G.R. No. 183120. January 22, 2014


This resolves the appeal filed by petitioner Inmark Marketing Phil., Inc. (petitioner) from the Decision[1] of the Court of Appeals (CA) dated November 22, 2007 in CA-G.R. CEB-SP No. 85301 which affirmed the Order[2] dated July 15, 2004 of the Regional Trial Court (RTC) of Cebu City, Branch 7, granting respondent Atty. Ramon B. Ceniza's (respondent) motion for the appointment of a commissioner.

The facts are culled from the assailed decision of the CA and from the factual findings of the Court in the related case of Ceniza v. Wistehuff, Sr.[3]

The present petition emanated from a complaint for accounting, declaration of dividends, specific performance, damages and attorney's fees with prayer for the issuance of a preliminary mandatory injunction docketed as CEB-26274-SRC before the RTC of Cebu City, Branch 11, filed by the respondent against the petitioner, and his fellow stockholders, Daniel Wistehuff Sr., Daniel Wistehuff III, Marites Gonzales-Wistehuff, and Bryan Wistehuff (the Wistehuffs).

Apparently, the complaint was prompted by the petitioner's refusal to pay the respondent's consultation fees. In his complaint, the respondent sought that the petitioner's President, Daniel Wistehuff III and former President, Daniel Wistehuff, Sr., be ordered, through a writ of preliminary mandatory injunction: (a) to produce all financial documents of the company from 1996; (b) that the same be deposited with the Court, and; (c) to faithfully comply with the terms of their retainer contract with the respondent, specifically as to the payment of his retainer fee and other legal services rendered. The respondent likewise prayed that the petitioner be ordered to make a full accounting of its operations and thereafter, to declare stock and cash dividends.

The respondent later amended his complaint by alleging therein that the same was filed by way of a derivative suit. His allegation was, however, denied by the petitioner and the Wistehuffs who asserted that the respondent was merely a trustee of the stocks registered in his name.[4]In its Decision[5] dated March 27, 2003, the RTC ruled in favor of the respondent by ordering as follows:
"WHEREFORE, in view of all the foregoing considerations, judgment is hereby rendered in favor of the (respondent) and against the (petitioner) ordering the latter as follows:
"1. to make a true and correct accounting of the earnings of the corporation which will be the basis of the declaration of dividends;

"2. to enjoin (petitioner) Inmark Marketing Philippines, Inc. and the individual defendants to comply with the terms and conditions of (respondent) Ceniza's Retainer Contract;

"3. to order the individual defendants to whom services were rendered to pay attorney's fees of P200,000.00;

"4. to order defendants Daniel Wistehuff III and Daniel Wistehuff, Sr., jointly and severally, to pay (respondent) the sum of P500,000.00 in moral damages and P25,000.00 in exemplary damages;

"5. to order defendants Daniel Wistehuff III and Daniel Wistehuff, Sr., to pay, jointly and severally, attorney's fees of P100,000.00 and litigation expenses of P10,000.00.
The petitioner appealed the foregoing ruling while the respondent moved for execution pending appeal, which motion was partially granted by the RTC in an Omnibus Order[6] dated August 14, 2003, the fallo of which reads:
WHEREFORE, in view of [the] foregoing premises, the Court hereby does the following:
(a) Orders the issuance of a writ of execution to enforce the portion of the judgment rendered in this case on March 27, 2003 ordering the defendants to make a true and correct accounting of the earnings of Inmark Marketing Philippines, Inc. which will be the basis of declaration of dividends;

(b) Denies the plaintiffs motion for immediate execution of the portions of the judgment relating to awards for damages, attorney's fees, and expenses of litigation; and

(c) Orders the release to Judge Jose P. Burgos of the receiver's cash bond in the sum of P25,000.00.
Accordingly, a Writ of Execution was issued on September 11, 2003. In compliance with the writ, the petitioner and the Wistehuffs submitted the following documents to the sheriff on September 15, 2003, viz: Report of an Independent Auditor - Sta. Ana Rivera & Co., Balance Sheet, Statements of Operation, Statements of Changes in Equity, Statements of Cash Flows and Notes to Financial Statements pertaining to the corporation.[7]

However, based on allegations that the 2002 Financial Statement submitted by the petitioner fraudulently and incorrectly reported a "loss", the respondent initiated indirect contempt proceedings against the petitioner and its counsel which was docketed as CEB-29783.[8] The indirect contempt case was later dismissed by the RTC which dismissal was eventually affirmed by this Court in G.R. No. 165734 on June 16, 2006.[9]

In the meantime, or on May 19, 2004, the respondent filed a "Motion for the Appointment of, and Referral to, a Commissioner." In its Order[10] dated July 15, 2004, the RTC granted the motion and appointed Atty. Bayani Atup as Commissioner tasked to receive evidence and report to the court about the true and correct earnings of the petitioner since the start of its operation in 1996.

Feeling aggrieved, the petitioner filed a petition for certiorari before the CA ascribing grave abuse of discretion to the RTC in issuing its July 15, 2004 Order. The petitioner claimed that the RTC has lost jurisdiction over CEB-26274-SRC upon the perfection of the petitioner's appeal of the March 27, 2003 Decision therein.[11]

Before resolving the substantive merits of the certiorari petition, the CA first issued a temporary restraining order on August 4, 2004 and a writ of preliminary injunction on October 14, 2004.[12]

In due course, the CA rendered its Decision[13] dated November 22, 2007 which affirmed the appointment of a commissioner by the RTC. In so ruling, the CA reasoned that while Rule 41, Section 9, paragraph 3 of the Rules of Court provides that the trial court loses jurisdiction over the case upon perfection of the appeal, the court, nonetheless, retains residual jurisdiction over subject matters not taken up or does not affect the appeal such as: issuance of protective orders, approval of compromises, permitting appeals of indigent litigants and issuance of orders for discretionary execution.

The CA also clarified that the jurisdiction of the RTC in determining the petitioner's compliance with the writ of execution in CEB-26274-SRC was not lost by virtue of the indirect contempt proceedings that involved the similar issue of compliance. The ruling in CEB-29783 for indirect contempt was only for the purpose of determining whether or not the petitioner and its counsel are guilty of disobeying the RTC so that the appropriate penalty may be meted. Such determination did not divest the RTC of its inherent jurisdiction to determine whether its Orders in CEB-26274-SRC were actually obeyed.

The CA further held that the records of the main case CEB-26274-SRC must be elevated to the appellate court in view of the perfection of the petitioner's appeal. The CA disposed thus:
WHEREFORE, in view of all the foregoing, the July 15, 2004 Order of Judge Simeon P. Dumdum, Presiding Judge of the Regional Trial Court, Branch 7, Cebu City, is hereby AFFIRMED. Our Resolution dated August 4, 2004 granting petitioner's motion for the issuance of a writ of preliminary injunction and the writ of preliminary injunction issued pursuant thereto are hereby SET ASIDE and the bond of [P]50,000.00 released. Furthermore, the Clerk of Court of the Regional Trial Court, Branch 7, Cebu City, is hereby directed to elevate the original records in Civil Case No. CEB-26274-SRC to the appellate court in accordance to the provision of the Revised Rules of Court.

The petitioner moved for partial reconsideration[15] but the motion was denied in a Resolution[16] dated May 6, 2008. Hence this appeal arguing, in the main, that: (a) the respondent committed forum-shopping because the issues involved in the dismissed indirect contempt case and the motion for appointment of a commissioner are the same — whether or not the petitioner disobeyed the writ of execution by submitting an allegedly erroneous 2002 financial statement, and; (b) the court handling the indirect contempt proceedings had the power to compel obedience to the writ of execution and as such, the trial court hearing CEB-26274-SRC is precluded from ruling on the same issue lest they arrive at divergent conclusions and sow havoc to judicial stability.[17]

We deny the appeal.

Forum shopping is the institution of two or more actions or proceedings involving the same parties for the same cause of action, either simultaneously or successively, on the supposition that one or the other court would make a favorable disposition. Forum shopping may be resorted to by a party against whom an adverse judgment or order has been issued in one forum, in an attempt to seek a favorable opinion in another, other than by appeal or a special civil action for certiorari.[18]

For forum-shopping to exist, there must be a concurrence of the requisites enumerated in Arevalo v. Planters Development Bank,[19] to wit:
"Forum-shopping exists when the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in another. Litis pendentia requires the concurrence of the following requisites: (1) identity of parties, or at least such parties as those representing the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and (3) identity with respect to the two preceding particulars in the two cases, such that any judgment that may be rendered in the pending case, regardless of which party is successful, would amount to res judicata in the other case."[20] (Citation omitted)
The facts of the present case do not show a confluence of the above elements. The cause of action, rights and reliefs involved in the indirect contempt case and in the herein motion for the appointment of a commissioner are not identical.

The indirect contempt case called for the exercise of the trial court's judicial discretion to determine whether the petitioner should be sanctioned for disregarding the writ of execution. The motion for the appointment of a commissioner, on the other hand, entreated the RTC to determine the propriety of appointing a commissioner to resolve the factual issue of whether the petitioner submitted a true and correct statement of its finances and earnings since 1996.

While both actions emanated from a similar act or transaction and involved the same parties, they entailed two different reliefs. The petition for indirect contempt was intended to compel the petitioner to faithfully comply with the writ of execution by submitting a truthful statement of its finances and earnings. Meanwhile, the motion for the appointment of a commissioner sought the exercise of the RTC's power to order trial before a commissioner of a factual issue that requires examination of a long account.

More importantly, the grant or denial of the motion for appointment of a commissioner did not amount to a res judicata in the indirect contempt case. As evident in the caption and material allegations, it is a mere motion, not an action; it is an auxiliary remedy that affords incidental relief to help achieve the purpose of the principal suit for accounting, declaration of dividends and specific performance. The ruling on such motion did not dictate the course of the proceedings or determine the merits of the indirect contempt case.

The apprehensions of the petitioner - that inconsistent rulings might result from the indirect contempt case and the motion for the appointment of a commissioner - are premature. Such a situation will result not from the grant or denial of the motion but rather from the report of the commissioner after reception of the parties' respective evidence, which event is yet to occur. The allegations proffered by the petitioner bear relevance only upon the submission of the commissioner's report against which the truthfulness of the financial statements it submitted will be tested.

Thus, absent any compelling reason to rule otherwise, the Court upholds the exercise of the RTC's discretion to appoint a commissioner as sanctioned by Rule 32, Section 2 of the Rules of Court which states:
When the parties do not consent, the court may, upon the application of either or of its own motion, direct a reference to a commissioner in the following cases:
(a) When the trial of an issue of fact requires the examination of a long account on either side, in which case the commissioner may be directed to hear and report upon the whole issue or any specific question involved therein;

(b) When the taking of an account is necessary for the information of the court before judgment, or for carrying a judgment or order into effect;

(c) When a question of fact, other than upon the pleadings, arises upon motion or otherwise, in any stage of a case, or for carrying a judgment or order into effect.
WHEREFORE, premises considered, the petition is hereby DENIED. The Decision dated November 22, 2007 of the Court of Appeals in CA-G.R. CEB-SP No. 85301 is AFFIRMED.


[1] Penned by Associate Justice Stephen C. Cruz with Associate Justices Antonio L. Villamor and Amy C. Lazaro-Javier, concurring; rollo, pp. 25-38.[2] Issued by Presiding Judge Simeon P. Dumdum, Jr; id. at 67-70.

[3] G.R. No. 165734, June 16, 2006, 491 SCRA 148.

[4] Id. at 150-151; CA Decision dated November 22, 2007, rollo, p. 26.

[5] Supra note 3, at 151-152.

[6] Id.

[7] Rollo, p. 28; supra note 3, at 153.

[8] Id.

[9] Supra note 3, at 168.

[10] Rollo, pp. 67-70.

[11] Id. at 30.

[12] Id.

[13] Id. at 25-38.

[14] Id. at 36-37.

[15] Id. at 39-45.

[16] Id. at 49-50.

[17] Id. at 6-23.

[18] Spouses dela Cruz v. Joaquin, 502 Phil. 803, 813 (2005).

[19] G. R. No. 193415, April 18, 2012, 670 SCRA 252.

[20] Id. at 264-265.

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