Goodland Company, Inc. vs.

Asia United Bank

G.R. No. 195561, March 14, 2012

Facts:
Goodland Company mortgaged its two parcels of land situated in Sta. Rosa,
Laguna through a Third Party Real Estate Mortgage (REM) with Smartnet to secure the
loans extended by Asia United Bank (AUB). Petitioner also executed another REM for its
Makati properties. Both the REMs were signed by its President Gilbert Guy. AUB
registered the mortgages with the Registry of Deed at the concerned properties.
Afterwards, Goodland repudiated the REMs. Hence, Goodland filed a complaint for
annulment of mortgage before the RTC of Bian, Laguna on the ground that the REM was
falsified and against the agreement that the blank mortgage would only serve as a comfort
document and not to be registered by AUB.
Smartnet defaulted on its loan obligation which prompted AUB to extra-judicially
foreclose the REM and then was issued a Certificate of Sale registered with the Registry
of Deeds. Goodland filed another case seeking for the annulment of the foreclosure sale
and enjoin consolidation of the title in favor of AUB. AUB moved to dismiss both the cases
filed by Goodland on the ground of forum shopping and litis pendentia. It was granted.
On appeal, the decision of the RTC were reversed. As to the Makati properties, the same
case was filed by Goodland including the President of AUB and the notarizing lawyer
whose signature was falsified. The same was contradicted by AUB but this time, the
motion to dismiss on the ground of forum shopping, non-payment of proper docket fees,
and litis pendentia were denied. AUB argued that there was no service of summons, thus
the court never acquired jurisdiction over the persons of the respondents. On appeal, the
CA held Goodland guilty of forum shopping for failing to inform AUB of the other case
filed while the case on the REM is pending.
Issue:
Is Goodland Company guilty of forum shopping?
Ruling:
Yes. All the elements of forum shopping are present in this case. There is forum
shopping when the following elements are present:
a. identity of parties, or at least such parties as represent the same interests in both
actions;
b. identity of rights asserted and relief prayed for, the relief being founded on the
same facts; and
c. the identity of the two preceding particulars such that any judgment rendered in
the other action will, regardless of which party is successful, amount to res judicata
in the action under consideration.
 There can be no dispute that the prayer for relief in the two cases was based on
the same attendant facts in the execution of REMs over petitioner’s properties in favor of
AUB. While the extrajudicial foreclosure of mortgage, consolidation of ownership in AUB
and issuance of title in the latter’s name were set forth only in the second case, these
were simply the expected consequences of the REM transaction in the first case. There
is also identity of parties. The parties in the first and second case are substantially the
same as they represent the same interest and offices. Goodland’s argument that the
certification and verification appended to its complaint satisfactorily conforms with the
requirements of the required certificate of non-forum shopping. However, the Supreme
Court disagrees. Goodland filed a certificate which is partly false and misleading.
The elements of litis pendentia are also present. It refers to the situation where two
actions are pending between the same parties for the same cause of action, so that one
of them becomes unnecessary and vexatious. It is based on the policy against multiplicity
of suits.