Br. 61 dismissed the second complaint due to litis pendentia. Meanwhile, RTC Br. 133 granted Daswani's motion to withdraw his amended complaint. The Petition: Daswani filed a petition for review on certiorari, arguing that he did not commit forum shopping as he had given notice of his intention to re-file the complaint, and that there was no misrepresentation in his certification against forum shopping.
Issue(s)
Whether Daswani committed forum shopping when he re-filed his complaint with the RTC Br. 61, and whether the RTC Br. 61 erred in dismissing Daswani's second complaint for violation of the rule against litis pendentia. Whether Daswani made misrepresentations in his certification against forum shopping.
Ruling
The Supreme Court granted the petition, annulled the resolutions of the Regional Trial Court of Makati City, Br. 61, and ordered the trial court to give due course to petitioner Surendra Gobindram Daswani's complaint.
Ratio Decidendi
On the issue of forum shopping and litis pendentia: The Court held that Daswani did not commit forum shopping. Forum shopping is defined as the repetitive availment of several judicial remedies in different courts, simultaneously or successively, founded on the same transactions and essential facts, raising substantially the same issues, either pending or already resolved adversely. However, the Court emphasized that forum shopping is always willful and deliberate, aimed at seeking a favorable disposition from another court after an adverse judgment. In Daswani's case, his re-filing was based on the good faith belief that his first complaint, dismissed without prejudice, could no longer be revived. His motion to withdraw his amended complaint, coupled with his notice to re-file, signified his acknowledgment of the finality of the dismissal order without prejudice. The Court further clarified that for litis pendentia to exist, the elements of identity of parties, rights asserted, relief prayed for, and the possibility of res judicata must concur. Crucially, the dismissal of Daswani's first complaint was not on the merits but solely due to his failure to pay the required docket fees, and the dismissal was explicitly "without prejudice." This meant Daswani was permitted to re-file the complaint after curing the defect, which he did by paying the additional docket fees in his second complaint. On the issue of misrepresentation in the certification against forum shopping: The Court found no misrepresentation. The certification against forum shopping requires the litigant to declare if they have commenced or are aware of any pending action involving the same issues. Liability arises from a failure to include the certification or from a misrepresentation regarding the pendency of another case. The Court noted that for a violation to occur, the earlier case must still be ongoing when the subsequent action is filed. In this instance, when Daswani filed his second complaint, the dismissal order of the RTC Br. 133 had already attained finality due to his failure to file a motion for reconsideration within the prescribed period. Consequently, the RTC Br. 133 lost jurisdiction over the first case, rendering any subsequent actions by that court, including the granting of the motion to withdraw, void. Therefore, there was no pending litigation that could give rise to forum shopping or res judicata, and thus no misrepresentation in Daswani's certification. The Court also stressed that fraud is not presumed and must be proven by clear and convincing evidence, which BDO failed to provide.
Main Doctrine
A litigant does not commit forum shopping when they re-file a complaint dismissed without prejudice, provided they give notice of their intention to re-file and the dismissal order has attained finality, thereby rendering the subsequent filing as a new action rather than a continuation of the first.