G.R. No. 190131, July 03, 2017
THIRD DIVISION
[ G.R. No. 190131, July 03, 2017 ]
SPOUSES ROLANDO M. ZOSA AND LUISA Y. ZOSA V. CHINATRUST [PHILIPPINES] COMMERCIAL BANK CORP. [NOW CTBC BANK (PHILIPPINES) CORP.], CHAILEASE FINANCE CORPORATION AND ATTY. JAIME PORTUGAL
Sirs/Mesdames:
Please take notice that the Court, Third Division, issued a
Resolution dated July 3, 2017, which reads
as follows:
"G.R. No. 190131 (Spouses Rolando M. Zosa and Luisa Y. Zosa v. Chinatrust [Philippines] Commercial Bank Corp. [now CTBC Bank (Philippines) Corp.], Chailease Finance Corporation and Atty. Jaime Portugal). - This is a petition for review on certiorari[1] under Rule 45 assailing the Decision[2] dated July 27, 2009 and Resolution[3] dated October 29, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 104047. The CA annulled and set aside the Orders dated October 22, 2007[4] and April 14, 2008 of Branch 157 of the Regional Trial Court (RTC) of Pasig City, denying herein respondents' motion to dismiss Civil Case No. 71042.[5]
On May 15, 1997, petitioners, spouses Rolando and Luisa
Zosa (petitioners), obtained a loan from respondent Chinatrust (Phils.)
Commercial Bank[6] (Chinatrust) in the amount of P55,000,000.00. To
secure the loan, they executed in favor of Chinatrust a real estate mortgage
over a parcel of land located in Barangay Ugong, Pasig City and covered by
Transfer Certificate of Title (TCT) No. 18718 (land).[7]
Petitioners reneged on their obligation to pay the loan. Consequently, Chinatrust filed a verified petition for the extrajudicial foreclosure of the mortgage with respondent Notary Public Jaime P. Portugal (Portugal). A notice of sale was issued, setting the auction sale of the land on September 28, 1999 at 10:00 a.m. at the entrance of the Pasig City Hall.[8]
On September 24, 1999 and prior to the holding of the auction sale, petitioners filed an action against Chinatrust and Portugal for injunction, specific performance, damages, and attorney's fees with the RTC. The case was docketed as Civil Case No. 67620.[9]
The auction sale proceeded. Respondent Chailease Finance Corporation (Chailease) emerged as the highest bidder in the auction sale. Thus, Portugal issued a certificate of sale in favor of Chailease.[10] Meanwhile, the RTC, on June 26, 2000, dismissed Civil Case No. 67620 due to petitioners' failure to prosecute.[11]
Subsequently, on July 5, 2000, the certificate of sale in favor of Chailease was registered with the Register of Deeds of Pasig City. TCT No. 18718 was cancelled and TCT No. PT-116372 was issued in the name of Chailease,which thereafter filed a petition for the issuance of a writ of possession with the RTC docketed as LRC Case No. R-6008.[12]
On January 28, 2001, petitioners filed a petition for certiorari before the CA assailing the Order of the RTC dismissing Civil Case No. 67620.[13] They also appealed the same order before the CA.[14] Both actions, however, did not prosper. The CA dismissed the petition for certiorari on June 22, 2001 and the appeal on May 16, 2002.[15] Petitioners subsequently filed a petition with this Court, docketed as G.R. No. 149984.
In the meantime, the RTC granted Chailease's petition for issuance of writ of possession in its Decision dated November 10, 2004. This Decision was later upheld by the CA[16] and this Court in Spouses Zosa v. Chailease Finance Corporation (G.R. No. 172285) on June 7, 2006[17] and September 4, 2006, respectively.[18]
On November 24, 2006, petitioners filed a petition for annulment of title and foreclosure sale against respondents before the RTC. This was docketed as Civil Case No. 71042.[19] Respondents moved for the dismissal of the case on the ground that petitioners are guilty of forum shopping and laches. According to respondents, the reliefs prayed for by petitioners were the same as those prayed for in Civil Case No. 67620, which was already dismissed with prejudice by the RTC.[20] Respondents further argued that "there are cases pending before the appellate courts involving the same parties, invoking identical rights and praying for exactly the same relief."[21] Even assuming petitioners may file the complaint, respondents argued that they failed to seasonably act which is tantamount to an abandonment of their right to do so. The RTC, however, denied respondents' motion in its Order[22] dated October 22, 2007. It agreed with petitioners that the two cases, namely
Civil Case Nos. 67620 and 71042, involve different causes of action praying for different remedies or reliefs. [23]
Respondents asked for reconsideration but the RTC did not yield.[24] Thus, respondents challenged the Orders of the RTC before the CA via a petition for certiorari.
Meanwhile, on November 28, 2008, we denied petitioners' subsequent petitions for review (G.R. No. 149984) assailing the CA decisions and resolutions in Civil Case No. 67620. We ruled that the petitions were duly dismissed by the CA since its successive filing, which assailed the same orders of the RTC, constituted forum shopping.[25]
Thereafter, the CA granted respondents' petition assailing the Order of the RTC in Civil Case No. 71042 in its Decision [26] dated July 27, 2009. The CA ruled:
However, the CA did not give credence to respondents' contention that petitioners violated the rule on certification of forum shopping since the latter indicated the pendency of the cases concerning G.R. No. 149984 before us.[30] Likewise, the CA did not agree with petitioners' claim that respondents committed forum shopping. [31]
Petitioners moved for reconsideration which the CA denied on October 29, 2009.[32] Thus, this petition.
The issues presented are:
An order denying a motion to dismiss is interlocutory since it does not terminate or finally dispose of the case. As such, it generally cannot be assailed in a special civil action for certiorari[33] The exception is when the denial was tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.[34]
In Villarica Pawnshop, Inc. v. Gernale,[35] we ruled that the refusal of the RTC to grant a motion to dismiss on the ground of litis pendentia, which was found to be present in the case, constituted grave abuse of discretion.[36] Hence, if there is litis pendentia inthis case, the denial of respondents' motion to dismiss on such ground can be assailed in a petition for certiorari as there is grave abuse of discretion on the part of the RTC.
Litis pendentia, which is also referred to as Lis pendens or auter action pendant,[37] exists when two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious.[38] Its requisites are: 1) identity of parties or at least such as represent the same interest in both actions; 2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and 3) identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other.[39]
Petitioners contend that there is no litis pendentia on account of the pendency of G.R. No. 149984 (involving the review of the orders in Civil Case No. 67620) at the time the RTC resolved the motion to dismiss filed in Civil Case No. 71042. They argue that the first requisite is lacking since Chailease was not a party in Civil Case No. 67620, the derivative case of G.R. No. 149984. They further argue that the failure of the CA to discuss Chailease's interest in Civil Case No. 71042 shows that there is no identity of parties between G.R. No. 149984 and Civil Case No. 71042.[40]
Petitioners' understanding of the first requisite is erroneous. Absolute identity of parties is not required.[41] Substantial identity, which is a community of interest between a party in the first case and a party in the second case albeit the latter was not impleaded in the first case, will suffice.[42] There is also identity of parties when there is privity between the parties, or they are successors-in-interest by title subsequent to the commencement of the action litigating for the same thing and under the same title and in the same capacity.[43]
Chailease was not a party to Civil Case No. 67620, the derivative case of G.R. No. 149984, which was an action for injunction, specific performance, damages, and attorney's fees. In fact, it was impossible for Chailease to be included in the complaint in said case since the auction sale had not yet taken place at the time. Nonetheless, there is a community of interests among the respondents.[44] Chailease's interest cannot be isolated from that of Chinatrust and Portugal's. Chailease's interest as the purchaser of the land will be adversely affected, to say the least, if there is an unfavorable ruling against Chinatrust and Portugal. If the foreclosure and auction sale are declared void, then Chailease will inevitably lose its title to the land. Therefore, it can be said that respondents share the same interest, which is primarily the validity of the foreclosure and auction sale. That being the case, there is an identity of parties in Civil Case Nos. 67620 and 71042 though Chailease was not a party in Civil Case No. 67620 and/or G.R. No. 149984.
As for the second requisite, petitioners argue that G.R. No. 149984 and Civil Case No.71042 are not one and the same. The first concerns a case filed to stop and/or enjoin the auction sale while the second one was filed to annul it and its effects. The grounds raised by petitioners against respondents in Civil Case No. 71042 only occurred after the auction sale had taken place. Petitioners also emphasize that they only followed the procedure laid down in Sagarbarria v. Philippine Business Bank [45] (Sagarbarria), which is to file a petition under Section 8[46] of Act No. 3135.[47]
We find, however, that the reliefs prayed for by petitioners in G.R. No. 149984 and Civil Case No. 71042 show significantly substantive similarities. G.R. No. 149984, which appeals the dismissal of Civil Case No. 67620, essentially seeks the following reliefs:
The fact that petitioners assailed the jurisdiction of the RTC in issuing the writ of possession only in Civil Case No. 71042, and that there were variances in the amounts and damages prayed for, do not create a significant disparity between the two cases that would bar application of the second requisite of litis pendentia. The crux of the matter in both cases remains the same; that is, whether or not the foreclosure and subsequent foreclosure sale were proper. In fact, the question about the issuance of the writ of possession should not be dealt with in this case given that its validity was already upheld by this Court in G.R. No. 172285.[54]
The third requisite has also been met in this case. Petitioners raised substantially the same grounds in both cases; a ruling in one would inevitably bar judgment in the other. Since there was no declaration by the court to the contrary, the dismissal of Civil Case No. 67620 due to petitioners' failure to prosecute is considered a judgment on the merits based on Section 3, Rule 17 of the Rules of Court.[55] Hence, the issues raised in Civil Case No. 67620, such as whether the loan was already due and demandable, can no longer be raised again in Civil Case No. 71042. To do so would be a clear case of res judicata, one aspect of which is "bar by prior judgment." There is "bar by prior judgment" when, as between the first case in which the judgment has been rendered and the second case that is sought to be barred, there is an identity of parties, subject matter, and causes of action. The judgment in the first case constitutes an absolute bar to the second action. The judgment or decree on the merits of the court of competent jurisdiction concludes the litigation between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action before same or any other tribunal.[56]
Considering that all the requisites of litis pendentia are present at the time that respondents moved for the dismissal of Civil Case No. 71042, it behooved the RTC to dismiss the petition on the ground of forum shopping. Its failure to do so constitutes grave abuse of discretion amounting to lack or excess of jurisdiction, which was rightfully assailed by respondents via a petition for certiorari.
Respondents' submission of their answer in the RTC cannot be considered a waiver of their right to question the denial of their motion to dismiss. It was necessary for respondents to file their answer. Otherwise, they would have been declared in default by the RTC.[57]
Petitioners extensively quote our ruling in Sagarbarria.[58] In said case, the petitioner therein filed a complaint to annul the real estate mortgage and prevent the foreclosure of his property. While the annulment case was pending, respondent mortgagee withdrew its application for extrajudicial foreclosure. However, it subsequently revived its application, foreclosed on the property and petitioned for the issuance of writ of possession.[59] When the writ was granted, petitioner assailed its issuance before the CA via a petition for certiorari.[60] The CA dismissed the petition, thus prompting petitioner to assail the ruling before us.[61] We upheld the ruling of the CA.[62] Petitioners herein give weight to the following statement we made in Sagarbarria:
WHEREFORE, the petition is DENIED. The July 27, 2009 Decision and October 29, 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 104047 are hereby AFFIRMED.
SO ORDERED."
[1] Rollo, pp. 12-45.
[2] Penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Martin S. Villarama, Jr. (later a member of this Court) and Jose C. Reyes, Jr.; id. at 46-59.
[3] Id. at 60-62.
[4] Id. at 87-89; issued by Judge Esperanza Fabon-Victorino.
[5] Id. at 46-47.
[6] Renamed to CTBC Bank (Philippines) Corp. as per its Certificate of Amended Articles of Incorporation dated September 19, 2013; id. at 253.
[7] Id. at 47.
[8] Id.
[9] Rollo, p. 49.
[10] Id. at 47.
[11] Zosa v. Estrella, G.R. No. 149984, November 28, 2008, 572 SCRA 428, 430.
[12] Rollo, pp.47-48.
[13] Zosa v. Estrella, supra at 431.
[14] Rollo, p. 49.
[15] Id. at 49-50.
[16] Id. at 48.
[17] CA rollo, p. 101.
[18] Id. at 102.
[19] Rollo, p. 48.
[20] Id. at87-88.
[21] Id. at 88.
[22] Id. at 87-89.
[23] Id. at 89.
[24] Id. at 50.
[25] Zosa v. Estrella, supra at 433-435.
[26] Rollo, pp. 46-59.
[27] Id. at 58.
[28] Id. at 54-55.
[29] Id. at 56-57.
[30] Id. at 52-53.
[31] Id. at 57.
[32] Id. at 60-62.
[33] Davao Light & Power Co., Inc. v. Judge, Regional Trial Court, Davao City, Br. 8,G.R. No. 147058, March 10, 2006, 484 SCRA 272, 280.
[34]Global Business Holdings, Inc. v. Surecomp Software, B.V.,G.R. No. 173463, October 13, 2010, 633 SCRA 94, 102.
[35] G.R. No. 163344, March 20, 2009, 582 SCRA 67.
[36] Id. at 81.
[37] Dotmatrix Trading v. Legaspi, G.R. No. 155622, October 26, 2009, 604 SCRA 431, 436.
[38] Ferrer, Jr. v. Bavtisla, G.R. No. 210551, June 30, 2015, 760 SCRA 652, 679-681, citing Film Development Council of the Philippines v. SM Prime Holdings, Inc., G.R. No. 197937, April 3, 2013, 695 SCRA 175, 185-188.
[39] Yu v. Philippine Commercial International Bank, G.R. No. 147902, March 17, 2006, 485 SCRA 56, 71.
[40] Rollo, pp. 31-32.
[41] Marasigan v. Chevron Phils., Inc., G.R. No 184015, February 8, 2012, 665 SCRA 499, 512.
[42] Ferrer, Jr. v. Bautista, supra at 681.
[43] Chu v. Cunanan, G.R. No. 156185, September 12, 2011, 657 SCRA 379, 392.
[44] See Sempio v. Court of Appeals, G.R. No. 124326, January 22, 1998, 284 SCRA 580, 587-588.
[45] G.R. No. 178330, July 23, 2009, 593 SCRA 645.
[46] Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.
[47] An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real-Estate Mortgages (1924).
[48] Rollo, p. 82.
[49] Id. at 71.
[50] See FCD Pawnshop and Merchandising Companyv. Union Bank of the Philippines, G.R. No. 207914, January 18, 2017 and Pilipino Telephone Corporation v. Radiomarine Network, Inc., G.R. No. 152092, August 4, 2010, 626 SCRA 702.
[51] Rollo, pp. 66-68, 78-79.
[52] Id. at 68, 80.
[53] Id. at 69,77.
[54] CA rollo, pp. 101-102.
[55] Sec. 3. Dismissal due to fault of plaintiff.- If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. The dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
[56] Eulogio v. Bell, Sr., G.R. No. 186322, July 8, 2015, 762 SCRA 103, 115-116.
[57] See Allied Banking Corporation v. Court of Appeals, G.R. No. 95223, July 26, 1996, 259 SCRA 371, 379.
[58] G.R. No. 178330, July 23, 2009, 593 SCRA 645.
[59] Id. at 648.
[60] Id. at 649.
[61] Id. at 650.
[62] Id. at 655.
[63] Id. at 650-651.
[64] Id. at 653-655.
"G.R. No. 190131 (Spouses Rolando M. Zosa and Luisa Y. Zosa v. Chinatrust [Philippines] Commercial Bank Corp. [now CTBC Bank (Philippines) Corp.], Chailease Finance Corporation and Atty. Jaime Portugal). - This is a petition for review on certiorari[1] under Rule 45 assailing the Decision[2] dated July 27, 2009 and Resolution[3] dated October 29, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 104047. The CA annulled and set aside the Orders dated October 22, 2007[4] and April 14, 2008 of Branch 157 of the Regional Trial Court (RTC) of Pasig City, denying herein respondents' motion to dismiss Civil Case No. 71042.[5]
On May 15, 1997, petitioners, spouses Rolando and Luisa
Zosa (petitioners), obtained a loan from respondent Chinatrust (Phils.)
Commercial Bank[6] (Chinatrust) in the amount of P55,000,000.00. To
secure the loan, they executed in favor of Chinatrust a real estate mortgage
over a parcel of land located in Barangay Ugong, Pasig City and covered by
Transfer Certificate of Title (TCT) No. 18718 (land).[7]Petitioners reneged on their obligation to pay the loan. Consequently, Chinatrust filed a verified petition for the extrajudicial foreclosure of the mortgage with respondent Notary Public Jaime P. Portugal (Portugal). A notice of sale was issued, setting the auction sale of the land on September 28, 1999 at 10:00 a.m. at the entrance of the Pasig City Hall.[8]
On September 24, 1999 and prior to the holding of the auction sale, petitioners filed an action against Chinatrust and Portugal for injunction, specific performance, damages, and attorney's fees with the RTC. The case was docketed as Civil Case No. 67620.[9]
The auction sale proceeded. Respondent Chailease Finance Corporation (Chailease) emerged as the highest bidder in the auction sale. Thus, Portugal issued a certificate of sale in favor of Chailease.[10] Meanwhile, the RTC, on June 26, 2000, dismissed Civil Case No. 67620 due to petitioners' failure to prosecute.[11]
Subsequently, on July 5, 2000, the certificate of sale in favor of Chailease was registered with the Register of Deeds of Pasig City. TCT No. 18718 was cancelled and TCT No. PT-116372 was issued in the name of Chailease,which thereafter filed a petition for the issuance of a writ of possession with the RTC docketed as LRC Case No. R-6008.[12]
On January 28, 2001, petitioners filed a petition for certiorari before the CA assailing the Order of the RTC dismissing Civil Case No. 67620.[13] They also appealed the same order before the CA.[14] Both actions, however, did not prosper. The CA dismissed the petition for certiorari on June 22, 2001 and the appeal on May 16, 2002.[15] Petitioners subsequently filed a petition with this Court, docketed as G.R. No. 149984.
In the meantime, the RTC granted Chailease's petition for issuance of writ of possession in its Decision dated November 10, 2004. This Decision was later upheld by the CA[16] and this Court in Spouses Zosa v. Chailease Finance Corporation (G.R. No. 172285) on June 7, 2006[17] and September 4, 2006, respectively.[18]
On November 24, 2006, petitioners filed a petition for annulment of title and foreclosure sale against respondents before the RTC. This was docketed as Civil Case No. 71042.[19] Respondents moved for the dismissal of the case on the ground that petitioners are guilty of forum shopping and laches. According to respondents, the reliefs prayed for by petitioners were the same as those prayed for in Civil Case No. 67620, which was already dismissed with prejudice by the RTC.[20] Respondents further argued that "there are cases pending before the appellate courts involving the same parties, invoking identical rights and praying for exactly the same relief."[21] Even assuming petitioners may file the complaint, respondents argued that they failed to seasonably act which is tantamount to an abandonment of their right to do so. The RTC, however, denied respondents' motion in its Order[22] dated October 22, 2007. It agreed with petitioners that the two cases, namely
Civil Case Nos. 67620 and 71042, involve different causes of action praying for different remedies or reliefs. [23]
Respondents asked for reconsideration but the RTC did not yield.[24] Thus, respondents challenged the Orders of the RTC before the CA via a petition for certiorari.
Meanwhile, on November 28, 2008, we denied petitioners' subsequent petitions for review (G.R. No. 149984) assailing the CA decisions and resolutions in Civil Case No. 67620. We ruled that the petitions were duly dismissed by the CA since its successive filing, which assailed the same orders of the RTC, constituted forum shopping.[25]
Thereafter, the CA granted respondents' petition assailing the Order of the RTC in Civil Case No. 71042 in its Decision [26] dated July 27, 2009. The CA ruled:
WHEREFORE,the petition is GRANTED. The assailed order(s) of the Regional Trial Court of Pasig City, Br. 157, in Civil Case No. 71.042, are ANNULLED and SET ASIDE and the complaint of Spouses Rolando M. Zosa and Luisa Y. Zosa is DISMISSED. No costs.The CA found all the requisites of litis pendentia present in the case. First, there is an identity of parties in G.R. No. 149984 and Civil Case No. 71042. While Chailease was added as a defendant in Civil Case No. 71042, the interest represented remained the same. Second, there is an identity of causes of action or reliefs sought. Ultimately, petitioners sought the declaration of the foreclosure of the land as illegal. Petitioners' prayers for the award of damages and the permanent injunction on the foreclosure of the land and the auction sale were merely incidental to the main relief sought.[28]Third, a judgment in either case will be a bar to the other action since they involve the same pieces of evidence.[29] Therefore, a dismissal of petitioners' complaint was warranted.
SO ORDERED.[27] (Emphasis in the original.)
However, the CA did not give credence to respondents' contention that petitioners violated the rule on certification of forum shopping since the latter indicated the pendency of the cases concerning G.R. No. 149984 before us.[30] Likewise, the CA did not agree with petitioners' claim that respondents committed forum shopping. [31]
Petitioners moved for reconsideration which the CA denied on October 29, 2009.[32] Thus, this petition.
The issues presented are:
-
Whether the CA could take cognizance of respondents' petition.
- Whether Civil Case No. 71042 should be dismissed on the ground of litis pendentia.
I.
An order denying a motion to dismiss is interlocutory since it does not terminate or finally dispose of the case. As such, it generally cannot be assailed in a special civil action for certiorari[33] The exception is when the denial was tainted with grave abuse of discretion amounting to lack or excess of jurisdiction.[34]
In Villarica Pawnshop, Inc. v. Gernale,[35] we ruled that the refusal of the RTC to grant a motion to dismiss on the ground of litis pendentia, which was found to be present in the case, constituted grave abuse of discretion.[36] Hence, if there is litis pendentia inthis case, the denial of respondents' motion to dismiss on such ground can be assailed in a petition for certiorari as there is grave abuse of discretion on the part of the RTC.
II.
Litis pendentia, which is also referred to as Lis pendens or auter action pendant,[37] exists when two actions are pending between the same parties for the same cause of action, so that one of them becomes unnecessary and vexatious.[38] Its requisites are: 1) identity of parties or at least such as represent the same interest in both actions; 2) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and 3) identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other.[39]
Petitioners contend that there is no litis pendentia on account of the pendency of G.R. No. 149984 (involving the review of the orders in Civil Case No. 67620) at the time the RTC resolved the motion to dismiss filed in Civil Case No. 71042. They argue that the first requisite is lacking since Chailease was not a party in Civil Case No. 67620, the derivative case of G.R. No. 149984. They further argue that the failure of the CA to discuss Chailease's interest in Civil Case No. 71042 shows that there is no identity of parties between G.R. No. 149984 and Civil Case No. 71042.[40]
Petitioners' understanding of the first requisite is erroneous. Absolute identity of parties is not required.[41] Substantial identity, which is a community of interest between a party in the first case and a party in the second case albeit the latter was not impleaded in the first case, will suffice.[42] There is also identity of parties when there is privity between the parties, or they are successors-in-interest by title subsequent to the commencement of the action litigating for the same thing and under the same title and in the same capacity.[43]
Chailease was not a party to Civil Case No. 67620, the derivative case of G.R. No. 149984, which was an action for injunction, specific performance, damages, and attorney's fees. In fact, it was impossible for Chailease to be included in the complaint in said case since the auction sale had not yet taken place at the time. Nonetheless, there is a community of interests among the respondents.[44] Chailease's interest cannot be isolated from that of Chinatrust and Portugal's. Chailease's interest as the purchaser of the land will be adversely affected, to say the least, if there is an unfavorable ruling against Chinatrust and Portugal. If the foreclosure and auction sale are declared void, then Chailease will inevitably lose its title to the land. Therefore, it can be said that respondents share the same interest, which is primarily the validity of the foreclosure and auction sale. That being the case, there is an identity of parties in Civil Case Nos. 67620 and 71042 though Chailease was not a party in Civil Case No. 67620 and/or G.R. No. 149984.
As for the second requisite, petitioners argue that G.R. No. 149984 and Civil Case No.71042 are not one and the same. The first concerns a case filed to stop and/or enjoin the auction sale while the second one was filed to annul it and its effects. The grounds raised by petitioners against respondents in Civil Case No. 71042 only occurred after the auction sale had taken place. Petitioners also emphasize that they only followed the procedure laid down in Sagarbarria v. Philippine Business Bank [45] (Sagarbarria), which is to file a petition under Section 8[46] of Act No. 3135.[47]
We find, however, that the reliefs prayed for by petitioners in G.R. No. 149984 and Civil Case No. 71042 show significantly substantive similarities. G.R. No. 149984, which appeals the dismissal of Civil Case No. 67620, essentially seeks the following reliefs:
Whereas in Civil Case No. 71042, petitioners prayed for the following reliefs:
- A restraining order be forthwith issued by this Honorable Court restraining defendants from proceeding with the extra-judicial foreclosure sale of the plaintiffs' property set for September 28, 1999 at 10:00 A.M. at the entrance of the Municipal Hall of Pasig City[;
- After due hearing and upon approval of the bond mentioned in paragraph 24 above, a writ of preliminary injunction be issued restraining defendants from proceeding with the extra-judicial foreclosure sale of plaintiffs' property as mentioned above until final termination of this case[;]
- After trial on the merits, a judgment be rendered:
PLAINTIFFS likewise pray for such further reliefs which may be deemed just and equitable in the premises.[48]
- Declaring the acts of defendants of foreclosing the property and setting the same for Auction Sale illegal, and permanently enjoining the same;
- Ordering defendant Chinatrust (Phils.) Commercial Bank Corporation to pay plaintiffs [PhP ]50,000.00 as actual damages, [PhP ]200,000.00 as moral damages, and [PhP ] 100,000.00 as attorney's fees and litigation expenses.
1. To declare the following null and void, to wit:It is immediately apparent that in both cases, petitioners principally question the propriety of the foreclosure and auction sale. We find that petitioners raised substantially the same arguments in both cases.[50]First, petitioners averred in both cases that the petition should have been filed with the Executive Judge, through the Clerk of Court. Further, due to the non payment of filing fees, Portugal had no jurisdiction to proceed with the auction sale.[51]Second, the notice and posting requirements under Administrative Order No. 3 were not observed.[52]Third, the loan was not yet due and demandable as Chinatrust agreed to a dacion en pago arrangement with petitioners and a restructuring of their reduced balance.[53] Therefore, without an iota of doubt, there is an identity of rights asserted and reliefs prayed for in this case.
a. The extrajudicial foreclosure of mortgage on parcel of land, Lot 10, Block 5 of the subd. Plan (LRC) Psd-222576 situated in Ugong, Pasig City, with an area of 1,000 square meters, more or less, now covered by TCT No. PT-116372 in the name of respondent Chailease Finance Corporation and previously covered by TCT No. 18718 in the name of petitioners, conducted by respondent Notary Public Jaime Portugal on [September 28,] 1999; and b. The Transfer Certificate of Title No. PT-116372 in the name of respondent Chailease Finance Corporation; and
2. To issue an order reinstating Transfer Certificate of Title No. 18718 in the name of petitioners Rolando M. Zosa and Luisa Y. Zosa;
3. To cancel the writ of possession issued by the Honorable Court, Branch 268 in LRC Case No. R-6008[; and]
4. To order respondents to jointly and solidarity pay [petitioner] the following:
Other reliefs just and equitable [under] the premises are also prayed for. [49] (Emphasis in the original.)
- [P]500,000.00 for and as attorneys fees[;]
- [P] 1,500,000.00 actual and other expenses[;]
- [P]2,500,000.00 as moral damages[; and]
- [P]500,000.00 as exemplary damages[.]
The fact that petitioners assailed the jurisdiction of the RTC in issuing the writ of possession only in Civil Case No. 71042, and that there were variances in the amounts and damages prayed for, do not create a significant disparity between the two cases that would bar application of the second requisite of litis pendentia. The crux of the matter in both cases remains the same; that is, whether or not the foreclosure and subsequent foreclosure sale were proper. In fact, the question about the issuance of the writ of possession should not be dealt with in this case given that its validity was already upheld by this Court in G.R. No. 172285.[54]
The third requisite has also been met in this case. Petitioners raised substantially the same grounds in both cases; a ruling in one would inevitably bar judgment in the other. Since there was no declaration by the court to the contrary, the dismissal of Civil Case No. 67620 due to petitioners' failure to prosecute is considered a judgment on the merits based on Section 3, Rule 17 of the Rules of Court.[55] Hence, the issues raised in Civil Case No. 67620, such as whether the loan was already due and demandable, can no longer be raised again in Civil Case No. 71042. To do so would be a clear case of res judicata, one aspect of which is "bar by prior judgment." There is "bar by prior judgment" when, as between the first case in which the judgment has been rendered and the second case that is sought to be barred, there is an identity of parties, subject matter, and causes of action. The judgment in the first case constitutes an absolute bar to the second action. The judgment or decree on the merits of the court of competent jurisdiction concludes the litigation between the parties, as well as their privies, and constitutes a bar to a new action or suit involving the same cause of action before same or any other tribunal.[56]
Considering that all the requisites of litis pendentia are present at the time that respondents moved for the dismissal of Civil Case No. 71042, it behooved the RTC to dismiss the petition on the ground of forum shopping. Its failure to do so constitutes grave abuse of discretion amounting to lack or excess of jurisdiction, which was rightfully assailed by respondents via a petition for certiorari.
Respondents' submission of their answer in the RTC cannot be considered a waiver of their right to question the denial of their motion to dismiss. It was necessary for respondents to file their answer. Otherwise, they would have been declared in default by the RTC.[57]
Petitioners extensively quote our ruling in Sagarbarria.[58] In said case, the petitioner therein filed a complaint to annul the real estate mortgage and prevent the foreclosure of his property. While the annulment case was pending, respondent mortgagee withdrew its application for extrajudicial foreclosure. However, it subsequently revived its application, foreclosed on the property and petitioned for the issuance of writ of possession.[59] When the writ was granted, petitioner assailed its issuance before the CA via a petition for certiorari.[60] The CA dismissed the petition, thus prompting petitioner to assail the ruling before us.[61] We upheld the ruling of the CA.[62] Petitioners herein give weight to the following statement we made in Sagarbarria:
Finally, [the CA] ruled that certiorari is not a proper remedy because Section 8 of Act No. 3135 provides for an adequate remedy against an invalid or irregular foreclosure. Hence, petitioner should have filed a petition under Section 8 of Act No. 3135, and in case of an adverse ruling, an appeal from the said adverse decision.Petitioners posit that they merely pursued the right remedy in instituting Civil Case No. 71042, a petition for the annulment of title, despite previously instituting Civil Case No. 67620, an action for injunction. This, however, does not aid their cause. In Sagarbarria, the lower tribunal did not, as in this case, act without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction. We held that in the first place, there is no discretion involved in the issuance of the order of the writ since it is the ministerial duty of the RTC.[64] Thus, the proper remedy was to appeal the order granting the writ of possession. The same cannot be said in this case. What is involved here is not an error of judgment but an error of jurisdiction on the part of the RTC.
The rule is explicit that certiorari may only be allowed where there is no appeal or any plain, speedy, and adequate remedy in the ordinary course of law. xxx[63]
WHEREFORE, the petition is DENIED. The July 27, 2009 Decision and October 29, 2009 Resolution of the Court of Appeals in CA-G.R. SP No. 104047 are hereby AFFIRMED.
SO ORDERED."
Very truly yours,
(Sgd.) WILFREDO V. LAPITAN
Division Clerk of Court
(Sgd.) WILFREDO V. LAPITAN
Division Clerk of Court
[1] Rollo, pp. 12-45.
[2] Penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Martin S. Villarama, Jr. (later a member of this Court) and Jose C. Reyes, Jr.; id. at 46-59.
[3] Id. at 60-62.
[4] Id. at 87-89; issued by Judge Esperanza Fabon-Victorino.
[5] Id. at 46-47.
[6] Renamed to CTBC Bank (Philippines) Corp. as per its Certificate of Amended Articles of Incorporation dated September 19, 2013; id. at 253.
[7] Id. at 47.
[8] Id.
[9] Rollo, p. 49.
[10] Id. at 47.
[11] Zosa v. Estrella, G.R. No. 149984, November 28, 2008, 572 SCRA 428, 430.
[12] Rollo, pp.47-48.
[13] Zosa v. Estrella, supra at 431.
[14] Rollo, p. 49.
[15] Id. at 49-50.
[16] Id. at 48.
[17] CA rollo, p. 101.
[18] Id. at 102.
[19] Rollo, p. 48.
[20] Id. at87-88.
[21] Id. at 88.
[22] Id. at 87-89.
[23] Id. at 89.
[24] Id. at 50.
[25] Zosa v. Estrella, supra at 433-435.
[26] Rollo, pp. 46-59.
[27] Id. at 58.
[28] Id. at 54-55.
[29] Id. at 56-57.
[30] Id. at 52-53.
[31] Id. at 57.
[32] Id. at 60-62.
[33] Davao Light & Power Co., Inc. v. Judge, Regional Trial Court, Davao City, Br. 8,G.R. No. 147058, March 10, 2006, 484 SCRA 272, 280.
[34]Global Business Holdings, Inc. v. Surecomp Software, B.V.,G.R. No. 173463, October 13, 2010, 633 SCRA 94, 102.
[35] G.R. No. 163344, March 20, 2009, 582 SCRA 67.
[36] Id. at 81.
[37] Dotmatrix Trading v. Legaspi, G.R. No. 155622, October 26, 2009, 604 SCRA 431, 436.
[38] Ferrer, Jr. v. Bavtisla, G.R. No. 210551, June 30, 2015, 760 SCRA 652, 679-681, citing Film Development Council of the Philippines v. SM Prime Holdings, Inc., G.R. No. 197937, April 3, 2013, 695 SCRA 175, 185-188.
[39] Yu v. Philippine Commercial International Bank, G.R. No. 147902, March 17, 2006, 485 SCRA 56, 71.
[40] Rollo, pp. 31-32.
[41] Marasigan v. Chevron Phils., Inc., G.R. No 184015, February 8, 2012, 665 SCRA 499, 512.
[42] Ferrer, Jr. v. Bautista, supra at 681.
[43] Chu v. Cunanan, G.R. No. 156185, September 12, 2011, 657 SCRA 379, 392.
[44] See Sempio v. Court of Appeals, G.R. No. 124326, January 22, 1998, 284 SCRA 580, 587-588.
[45] G.R. No. 178330, July 23, 2009, 593 SCRA 645.
[46] Sec. 8. The debtor may, in the proceedings in which possession was requested, but not later than thirty days after the purchaser was given possession, petition that the sale be set aside and the writ of possession cancelled, specifying the damages suffered by him, because the mortgage was not violated or the sale was not made in accordance with the provisions hereof, and the court shall take cognizance of this petition in accordance with the summary procedure provided for in section one hundred and twelve of Act Numbered Four hundred and ninety-six; and if it finds the complaint of the debtor justified, it shall dispose in his favor of all or part of the bond furnished by the person who obtained possession. Either of the parties may appeal from the order of the judge in accordance with section fourteen of Act Numbered Four hundred and ninety-six; but the order of possession shall continue in effect during the pendency of the appeal.
[47] An Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to Real-Estate Mortgages (1924).
[48] Rollo, p. 82.
[49] Id. at 71.
[50] See FCD Pawnshop and Merchandising Companyv. Union Bank of the Philippines, G.R. No. 207914, January 18, 2017 and Pilipino Telephone Corporation v. Radiomarine Network, Inc., G.R. No. 152092, August 4, 2010, 626 SCRA 702.
[51] Rollo, pp. 66-68, 78-79.
[52] Id. at 68, 80.
[53] Id. at 69,77.
[54] CA rollo, pp. 101-102.
[55] Sec. 3. Dismissal due to fault of plaintiff.- If, for no justifiable cause, the plaintiff fails to appear on the date of the presentation of his evidence in chief on the complaint, or to prosecute his action for an unreasonable length of time, or to comply with these Rules or any order of the court, the complaint may be dismissed upon motion of the defendant or upon the court's own motion, without prejudice to the right of the defendant to prosecute his counterclaim in the same or in a separate action. The dismissal shall have the effect of an adjudication upon the merits, unless otherwise declared by the court.
[56] Eulogio v. Bell, Sr., G.R. No. 186322, July 8, 2015, 762 SCRA 103, 115-116.
[57] See Allied Banking Corporation v. Court of Appeals, G.R. No. 95223, July 26, 1996, 259 SCRA 371, 379.
[58] G.R. No. 178330, July 23, 2009, 593 SCRA 645.
[59] Id. at 648.
[60] Id. at 649.
[61] Id. at 650.
[62] Id. at 655.
[63] Id. at 650-651.
[64] Id. at 653-655.
