BF Citiland v. Bangko Sentral ng Pilipinas
REITERATIONFacts
The Antecedents: Petitioner BF Citiland Corporation (BF Citiland) executed a Deed of Conveyance over its real property in favor of Banco Filipino Savings and Mortgage Bank (Banco Filipino) as payment for subscription of shares of stocks. Banco Filipino used the property as collateral for its Special Liquidity Facilities (SLF) loan from respondent Bangko Sentral ng Pilipinas (BSP). BF Citiland also executed a third-party mortgage and a deed of real estate mortgage over the same property as accommodation mortgagor to secure Banco Filipino's SLF loan from BSP. Subsequently, BF Citiland learned that BSP disapproved the conveyance, leading to its rescission. In 2011, Banco Filipino was placed under receivership of the Philippine Deposit Insurance Corporation (PDIC). BSP then filed a petition for extrajudicial foreclosure of the real estate mortgage against BF Citiland. Procedural History: On November 18, 2011, BF Citiland filed a petition for declaratory relief and prohibition (declaratory relief case) against BSP and the Makati RTC Clerk of Court and Ex-Officio Sheriff to determine BSP's right to foreclose and prevent the auction. This was raffled to Makati RTC, Branch 143. On August 2, 2012, the auction sale proceeded, with BSP as the highest bidder. On November 8, 2012, BF Citiland filed an action for annulment of mortgage and foreclosure sale (annulment case) against Banco Filipino, BSP, and the Makati RTC Clerk of Court and Ex-Officio Sheriff, seeking to annul the deeds of mortgage, auction sale, certificate of sale, and annotation on the title. This was raffled to Makati RTC, Branch 141. BSP filed motions to dismiss in both branches on the ground of forum shopping. Branch 141 denied the motion to dismiss in the annulment case, and its motion for reconsideration. Branch 143 dismissed the declaratory relief case due to forum shopping. BSP then filed an omnibus motion before Branch 141 to take judicial notice of Branch 143's order and dismiss the annulment case, which Branch 141 denied. BSP filed a petition for certiorari with the Court of Appeals (CA). The Petition: The CA granted BSP's petition, dismissing the annulment case, finding that BF Citiland committed forum shopping. BF Citiland filed a Petition for Review on Certiorari with the Supreme Court, arguing that the elements of forum shopping were absent.
Issue(s)
Whether or not BF Citiland committed forum shopping. Whether the Makati RTC, Branch 141 committed grave abuse of discretion in denying BSP's omnibus motion to dismiss the annulment case.
Ruling
The petition is denied. The Decision of the Court of Appeals granting the petition for certiorari and dismissing the annulment case is affirmed.
Ratio Decidendi
On the issue of forum shopping: The Court affirmed the CA's finding that BF Citiland committed forum shopping. The Court reiterated the definition of forum shopping as the repetitive availment of several judicial remedies in different courts, simultaneously or successively, all substantially founded on the same transactions and essential facts, and raising substantially the same issues. The elements of forum shopping were found to be present: (1) identity of parties or parties representing the same interests, as BF Citiland was the petitioner in both cases, and BSP and the RTC Clerk of Court were common respondents, with Banco Filipino having an interest in the outcome; (2) identity of rights asserted and reliefs prayed for, founded on the same facts, as both cases stemmed from the foreclosure of mortgages and aimed to protect BF Citiland's right to retain ownership, based on the theory that the principal obligation could not be enforced due to Banco Filipino's receivership, thus the accessory mortgage obligation could not be enforced; and (3) the potential for res judicata or litis pendentia, as a resolution in one case would affect the other. The Court noted that while the terminologies of the two actions were dissimilar, they were rooted on the same theory of the case, protected the same right, and pursued the same result. On the issue of grave abuse of discretion: The Court found that the Makati RTC, Branch 141 committed grave abuse of discretion for failing to apply the rule against forum shopping despite knowing that BF Citiland had previously filed a case. The CA correctly determined that the RTC acted capriciously in denying the omnibus motion to dismiss when a finding of forum shopping warrants the dismissal of both cases as a punitive measure. The CA's dismissal of the annulment case without prejudice was also affirmed, as there was an absence of willful and deliberate intent to violate the rule against forum shopping, evidenced by BF Citiland's disclosure of the pending case in its Certification of Non-Forum Shopping and BSP's failure to substantiate bad faith.
Main Doctrine
Forum shopping exists 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 elements are: (1) identity of parties or parties that represent the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the relief being founded on the same facts; and (3) the identity of the two preceding particulars, such that any judgment rendered in the other action will amount to res judicata in the action under consideration, regardless of which party is successful.