Tourist Duty Free Shops v. Sandiganbayan
REITERATIONFacts
The Antecedents: Petitioner Tourist Duty Free Shops, Inc. (TDFSI) assailed a sequestration order issued by the Presidential Commission on Good Government (PCGG) on March 11, 1986. The order directed TDFSI to refrain from entering into new contracts, making disbursements except for salaries and ordinary business expenses, and withdrawing funds. On July 21, 1987, PCGG filed a complaint (Civil Case No. 0008) for reconveyance, reversion, accounting, restitution, and damages against various individuals, alleging their collaboration in a scheme to appropriate and conceal assets illegally obtained, including franchise to operate TDFSI and manipulation of importations for personal benefit. Procedural History: TDFSI filed a complaint for injunction and specific performance against PCGG, Rizal Commercial Banking Corporation (RCBC), and Bank of America (BA) before the Sandiganbayan (Civil Case No. 0142), seeking to nullify the sequestration order. TDFSI argued the writ was void for lack of investigation, lawful acquisition of assets, signature by only one commissioner, and failure to file a corresponding judicial action within the constitutional period. TDFSI also sought to compel RCBC and BA to honor its checks and allow withdrawals. PCGG, in its answer, asserted the validity of the writ, its lack of proper party-in-interest status, immunity from suit, and prayed for dismissal on grounds of litis pendencia or consolidation with Civil Case No. 0008. RCBC and BA contended they were merely obeying the sequestration order. The Sandiganbayan initially granted TDFSI's motion for relief pendente lite to pay operating expenses but ordered requests for further disbursements to be coursed through PCGG. Subsequently, on June 15, 1992, the Sandiganbayan dismissed the case motu proprio, deeming all pending incidents moot and academic, without prejudice to refiling motions in Civil Case No. 0008. TDFSI's motion for reconsideration was denied on September 23, 1992. The Petition: TDFSI filed a petition for review on certiorari seeking to nullify the Sandiganbayan's Resolutions dated June 15, 1992, and September 23, 1992.
Issue(s)
Whether the Sandiganbayan erred in dismissing the case motu proprio and on the ground of litis pendencia. Whether the Sandiganbayan erred in merging Civil Case No. 0142 with Civil Case No. 0008.
Ruling
The Supreme Court reversed and set aside the Resolutions of the Sandiganbayan dated June 15, 1992, and September 23, 1992. The case was remanded to the Sandiganbayan for further proceedings.
Ratio Decidendi
On Whether the Sandiganbayan erred in dismissing the case motu proprio and on the ground of litis pendencia: The Court held that while no formal motion to dismiss was filed, the respondent PCGG repeatedly prayed for the dismissal of the case on the ground of litis pendencia in its answer and subsequent pleadings. This is permissible under Section 6, Rule 16 of the Rules of Court, which allows grounds for dismissal to be pleaded as an affirmative defense in the answer, with a preliminary hearing at the court's discretion. However, the Court found it erroneous for the Sandiganbayan to dismiss the case on the ground of litis pendencia because the requisites for litis pendencia were absent. Specifically, there was no identity of parties, as TDFSI, RCBC, and BA were not parties in Civil Case No. 0008, nor were the defendants in Civil Case No. 0008 parties to the present case. Furthermore, there was no identity of rights asserted and relief prayed for; Civil Case No. 0008 involved reconveyance, reversion, accounting, restitution, and damages, while the instant case was for specific performance against RCBC and BA. Consequently, any judgment in one case would not constitute res judicata on the other, and the cases ought to be resolved independently. On Whether the Sandiganbayan erred in merging Civil Case No. 0142 with Civil Case No. 0008: The Court found that merging Civil Case No. 0142 with Civil Case No. 0008 was unwarranted. The doctrines cited by the respondents from Republic vs. Sandiganbayan were found not applicable because they presupposed a valid and existing sequestration of the unimpleaded corporations. The Court emphasized that the suit against shareholders is not ipso facto a suit against the corporation itself without violating the principle of distinct corporate personality, and failure to implead corporations as defendants violates their right to due process. The Court reiterated that the pronouncements in Republic vs. Sandiganbayan were clarified in PCGG vs. Sandiganbayan and AEROCOM Investors and Managers, Inc., which held that the suit against shareholders does not automatically bind the corporation itself, especially when the corporation is not impleaded, thus violating its right to due process.
Main Doctrine
The Sandiganbayan erred in dismissing the case on the ground of litis pendencia as the requisites for litis pendencia were absent, specifically the identity of parties and the identity of rights asserted and relief prayed for. A merger of the two cases was not justified under existing doctrines.