ASIA UNITED BANK vs. GOODLAND CO. G.R. No. 191388

ASIA UNITED BANK vs. GOODLAND CO. G.R. No.
191388 (REMREV1 – CIVPRO)
FACTS: Respondent Goodland Company Inc. executed a Third Party Real Estate Mortgage (REM) over
two parcels of land located in Sta. Rosa, Laguna, in favor of petitioner Asia United Bank (AUB). This
mortgage secured the obligation amounting to PHP 250,000,000 of Radiomarine Network, Inc. (RMNI)
doing business as Smartnet Philippines, to AUB. The REM was registered on March 8, 2001 in the
Registry of Deeds of Calamba, Laguna. Respondent then filed a complaint in the RTC of Biñan, Laguna,
for the annulment of the REM on the ground that the same was falsified and done in contravention of
the parties’ verbal agreement. While the same was pending, RMNI defaulted in the payment of its
obligation to AUB, prompting AUB to exercise the right to extrajudicially foreclose the mortgage. It filed
its application for extrajudicial foreclosure under Act No. 3135. The mortgaged properties were sold in
public auction to the petitioner as the highest bidder. Before petitioner could consolidate its title,
respondent filed a complaint to annul the foreclosure sale and to enjoin the consolidation in favor of
AUB (injunction). Respondent alleged the falsified nature of the REM as basis for the injunction. A few
days later, petitioner consolidated its ownership over the parcels of land. Petitioner then filed a motion
to dismiss for the injunction case, stating that the two cases filed by the respondent both relied on the
alleged falsification of the real estate mortgage as the basis for the reliefs. The RTC dismissed the
injunction case with prejudice, on the grounds of forum shopping/litis pendentia. Since both were
founded upon the same transactions, essential facts and circumstances, and both raise the same issues,
the judgment of one might necessarily bar another or result in res judicata. Respondent appealed the
aforesaid decision to the CA, and the CA reversed the trial court’s ruling, and ruled for the respondents.
The CA ruled that the two cases that Goodland filed were asking for different reliefs—the annulment
case sought the nullification of the REM, while the injunction asked for the nullification of the
foreclosure proceedings, and to enjoin the consolidation of title in favor of the petitioners.
ISSUE: Whether or not the successive filing of annulment and injunction case constituted forum
shopping.
HELD: YES. There is forum shopping "when a party repetitively avails of several judicial remedies in
different courts, simultaneously or successively, all substantially founded on the same transactions and
the same essential facts and circumstances, and all raising substantially the same issues either pending
in or already resolved adversely by some other court." Forum shopping can be committed three ways,
according to recent jurisprudence: 1. filing multiple cases based on the same cause of action and with
the same prayer, the previous case not having been resolved yet (litis pendentia); 2. filing multiple cases
based on the same cause of action and the same prayer, the previous case having been finally resolved
(res judicata); 3. filing multiple cases based on the same cause of action but with different prayers (res
judicata / litis pendentia) Common in the types of forum shopping is the identity of cause of action in
the different cases filed, which is defined under Rule 2, Sec. 2 as “the act or omission by which a party
violates the right of another.” The cause of action in the annulment case is the alleged nullity of the REM
because of its spurious nature, which is allegedly violative of Goodland’s right to the mortgaged
property. It serves as the basis for the nullification of the REM. The injunction case involves the same
cause of action as it also invokes the nullity of the REM as the basis of the prayer for nullification of the
extrajudicial foreclosure and for injunction against consolidation of title. What is involved in the case at
bar is the third mode of committing forum shopping, as there is still forum shopping even if the reliefs
prayed for in the two cases be different, so long as both cases raise substantially the same issues. A
party cannot, by varying the form of an 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.
The RTC decision dismissing the complaint is now reinstated

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ASIA UNITED BANK vs. GOODLAND CO. G.R. No. 191388

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ASIA UNITED BANK vs. GOODLAND CO. G.R. No.

191388 (REMREV1 – CIVPRO)

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