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First Philippines International Bank vs. C.A. [G.R. No. 115849. January 24, 1996]

16 Oct

Ponente: PANGANIBAN, J.

FACTS:

[D]uring the pendency of the proceedings in the Court of Appeals, Henry Co and several other stockholders of the Bank (petitioner), through counsel Angara Abello Concepcion Regala and Cruz, filed an action (Second Case) purportedly a “derivative suit” with the Regional Trial Court of Makati, Branch 134 against Encarnacion, Demetria and Janolo “to declare any perfected sale of the property as unenforceable and to stop Ejercito from enforcing or implementing the sale. In his answer, Janolo argued that the Second Case was barred by litis pendentia by virtue of the case then pending in the Court of Appeals. During the pre-trial conference in the Second Case, plaintiffs filed a Motion for Leave of Court to Dismiss the Case Without Prejudice. Private respondent opposed this motion on the ground, among others, that plaintiff’s act of forum shopping justifies the dismissal of both cases, with prejudice. Private respondent, in his memorandum, averred that this motion is still pending in the Makati RTC.

[P]etitioners explain that there is no forum-shopping because:

1)    In the earlier or “First Case” from which this proceeding arose, the Bank was impleaded as a defendant, whereas in the “Second Case” (assuming the Bank is the real party in interest in a derivative suit), it was the plaintiff;

x x x

ISSUE:

Whether or not there is forum-shopping on the part of petitioner Bank.

HELD:

YES. Petition was denied. Assailed decision was affirmed. Petitioner was reprimanded. Costs against the petitioner.

RATIO:

[W]here a litigant (or one representing the same interest or person) sues the same party against whom another action or actions for the alleged violation of the same right and the enforcement of the same relief is/are still pending, the defense of litis pendencia in one case is a bar to the others; and, a final judgment in one would constitute res judicata and thus would cause the dismissal of the rest. In either case, forum shopping could be cited by the other party as a ground to ask for summary dismissal of the two (or more) complaints or petitions, and for the imposition of the other sanctions, which are direct contempt of court, criminal prosecution, and disciplinary action against the erring lawyer.

[W]hat is truly important to consider in determining whether forum-shopping exists or not is the vexation caused the courts and parties-litigant by a party who asks different courts and/or administrative agencies to rule on the same or related causes and/or to grant the same or substantially the same reliefs, in the process creating the possibility of conflicting decisions being rendered by the different fora upon the same issue. In this case, this is exactly the problem: a decision recognizing the perfection and directing the enforcement of the contract of sale will directly conflict with a possible decision in the Second Case barring the parties from enforcing or implementing the said sale. Indeed, a final decision in one would constitute res judicata in the other.

 
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Posted by on October 16, 2012 in Case Digests, Legal Ethics

 

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