SM Prime Holdings v. Marañon
REITERATIONFacts
The Antecedents: SM Prime Holdings, Inc. (SMPHI) offered to lease four provincial properties. The Province of Negros Occidental (the Province) instead issued an Offer to Sell or Lease these properties through public auction. SMPHI believed its initial offer constituted an unsolicited proposal under RA 6957, as amended by RA 7718, and thus inappropriate to participate in the bidding. The first bidding had only one participant, Ayala Land, Inc. (ALI), and was declared a failure. The second bidding also failed as both SMPHI's and ALI's bids were below the appraised value. Consequently, the Province's Committee on Awards and Disposal of Properties declared the bidding a failure and opted for negotiation. ALI was the sole entity to submit a proposal, leading to a Deed of Conditional Sale and Contract of Lease in its favor. SMPHI subsequently filed a complaint seeking the nullification of these agreements, alleging fraudulent manipulation of the bidding process by the Province. Procedural History: SMPHI's complaint before the Regional Trial Court (RTC), Branch 48, was dismissed on the ground of forum shopping. Prior to this, SMPHI had initiated several legal actions concerning the same dispute. These included a Petition for Certiorari (SCA Case No. 11-13803) before RTC Branch 50, which was denied, and an appeal to the Court of Appeals (CA-G.R SP No. 06084) regarding the denial of a TRO, which was also dismissed. SMPHI also appealed the RTC Branch 50 decision to the CA (CA-G.R CEB-SP No. 08549), which affirmed the lower court's findings. Furthermore, SMPHI's attempts to register a Notice of Lis Pendens and an Affidavit of Adverse Claim with the Register of Deeds and the Land Registration Authority (LRA) were denied, with the LRA's decision in Consulta No. 5337 attaining finality. The Commission on Audit (COA) had also previously ruled on the matter in Decision No. 2012-147, finding no irregularities. The Petition: This case reaches the Supreme Court via a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the Resolutions of the RTC Branch 48 dated March 3, 2017, and July 26, 2017, which dismissed SMPHI's complaint due to forum shopping. The core issue presented to the Supreme Court is whether SMPHI engaged in forum shopping by initiating multiple legal actions and administrative proceedings that sought substantially the same relief – to be declared the winning bidder and to nullify the sale and lease agreements with ALI. SMPHI argues that its actions were distinct and did not constitute forum shopping, while the respondents contend that SMPHI's multiple filings aimed to obtain a favorable outcome from different forums on the same set of facts and issues, thereby abusing the court's processes.
Issue(s)
Whether SMPHI committed forum shopping warranting the dismissal of its complaint before the RTC Branch 48.
Ruling
The petition is denied. The Resolutions dated March 3, 2017 and July 26, 2017 of Branch 48, Regional Trial Court, Bacolod City in Civil Case No. 14-14323 are affirmed.
Ratio Decidendi
On the Issue of Forum Shopping: The Court ruled in the affirmative, finding that SMPHI committed forum shopping. Forum shopping is defined as the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another, and possibly favorable, opinion in another forum, or the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. The rationale behind the prohibition of forum shopping is to prevent vexation to the courts and litigants, the abuse of court processes, the degradation of the administration of justice, and the clogging of court dockets, as well as to avoid the possibility of conflicting decisions. The Court traced SMPHI's previous actions, including filing a Petition for Certiorari with application for TRO/WPI before RTC Branch 50 (SCA Case No. 11-13803), a petition for certiorari with application for TRO/WPI before the Court of Appeals (CA-G.R SP No. 06084), an appeal to the CA (CA-G.R CEB-SP No. 08549), and a Consulta before the LRA (Consulta No. 5337). In all these proceedings, SMPHI sought essentially the same relief: to be declared the winning bidder in the bidding held on July 7, 2011, and to nullify the subsequent award to ALI. The issues raised in these prior cases, concerning the validity of Resolution No. 11-001 declaring the bidding a failure and the subsequent negotiated sale, were substantially the same as those raised in the complaint before RTC Branch 48. The Court emphasized that identity of causes of action does not require absolute identity; what is critical is the identity of the facts essential to the maintenance of the actions and whether the same evidence would sustain both. SMPHI's act of approaching different fora for substantially the same relief on the supposition of a favorable disposition constituted a clear violation of the rules against forum shopping.
Main Doctrine
Forum shopping consists in the act of a party against whom an adverse judgment has been rendered in one forum, of seeking another, and possibly favorable, opinion in another forum (other than by appeal or by special civil action of certiorari), or the institution of two or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition. It is an act of malpractice that trifles with the courts, abuses their processes, degrades the administration of justice and adds to the already congested court dockets.