Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 160604               March 28, 2008

PHILIPPINE DAILY INQUIRER, ISAGANI YAMBOT, LETTY JIMENEZ-MAGSANOC, PERGENITO

B. BANDAYREL, JR., GOBLETH C. MOULIC, ESTANISLAO CALDEZ, and ZENAIDA
CALDEZ, Petitioners,
vs.
HON. ELMO M. ALAMEDA, in his capacity as the Presiding Judge of the REGIONAL TRIAL
COURT OF TUGUEGARAO CITY, CAGAYAN, BRANCH 5, and LUZ CORTEZ
BABARAN, Respondents.

DECISION

AZCUNA, J.:

Before us is a petition for review on certiorari seeking the review, setting aside, and annulment of the
Resolution1 of the Court of Appeals (CA) in CA-G.R. SP No. 79702 dated October 22, 2003
dismissing the petition for certiorari and prohibition filed by petitioners.

The antecedents are as follows:

The Philippine Daily Inquirer (PDI), in its August 1, 2000 issue, published an article with the heading
"After Bong, who’s next?"2 The article narrates the death of Expedito "Bong" Caldez, a photo
correspondent of the PDI in Cagayan. In said article, the family of the deceased correspondent
laments the death of their loved one due to the alleged erroneous diagnosis of Dr. Luz Babaran. 3

Later, in its September 29, 2000 issue, the PDI published another article with the heading "DOH
orders probe of fotog’s death." 4 In said article, it was reported that the regional Department of Health
(DOH) in Tuguegarao City has started investigating the death of Expedito Caldez following an order
from the DOH’s Bureau of Licensing and Regulation.

On July 25, 2001, based on the two PDI column articles, Dr. Babaran filed a complaint for
Damages,5 Civil Case No. 5850, against herein petitioners. In said complaint Dr. Babaran alleged,
among other things, that: after learning about the article published in the August 1, 2000 issue of the
PDI, she wrote a letter to the editor of the PDI but she never received any response from the latter;
to aggravate the matter, another article appeared in the September 29, 2000 issue of the PDI and
she was again singled out as having erroneously diagnosed the illness of Expedito Caldez; the
Report6 of the DOH Fact-Finding Committee concluding that her diagnosis cannot be considered
erroneous, was suppressed and was never published by the PDI; the articles portrayed her as
incompetent and one whose alleged erroneous diagnosis caused the death of Expedito Caldez; and,
in causing the articles to be published, petitioners acted in bad faith.

On September 13, 2001, petitioners filed their Answer 7 with counterclaims. In said answer,
petitioners raised, among others, the following defenses: that the complaint states no cause of action
against them; that the complaint fails and omits to state the factual premises to support a conclusion
that there was malice on the part of the PDI in publishing the questioned news report; that private
respondent failed to allege "actual malice" on the part of the petitioners; that a case for actionable
libel with claims for damages has not been adequately stated in the complaint; and, that the
complaint fails to establish the basis of petitioners’ liability. 8

Pre-trial was held and terminated, and petitioners thereafter filed a Motion for a Preliminary Hearing
on Affirmative Defense Raised in the Answer (which is also a ground for a motion to dismiss). 9 In
said motion, it was alleged that at the pre-trial on February 19, 2003, the court noted that one of the
defenses raised by petitioners was that private respondent has not delineated the participation of
each of petitioners in the publication of the alleged libelous articles. 10 Thereupon, private
respondent’s counsel asked for a few days to determine whether the complaint should be amended
to cure its defects. However, private respondent had not moved to amend the complaint, hence,
petitioners filed the motion.11

In support thereof, petitioners contend that: in libel charges, the participation of each defendant must
be specifically alleged in the complaint, which private respondent failed to do; and the allegations of
the complaint are mere conclusions of law and opinions of the private respondent. 12 Petitioners
ultimately prayed that a preliminary hearing be conducted on their affirmative defense that the
complaint failed to state a cause of action; and that, thereafter, the complaint be dismissed. 13

Subsequently, private respondent filed a Comment/Opposition to the Motion to Dismiss Based on

Affirmative Defense.14 In said comment/opposition, private respondent averred that at the February
19, 2003 pre-trial, the issue of whether or not the complaint states a cause of action was not raised.
As such, it is no longer an issue to be litigated in the case. Private respondent prayed that the court
deny petitioners’ motion to dismiss.

On May 30, 2003, the Regional Trial Court (RTC) issued an Order 15 denying petitioners’ motion in
this wise:

With this finding and conclusion, the Court finds no further necessity in dwelling at length on the
other issues raised by the defendants. Consequently, the motion for a Preliminary Hearing on
Affirmative Defense Raised in the Answer (which is also a ground for a motion to dismiss) is hereby
DENIED. The initial presentation of plaintiff’s evidence is set on July 3, 2003, at 8:30 o’clock in the
morning.

SO ORDERED.16

The RTC opined that private respondent’s allegations in her complaint, as well as her documentary
evidence, show that there is sufficient cause of action. It added that the documentary evidence
discloses facts which are sufficient to enable the court to go beyond the disclosures in the complaint.
Considering that the facts alleged in the complaint which make out the principal cause of action and
relief are sufficient, the case should not be dismissed. 17

Petitioners filed a Motion for Reconsideration18 but it was denied in the Order19 dated July 29, 2003.

Aggrieved, petitioners filed a Petition for Certiorari and Prohibition (with Prayer for the Issuance of
Temporary Restraining Order and/or Preliminary Injunction) 20 with the CA, relying on the ground that:

THE RESPONDENT TRIAL JUDGE GRAVELY ABUSED HIS DISCRETION AND EXCEEDED HIS
JURISDICTION IN NOT DISMISSING THE COMPLAINT DESPITE ITS FAILURE TO VALIDLY AND
SUFFICIENTLY STATE A CAUSE OF ACTION FOR LIBEL AGAINST THE PETITIONERS
BECAUSE:
 A) THE PARTICIPATION OF EACH DEFENDANT (PETITIONER) IN THE WRITING,
EDITING, PRINTING, AND PUBLICATION OF THE NEWS ARTICLES IN QUESTION IS
NOT SPECIFICALLY SET OUT IN THE COMPLAINT;

B) THE MATERIAL ALLEGATIONS OF THE COMPLAINT ARE PURELY LEGAL

CONCLUSIONS AND OPINIONS OF PRIVATE RESPONDENT, AND NOT STATEMENTS
OF ULTIMATE FACTS.21

Petitioners prayed among others: that the Orders of the RTC dated May 30, 2003 and July 29, 2003
be annulled and set aside for having been rendered with grave abuse of discretion and/or excess of
jurisdiction; and that Civil Case No. 5850 be dismissed for failure to state a cause of action. 22

On October 22, 2003, the CA issued a Resolution23 dismissing the petition for being insufficient in
form and substance and for presenting no justiciable issue needing serious consideration by the
court. Also, the CA noted that the Order dated May 30, 2003 shows that the RTC had already ruled
against petitioners’ affirmative defense that the complaint states no cause of action.

Hence, this petition, raising the following issues:

WHETHER OR NOT A COMPLAINT WHICH FAILS TO VALIDLY AND SUFFICIENTLY STATE A

CAUSE OF ACTION FOR LIBEL BECAUSE:

A) THE PARTICIPATION OF EACH DEFENDANT (PETITIONER) IN THE WRITING,

EDITING, PRINTING, AND PUBLICATION OF THE NEWS ARTICLES IN QUESTION IS
NOT SPECIFICALLY SET OUT IN THE COMPLAINT;

B) THE MATERIAL ALLEGATIONS OF THE COMPLAINT ARE PURELY LEGAL

CONCLUSIONS AND OPINIONS OF PRIVATE RESPONDENT, AND NOT STATEMENTS
OF ULTIMATE FACTS; AND

C) THE COMPLAINT IS VIOLATIVE OF PETITIONERS’ CONSTITUTIONAL RIGHTS TO

FREE PRESS AND TO FREE SPEECH.

SHOULD BE DISMISSED UPON MOTION BY THE DEFENDANTS (PETITIONERS HEREIN). 24

Petitioners argue that private respondent’s complaint failed to comply with the requirement in libel
cases that the participation of each defendant must be specifically alleged in the complaint.
Petitioners maintain that their divergent personal circumstances and different legal existence, not to
mention the absence of any professional relationship of two of petitioners with the rest of them,
should have prompted private respondent to specify the participation of each petitioner in the news
gathering, reporting, editing, publication, and circulation of the subject articles. As such it cannot be
determined with certainty from the allegations in the complaint whose acts and omissions are
actually complained of.25

Also, petitioners added that the material allegations of the complaint are not statements of ultimate
facts but were mere conclusions of law and were merely private respondent’s opinions. 26

Finally, petitioners contend that the complaint violates their constitutionally protected freedom of
speech and of the press.27
As defined in Section 2, Rule 2 of the Rules of Court, a cause of action is the act or omission by
which a party violates the right of another. In relation to a complaint, it is a formal statement of the
operative facts that give rise to a remedial right. The question of whether the complaint states a
cause of action is determined by its averments regarding the acts committed by the defendant. Thus,
it must contain a concise statement of the ultimate or essential facts constituting the plaintiff's cause
of action. As such, the failure to make a sufficient allegation of a cause of action in the complaint
warrants its dismissal.28 Its essential elements are as follows:

1. A right in favor of the plaintiff by whatever means and under whatever law it arises or is
created;

2. An obligation on the part of the named defendant to respect or not to violate such right;
and

3. Act or omission on the part of such defendant in violation of the right of the plaintiff or
constituting a breach of the obligation of the defendant to the plaintiff for which the latter may
maintain an action for recovery of damages or other appropriate relief.

Of the three, the most important is the last element since it is only upon the occurrence of the last
element that a cause of action arises, giving the plaintiff the right to maintain an action in court for
recovery of damages or other appropriate relief. 29 In determining whether an initiatory pleading states
a cause of action, "the test is as follows: admitting the truth of the facts alleged, can the court render
a valid judgment in accordance with the prayer?" To be taken into account are only the material
allegations in the complaint; extraneous facts and circumstances or other matters aliunde are not
considered. The court may however consider, in addition to the complaint, the appended annexes or
documents, other pleadings of the plaintiff, or admissions in the records. 30

When a defendant seeks the dismissal of the complaint through a motion to dismiss, the sufficiency
of the motion should be tested on the strength of the allegations of facts contained in the complaint
and on no other basis.31 The issue of whether or not the complaint failed to state a cause of action,
warranting its dismissal, must be passed upon on the basis of the allegations stated therein
assuming them to be true and the court cannot inquire into the truth of the allegations and declare
them to be false; otherwise, it would be a procedural error and a denial of due process to the
plaintiff.32

This Court finds that petitioners raised the threshold question of whether the complaint sufficiently
alleges a cause of action. 1avvphi1

Hence, the trial court should have granted petitioners’ motion for a preliminary hearing on the
affirmative defenses raised in the answer based on failure to state a cause of action. This procedure
is designed to prevent a tedious, if not traumatic, trial in case the complaint falls short of sufficiently
alleging a cause of action.

WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals dated October 22,
2003 is REVERSED, and the case is REMANDED to the Regional Trial Court of Tuguegarao City,
Cagayan, Branch 5, for the trial court to hear and resolve petitioners’ Affirmative Defenses Raised in
the Answer.

No costs.

SO ORDERED
 Republic of the Philippines
SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 123555 January 22, 1999

PROGRESSIVE DEVELOPMENT CORPORATION, INC., petitioner,

vs.
COURT OF APPEALS and WESTIN SEAFOOD MARKET, INC. respondents.

BELLOSILLO, J.:

May the lessee which instituted before the Metropolitan Trial Court an action for forcible entry with
damages against its lessor file a separate suit with the Regional Trial Court against the same lessor
for moral and exemplary damages plus actual and compensatory damages based on the same
forcible entry?

On grounds of litis pendencia and forum-shopping petitioner invokes established jurisprudence that

a party cannot by varying the form of action or adopting a different method of presenting his case
evade the principle that the same cause of action shall not be litigated twice between the same
parties or their privies.   Petitioner therefore prays for reversal of the decision of the Court of Appeals
1

dated 27 May 1995, as well as its Resolution dated 17 January 1996 denying reconsideration, which
upheld the denial by the Regional Trial Court of petitioner's motion to dismiss private respondent's
damage suit.

The antecedents: On 27 May 1991 petitioner leased to private, respondent Westin Seafood Market,
Inc., a parcel of land with a commercial building thereon located at Aranet Center, Cubao, Quezon
City, for a period of nine (9) years and three (3) months, i.e., from 2 January 1989 to 30 April 1998,
with a monhtly rental of approximately P600,000.00. The contract contained, among others, the
following pertinent terms and conditions:

EFFECT OF VIOLATIONS

25. LESSEE hereby agrees that all the provisions contained in this Contract shall be
deemed as conditions, as-well as covenants, and that this Contract shall be
automatically terminated and cancelled without resorting to court action should
LESSEE violate any or all said conditions, including the payment of Rent, CUSA and
other charges indicated in the FLP when due within the time herein stipulated and in
any such cases, LESSEE hereby irrevocably appoints LESSOR, its authorized
agents, employees and/or representatives as his duly authorized attorney-in-fact,
even after the termination, expiration or cancellation of this Contract, with full power
and authority to open, enter, repossess, secure, enclose, fence and otherwise take
full and complete physical possession and control of the leased premises and its
contents without resorting to court action and/or to summarily disconnect electrical
and/or water services thereof, and that LESSEE hereby irrevocably empowers
 LESSOR, his authorized agents, employees and/or representatives to take inventory
and possession of whatever equipment, furniture, articles, merchandise, appliances,
etc., found therein belonging to LESSEE, consignors and/or to any other persons
and to place the same in LESSOR's warehouse or any other place at LESSOR's
discretion for safekeeping; charging LESSEE the corresponding storage fees
therefor; that in case LESSEE fails to claim-said equipment, furniture, articles,
merchandise, appliances, etc. from storage and simultaneously liquidate any liability
with LESSOR within seven (7) days from date of said transfer to LESSOR's
warehouse, LESSOR is likewise hereby expressly authorized and empowered by
LESSEE to dispose of said property/properties in a public sale through a Notary
Public of LESSOR's choice and to apply the proceeds thereof to whatever liability
and/or indebtedness LESSEE may have to LESSOR plus reasonable expenses for
the same, including storage fees, and the balance, if any, shall be turned over to
LESSEE; that LESSEE hereby expressly agrees that any or all acts performed by
LESSOR, his authorized agents, employees and/or representatives under the
provisions of this Section may not be the subject of any petition for a Writ of
Preliminary Injunction or Mandatory Injunction in court, and that LESSOR and/or his
authorized agents, employees, and/or representatives shall be free from any civil
and/or criminal liability or responsibility whatsoever therefor.

TERMINATION OF LEASE

26. Upon-the automatic termination of this lease contract, as the case may be,
LESSEE shall immediately vacate and redeliver physical possession of the leased
premises, including the keys appertaining thereto, to LESSOR in good, clean and
sanitary condition, reasonable wear and tear excepted, devoid of all occupants,.
equipment, furnitures articles, merchandise, etc., belonging to LESSEE or to any
other person except those belonging to LESSOR; that should LESSEE fail to comply
with this provision, LESSOR is hereby given the same rights and power to proceed
against LESSEE as expressly granted in the immediately; preceding section.

Private respondent failed to pay rentals despite several demands by petitioner. As of 19 October
1992 the arrearages amounted to P8,608,284.66. Admittedly, non-payment of rentals constituted
breach of their contract; thus, pursuant to the express authority granted petitioner under the above-
quoted Secs. 25 and 26 of the lease agreement, petitioner on 31 October 1992 repossessed the
leased premises, inventoried the movable properties found within and owned by private respondent
and scheduled public auction for the sale of the movables on 19 August 1993 with notice to private
respondent.

On 26 November 1992 private respondent filed with the Metropolitan Trial Court of Quezon City a
complaint against petitioner for forcible entry with damages and a prayer for a temporary restraining
order and/or writ of preliminary injunction.   The case was raffled to Branch 40 presided over by
2

Judge Guillermo L. Loja Jr. who issued a temporary restraining order enjoining petitioner from selling
private respondent's properties at a public auction.

On 9 December 1992 Judge Loja inhibited himself from trying the case and directed its transfer to
Branch 34 presided over by Judge Joselito SD Generoso. Soon after, petitioner filed an urgent
motion for the inhibition of Judge Generoso and the immediate reraffle of the case arguing that the
summary transfer of the case to Judge Generoso was irregular as it was not done by raffle.

The motion was granted and the case went to Branch 36 presided over by Judge Francisco D.
Villanueva. Thereafter, on 22 December 1992, at the continuation of the hearing on the issuance of
a writ preliminary mandatory injunction, the parties agreed, among others, on the following: (a)
private respondent would deposit with the Philippine Commercial and Industrial Bank in the name of
the Metropolitan Trial Court, Branch 36, the amount of P8,000,000.00 to guarantee the payment of
its back rentals; (b) petitioner would defer the sale of the personal properties of the Westin Seafood
Market, Inc., until a final settlement of the case had been arrived, at; (c) petitioner shall allow private
respondent to retrieve all the perishable goods from inside the leased premises like frozen meat,
vegetables and fish, all properly receipted for; (d) petitioner shall allow three (3) maintenance
personnel of private respondent to enter the premises at reasonable working hours to maintain the
restaurant equipment; and (e) the parties shall negotiate for the restoration of the premises to private
respondent, and if no settlement be arrived at on or before January 8, 1993, the hearing on the
merits of the case shall proceed and the disposition of the amount deposited representing the rental
arrearages shall be left to the. discretion of the court.

This agreement was incorporated in the order of the court dated 22 December 1992   which in effect
3

terminated for all intents and purposes the incident on the issuance of a preliminary writ of injunction.

Private respondent did not comply with its undertaking to deposit with the designated bank the
amount representing its back rentals. Instead, with the forcible entry case still pending with the
MeTC, private respondent instituted on 9 June 1993 another action for damages against petitioner
with the Regional Trial Court of Quezon City. The case was raffled to Branch 101 presided over by
Judge Pedro T. Santiago.  4

Petitioner filed a motion, to dismiss the damage suit on the ground of litis pendencia and forum
shopping. On 2 July 1993, instead of ruling on the motion, Judge Santiago issued an order archiving
the case pending the outcome of the forcible entry case being heard at the MeTC for the reason that
"the damages is (sic) principally anchored on whether or not the defendants (petitioner herein) have
committed forcible entry."   On 2 August 1993 petitioner moved for reconsideration of the order and
5

reiterated its motion to dismiss the suit for damages.

Before petitioner's motion to dismiss could be resolved, private respondent filed with the RTC on 18
August 1993 an amended complaint for damages. On 14 September 1993 it also filed an Urgent Ex-
Parte Motion for the Issuance of a Temporary Restraining Order and Motion for the Grant of
a Preliminary Prohibitory and Preliminary Mandatory Injunction. On the very same day, Judge
Santiago issued an order (a) denying petitioner's motion to dismiss, (b) admitting private
respondent's amended complaint, and (c) granting private respondent's application for a temporary
restraining order against petitioner.

Thus, petitioner filed with the Court of Appeals a special civil action for certiorari and prohibition on
the ground that Judge Santjago acted in excess of his jurisdiction and/or committed grave abuse of
discretion amounting to lack of jurisdiction in admitting, the amended complaint of private respondent
and issuing a restraining order against petitioner; in allowing private respondent to engage in forum
shopping; and, taking cognizance of the action; for damages despite lack of jurisdiction.  6

But the Court of Appeals dismissed the petition due to the failure of petitioner to file a motion for
reconsideration of Judge Santiago's order of 14 September 1993 which, it explained, was a
prerequisite to the institution of a petition for certiorari and prohibition. It also found that the elements
of litis pendencia were lacking to justify the dismissal of the action for damages with the RTC
because despite the pendency of the forcible entry case with the MeTC the only damages
recoverable thereat were those caused by the loss of the use and occupation of the property and not
the kind of damages being claimed before the RTC which had no direct relation to loss of material
possession. It clarified that since the damages prayed for in the amended complaint with the RTC
were those caused by the alleged high-handed manner with which petitioner reacquired possession
of the leased premises and the sale of private respondent's movables found therein, the RTC and
not the MeTC had jurisdiction over the action of damages.  7

Petitioner, aggrieved by the decision of the appellate court, filed the instant petition for review
on certiorari under Rule 45 of the Rules of Court alleging that it erred in (a) finding that petitioner
failed to avail of its plain, speedy and adequate remedy of a prior motion for reconsideration with the
RTC; (b) ruling that, the trial judge did not act with grave abuse of discretion in taking cognizance of
the action for damages and injunction despite the pendency of the forcible entry case with the
MeTC; and, (c) ruling that private respondent did not commit forum shopping since the causes of
action before the RTC and MeTC were not identical with each other.

There is merit in the petition. While generally a motion for reconsideration must first be filed before
resorting to certiorari in order to give the lower court an opportunity to correct the errors imputed to
it   this rule admits of exceptions and is not intended to be applied without considering the
8

circumstances of the case.   The filing of the motion for reconsideration before availing of the remedy
9

of certiorari is not sine qua non when the issue raised is one purely of law,   or where the error is
10

patent or the disputed order is void,   or the questions raised on certiorari are the same as those
11

already squarely presented to and passed upon by the lower court

In its motion for dismissal of the action for damages with the RTC petitioner raised the ground that
another action for forcible entry was pending at the MeTC between the same parties involving the
same matter and cause of action. Outrightly rejected by the RTC, the same issue was elevated by
petitioner on certiorari before the Court of Appeals. Clearly, under the prevailing circumstance, any
motion for reconsideration of the trial court would have been a pointless exercise.  12

We now turn to the issue of whether an action for damages filed with the Regional Trial Court by the
lessee against the lessor should be dismissed on the ground of pendency of another action for
forcible entry and damages earlier filed by the same lessee against the same lessor before the
Metropolitan Trial Court.

Sec. 1 of Rule 70 of the Rules of Court provides that any person deprived of the possession of any
land or building by force, indimidation, threat, strategy or stealth, or against whom thepossession of
any land or building is unlawfully withheld, may bring an action in the proper Municipal Trial Court
against the person or persons unlawfully withholding or depriving of possession, together with
damages and costs. The mandate under this rule is categorical: that all cases for forcible entry or
unlawful detainer shall be filed before the Municipal Trial Court which shall include not only the plea
for restoration of possession but also all claims for damages and costs arising therefrom. Otherwise
expressed, no claim for damages arising out of forcible entry or unlawful detainer may be filed
separately and independently of the claim for restoration of possession.

This is consistent with the principle laid down in Sec. 1, par. (e), of Rule 16 of the Rules of Court
which states that the pendency of another action between the same parties for the same cause is a
ground for dismissal of an action. Res adjudicata requires that there must be between the action
sought to be dismissed and the other action the following elements: (a) identity of parties or at least
such as representing the same interest in both actions; (b) identity of rights asserted and relief
prayed for, the relief being founded on the same facts; and, (c) the identity in the two (2) preceding
particulars should be such that any judgment which may be rendered on the other action will,
regardless of which party is successful, amount to res adjudicata in the action under
consideration. 13

It is likewise basic under Sec. 3 of Rule 2 of the Revised Rules of Court, as amended, that a party
may not institute more than one suit for a single cause of action. Under Sec. 4 of the same Rule, if
two or more suits are instituted on the basis of the same cause of action, the filing of one or a
judgment upon the merits in any one is available as a ground for the dismissal of the other or others.
"Cause of action" is defined by Sec. 2 of Rule 2 as the act of omission by which a party violates a
right of another.   These premises obtaining, there is no question at all that private respondent's
14

cause of action in the forcible entry case and in the suit for damages is the alleged illegal retaking of
possession of the leased premises by the lessor, petitioner herein, from which all legal reliefs arise.
Simply stated, the restoration of possession and demand for actual damages in the case before the
MeTC and the demand for damages with the RTC both arise from the same cause of action, i.e., the
forcible entry by petitioner into the least premises.

A comparative study of the two (2) complaints filed by private respondent against petitioner before
the two (2) trial courts shows that not only are the elements of res adjudicata present, at least insofar
as the claim for actual and compensatory damages is concerned, but also that the claim for
damages — moral and exemplary in addition to actual and compensatory — constitutes splitting a
single cause of action. Since this runs counter to the rule against multiplicity of suits, the dismissal of
the second action becomes imperative.

The complaint for forcible entry contains the following pertinent allegations —

2.01 On 02 January 1989, plaintiff entered, into a contract of lease with defendant
PDC over a property designated as Ground Floor, Seafood Market (hereinafter
"Subject Premises") situated at the corner of EDSA, corner MacArthur Street,
Araneta Center, Cubao, Quezon City, for a period of ten (10) years from 02 January
1989 to 30 April 1998.

2.02 Immediately after having acquired actual physical possession of the Subject
Premises, plaintiff established and now operates thereon the now famous Seafood
Market Restaurant. Since then, plaintiff had been in actual, continuous, and peaceful
physical possession of the Subject Premises until 31 October 1992.

x x x           x x x          x x x

3.02 Plaintiff, being the lessee of the Subject Premises, is entitled to the peaceful
occupation and enjoyment of the Subject Premises to the exclusion of all others,
including defendants herein.

3.03 Defendants' resort to strong arms tactics to forcibly wrest possession of the
Subject Premises from plaintiff and maintain possession thereof through the use of
force, threat, strategy and intimidation by the use of superior number of men and
arms amounts to the taking of the law into their own hands.

3.04 Thus, defendants' act of unlawfully evicting out plaintiff from the Subject
Premises it is leasing from defendant PDC and depriving it of possession thereof
through the use of force, threat, strategy and intimidation should be condemned and
declared illegal for being contrary; to public order and policy.

3.05 Consequently, defendants should be enjoined from continuing with their illegal
acts and be ordered to vacate the Subject Premises and restore possession thereof,
together with its contents, to plaintiff.

x x x           x x x          x x x
 4.07 Considering that defendants' act of forcibly grabbing possession of the Subject
Premises from plaintiff is illegal and null and void, defendant should be adjudged
liable to plaintiff for all the aforedescribed damages which plaintiff incurred as a result
thereof.

The amended complaint for damages filed by private respondent alleges basically the same factual
circumstances and issues as bases for the relief prayed for, to wit:

4. On May 28, 1991, plaintiff and defendant PDC entered into a Contract of Lease for
a period of ten years or from January 2, 1989 up to April 30, 1998 over a property
designated as Ground Floor, Seafood Market (hereinafter referred to as Subject
Premises) situated at the corner of EDSA corner McArthur Street, Araneta Center,
Cubao, Quezon City. A copy of the lease contract is attached hereto as Annex "A".

5. Immediately thereafter, plaintiff took over actual physical possession of Subject

Premises, and established thereon the now famous "Seafood Market Restaurant."

x x x           x x x          x x x

7 On October 31, 1992 at around 8:30 p.m., defendant PDC, without the benefit of
any writ of possession or any lawful court order and with the aid of approximately
forty (40) armed security guards and policemen under the supervision of defendant
Tejam, forcibly entered the subject premises through force, intimidation, threats and
stealth and relying on brute force and in a thunderboltish manner and against
plaintiff's will, unceremoniously drew away all of plaintiff's men out of the subject
premises, thereby depriving herein plaintiff of its actual, physical and natural
possession of the subject premises. The illegal, high-handed manner and gestapo
like take-over by defendants of subject premises is more particularly described as
follows: . . .

8. To date, defendants continue to illegally possess and hold the Subject Premises,
including all the multi-million improvements, fixtures and equipment therein owned by
plaintiff, all to the damage and prejudice of plaintiff. The actuations of defendants
constitute an unlawful appropriation, seizure and taking of property against the will
and consent of plaintiff. Worse, defendants are threatening to sell at public auction
and without the consent of plaintiff and without lawful authority, the multi-million
fixtures and equipment of plaintiff and at prices way below the market value thereof.
Plaintiff hereby attaches as Annex "B" the letter from defendants dated August 6,
1993 addressed to plaintiff, informing the latter that the former intends to sell at an
auction on August 19, 1993 at 2:00 p.m. properties of the plaintiff presently in
defendants' possession.

x x x           x x x          x x x

12. Defendants' unlawful takeover of the premises constitutes a violation of its

obligation under Art. 1654 of the New Civil Code requiring the lessor to maintain the
lessee in peaceful and adequate enjoyment of the lease for the entire duration of the
contract. Hence, plaintiff has filed the present suit for the recovery of damages under
Art. 1659 of the New Civil Code. . . .

Restated in its bare essentials, the forcible entry case has one cause of action, namely, the alleged
unlawful entry by petitioner into the leased premises out of which three (3) reliefs (denominated by
private respondent as is causes of action) arose: (a) the restoration by the lessor (petitioner herein)
of the possession of the leased premises to the lessee; (b) the claim for actual damages due to the
losses suffered by private respondent such as the deterioration of perishable foodstuff stored inside
the premises and the deprivation of the use of the premises causing loss of expected profits; and, (c)
the claim for attoney's fees and cost of suit.

On the other hand, the complaint for damages prays for a monetary award consisting of (a) moral
damages of P500,000.00 and exemplary damages of another P500,000.00; (b) actual damages of
P20,000,000.00 and compensatory damages of P1,000,000.00 representing unrealized profits; and,
(c) P200,000.00 for attorney's fees and costs, all based on the alleged forcible takeover of the
leased premises by petitioner. Since actual and compensatory damages were already prayed for in
the forcible entry case before the MeTC, it is obvious that this cannot be relitigated in the damage
suit before the RTC by reason of res adjudicata.

The other claims for moral and exemplary damages cannot also succeed considering that these
sprung from the main incident being heard before the MeTC. Jurisprudence is unequivocal that
when a single delict or wrong is committed — like the unlawful taking or detention of the property of
the another — there is but one single cause of action regardless of the number of rights that may
have been violated, and all such rights should be alleged in a single complaint as constituting one
single cause of action.   In a forcible entry case, the real issue is the physical possession of the real
15

property. The question of damages is merely secondary or incidental, so much so that the amount
thereof does not affect the jurisdiction of the court. In other words, the unlawful act of a deforciant in
taking possession of a piece of land by means of force and intimidation against the rights of the party
actually in possession thereof is a delict or wrong, or a cause of action that gives rise to two (2)
remedies, namely, the recovery of possession and recovery of damages arising from the loss of
possession, but only to one action. For obvious reasons, both remedies cannot be the subject of two
(2) separate and independent actions, one for recovery of posssession only, and the other, for the
recovery of damages. That would inevitably lead to what is termed in law as splitting up a cause of
action.   In David v. de la Cruz   we observed —
16 17

Herein tenants have but one cause of action against their landlord, their illegal
ejectment or removal from their landholdings, which cause of action however entitles
them to two (2) claims or remedies — for reinstatement of damages. As both claims
arise from the same cause of action, they should be alleged in a single complaint.

A claim cannot be divided in such a way that a part of the amount of damages may be recovered in
one case and the rest, in another.   In Bacharach v. Icarangal   we explained that the rule was
18 19

aimed at preventing repeated litigations betweent the same parties in regard to the same subject of
the controversy and to protect the defendant from unnecessary vexation. Nemo debet bis vexari pro
una et eadem causa.

What then is the effect of the dismissal of the other action? Since the rule is that all such rights
should be alleged in a single complaint, it goes without saying that those not therein included cannot
be the subject of subsequent complaints for they are barred forever.   If a suit is brought for a part of
20

a claim, a judgment obtained in that action precludes the plaintiff from bringing a second action for
the residue of the claim, notwithstanding that the second form of action is not identical with the first
or different grounds for relief are set for the second suit. This principle not only embraces what was
actually determined, but also extends to every matter which the parties might have litigated in the
case.   This is why the legal basis upon which private respondent anchored its second claim for
21

damages, i.e., Art. 1659 in relation to Art. 1654 of the Civil Code,   not otherwise raised and cited by
22

private respondent in the forcible entry case, cannot be used as justification for the second suit for
damages. We note, not without some degree of displeasure, that by filing a second suit for
damages, private respondent was not only able to press a claim for moral and exemplary damages
which by its failure to allege the same in its suit before the MeTC foreclosed its right to sue on it, but
it was also able to obtain from the RTC, by way of another temporary restraining order, a second
reprieve from an impending public auction sale of its movables which could not anymore secure from
the MeTC before which the matter of the issuance of a preliminary writ of injunction was already
closed.

The foregoing discussions provide sufficient basis to petitioner's charge that private respondent and
its counsel in the trial courts committed forum shopping. In Crisostomo v. Securities and Exchange
Commission   we ruled —
23

There is forum-shopping whenever, as a result of an adverse opinion in one forum,

party seeks a favorable opinion (other than by appeal or certiorari) in another. The
principle applies . . . with respect to suits filed in the courts . . . in connection with
litigations commenced in the court . . . in anticipation of an unfavorable . . . ruling and
a favorable case where the court in which the second suit was brought, has no
jurisdiction.

This Court likewise elucidated in New Pangasinan Review, Inc. v. National Labor Relations
Commission   that there is forum-shopping when the actions involve the same transactions, the
24

same essential facts and circumstances. The reason behind the proscription of forum shopping is
obvious. This unnecessarily burdens our courts with heavy caseloads, unduly taxes the manpower
and financial resources of the judiciary and trifles with and mocks our judicial processes, thereby
adversely affecting the efficient administration of justice. This condemnable conduct has prompted
the Court to issue circulars   ordering among others that a violation thereof shall be cause for the
25

dismissal of the case or cases without prejudice to the taking of appropriate action against the
counsel or party concerned.

The records ineluctably show that the complaint lodged, by private respondent with the Regional
Trial Court of Quezon City contained no certification of non-forum shopping. When petitioner filed a
motion to dismiss the case raising among others the ground of forum shopping it pointed out the
absence of the required certification. The amended complaint, as well as the second and third
amended complaints, attempted to rectify the error by invariably stating that there was no other
action pending between the parties involving the same causes of action although there was actually
a forcible entry case pending before the MTC of Quezon City. By its admission of a pending forcible
entry case, it is obvious that private respondent was indulging in forum shopping. While private
respondent conveniently failed to inform the RTC that it had likewise sought damages in the MTC on
the basis of the same forcible entry, the fact remains that it precisely did so, which stratagem was
being duplicated in the second case. This is a compelling reason to dismiss the second case.

WHEREFORE, the Petition is GRANTED. The questioned Decision of the Court of Appeals dated 27
September 1995 and the Order of the Regional Trial Court of Quezon City dated 24 September 1993
are REVERSED and SET ASIDE. The Regional Trial Court of Quezon City is directed to dismiss
Civil Case No. Q-93-16409, "Westin Seafood Market, Inc. v. Progressive Development
Corporation, et al.," and the Metropolitan Trial Court of Quezon City to proceed with the proper
disposition of Civil Case No. 6589, "Westin Seafood Market, Inc. v. Progressive Development
Corporation, et al.," with dispacth considering the summary nature of the case. Treble costs against
private respondent. 1âwphi1.nêt

SO ORDERED
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-53564 February 27, 1987

JUAN BAYANG, petitioner,
vs.
HON. COURT OF APPEALS and BENIGNO BIONG, respondents.

Rodrigo Matutina for petitioner.

Luceniano E. Lancin for private respondent.

CRUZ, J.:

Sometime in November 1969, Juan Bayang filed a complaint for quieting of title with damages
against Benigno Biong in the Court of First Instance of Surigao del Norte, Branch 1, docketed as
Civil Case No. 1892.   In 1970, while the case was pending, Biong succeeded in dispossessing the
1

plaintiff of the land in question and remained there until January 25, 1978.   On February 21, 1972,
2

the case was decided in favor of Biong, but the Court of Appeals on December 8, 1977, reversed the
trial court, declaring in the dispositive portion of its decision:

WHEREFORE, the judgment appealed from is reversed and appellants are hereby
declared owner of the property in litigation, and defendant-appellee are (sic) hereby
ordered to pay appellant the sum of P56.40 as the latter's share in the proceeds from
the sale of the copra derived from the third harvest of coconuts from the same land,
and P1,000.00 as attorney's fees, and costs of Litigation. 3

This decision became final on February 2, 1978.

On February 6, 1978, Bayang filed a second case, docketed as Civil Case No. 2589, with the CFI of
Surigao del Norte, Branch II, seeking to recover from Biong the incomes earned from the same land
from 1970 up to the quarterly incomes from 1978 until the said land was delivered to the plaintiff.   At
4

the pre-trial conference held on July 10, 1978, the counsel for Bayang admitted that as of January
25, 1978, Biong had already surrendered possession of the land in question to Bayang.   On August
5

16, 1978, Biong filed a motion for summary judgment, reiterating the affirmative defense of res
judicata raised in his answer dated April 12, 1978, insofar as it related to the incidents concerning
the case prior to January 25, 1978.   An opposition to this motion was duly filed by Bayang. 
6 7

The trial court, after considering the arguments of the parties, granted the motion and rendered a
summary judgment on October 30, 1978.   The said decision was sustained by the Court of Appeals,
8

and Bayang is now before us in this petition for review by certiorari under Rule 45 of the Rules of
Court.

His assignment of errors raises two basic submissions, to wit:

1. Civil Case No. 2589 should not have been decided by summary judgment.

2. The judgment in CA-G.R. No. 54720-R (appeal from judgment in Civil Case No. 1892) did not
constitute res judicata as to bar Civil Case No. 2589.

Both contentions are incorrect. We rule for the respondents.

In its decision, the Court of Appeals quoted the following excerpt from Singleton v. Philippine Trust
Co.   on the nature and functions of the summary judgment:
9

Summary judgment is one of the methods sanctioned in the present Rules of Court
for a prompt disposition of civil actions wherein there exists no serious controversy.
The procedure may be availed of not only by claimants, but also by defending parties
who may be the object of unfounded claims. A motion for summary judgment
assumes that scrutinizing of the facts will disclose that the issues presented by the
pleadings need not be tried because they are so patently unsubstantial as not to be
genuine issues, or that there is no genuine issue as to any material facts or where
the facts appear undisputed and certain from the pleadings, depositions, admissions
and affidavits.

We hold that there was no genuine or triable issue of fact raised by the parties, in view particularly of
the affirmative defense of res judicata invoked by the private respondent. That defense is sustained.

A long line of decisions has consistently held that for res judicata to apply: a) the former judgment
must be final; b) it must have been rendered by a court having jurisdiction over the subject matter
and the parties; c) it must be a judgment on the merits; and d) there must be between the first case
and the second case identity of parties, identity of subject matter and Identity of cause of action. 
10

The decision in Civil Case No. 1892 became final and executory on February 2, 1978. There is no
dispute that the trial court which rendered that decision had jurisdiction over the subject-matter and
the parties to the proceeding. The case was tried on the merits. The parties to Civil Case No. 1892
and the subsequent Civil Case No. 2589 are the same petitioner and private respondent now before
us.

The petitioner would draw a distinction between the land in dispute in Civil Case No. 1892 and the
income from that land being claimed in Civil Case No. 2589. But that is in our view splitting hairs to
split a cause of action. The subject-matter is essentially the same in both cases as the income is
only a consequence or accessory of the disputed property. We cannot agree that there are involved
here two causes of action calling for two separate cases. The claim for the income from the land was
incidental to, and should have been raised by Bayang in his earlier claim for, ownership of the land.

We note that while the first case was pending, the private respondent, by the petitioner's own
account, "succeeded in dispossessing" him of the disputed land   and that at the pretrial conference
11

on Civil Case No. 2589, Bayang's counsel admitted that Biong had vacated the said property as of
January 25, 1978.   This means that from 1970 to the date the respondent surrendered the property
12

in 1978, Biong was presumably collecting and enjoying the income therefrom to the exclusion of the
petitioner.

Civil Case No. 1892 was commenced in November 1969 and was finally decided only on February
2, 1978. The private respondent entered the disputed property in 1970 and left it only in 1978. For
about seven years, therefore, the petitioner made no move at all to amend his complaint to include a
claim for the income supposedly received by the private respondent during that period.

Under Rule 10, Section 6, of the Rules of Court.

Sec. 6. Matters subject of supplemental pleadings. — Upon motion of a party the

court may, upon reasonable notice and upon such terms as are just, permit him to
serve a supplemental pleading setting forth transactions, occurrence or events which
have happened since the date of the pleading sought to be supplemented. If the
court deems it advisable that the adverse party should plead thereto, it shall so order,
specifying the time therefor.

In the case of Jalandoni v. Martin-Guanzon,   this Court declared through Justice J.B.L. Reyes:
13

As to the value of the plaintiff's share in the products of the land during the time that
the former action was pending (which are the damages claimed under the second
cause of action), their recovery is now barred by the previous judgment. These
damages are but the result of the original cause of action, viz., the continuing refusal
by defendants in 1941 to recognize the plaintiff's right to an interest in the property.
In the same way that plaintiffs claimed for their share of the produce from 1941 to
1947, these later damages could have been claimed in the first action, either in the
original camplaint (for their existence could be anticipated when the first complaint
was filed) or else by supplemental pleading. To allow them to be recovered by
subsequent suit would be a violation of the rule against multiplicity of suits, and
specifically of sections 3 and 4 of Rules 2 of the Rules of Court, against the splitting
of causes of action, since these damages spring from the same cause of action that
was pleading (sic) in the former case No. 573 between the same parties (Blossom &
Co., Inc. v. Manila Gas Corporation, 55 Phil. 226; Santos v. Moir, 36 Phil. 350;
Pascua v. Sideco 24 Phil. 26; Bachrach Motor Co. v. Icarangal 68 Phil. 287).

And in another case,   the same jurist declared:

14

Urtula, as defendant in the expropriation case, could have raised the matter of
interest before the trial court even if there had been no actual taking yet by the
Republic and the said court could have included the payment of interest in its
judgment but conditioned upon the actual taking, because the rate of interest upon
the amount of just compensation (6%) is a known factor, and it can reasonably be
expected that at some future time, the expropriator would take possession of the
property, though the date be not fixed. In this way, multiple suits would be avoided.
Moreover, nothing prevented appellee from calling the attention of the appellate
courts (even by motion to reconsider before judgment became final) to the
subsequent taking of possession by the condemnor, and asking for allowance of
interest on the indemnity since that followed the taking as a matter of course, and
raised no issue requiring remand of the records to the Court of origin.

As the issue of interest could have been raised in the former case but was not
raised, res judicata blocks the recovery of interest in the present case. (Tejedor vs.
Palet, 61 Phil. 494; Phil. Engineering Corp., et al. vs. Ceniza, etc., et al., L-17834, 29
Sept. 1962). It is settled that a former judgment constitutes a bar, as between the
parties, not only as to matters expressly adjudged, but all matters that could have
been adjudged at the time (Rule 39, sec. 49; Corda vs. Maglinti L-17476, November
30, 1961; Rodriguez vs. Tan, 48 Off. Gaz. 3330).
Clearly, then, Civil Case No. 2589 is barred by the previous judgment in Civil Case No. 1892. This
being so, it should follow that the trial judge committed no grave abuse of discretion in deciding the
latter case by summary judgment.

We are not unmindful of the argument that affirmance of the challenged decision of the respondent
court will result in the unjust enrichment of Biong at the expense of Bayang. This assumes, of
course, that the petitioner could have proved his right to the income he now claims belatedly. The
point is that he did not make the proper claim at the proper time and in the proper proceedings, and
he cannot do it now. Whatever right he might have had is now deemed waived because of his
neglect.

Nemo debet bis vexare pro una et eadem causa. This has to be so if litigants are to be spared the
annoyance, anxiety and expense that could otherwise be inflicted upon them endlessly by
capricious, malicious or vindictive suitors.

WHEREFORE, the petition is dismiss and the appealed decision is affirmed. Costs against the
petitioner.

SO ORDERED

Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 191388               March 9, 2011

ASIA UNITED BANK, CHRISTINE T. CHAN, and FLORANTE C. DEL MUNDO, Petitioners,

vs.
GOODLAND COMPANY, INC., Respondent.

DECISION

DEL CASTILLO, J.:

The costly consequence of forum shopping should remind the parties to ever be mindful against
abusing court processes.

Before the Court is a Petition for Review1 under Rule 45 of the Rules of Court assailing the
Decision2 dated June 5, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 90114, as well as its
Resolution3 dated February 17, 2010, which denied a reconsideration of the assailed Decision. The
dispositive portion of the appellate court’s Decision reads:

WHEREFORE, the appeal is GRANTED and the appealed Order dated March 15, 2007 is
REVERSED and SET ASIDE. In lieu thereof, another is entered ordering the DENIAL of appellee
bank’s motion to dismiss and directing the REINSTATEMENT of appellant’s complaint as well as the
REMAND of the case to the trial court for further proceedings.

SO ORDERED.4
Factual Antecedents

Respondent Goodland Company, Inc. (Goodland) executed a Third Party Real Estate Mortgage
(REM) over two parcels of land located in the Municipality of Sta. Rosa, Laguna and covered by
Transfer Certificates of Title (TCT) Nos. 3216725 and 3216736 in favor of petitioner Asia United Bank
(AUB). The mortgage secured the obligation amounting to ₱250 million of Radiomarine Network, Inc.
(RMNI), doing business as Smartnet Philippines, to AUB. The REM was duly registered on March 8,
2001 in the Registry of Deeds of Calamba, Laguna. 7

Goodland then filed a Complaint 8 docketed as Civil Case No. B-6242 before Branch 25 of the
Regional Trial Court (RTC) of Biñan, Laguna for the annulment of the REM on the ground that the
same was falsified and done in contravention of the parties’ verbal agreement (Annulment Case).

While the Annulment Case was pending, RMNI defaulted in the payment of its obligation to AUB,
prompting the latter to exercise its right under the REM to extrajudicially foreclose the mortgage. It
filed its Application for Extrajudicial Foreclosure of Real Estate Mortgage under Act No. 3135, as
amended with the Office of the Executive Judge of the RTC of Biñan, Laguna on October 19,
2006.9 The mortgaged properties were sold in public auction to AUB as the highest bidder. It was
issued a Certificate of Sale, which was registered with the Registry of Deeds of Calamba on
November 23, 2006.

Before AUB could consolidate its title, Goodland filed on November 28, 2006 another
Complaint10 docketed as Civil Case No. B-7110 before Branch 25 of the RTC of Biñan, Laguna,
against AUB and its officers, petitioners Christine Chan and Florante del Mundo. This Complaint
sought to annul the foreclosure sale and to enjoin the consolidation of title in favor of AUB (Injunction
Case). Goodland asserted the alleged falsified nature of the REM as basis for its prayer for
injunction.

A few days later, AUB consolidated its ownership over the foreclosed properties and obtained new
titles, TCT Nos. T-65703111 and 657032,12in its name from the Registry of Deeds of Calamba.

Petitioners then filed on December 11, 2006 a Motion to Dismiss with Opposition to a Temporary
Restraining Order in the Injunction Case.13 They brought to the trial court’s attention Goodland’s
forum shopping given the pendency of the Annulment Case. They argued that the two cases both
rely on the alleged falsification of the real estate mortgage as basis for the reliefs sought.

Ruling of the Regional Trial Court (Injunction Case)

On March 15, 2007, the trial court acted favorably on petitioners’ motion and dismissed the
Injunction Case with prejudice on the grounds of forum shopping and litis pendentia. 14 The trial court
explained that the Injunction Case and the Annulment Case are both founded on the same
transactions, same essential facts and circumstances, and raise substantially the same issues. The
addition of the application for a writ of preliminary injunction does not vary the similarity between the
two cases. The trial court further noted that Goodland could have prayed for injunctive relief as
ancillary remedy in the Annulment Case. Finally, the trial court stated that any judgment in the
Annulment Case regarding the validity of the REM would constitute res judicata on the Injunction
Case.

Ruling of the Court of Appeals15 (Injunction Case)

Goodland appealed16 the same to the CA.

Meanwhile, AUB filed an Ex-Parte Application for Writ of Possession on December 18, 2006, which
was granted on March 15, 2007. The writ was issued on March 26, 2007 and AUB obtained
possession of the foreclosed properties on April 2, 2007.

On June 5, 2009, the CA promulgated its assailed Decision, which ruled in favor of Goodland and
ordered the reinstatement of the Injunction Case in the trial court.17

The CA rejected petitioners’ contention that Goodland’s appeal raised pure questions of law, 18 which
are within the jurisdiction of the Supreme Court under Rule 45. 19 Instead, it found Goodland’s Rule
41 appeal to be proper because it involved both questions of fact and of law. The CA held that a
question of fact existed because petitioners themselves questioned in their Brief the veracity of
Goodland’s Certification of Non-Forum Shopping. 20

The CA conceded that Goodland’s Brief failed to comply with the formal requirements, which are all
grounds for the dismissal of the appeal,21 e.g., failure of the appellant to serve and file the required
number of copies of its brief on all appellees and absence of page references to the record.
However, it relaxed the rules so as to completely resolve the rights and obligations of the parties.
The CA, however, warned Goodland that its future lapses will be dealt with more severely. 22

The CA further ruled against petitioners’ argument that the delivery of the foreclosed properties to
AUB’s possession has rendered Goodland’s appeal moot. It explained that the Injunction Appeal
involving the annulment of extrajudicial foreclosure sale can proceed independently of petitioners’
application for a writ of possession. 23

The CA then concluded that Goodland was not guilty of forum shopping when it initiated the
Annulment and Injunction Cases. The CA held that the reliefs sought in the two cases were different.
The Annulment Case sought the nullification of the real estate mortgage, while the Injunction Case
sought the nullification of the foreclosure proceedings as well as to enjoin the consolidation of title in
favor of petitioners.24 The CA further held that aside from the difference in reliefs sought, the two
cases were independent of each other because the facts or evidence that supported their respective
causes of action were different. The acts which gave rise to the Injunction Case (i.e., the extrajudicial
foreclosure proceedings) occurred long after the filing of the Annulment Case. 25

The appellate court also held that any decision in either case will not constitute res judicata on the
other. It explained that the validity of the real estate mortgage has no "automatic bearing" on the
validity of the extrajudicial foreclosure proceedings. 26

Moreover, according to the CA, the fact that Goodland stated in its Certification of Non-Forum
Shopping in the Injunction Case that the Annulment Case was pending belied the existence of forum
shopping.27

Petitioners filed a Motion for Reconsideration28 on July 2, 2009, which was denied in the assailed
Resolution of February 17, 2010. 29

Hence, the instant petition.

Ruling in G.R. No. 190231 (Annulment Case)

Contemporaneously with the proceedings of the Injunction Case, the earlier Annulment Case (Civil
Case No. B-6242) was also dismissed by the trial court on the ground of forum shopping on August
16, 2007.30
Goodland filed an appeal31 of the dismissal to the CA, which appeal was granted. The CA ordered on
August 11, 2009 the reinstatement of the Annulment Case in the trial court. 32

AUB then filed with this Court a Petition for Review,33 docketed as G.R. No. 190231 and entitled Asia
United Bank and Abraham Co v. Goodland Company, Inc.

On December 8, 2010, the Court’s First Division reversed the CA ruling and resolved the appeal in
AUB’s favor.34 The sole issue resolved by the Court was whether Goodland committed willful and
deliberate forum shopping by filing Civil Case Nos. B-6242 (Annulment Case) and B-7110 (Injunction
Case).  The Court ruled that Goodland committed forum shopping because both cases asserted
lavvphil

non-consent to the mortgage as the only basis for seeking the nullification of the REM, as well as the
injunction of the foreclosure. When Goodland did not notify the trial court of the subsequent filing of
the injunction complaint, Goodland revealed its "furtive intent to conceal the filing of Civil Case No.
B-7110 for the purpose of securing a favorable judgment." Thus, the Court concluded that the trial
court was correct in dismissing the annulment case with prejudice. The dispositive portion of the said
Resolution reads as follows:

WHEREFORE, the petition is hereby GRANTED. The August 11, 2009 decision and November 10,
2009 resolution of the Court of Appeals in CA-GR CV No. 9126[9] are REVERSED and SET ASIDE.
The August 16, 2007 and December 5, 2007 orders of the Regional Trial Court of Biñan, Laguna,
Branch 25 in Civil Case No. B-6242 are REINSTATED. 35

Goodland filed a Motion for Reconsideration 36 but the same was denied with finality in the Court’s
Resolution dated January 19, 2011.

Issue37

The parties present several issues for the Court’s resolution. Most of these address the procedural
infirmities that attended Goodland’s appeal to the CA, making such appeal improper and dismissible.
The crux of the case, however, lies in the issue of whether the successive filing of the Annulment
and Injunction Cases constitute forum shopping.

Petitioners’ Arguments

Petitioners maintain that Goodland is guilty of forum shopping because it sought in the Annulment
Case to annul the REM on the ground that it was falsified and unlawfully filled-out; while in the
Injunction Case, Goodland wanted to nullify the foreclosure sale arising from the same REM on the
ground that the REM was falsified and unlawfully filled-out. Clearly, Goodland’s complaints rise and
fall on the issue of whether the REM is valid. This requires the presentation of the same evidence in
the Annulment and Injunction Cases.38

Goodland’s Arguments

Goodland counters that it did not commit forum shopping because the causes of action for the
Injunction and Annulment Cases are different. The Annulment Case is for the annulment of REM;
while the Injunction Case is for the annulment of the extrajudicial foreclosure sale. Goodland argues
that any judgment in the Annulment Case, regardless of which party is successful, would not amount
to res judicata in the Injunction Case.39

Our Ruling
We grant the petition.

There is forum shopping "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." 40 The different ways by which forum shopping
may be committed were explained in Chua v. Metropolitan Bank & Trust Company: 41

Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause
of action and with the same prayer, the previous case not having been resolved yet (where the
ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action
and the same prayer, the previous case having been finally resolved (where the ground for dismissal
is res judicata); and (3) filing multiple cases based on the same cause of action, but with different
prayers (splitting causes of action, where the ground for dismissal is also either litis pendentia or res
judicata).

Common in these types of forum shopping is the identity of the cause of action in the different cases
filed. Cause of action is defined as "the act or omission by which a party violates the right of
another."42

The cause of action in the earlier Annulment Case is the alleged nullity of the REM (due to its
allegedly falsified or spurious nature) which is allegedly violative of Goodland’s right to the
mortgaged property. It serves as the basis for the prayer for the nullification of the REM. The
Injunction Case involves the same cause of action, inasmuch as it also invokes the nullity of the
REM as the basis for the prayer for the nullification of the extrajudicial foreclosure and for injunction
against consolidation of title. While the main relief sought in the Annulment Case (nullification of the
REM) is ostensibly different from the main relief sought in the Injunction Case (nullification of the
extrajudicial foreclosure and injunction against consolidation of title), the cause of action which
serves as the basis for the said reliefs remains the same — the alleged nullity of the REM. Thus,
what is involved here is the third way of committing forum shopping, i.e., filing multiple cases based
on the same cause of action, but with different prayers. As previously held by the Court, there is still
forum shopping even if the reliefs prayed for in the two cases are different, so long as both cases
raise substantially the same issues.43

There can be no determination of the validity of the extrajudicial foreclosure and the propriety of
injunction in the Injunction Case without necessarily ruling on the validity of the REM, which is
already the subject of the Annulment Case. The identity of the causes of action in the two cases
entails that the validity of the mortgage will be ruled upon in both, and creates a possibility that the
two rulings will conflict with each other. This is precisely what is sought to be avoided by the rule
against forum shopping.

The substantial identity of the two cases remains even if the parties should add different grounds or
legal theories for the nullity of the REM or should alter the designation or form of the action. The
well-entrenched rule is that "a party cannot, by varying the form of action, or adopting a different
method of presenting his case, escape the operation of the principle that one and the same cause of
action shall not be twice litigated." 44

The CA ruled that the two cases are different because the events that gave rise to them are
different. The CA rationalized that the Annulment Case was brought about by the execution of a
falsified document, while the Injunction Case arose from AUB’s foreclosure based on a falsified
document. The distinction is illusory. The cause of action for both cases is the alleged nullity of the
REM due to its falsified or spurious nature. It is this nullity of the REM which Goodland sought to
establish in the Annulment Case. It is also this nullity of the REM which Goodland asserted in the
Injunction Case as basis for seeking to nullify the foreclosure and enjoin the consolidation of title.
Clearly, the trial court cannot decide the Injunction Case without ruling on the validity of the
mortgage, which issue is already within the jurisdiction of the trial court in the Annulment Case.

The recent development in Asia United Bank v. Goodland Company, Inc., 45 which involved
substantially the same parties and the same issue is another reason for Goodland’s loss in the
instant case. The issue that Goodland committed deliberate forum shopping when it successively
filed the Annulment and Injunction Cases against AUB and its officers was decided with finality
therein. This ruling is conclusive on the petitioners and Goodland considering that they are
substantially the same parties in that earlier case.

Given our ruling above that the Injunction Case ought to be dismissed for forum shopping, there is
no need to rule further on the procedural infirmities raised by petitioners against Goodland’s appeal.

WHEREFORE, premises considered, the Petition is GRANTED. The June 5, 2009 Decision of the
Court of Appeals and its February 17, 2010 Resolution in CA-G.R. CV No. 90114 are hereby
REVERSED and SET ASIDE. The March 15, 2007 Order of Branch 25 of the Regional Trial Court of
Biñan, Laguna DISMISSING Civil Case No. B-7110 is hereby REINSTATED and AFFIRMED.

SO ORDERED