Victronics Computers v. Regional Trial Court
REITERATIONFacts
The Antecedents: Petitioner Victronics Computers, Inc. sold computer systems to respondents Karl C. Velhagen and Archimedes R. King, who operated under various business names including Victoria Court, GMT Consolidated Company, and Victoria Group of Companies. The sale was based on a Purchase Order with specific terms for payment and delivery. Victronics delivered the computer sets, but the respondents only paid fifty percent (50%) of the purchase price, leaving an outstanding balance. Victronics subsequently filed a collection suit against Velhagen and King for the unpaid amount. Procedural History: Following Victronics' collection suit (Civil Case No. 91-2069) filed on July 26, 1991, the respondent corporations, which owned the establishments where the computer sets were delivered and operated under the Victoria Court Group of Companies, filed a separate suit (Civil Case No. 91-2192) on August 9, 1991, seeking to nullify the Purchase Order due to alleged fraud and undue influence. The respondent corporations' counsel then filed a Motion to Dismiss and/or Suspend Proceedings in Civil Case No. 91-2069, citing litis pendentia and a prejudicial question. The Regional Trial Court (RTC), Branch 63, Makati, dismissed Civil Case No. 91-2069 on September 16, 1991, based on litis pendentia. Victronics filed a Motion for Reconsideration, which was denied by the RTC on January 22, 1992, reiterating the dismissal and denying other motions, including one for consolidation and a contempt charge for forum-shopping. The Petition: Petitioner Victronics Computers, Inc. filed a petition for review on certiorari under Rule 45 of the Rules of Court. They seek to set aside the RTC's dismissal of their collection suit (Civil Case No. 91-2069) and its denial of their motions. Victronics argues that the RTC erred in equating the respondents' grounds for suspension with litis pendentia, in ruling that a pending action existed when jurisdiction over Victronics had not yet been acquired in the second case, in preferring the second action over the first which was filed earlier and was the collection suit, in disregarding relevant Supreme Court rulings, in failing to find forum-shopping, in ignoring the amended complaint, and in issuing an order that did not conform to the prevailing state of affairs. Victronics also requests the Court to direct the RTC to issue alias summons to the respondent corporations and to consolidate the two cases.
Issue(s)
Whether the respondent Court erred in dismissing Civil Case No. 91-2069 on the ground of lis pendens. Whether the private respondents are guilty of forum-shopping. Whether the respondent Court committed grave abuse of discretion in its orders.
Ruling
The petition is GRANTED. The Order of the respondent Court dated September 16, 1991, dismissing Civil Case No. 91-2069 is SET ASIDE, and a new one is entered DISMISSING instead, on the ground of lis pendens, Civil Case No. 91-2192 of Branch 150 of the Regional Trial Court of Makati. The Order of the respondent Court dated January 22, 1992, is MODIFIED by setting aside that portion denying the motion to reconsider its September 16, 1991 Order and declaring the portion denying the motion for consolidation as moot and academic.
Ratio Decidendi
On the issue of lis pendens and the dismissal of Civil Case No. 91-2069: The Court found that the elements of lis pendens were present. However, the Court clarified that the rule Qui prior est tempore, potior est jure is not absolute and determined that Civil Case No. 91-2192 was vexatious and not filed in good faith. Therefore, the Court ruled that Civil Case No. 91-2192 should be abated instead of Civil Case No. 91-2069. The Court held that the RTC committed grave abuse of discretion in dismissing the first case. On the issue of forum-shopping: The Court found that the respondent Court did not have a full grasp of the underpinnings of forum-shopping. The Court noted that the rule has not been extended to a defendant who commences a new action against the plaintiff instead of filing a responsive pleading. The Court stated that the move of the defendants to dismiss the case filed before Branch 63 to give way to the case before Branch 150 did not negate the charge of forum-shopping. The Court's finding that Civil Case No. 91-2192 was vexatious and not filed in good faith implicitly addresses the impropriety of the respondents' actions. On the issue of grave abuse of discretion: The Court held that the RTC committed grave abuse of discretion in dismissing the first case, Civil Case No. 91-2069, as the second case, Civil Case No. 91-2192, was vexatious and not filed in good faith.
Main Doctrine
The dismissal of a collection suit on the ground of lis pendens was set aside, and the subsequent suit for annulment of contract was dismissed instead, as the latter was deemed vexatious and not filed in good faith, and the former was the more appropriate action. The Court reiterated that while generally the second case filed is abated, the rule is not absolute and the court may consider factors such as good faith, appropriateness of the action, and the interest of justice.