Goodland Company, Inc. vs.

Asia United Bank

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

Facts:
Goodland Company mortgaged its two parcels of land situated in Sta.
Rosa, Laguna through a Third Party Real Estate Mortgage (REM) with
Smartnet to secure the loans extended by Asia United Bank (AUB). Petitioner
also executed another REM for its Makati properties. Both the REMs were
signed by its President Gilbert Guy. AUB registered the mortgages with the
Registry of Deed at the concerned properties. Afterwards, Goodland
repudiated the REMs. Hence, Goodland filed a complaint for annulment of
mortgage before the RTC of Bian, Laguna on the ground that the REM was
falsified and against the agreement that the blank mortgage would only
serve as a comfort document and not to be registered by AUB.
Smartnet defaulted on its loan obligation which prompted AUB to
extra-judicially foreclose the REM and then was issued a Certificate of Sale
registered with the Registry of Deeds. Goodland filed another case seeking
for the annulment of the foreclosure sale and enjoin consolidation of the title
in favor of AUB. AUB moved to dismiss both the cases filed by Goodland on
the ground of forum shopping and litis pendentia. It was granted. On appeal,
the decision of the RTC were reversed. As to the Makati properties, the same
case was filed by Goodland including the President of AUB and the notarizing
lawyer whose signature was falsified. The same was contradicted by AUB but
this time, the motion to dismiss on the ground of forum shopping, nonpayment of proper docket fees, and litis pendentia were denied. AUB argued
that there was no service of summons, thus the court never acquired
jurisdiction over the persons of the respondents. On appeal, the CA held
Goodland guilty of forum shopping for failing to inform AUB of the other case
filed while the case on the REM is pending.
Issue:
Is Goodland Company guilty of forum shopping?
Ruling:
Yes. All the elements of forum shopping are present in this case. There
is forum shopping when the following elements are present:
a. identity of parties, or at least such parties as represent the same
interests in both actions;

b. identity of rights asserted and relief prayed for, the relief being
founded on the same facts; and
c. the identity of the two preceding particulars such that any judgment
rendered in the other action will, regardless of which party is
successful, amount to res judicata in the action under consideration.
There can be no dispute that the prayer for relief in the two cases was
based on the same attendant facts in the execution of REMs over petitioners
properties in favor of AUB. While the extrajudicial foreclosure of mortgage,
consolidation of ownership in AUB and issuance of title in the latters name
were set forth only in the second case, these were simply the expected
consequences of the REM transaction in the first case. There is also identity
of parties. The parties in the first and second case are substantially the same
as they represent the same interest and offices. Goodlands argument that
the certification and verification appended to its complaint satisfactorily
conforms with the requirements of the required certificate of non-forum
shopping. However, the Supreme Court disagrees. Goodland filed a
certificate which is partly false and misleading.
The elements of litis pendentia are also present. It refers to the
situation where two actions are pending between the same parties for the
same cause of action, so that one of them becomes unnecessary and
vexatious. It is based on the policy against multiplicity of suits.