CASE 2016-0053: GRACE PARK INTERNATIONAL CORPORATION AND WOODLINK REALTY CORPORATION –VERSUS- EASTWEST BANKING CORPORATION, SECURITY BANKING CORPORATION, ALLIED BANKING CORPORATION, REPRESENTED BY THE TRUSTEE AND ATTORNEY-IN-FACT OF EASTWEST BANKING CORPORATION TRUST DIVISION, EMMANUEL L. ORTEGA, IN HIS CAPACITY AS THE EX-OFFICIO SHERIFF OF THE REGIONAL TRIAL COURT, MALOLOS CITY, BULACAN, EDRIC C. ESTRADA, IN HIS CAPACITY AS SHERIFF IV OF THE REGIONAL TRIAL COURT, MALOLOS CITY, BULACAN (G.R. NO. 210606, 27 JULY 2016, PERLAS-BERNABE, J) (SUBJECT/S: FORUM SHOPPING) (BRIEF TITLE: GRACE PARK INTERNATIONAL VS. EASTWEST BANKING ET AL.)

 

DISPOSITIVE:

 

“WHEREFORE, the petition is GRANTED. The Decision dated May 22, 2013 and the Resolution dated December 27, 2013 of the Court ofAppeals in CA-G.R. CV No. 98880 are hereby REVERSED and SET ASIDE. Civil Case No. 543-M-2010 is REINSTATED and REMANDED to the Regional Trial Court of Malolos City, Bulacan, Branch 15 for further proceedings.

 

SO ORDERED.”

 

SUBJECTS/DOCTRINES/DIGEST:

 

“Anent the first requisite of forum shopping, “[t]here is identity of parties where the parties in both actions are the same, or there is privity between them, 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. Absolute identity of parties is not required, shared identity of interest is sufficient to invoke the coverage of this principle. Thus, it is enough that there is a community of interest between a party in the first case and a party in the second case even if the latter was not impleaded in the first case.”34

 

With respect to the second and third requisites of forum shopping, “[h]ornbook is the rule that identity of causes of action does not mean absolute identity; otherwise, a party could easily escape the operation of res judicata by changing the form of the action or the relief sought. The test to ~ determine whether the causes of action are identical is to ascertain whether the same evidence will sustain both actions, or whether there is an identity in the facts essential to the maintenance of the two actions. If the same facts or evidence would sustain both, the two actions are considered the same, and a judgment in the first case is a bar to the subsequent action. Hence, 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 between the same parties or their privies. Among the several tests resorted to in ascertaining whether two suits relate to a single or common cause of action are: (1) whether the same evidence would support and sustain both the first and second causes of action; and (2) whether the defenses in one case may be used to substantiate the complaint in the other. Also fundamental is the test of determining whether the cause of action in the second case existed at the time of the filing of the first complaint. “35

 

Here, it cannot be said that there is an identity of parties between Civil Case No. 10-323 pending before RTC-Makati and Civil Case No. 543-M2010 pending before RTC-Malolos because the plaintiffs in the former, herein Sherwyn, et al., represent substantially different interests from the plaintiffs in the latter, herein petitioners. This is because in Civil Case No. 10-323, Sherwyn, et al.’s interest is to be subrogated into the shoes of BDO as one of the creditors under the MTI; on the other hand, petitioners’ interest in Civil Case No. 543-M-2010 is the enforcement of their rights as debtors to the MTI, i.e., ensuring that the foreclosure proceedings were in accord with the foreclosure provisions of the MTI.

 

Secondly, the underlying circumstances surrounding the causes of action in both cases are likewise substantially different in that: (a) in Civil Case No. 10-323, the cause of action arose from EBC’s alleged unjust refusal to subrogate Sherwyn, et al. to the rights of BDO; while ( b) in Civil Case No. 543-M-2010, the cause of action stemmed from EBC’s purported breach of Section 6.0536 of the MTI which provides that it should first secure a written instruction from the Majority Creditors 37 before commencing foreclosure proceedings against the collaterals.


Finally, a judgment in Civil Case No. 10-323 will not necessarily result in res judicata in Civil Case No. 543-M-2010. Being principally a subrogation case which is an action in personam, 38 a judgment in Civil Case No. 10-323 will not bind any non-parties to it, such as the corporation plaintiffs and the other defendants (aside from EBC) in Civil Case No. 543M-2010 that represent interests separate and distinct from the parties in Civil Case No. 10-323.39 At the most, a judgment in Civil Case No. 10-323 may only constitute the factum probans (or evidentiary facts) by which the factum probandum (or the ultimate fact) sought to be proven by petitioners in Civil Case No. 543-M-2010, i.e., EBC’s non-compliance with the foreclosure provisions of the MTI, could be established.

 

In sum, both the RTC-Malolos and the CA erred in dismissing Civil Case No. 543-M-2010 on the ground of forum shopping and/or litis pendentia. Hence, Civil Case No. 543-M-2010 stands to be reinstated and remanded to the court a quo for further proceedings.”


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 SCD-2016-0053-GRACE PARK INTERNATIONAL

 

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