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FIRST DIVISION

[ G.R. No. 214526, November 03, 2020 ]

THE HEIRS OF INOCENTES MAMPO AND RAYMUNDO A. MAMPO, REPRESENTED BY AZUCENA C.


MAMPO, JRA., PETITIONERS, VS. JOSEFINA MORADA, RESPONDENT.

DECISION

CAGUIOA, J:

Before the Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court (Rules) assailing the
Decision2 dated December 20, 2013 (Assailed Decision) and Resolution3 dated September 1, 2014 (Assailed
Resolution) of the Court of Appeals4 (CA), in CA-G.R. SP No. 123523.

Facts

Petitioners are the surviving wives and children of deceased Inocentes Mampo (Inocentes) and Raymundo Mampo
(Raymundo) (collectively, Heirs of Mampos). Inocentes and Raymundo instituted a Complaint5 dated August 28,
2000 before the office of the Provincial Agrarian Reform Adjudicator (PARAD) against Nelida and Alex Severo for
Recovery of Possession of five parcels of land in Baras, Canaman, Camarines Sur (subject lots) which were
covered by Emancipation Patents (EPs).6 The complaint was dismissed and appealed to the Department of Agrarian
Reform Adjudication Board (DARAB) Central Office.

In its Decision7 dated January 16, 2008, the DARAB set aside the PARAD's Decision and ruled in favor of the Heirs
of Mampos, thus:

WHEREFORE, premises considered, the appealed decision is hereby SET ASIDE and a NEW
JUDGMENT is the (sic) thus rendered as follows:

1. Ordering the respondents-appellees, and all persons acting for, and in their behalf, to
immediately vacate the subject landholdings;

2. Ordering the respondents-appellees to restore the possession of the subject landholdings to


the complainants-appellants; and

3. Ordering the respondents-appellees to thereafter, respect and maintain the peaceful


possession and cultivation of the complainants-appellants of the subject landholdings.

SO ORDERED.8

Said decision became final and executory on August 9, 2008. On November 14, 2008, upon motion of the Heirs of
Mampos, a Writ of Execution9 was issued by the PARAD.

On May 7, 2009, herein respondent Josefina Mampo Morada (Morada) filed a Third-Party Claim10 dated May 7,
2009, which was granted by the PARAD in its Order dated February 26, 2010.11 Consequently, the PARAD ordered
the parties to respect Morada's possession and the recall of the Writ of Execution dated November 14, 2008,12 to
wit:
WHEREFORE, premises considered, finding merit to the instant third party claim, the same is hereby
GRANTED. Parties are hereby ordered to respect third party claimant Josefina Mampo Morada in her
peaceful possession and cultivation of the subject premises. The prayer to stay the enforcement of the
decision rendered in the above-entitled case is GRANTED, the Writ of Execution dated November 14,
2008 is hereby ordered RECALLED.

SO ORDERED.13

The PARAD gave credence to the claim of Morada that she was the actual tiller. Moreover, she is preferred to be
awarded the same as against Inocentes who, at one time, voluntarily relinquished, for a fee, his tenancy over a
landholding.

The Heirs of Mampos filed a Motion for Reconsideration, but the same was denied by the PARAD.14 Thereafter, they
filed with the DARAB a Manifestation with Motion for the Implementation of the Decision Dated January 16,
2008.15 This was dismissed by the DARAB for lack of jurisdiction, as the same was, in essence, a special civil action
under Rule 65 of the Rules.

However, in its Resolution16 dated September 19, 2011, the DARAB later granted the Heirs of Mampos' Motion for
Reconsideration, ordered the revival of the Writ of Execution dated November 14, 2008 and directed the immediate
implementation thereof. It ruled, among others, that Morada's Third-Party Claim was, in reality, a protest against the
identification and qualification of the Heirs of Mampos as beneficiaries of the awarded landholdings; hence, it should
have been dismissed for lack of jurisdiction inasmuch as the determination of such questions belongs to the
exclusive jurisdiction of the Department of Agrarian Reform (DAR) Secretary under the DARAB Rules of
Procedure.17 Morada moved for reconsideration but the same was denied.18

On January 6, 2012, Morada filed the first subject action - a Petition for Certiorari19 under Rule 65 of the Rules with
the CA, docketed as CA-G.R. SP No. 123033 (Rule 65 action), and was assigned to the CA Sixth Division. Therein,
she sought to annul the DARAB Decision dated September 19, 2011 for allegedly having been issued with grave
abuse of discretion, and to affirm the DARAB Decision dated February 11, 2011.20

Thereafter, on February 9, 2012, Morada instituted the second subject action - a Petition for Review21 under Rule
43, likewise before the CA, which was docketed as CA-G.R. SP No. 123523 (Rule 43 action) and raffled to the CA
12th Division.22 Here, she prayed that the DARAB Decision dated September 19, 2011 be reversed and that the
Decision of the PARAD dated February 26, 2010 be affirmed.23

On August 12, 2012, petitioners filed, in the Rule 65 action, a Manifestation and Motion to Dismiss for Violation
Against the Rule on Forum Shopping24 dated August 12, 2012. They prayed therein that both the Rules 65 and 43
actions be dismissed for being violative of the rule against forum shopping.25 Morada filed a Comment26 dated
August 17, 2012, asserting that she has not violated forum shopping rules as the two cases have different issues -
one, being a Rule 65 case, involving the question of whether the DARAB committed grave abuse of discretion, and
the other, being a Rule 43 case, involving questions of both facts and law.27

The CA Sixth Division, in its Resolution28 dated September 28, 2012, granted the motion and dismissed the Rule 65
action. The relevant portion of the Resolution reads:

It bears stressing that forum shopping exists when two or more actions involve the same transactions,
essential facts and circumstances, and raise identical causes of action, subject matter, and issues.
Another test of forum shopping is when the elements of litis pendencia are present or where a final
judgment in one case will amount to res judicata in another.

The records show that G.R. SP No. 123523 and CA G.R. SP No. 123033, present the same set of facts
and issues and the remedies sought in both cases are also the same. In both petitions, petitioner
questioned not only the merits of the decision but also the order of public respondent DARAB in
granting execution pending appeal. It is clear therefore that a ruling of this Court in CA G.R. SP No.
123523 would undoubtedly constitute res judicata on the identical issue raised in G.R. SP No. 123033.
Petitioner cannot avoid violation of the rule against forum shopping by varying the forms of the action or
adopting a different mode of presenting one's case. For being violative of the rule against forum
shopping, the instant petition for [certiorari] docketed as G.R. SP No. 123033 should therefore be
dismissed.

WHEREFORE, the Motion to Dismiss is GRANTED and the petition, DISMISSED, for violation against
the rule on forum shopping.

SO ORDERED.29

The same became final and executory on November 15, 2012.


Meanwhile, Morada, in the Rule 43 action, filed a Manifestation30 dated October 31, 2012, notifying the CA 12th
Division of the Resolution dated September 28, 2012 of the CA Sixth Division which dismissed the Rule 65 action
for forum shopping. Morada likewise manifested that "[s]he is not appealing said decision and, [instead], pursues
her legal remedies with this Honorable Court in CA-G.R. SP No. 123523."31

On March 9, 2013, petitioners also filed a Manifestation in the Rule 43 action, praying that the same be dismissed to
pave the way for the implementation of the DARAB Decision dated January 8, 2008.32

On December 20, 2013, the CA, in the Rule 43 action, issued the assailed Decision, granting Morada's petition,
thus:

WHEREFORE, premises considered, the instant petition for review is GRANTED. The assailed
September 19, 2011 Resolution is hereby NULLIFIED and the February 26,2010 Order of the
PARAD STANDS.

SO ORDERED.33

According to the CA, Morada's third-party claim was valid pursuant to Rule 39, Section 16 of the Rules which allows
third-party claims as a remedy for third parties having claims on a property levied during the execution stage.
Moreover, the CA ruled that the Order dated February 26, 2010 of the PARAD which granted Morada's third-party
claim was not appealed by petitioners. Instead, they filed a Manifestation with Motion for the Implementation of the
Decision dated January 16, 2008 with the DARAB. Hence, said PARAD Order became final and executory.34 The
Assailed Decision is silent as to the matter of forum shopping manifested in the case by both parties.

Petitioners filed a motion for reconsideration but the same was denied in the Assailed Resolution.

Hence, the present recourse, wherein the merits of the Assailed Decision are no longer challenged. Instead,
petitioners submit that since Morada committed forum shopping as ruled in the CA's Resolution dated September
28, 2012 in the Rule 65 action, which Resolution later became final and executory, Morada's Rule 43 action should
have likewise been dismissed.35

Morada filed her Comment36 dated March 9, 2015, wherein she asserts that she has not violated the rules on forum
shopping because the two petitions she filed with the CA involved different issues and that she has manifested the
dismissal of the Rule 65 action to the CA 12th Division in the Rule 43 action, as well as her intention to pursue the
latter case as a legal remedy.

Petitioners filed their Reply to Respondent's Comment37 dated October 12, 2015.

Issue

Petitioners raise the lone issue: whether or not the CA is correct in nullifying the resolution of the DARAB dated
September 19, 2011 and reinstating the Order of the PARAD dated February 26, 2010 despite the violation against
the rule on forum shopping.38 Stated differently, they ask the Court if the CA erred in failing to likewise dismiss the
Rule 43 action for forum shopping.

Ruling

There is merit in the petition.

Forum shopping is committed by a party who institutes two or more suits involving the same parties for the same
cause of action, either simultaneously or successively, on the supposition that one or the other court would make a
favorable disposition or increase a party's chances of obtaining a favorable decision or action.39 It is an act of
malpractice that is prohibited and condemned because it trifles with the courts, abuses their processes, degrades
the administration of justice, and adds to the already congested court dockets.40

At present, the rule against forum shopping is embodied in Rule 7, Section 5 of the Rules, thus:

SEC 5. Certification against forum shopping. - The plaintiff or principal party shall certify under oath in
the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or
filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and, to the best
of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending
action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn
that the same or similar action or claim has been filed or is pending, he shall report that fact within five
(5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

Failure to comply with the foregoing requirements shall not be curable by mere amendment of the
complaint or other initiatory pleading but shall be cause for the dismissal of the case without prejudice,
unless otherwise provided, upon motion and after hearing. The submission of a false certification or
non-compliance with any of the undertakings therein shall constitute indirect contempt of court, without
prejudice to the corresponding administrative and criminal actions. If the acts of the party or his counsel
clearly constitute willful and deliberate forum shopping, the same shall be ground for summary
dismissal with prejudice and shall constitute direct contempt, as well as a cause for administrative
sanctions. (n)

There are two rules on forum shopping, separate and independent from each other, provided in Rule 7, Section 5: 1)
compliance with the certificate of forum shopping and 2) avoidance of the act of forum shopping itself.41

To determine whether a party violated the rule against forum shopping, the most important factor is whether the
elements of litis pendentia are present, or whether a final judgment in one case will amount to res judicata in
another. Otherwise stated, the test for determining forum shopping is whether in the two (or more) cases pending,
there is identity of parties, rights or causes of action, and reliefs sought.42

Hence, forum shopping can be committed in several ways: (1) filing multiple cases based on the same cause of
action and with the same prayer, the previous case not having been resolved yet (where the ground for dismissal
is litis pendentia); (2) filing multiple cases based on the same cause of action and the same prayer, the previous
case having been finally resolved (where the ground for dismissal is res judicata); and (3) filing multiple cases based
on the same cause of action but with different prayers (splitting of causes of action, where the ground for dismissal
is also either litis pendentia or res judicata).43

These tests notwithstanding, what is pivotal is the vexation brought upon the courts and the litigants by a party who
asks different courts to rule on the same or related causes and grant the same or substantially the same reliefs and,
in the process, creates the possibility of conflicting decisions being rendered by the different fora upon the same
issues.44

Forum shopping is a ground for summary dismissal of both initiatory pleadings without prejudice to the taking of
appropriate action against the counsel or party concerned.45 This is a punitive measure to those who trifle with the
orderly administration of justice.46

Guided by the foregoing settled doctrines, the Court rules that the CA erred in failing to dismiss the Rule 43
action for forum shopping.

Morada is guilty of forum shopping by


committing two distinct acts thereof:
(1) she willfully and deliberately
instituted two actions in two different
divisions of the CA to avail of remedies
founded on similar facts; and (2) she
submitted false certifications of non-
forum shopping and did not observe
the undertakings therein mandated by
Rule 7, Section 5.

a. Morada filed multiple suits


seeking identical reliefs.

To recall, in its Resolution dated September 28, 2012, the CA dismissed the Rule 65 action upon the finding that
Morada committed forum shopping in instituting the same and the Rule 43 action, thus:

The records show that G.R. SP No. 123523 and CA G.R. SP No. 123033, present the same set of facts
and issues and the remedies sought in both cases are also the same. In both petitions, petitioner
questioned not only the merits of the decision but also the order of public respondent DARAB in
granting execution pending appeal. It is clear therefore that a ruling of this Court in CA G.R. SP No.
123523 would undoubtedly constitute res judicata on the identical issue raised in G.R. SP No. 123033.
Petitioner cannot avoid violation of the rule against forum shopping by varying the forms of the action or
adopting a different mode of presenting one's case. For being violative of the rule against forum
shopping, the instant petition for [certiorari] docketed as G.R. SP No. 123033 should therefore
be dismissed.47

It is not disputed that the foregoing Resolution of the CA was purposely not appealed by Morada, and thus became
final and executory on November 15, 2012. Hence, it is conclusive as to the issue of whether or not Morada
committed forum shopping in connection with her filing of the Rules 65 and 43 actions. As to this issue, res
judicata48 - the rule that a final judgment or decree on the merits by a court of competent jurisdiction is conclusive of
the rights of the parties or their privies in all later suits on points and matters determined in the former suit49 - has set
in.
Res judicata embraces two aspects - "bar by prior judgment" or the effect of a judgment as a bar to the prosecution
of a second action upon the same claim, demand or cause of action and "conclusiveness of judgment" which
ordains that issues actually and directly resolved in a former suit cannot again be raised in any future case between
the same parties involving a different cause of action.50 As to the latter, which is relevant to the issue of commission
of forum shopping in the present case, the Court has held:

Conclusiveness of judgment finds application when a fact or question has been squarely put in issue,
judicially passed upon, and adjudged in a former suit by a court of competent jurisdiction. The fact or
question settled by final judgment or order binds the parties to that action (and persons in
priority with them or their successors-in-interest), and continues to bind them while the judgment
or order remains standing and unreversed by proper authority on a timely motion or petition; the
conclusively settled fact or question furthermore cannot again be litigated in any future or other
action between the same parties or their privies and successors-in-interest, in the same or in
any other court of concurrent jurisdiction, either for the same or for a different cause of action.
Thus, only the identities of parties and issues are required for the operation of the principle of
conclusiveness of judgement.51

Conclusiveness of judgment proscribes there-litigation in a second case of a fact or question already settled in a
previous case. The second case, however, may still proceed provided that it will no longer touch on the same fact or
question adjudged in the first case. Conclusiveness of judgment requires only the identity of issues and parties, but
not of causes of action.52

Hence, as the parties to the present case and the Rule 65 action are the same, the issue of whether forum shopping
was committed by Morada, which was already decided with finality in the latter case, may no longer be re­litigated
herein.

Nevertheless, even if the Court passes upon this issue, it will arrive at the same conclusion as the CA did in the
Rule 65 action - that Morada committed forum shopping. Worse, the same was willful and deliberate.

In denying that she had violated the rule, Morada claims that the Rules 65 and 43 actions involve different issues -
that the Rule 65 action is a petition for certiorari while the Rule 43 action is a petition for review. Hence, the former
involves the question of whether the DARAB committed grave abuse of discretion and the latter raises questions of
facts and law. Moreover, the two cases allegedly involve different parties -in the Rule 65 action, the respondent is
the DARAB while in the Rule 43 action, the respondents are the petitioners herein.

These contentions do not hold water.

As mentioned, the test for determining the existence of forum shopping is whether the elements of litis pendentia are
present, or whether a final judgment in one case amounts to res judicata in another. Thus, there is forum shopping
when the following elements are present: (a) identity of parties, or at least such parties as representing the same
interests in both actions; (b) identity of rights asserted and reliefs 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. Said requisites are
also constitutive of the requisites for auter action pendant or lis pendens.53

In the case before the Court, the first element is present - the parties were the same in both the Rules 65 and 43
actions, albeit in the former, the DARAB was added as a public respondent. The Court has held that absolute
identity of parties is not required, it being enough that there is substantial identity of the parties or at least such
parties represent the same interests in both actions.54

As to the second element, while the remedies of petition for certiorari and appeal are substantially different in that
the former's purpose is to correct errors of jurisdiction or grave abuse of discretion amounting to lack or excess of
jurisdiction and the latter to correct a mistake of judgement or errors of law or fact,55 a plain reading and comparison
of Morada's prayers in the two petitions she filed reveal that they involve the same rights asserted and reliefs asked
for:

CA-G.R. SP No. 123033 CA-G.R. SP No. 123523


(Rule 65 petition for certiorari) (Rule 43 petition for review)
WHEREFORE, it is most respectfully prayed of WHEREFORE, it is most respectfully prayed of
this Honorable Court to issue the writ of this Honorable Court that (sic) decision of the
[certiorari] ANNULLING and SETTING ASIDE its Appellate Board (DARAB) dated September
decision dated September 19, 2011 rendered 19, 2011 be reversed and affirming (sic) en (sic)
by the Public Respondents in DARAB CASE toto the decision of the Lower Board (PARAD)
NO. 12176 for having been issued with grave dated February 26, 2010.57
abuse of discretion amounting to lack or excess of
jurisdiction and affirming en (sic) toto public
respondents' decision dated February 11, 2011.56

Clearly, both petitions challenged and prayed for the reversal of the DARAB Resolution dated September 19, 2011,
ultimately, to prevent the execution of the PARAD Decision dated January 16, 2008 which awarded possession of
the subject lots to the Heirs of Mampos.58 Thus, there exists between the two actions, identity as to parties, rights
asserted and reliefs sought, to a degree that a judgment in either action will amount to res judicata in the other.

Similar to this case, Ley Construction and Development Corporation v. Hyatt Industrial Manufacturing
Corporation59 (Ley Construction) involved a special civil action for certiorari and an appeal which practically sought
the same reliefs. The case stemmed from a civil action for specific performance filed by Ley Construction against
Hyatt Industrial. The trial court ordered the cancellation of all the depositions set for hearing, prompting Ley
Construction to file before the CA a petition for certiorari assailing said order. Pending the Rule 65 petition, the trial
court dismissed Ley Construction's action for specific performance which was then appealed to the CA. Later, the
CA likewise dismissed the Rule 65 petition, which dismissal was taken on appeal to the Court. In denying the
appeal, the Court ruled:

Third, petitioner's submission that the Petition for Certiorari has a practical legal effect is in fact an
admission that the two actions are one and the same. Thus, in arguing that the reversal of the two
interlocutory Orders "would likely result in the setting aside of the dismissal of petitioner's amended
complaint," petitioner effectively contends that its Petition for Certiorari, like the appeal, seeks to set
aside the Resolution and the Orders.

Such argument unwittingly discloses a recourse to forum shopping. which has been held "as the
institution of two or more actions or proceedings grounded on the same cause on the supposition that
one or the other court would make a favorable disposition." Clearly, by its own submission, petitioner
seeks to accomplish the same thing in its Petition for Certiorari and in its appeal: both assail the two
interlocutory Orders and both seek to set aside the RTC Resolution.

Hence, even assuming that the Petition for Certiorari has a practical legal effect because it would lead
to the reversal of the Resolution dismissing the Complaint, it would still be denied on the ground of
forum shopping.60

Moreover, the Court denied Ley Construction's allegation that the two actions are distinct, thus:

x x x The tortuous explanation of petitioner cannot refute the clear fact that the relief sought in the
Petition for Certiorari is also prayed for in the appeal. In the latter, it questioned not only the propriety of
the Resolution dismissing the Complaint, but also the two interlocutory Orders denying its recourse to
the discovery procedure.61

Hence, guided by Ley Construction, that the two cases filed by Morada before the CA involved two separate
remedies - one a petition for certiorari and the other, an appeal - does not refute the fact that the reliefs she prayed
for in said cases were identical: to have the DARAB Resolution dated September 19, 2011 reversed and set aside in
order to prevent the execution of the PARAD Decision dated January 16, 2008 which awarded possession over the
subject lots to the Heirs of Mampos.

Therefore, Morada's claim that the actions involve different remedies and parties are specious. At any rate, as has
been repeatedly held by the Court, what is truly important to consider in determining the existence of forum
shopping is the vexation caused the courts and parties-litigant by the party who instituted different actions seeking
the same reliefs in different fora, thereby creating the possibility of conflicting decisions on the same issue.62

b. Morada submitted false


certifications of non-forum
shopping and did not observe
the undertakings therein
mandated by Rule 7, Section 5.

Aside from seeking identical reliefs from different divisions of the CA, Morada made false representations in her
Certifications of Non-forum Shopping and did not observe the mandatory undertakings therein. First, in her
Certification in the Rule 43 action, she falsely certified that she has not previously commenced a similar action in
another court. Second, in the same Rule 43 Certification, she did not disclose the pendency of the Rule 65 action - a
prior action which involved the same issues then pending with the CA Sixth Division. Third, in connection with her
Certification in her Rule 65 action, she did not report to the court her filing of the Rule 43 action with the CA 12th
Division within five days therefrom.

These acts violate the rule on forum shopping under Rule 7, Section 5, which provides for the following
undertakings:
SEC. 5.Certification against forum shopping. - The plaintiff or principal party shall certify under oath in
the complaint or other initiatory pleading asserting a claim for relief, or in a sworn certification annexed
thereto and simultaneously filed therewith: (a) that he has not theretofore commenced any action or
filed any claim involving the same issues in any court, tribunal or quasi-judicial agency and. to the best
of his knowledge, no such other action or claim is pending therein; (b) if there is such other pending
action or claim, a complete statement of the present status thereof; and (c) if he should thereafter learn
that the same or similar action or claim has been filed or is pending, he shall report that fact within five
(5) days therefrom to the court wherein his aforesaid complaint or initiatory pleading has been filed.

x x x x (Underscoring supplied)

The CA erred in failing to likewise


dismiss the Rule 43 action.

The Rules 65 and 43 actions, having been commenced in violation of the rules on forum shopping, were both
dismissible.

Morada insists that she was pursuing her legal remedies in the Rule 43 action, and continuously here in the present
appeal of such action, in light of the dismissal with finality of her Rule 65 action for forum shopping. Stated
differently, she seems to be under the impression that in multiple cases constituting forum shopping, only one of
such cases is dismissible and that the litigant may choose which legal remedy to maintain.

She is mistaken. Where there is forum shopping, the penalty is dismissal of both actions.63 This is so because
twin dismissal is a punitive measure to those who trifle with the orderly administration of justice.64

As discussed, there exists, in forum shopping, the elements of litis pendentia or a final judgement in one case
being res judicata in the other. Consequently, where there is forum shopping, the defense of litis pendentia in one
ℒ αwρhi ৷

case is a bar to the other; 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.65

In an abundance of cases, the Court has adhered to the multiple dismissal rule.

In Buan v. Lopez,66 finding that forum shopping was committed by petitioners when they instituted before the Court a
special civil action for prohibition while another special civil action for "prohibition with preliminary injunction" was
pending before the Regional Trial Court (RTC) of Manila,67 the Court dismissed both actions, to wit:

Indeed, the petitioners in both actions, described in their petitions as vendors of religious articles, herbs
and plants, and sundry merchandise around the Quiapo Church or its "periphery," have incurred not
only the sanction of dismissal of their case before this Court in accordance with Rule 16 of the
Rules of Court but also the punitive measure of dismissal of both their actions. that in this
Court and that in the Regional Trial Court as well.68

In Zamora v. Quinan, Jr.,69 the CA dismissed an action for Annulment of Judgment of the RTC on the ground of
forum shopping in relation to a complaint for Reconveyance of Title filed with the RTC Cebu. Prior to this, the RTC
has likewise dismissed the reconveyance suit before it for forum shopping. On petition for review, the Court
sustained the CA's dismissal, ruling that "once there is finding of forum shopping, the penalty is summary dismissal
not only of the petition pending before [this Court], but also of the other case that is pending in a lower court."70

In First Philippine International Bank v. Court of Appeals,71 an action for specific performance was brought to the
Court on petition for review. While the same was pending, another action denominated as a derivative suit was filed
before the RTC Makati. The Court dismissed both the action before it and the one pending in the RTC, ruling that as
there was forum shopping, the only sanction was the dismissal of both cases with prejudice.

Dy v. Mandy Commodities Co., Inc.72 involves an action for Forcible Entry filed by respondent against petitioner that
was eventually appealed by the latter to the CA. Pending the same, petitioner filed an Unlawful Detainer case
against respondent before the Metropolitan Trial Court (MeTC) Manila. The CA dismissed petitioner's appeal then
pending before it as well as her Unlawful Detainer case which was then pending on appeal with the RTC Manila.
The Court sustained the twin dismissal ordered by the CA and rejected petitioner's claim that assuming she was
guilty of forum shopping, the CA should have dismissed only the Forcible Entry case and allowed her unlawful
Detainer case to be first decided by the lower court. The Court pronounced:

The grave evil sought to be avoided by the rule against forum shopping is the rendition by two
competent tribunals of two separate and contradictory decisions. Unscrupulous party litigants, taking
advantage of a variety of competent tribunals, may repeatedly try their luck in several different fora until
a favorable result is reached. To avoid the resultant confusion, this Court adheres strictly to the
rules against forum shopping and any violation of these rules results in the dismissal of a case.
xxx

xxxx

Petitioner insist that, assuming arguendo he (sic) is guilty of forum shopping, the Court of Appeals
should have dismissed CA-GR SP No. 86478 (Respondent's Forcible Entry Case) and allowed
Petitioner Unlawful Detainer Case be decided first by the MeTC.

Petitioner's argument is inaaccurate.

Once there is a finding of forum shopping, the penalty is summary dismissal not only of the
petition pending before this Court, but also of the other case that is pending in a lower court.
This is so because twin dismissal is a punitive measure to those who trifle with the orderly
administration of justice.

xxxx

Taking our cue from these cases, the Court of Appeals' action of dismissing petitioner's appeal relative
to Respondent's Forcible Entry Case and Petitioner's Unlawful Detainer Case is, therefore,
warranted.73

Likewise, the earlier rules on forum shopping explicitly provide for multiple dismissals. The Interim Rules and
Guidelines of the Court dated January 11, 1983 - where the rule on forum shopping was first written in the Philippine
jurisdiction - provided that a violation of said rules "shall constitute contempt of court and shall be a cause for the
summary dismissal of both petitions, without prejudice to the taking of appropriate action against counsel or party
concerned."74 Thereafter, Revised Circular No. 28-91 and Administrative Circular No. 04-94 provided that a violation
thereof "shall be a cause for the summary dismissal of the multiple petitions or complaints."

The dismissal of all cases involved in forum shopping is a punitive measure against the deplorable practice of
litigants of resorting to different fora to seek similar reliefs, so that their chances of obtaining a favorable judgment is
increased. This results in the possibility of different competent tribunals arriving at separate and contradictory
decisions. Moreover, it adds to the congestion of the heavily burdened dockets of the courts.75 To avoid this grave
evil, the Court has held that the rules on forum shopping must be strictly adhered to.76

Notably, in a number of cases, the Court has distinguished between forum shopping that is not willful and deliberate
and those which are.77 In the former, the subsequent cases shall be dismissed without prejudice on the ground of
either litis pendentia or res judicata, while in the latter, all actions shall be dismissed.78 Upon the other hand, there is
likewise Daswani v. Banco de Oro Universal Bank,79 where the Court observed that from the nature of forum
shopping, it appears to be always willful and deliberate, thus:

In Yap v. Chua, the Court elaborately explained the nature of forum shopping, to wit:

Forum shopping is the institution of two or more actions or proceedings involving the same
parties for the same cause of action, either simultaneously or successively, on the
supposition that one or the other court would make a favorable disposition. Forum
shopping [is] resorted to by any party against whom an adverse judgment or order has
been issued in one forum, in an attempt to seek a favorable opinion in another, other
than by appeal or a special civil action for [certiorari].

Following this line of reasoning, one can conclude that forum shopping is always willful and deliberate
on the part of the litigant. To secure a higher percentage of winning, a party resorts to the filing of the
same suits in various fora, without any regard for the resulting abuse to the courts, to the other party,
and to our justice system. This malicious ulterior motive compels a party to violate the rules against
forum shopping notwithstanding its pernicious effects.80

In the present case, applying either doctrine would still lead the Court to rule against Morada, as it finds that she
engaged in willful and deliberate forum shopping.

While the CA resolution finding forum shopping in the Rule 65 action was silent as to the willfulness and
deliberateness of the act, the circumstances of this case overwhelmingly suggest that it was. As exhaustively
discussed above, the identity in the reliefs sought by Morada in the Rules 65 and 43 actions is so glaring that any
reasonably prudent person may readily see the similarity, thus negating any claim of good faith in their filing. Both
petitions literally prayed for the reversal of the DARAB Decision dated September 19, 2011, such that the possibility
of different decisions rendered by the concerned CA divisions would readily be apparent, if not intentionally sought.
Hence, both the Rule 65 and Rule 43 actions were dismissible. The CA 12th Division that was hearing the Rule 43
Petition erred in failing to dismiss the action before it, even as its attention was repeatedly called to the existence of
the Rule 65 action and its subsequent dismissal, with finality, on the ground of forum shopping, not just by
petitioners81 but also by Morada herself.82

The predecessors to the present rules on forum shopping, Revised Circular No. 28-91 and Administrative Circular
No. 04-94, enlighten on the intent of the Court to cover multiple dismissals of cases pending before same­ level
courts, tribunals or agencies, such as different divisions of the CA as in the instant case, thus:

1. To avoid the foregoing, in every petition filed with the Supreme Court or the Court of Appeals, the
petitioner, aside from complying with pertinent provisions of the Rules of Court and existing circulars,
must certify under oath all of the following facts or undertakings: (a) he has not theretofore commenced
any other action or proceeding involving the same issues in the Supreme Court, the Court of Appeals,
or any other tribunal or agencies; (b) to the best of his knowledge, no such action or proceeding is
pending in the Supreme Court, the Court of Appeals, or different Divisions thereof, or any other
tribunal or agency; (c) if there is such other action or proceeding pending, he must state the status of
the same, and (d) if he should thereafter learn that a similar action or proceeding has been filed or is
pending before the Supreme Court, the Court of Appeals, or different Divisions thereof, or any
other tribunal or agency, he undertakes to promptly inform the aforesaid courts and such other tribunal
or agency of that fact within five (5) days therefrom.

2. Any violation of this revised Circular will entail the following sanctions: (a) it shall be a cause for the
summary dismissal of the multiple petitions or complaints; x x x. (Emphasis and underscoring supplied)

Considering that the grave evil sought to be avoided by the proscription against forum shopping - the risk of
conflicting decisions from different courts and the unnecessary clogging of their dockets - is present even when the
cases concerned are pending in equal-level courts, there is no reason why such courts should not be empowered to
exact the full measure of penalty against this unscrupulous practice by dismissal of all such cases pending before
them. Otherwise, the forum shopping rules may easily be circumvented as litigants may avoid dismissal of their
multiple identical actions by simply filing them in same-level courts or in different divisions of the same court.

In sum, the Court finds that the CA erred in failing to dismiss the Rule 43 action or CA-G.R. SP No. 123523 for
forum shopping.

A final word: Rule 7, Section 5 provides that, apart from being a ground for summary dismissal with prejudice, willful
and deliberate forum shopping shall constitute direct contempt and is a cause for administrative sanctions.83

Here, Morada's counsel, Guzman and Associates represented by Atty. Godofredo B. Guzman (Atty. Guzman),
appears to be guilty of forum shopping as much as their client was. The records show that Atty. Guzman was the
same counsel who filed the subject Rules 65 and 43 petitions. In fact, Atty. Guzman, being a lawyer and hence
familiar with court processes and the Rules of Court, is expected to be much more circumspect than his client. In the
interest of due process, the Court will allow Atty. Guzman to explain his role in this pernicious practice of forum
shopping before imposing upon him any sanctions.84

WHEREFORE, premises considered, the petition is GRANTED. The Decision dated December 20, 2013 and
Resolution dated September 1, 2014 of the Court of Appeals in CA-G.R. SP No. 123523 are REVERSED and SET
ASIDE. The September 19, 2011 Resolution of the Department of Agrarian Reform Adjudication Board
is REINSTATED.

The Court DIRECTS Atty. Godofredo B. Guzman and respondent to show cause in writing within ten (10) days from
notice why they should not be cited for direct contempt for committing willful and deliberate forum shopping in the
filing of multiple suits asserting the same claims.

SO ORDERED.

Peralta, C. J., (Chairperson), Carandang, Zalameda, and Gaerlan, JJ., concur.

Footnotes
1
Rollo, pp. 12-25.
2
Id. at 29-39. Penned by Associate Justice Vicente S.E. Veloso and concurred in by Associate Justices
Socorro B. Inting and Melchor Quirino C. Sadang.
3
Id. at 41.
4
Special Eleventh Division and Former Special Eleventh Division, respectively.
5
Rollo, pp. 92-95.
6
Id. at 92-94.
7
Id. at 96-101.
8
Id. at 100.
9
Id. at 102-104.
10
Id. at 105-108.
11
Id. at 109-111.
12
Id. at 31.
13
Id. at 110-111.
14
Id. at 31.
15
Id. at 112-120.
16
Id. at 43-48.
17
Id. at 46-48.
18
Id. at 34.
19
Id. at 49-59; entitled "Josefino Mampo v. DARAB Board, namely MARIE FRANCES PESAYCO AQUINO,
JIM G. CULETO, MA. PATRICIA RUALO-BELLO & ARNOLD C. ARRISTA, in their capacity as DARAB
MEMBERS and Inocentes Mampo and Raymundo Mampo."
20
Id. at 58.
21
Id. at 60-79; entitled "Inocentes Mampo and Raymundo Mampo v. Nelida Severo and Alex Severo and
Josefina Morado (as third party claimant)."
22
Id. at 81; as mentioned by the CA Sixth Division in its Resolution dated September 28, 2012.
23
Id. at 78.
24
Id. at 127-130.
25
Id. at 129.
26
Id. at 165-166.
27
Id. at 165.
28
Id. at 81-82.
29
Id. at 82.
30
Id. at 163-164.
31
Id. at 163.
32
Id. at 18.
33
Id. at 39.
34
Id. at 36-39.
35
Id. at 21.
36
Id. at 146-150.
37
Id. at 171-176.
38
Id. at 19.
39
See Zamora v. Quinan, Jr., G.R. No. 216139, November 29, 2017, 847 SCRA 251, 257; Yap v. Chua, G.R.
No. 186730, June 13, 2012, 672 SCRA 419, 427-428.
40
Heirs of Sotto v. Palicte, G.R. No. 159691, February 17, 2014, 716 SCRA 175, 178.
41
See Korea Exchange Bank v. Gonzales, G.R. Nos. 142286-87, April 15, 2005, 456 SCRA 224, 243; City of
Taguig v. City of Makati, G.R. No. 208393, June 15, 2016, 793 SCRA 527, 549.
42
Yap v. Chua, supra note 39.
43
Zamora v. Quinan, Jr., supra note 39 at 260, citing City of Taguig v. City of Makati, supra note 41 at 550.
44
Yap v. Chua, supra note 39 at 428.
45
See Korea Exchange Bank v. Gonzales, supra note 41 at 243.
46
See Ley Construction & Development Corporation v. Philippine Commercial & International Bank, G.R. No.
160841, June 23, 2010, 621 SCRA 526, 537.
47
Rollo, p. 82. Emphasis supplied.
48
The aspect of res judicata relevant to the present case is set forth in Section 47, Rule 39 of the Rules.
49
See Degayo v. Magbanua-Dinglasan, G.R. No. 173148, April 6, 2015, 755 SCRA 1, 8-9.
50
See Ley Construction & Development Corporation v. Philippine Commercial and International Bank, supra
note 46 at 535.
51
Degayo v. Magbanua-Dinglasan, supra note 49 at 12. Emphasis supplied; citations omitted.
52
Ley Construction & Development Corporation v. Philippine Commercial & International Bank, supra note 46
at 536.
53
Dy v. Mandy Commodities Co., Inc., G.R. No. 171842, July 22, 2009, 593 SCRA 440, 451.
54
Brown-Araneta v. Araneta, G.R. No. 190814, October 9, 2013, 707 SCRA 440, 451.
55
Madrigal Transport, Inc v. Lapanday Holdings Corporation et al., G.R. No. 156067, August 11, 2004, 436
SCRA 123, 134.
56
Rollo, p. 58. Emphasis supplied.
57
Id. at 78. Emphasis supplied.
58
Id. at 52-53.
59
G.R. No. 133145, August 29, 2000, 339 SCRA 223.
60
Id. at 229-230. Underscoring supplied.
61
Id. at 31. Underscoring supplied.
62
See City of Taguig v. City of Makati, supra note 41 at 553.
63
See Dy v. Mandy Commodities Co, Inc., supra note 52 at 453; City of Taguig v. City of Makati, supra note
40 at 549; Korea Exchange Bank v. Gonzales, supra note 40 at 243.
64
Dy v. Mandy Commodities Co, Inc., supra note 52 at 453.
65
See First Philippine International Bank v. Court of Appeals, G.R. No. 115849, January 24, 1996, 252 SCRA
259, 284.
66
G.R. No. 75349, October 13, 1986, 145 SCRA 34.
67
Id. at 73.
68
Id. at 38. Emphasis supplied and underscoring supplied.
69
Supra note 39.
70
Id. at 265.
71
Supra note 65.
72
Supra note 53.
73
Id. at 450-454. Emphasis and underscoring supplied; citations omitted.
74
See Prubankers Association v. Prudential Bank and Trust Company, G.R. No. 131247, January 25, 1999,
302 SCRA 74, 83.
75
See Dy v. Mandy Commodities Co., Inc., supra note 53; Solid Homes, Inc. v. CA, G.R. No. 108452, April 11,
1997, 271 SCRA 157, 163.
76
See Dy v. Mandy Commodities Co., Inc., id. at 450.
77
See Heirs of Sotto v. Palicte, supra note 40 at 188; Rev. Ao-As v. Court of Appeals, 524 Phil. 645 (2006).
78
Id. at 188.
79
G.R. No. 190983, July 29, 2015, 764 SCRA 160.
80
Id. at 168. Emphasis and underscoring supplied; citations omitted.
81
Via "Manifestation" with prayer to dismiss dated March 9, 2013; rollo, pp. 18-19.
82
Via Manifestation dated October 31, 2012; id. at 163-164.
83
Also see City of Taguig v. City of Makati, supra note 41 at 567.
84
See Heirs of Sotto v. Palicte, supra note 39 at 180-181 where the Court, despite finding that petitioners
were guilty of "unmitigated forum shopping," still directed their counsel to explain why he should not be
sanctioned.

The Lawphil Project - Arellano Law Foundation


31\epublic of tbe flbilippine~
i,upreme QCourt
;!Manila

THIRD DIVISION

CEZAR QUIAMBAO and G.R. No. 192901


OWENS. CARSI-CRUZ,
Petitioners,

- versus -

BONIFACIO C. SUMBILLA
and ADERITO Z. YUJUICO,
Respondents.

X --------------------------------------X

ANTHONY K. QUIAMBAO, G.R. No. 192903


Petitioner,

Present:

CAGUIOA, J.,
- versus - Chairperson,
INTING,
GAERLAN,
DIMAAMPAO, and
SINGH,JJ
BONIFACIO C. SUMBILLA
and ADERITO Z. YUJUICO, Promulgated:
Respondents. FE:bruary 1, 2023
x------------------------------------------------------ ll.\~5)~-'ifi_____________________ x

DECISION

GAERLAN, J.:

Before this Court is a Petition for Review on Certiorari 1 dated August


2, 2010, assailing the Decision 2 dated January 27, 2010 and the Resolution3
dated July 6, 2010 of the Court of Appeals (CA) in CA-G.R. SP No. 109312.

Rollo (G .R. No. 19290 I), pp. 3-20.


Id. at 22-31. Penned by Associate Justice Estela M. Perlas-Bernabe (former Member of this Court),
with Associate Justices Rebecca De Guia-Salvador and Jane Aurora C. Lantion, concurring.
Id. at 33-34.
Decision 2 G.R. Nos. 192901 and 192903

Factual Antecedents

The instant case arose from the filing of three separate complaints by
Bonifacio C. Sumbilla and Aderito Z. Yujuico (collectively, respondents),
members of the Board of Directors of Pacifica, Inc. (Pacifica), namely:

(1) Securities and Exchange (SEC) Case No. 07-95 in the


Regional Trial Court (RTC) of Pasig City (Pasig Case);
(2) Civil Case No. 07-117901 in the RTC of Manila (Manila
Case); and
(3) Civil Case No. 07-831 in the RTC ofMakati City (Makati
Case).

The three complaints were filed against Cesar T. Quiambao (Cesar),


Owen Casi Cruz (Owen), and Anthony K. Quiambao (Anthony; collectively,
petitioners), and Pacifica.

Institution of the Pasig Case

On August 21, 2007 respondents filed a Complaint 4 with application


for the issuance of temporary restraining order and/or writ of preliminary
injunction against petitioners and Pacifica, seeking to enjoin Pacifica's
Annual Stockholders' Meeting (ASM) scheduled on August 23, 2007 on the
ground that it was called in violation of Pacifica' s by-laws and the Corporation
Code. 5 However, for failure to serve summons and notices of hearing upon
petitioners and Pacifica, the application for injunctive relief was denied. Thus,
the ASM pushed through as scheduled. 6

Subsequently, respondents filed an Amended Complaint,7 where they


additionally prayed that the ASM conducted be declared illegal, and that the
election of the new set of Board of Directors of Pacifica be nullified. 8

Institution of the Manila and Makati Cases

As the corporate records of Pacifica on file with the SEC have


conflicting addresses with respect to Pacifica's principal place of business,
respondents sought clarification with the SEC through their Letter9 dated

4
Id. at 35-54.
ld.at41 -45 .
6
Id. at 23.
Id. at 55-82 .
Id . at 76.
9
Id . at 769-770.
Decision 3 G.R. Nos. 192901 and 192903

August 30, 2007. In the letter, respondents explained that in Pacifica's


General Information Sheet for 2004-2006, the principal place of business
indicated therein was Pasig City, while Pacifica's Articles of Incorporation
and Amended Articles of Incorporation indicated Manila and Makati City as
Pacifica's principal place of business, respectively. Respondents, likewise,
stated that they were seeking clarification for purposes of determining the
proper venue where they could file an intra-corporate dispute case.

Without waiting for SEC's response, respondents simultaneously filed


the Manila and Makati Cases on September 7, 2007, or within the 15-day
period prescribed by Section 3, Rule 6 of A.M. No. 01-2-04-SC or the Interim
Rules of Procedure for Intra-Corporate Controversies. 10

In both the Manila and Makati Cases, respondents similarly prayed that
the ASM conducted on August 23, 2007 be declared invalid, and that the
election of the new set of Board of Directors of Pacifica be nullified. 11

Notably, respondents, likewise, stated in their complaints 12 in the


Manila and Makati Cases that they were constrained to file the three identical
cases because there were doubts as to Pacifica's principal place of business,
and that they could not afford to wait for SEC' s response to their letter to
avoid the possibility of foreclosing their remedies. Nonetheless, respondents
manifested that once the SEC clarifies Pacifica's principal place of business
and which among their cases should be maintained, they would immediately
withdraw the others. Such manifestation was, likewise, included in the
Verification and Certification Against Forum Shopping attached to their
complaints.

Withdrawal of the Pasig and Manila Cases

On November 19, 2007, the SEC finally issued its response and
disclosed that per the latest amendment to Pacifica's Articles of Incorporation,
its principal place of business is in Makati City. 13 Thus, respondents
immediately filed their Notice of Withdrawal 14 in the Pasig and Manila Cases.

10
Section. 3. Complaint. - In addition to the requirements in section 4, Rule 2 of these Rules, the
complaint in an election contest must state the following:
I . The case was filed within fifteen (I 5) days from the date of the election if the by-laws of the
corporation do not provide for a procedure for resolution of the controversy, or within fifteen ( 15)
days from the resolution of the controversy by the corporation as provided in its by-laws; and
2. The plaintiff has exhausted all intra-corporate remedies in election cases as provided for in the
by-laws of the corporation.
II
Rollo (G.R. No. 192901), pp. 102, 129.
12
Id . at 83-108, 109-135.
13
Id . at 821.
14
Id. at 8 I 8-820, 822-824.
Decision 4 G.R. Nos. 192901 and 192903

Such withdrawal of the Complaints in the Pasig and Manila Cases were done
even before any responsive pleading was filed therein.

Proceedings in the Makati Case

Being filed in the proper venue, the Makati Case proceeded.

Significantly, on September 1, 2008, Process Server Fernando Vinluan


and SheriffIV Robert V. Alejo submitted an Officer's Return before the RTC,
which declared that summons have been duly served. 15 Because no answer
was filed, respondents filed a Motion to Render Judgment by Default, 16 which
was granted by the RTC in its Order 17 dated April 15, 2009.

Thereafter, petitioners filed an Urgent Motion, 18 where they argued that


they were not adequately notified of the case and that service of summons was
improperly made. As such, petitioners prayed that the RTC Order granting the
Motion to Render Judgment by Default be set aside. 19

Petition for Certiorari before the Court of Appeals

Petitioners then filed a Petition for Certiorari2° before the CA, raising
the following issues:

THE RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF


JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION IN
ISSUING THE QUESTIONED ORDER, INASMUCH AS THE TRIAL
COURT HAS NOT VALIDLY ACQUIRED JURISDICTION OVER THE
PERSONS OF THE PETITIONERS.

A. Both respondent Judge's questioned Order and respondent Vinluan' s


Officer 's Return show that service of summons was not properly served
upon petitioners.

B. In light of the patent defects in the supposed substituted service of


summons upon petitioners, Respondent Judge acted without or in excess
of jurisdiction or with grave abuse of discretion in upholding Vinluan' s
supposed substituted service of summons and using the same as basis in
issuing the questioned Order.

15
Id . at 24-25 .
16
Id . at 384-395.
17
Id . at 135- I 36.
I8
Id. at 530-542.
19
Id. at 538.
20
Id.at 137-172.
Decision 5 G.R. Nos. 192901 and 192903

II

DESPITE BEING APPRISED OF PRIVATE RESPONDENTS' BRAZEN


ACT OF FORUM SHOPPING AND ABUSE OF JUDICIAL PROCESS,
RESPONDENT JUDGE ACTED WITHOUT OR IN EXCESS OF
JURISDICTION OR WITH GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION IN
REFUSING TO SUMMARILY DISMISS THE MAKA TI CASE AS
MANDATED BY THE RULES OF COURT AND BY RULING CASE
LAW. 21

On January 27, 2010, the CA rendered its Decision, 22 which partially


granted the petition for certiorari, to wit:

WHEREFORE, premises considered, the instant pet1t10n for


certiorari is PARTIALLY GRANTED. The assailed Order of the RTC is
hereby REVERSED AND SET ASIDE for being null and void and all
orders and/or proceedings emanating therefrom are vacated. The RTC is
ordered to issue the corresponding summons upon petitioners.

SO ORDERED. 23

The CA found that the summons were improperly served upon


petitioners. However, as regards the issue on forum shopping, the CA stated
that respondents' act of filing three separate cases was justified and that there
was no willful or deliberate intent on the part of respondents to commit forum
shopping, thus:

On the issue of forum shopping, the CoUii finds adequate and


justified the explanation of private respondents anent the simultaneous
filing of the same complaint before three (3) different fora on account of the
confusion in Pacifica, Inc.' s principal place of business and to avoid the
possible foreclosure of their remedy to annul the August 23, 2007 annual
stockholders meeting. Besides, to merit disciplinary action, forum shopping
must be willful and deliberate. In this case, private respondents' admission
in their Complaint Ad Cautelam of their subject recourse and the consequent
withdrawal of the complaints before the RTC of Pasig City and Manila upon
being advised by the Securities and Exchange Commission (SEC) that
Pacifica, Inc.'s principal place of business is in Makati City sufficiently
negated any deliberate intent on their part to engage in forum shopping. 24
(Citations omitted)

21
Id. at 145 .
22
Id . at 22-32.
_,
?'
Id. at 30.
24
Id. at 29-30.
Decision 6 G.R. Nos. 192901 and 192903

Petitioners moved for reconsideration, but the same was denied in the
CA's Resolution 25 dated July 6, 2010.

The Instant Petition

On August 2, 2010, Cezar and Owen filed a Petition for Review on


Certiorari, 26 docketed as G.R. No. 192901, where they argued that the CA
erred when it refused to dismiss the Makati Case notwithstanding
respondents' admitted act of forum shopping. 27 Subsequently, Anthony also
instituted a case before the Court, docketed as G.R. No. 192903.

On April 17, 2010, Anthony filed an Omnibus Motion, 28 where he: (1)
explained that he was abroad when Cezar and Owen filed the petition, and as
such, he was unable to join as a petitioner; (2) asked that he be allowed to
adopt Cezar and Owen's petition as his petition in G.R. No. 192903; and (3)
prayed that G.R. Nos. 192901 and 192903 be consolidated. Thereafter, on
November 17, 2010, the Court issued a Resolution,29 ordering the
consolidation of the two cases.

On January 14, 2013, respondents filed their Comment, 30 emphasizing


that there was no deliberate or willful intent on their part to commit forum
shopping, considering that they exercised due diligence to prevent it when
they: (1) asked the SEC for clarification as to Pacific ' s principal place of
business; (2) declared all the cases in their certifications against forum
shopping; and (3) immediately withdrew the Pasig and Manila Cases upon
receipt of the SEC' s response. 31

Issue

The main issue the Court is tasked to resolve is whether the CA erred
when it declared that respondents are not guilty of forum shopping.

The Court's Ruling

The petition is bereft of merit. The CA did not err when it found that

25
Id. at 33-34.
26
Id. at 3-20.
27
Id. at 10.
28
Rollo (G.R. No. 192903), pp. 23 -28 .
29
Rollo (G.R. No. 192901), p. 573 .
30
Id. at 605-614.
31
Id . at 612.
Decision 7 G.R. Nos. 192901 and 192903

respondents' act of filing three separate cases was justified and reasonable
given the circumstances.

The elements of forum shopping have been discussed by the Court in


several cases. In San Juan v. Arambulo, Sr., 32 the Court held:

Forum shopping is the filing of multiple suits involving the same


parties for the same cause of action, either simultaneously or successively,
for the purpose of obtaining a favorable judgment. A party violates the
rule against forum shopping if the elements of litis pendentia are
present; or if a final judgment in one case would amount to res judicata
in the other.

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, is 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; said requisites [are] also
constitutive of the requisites for auter action pendant or !is pendens." 33
(Emphases supplied)

Meanwhile, in Dy v. Mandy Commodities Co., lnc .,34 the Court


discussed the purpose of the rule on forum shopping:

Forum shopping is a deplorable practice of litigants consisting of


resorting to two different.fora for the purpose of obtaining the same relief,
to increase the chances of obtaining a favorable judgment. What is
pivotal to the determination of whether forum shopping exists or not is the
vexation caused to the courts and the party-litigants by a person who
asks appellate courts and/or administrative entities to rule on the same
related causes and/or to grant the same or substantially the same relief,
in the process creating the possibility of conflicting decisions by the
different courts or fora upon the same issues .

The grave evil sought to be avoided by the rule against forum


shopping is the rendition by two competent tribunals of two separate
and contradictory decisions. Unscrupulous party litigants, taking
advantage of a variety of competent tribunals, may repeatedly try their
luck in several different fora until a favorable result is reached. To avoid
the resultant confusion, this Court adheres strictly to the rules against forum
shopping, and any violation of these rules results in the dismissal of a case.
x x x35 (Emphases supplied; citations omitted)

32
514 Phil. 112 (2005).
33
Id . at I I 5- I 16.
34
611 Phil. 74 (2009).
35
Id . at 84.
Decision 8 G.R. Nos. 192901 and 192903

Moreover, in Uematsu v. Balinon, 36 the Court categorically stated that


the rule on forum shopping aims to avoid the rendition of contradictory
judgments of two competent courts or tribunals:

In fine, there is forum shopping when a party files two or more cases
involving the same parties, causes of action and reliefs. Notably, forum
shopping is one of the grounds for the dismissal of a case. The rule against
it aims to avoid the rendition of two competent courts of separate and
opposing rulings which may arise because a party-litigant, takes
advantage and tries his or her luck into seeking relief until a result in
one's favor is attained. 37 (Emphasis supplied)

Thus, to constitute forum shopping, the filing of several suits in


different fora, which involve the same parties, causes of action, or reliefs
prayed for, must be for the purpose of increasing the chances of obtaining a
favorable judgment.

Such is not the case here.

To recall, respondents filed three similar cases in three separate courts.


However, as borne by the records, they did so not for the purpose of increasing
their chance of obtaining a favorable judgment. Rather, respondents filed their
cases in three different courts because of the uncertainty as to the proper venue
of their action. As shown by the documents submitted before the Court,
Pacific's corporate records indicate three different venues as regards its
principal place of business. While respondents sought clarification with the
SEC, the Court cannot fault them for failing to wait for SEC' s response
because waiting for the same could have resulted in the foreclosure of their
available remedies. Moreover, immediately after their receipt of the SEC's
response, respondents withdrew the Manila and Pasig Cases. Undeniably,
therefore, the danger which the rule on forum shopping seeks to prevent - that
tribunals render contradictory decisions - is not attendant in this case because
only the Makati Case remained.

In fact, there have already been instances when the Court ruled that no
forum shopping exists upon a litigant's withdrawal of his or her other cases.

In The Executive Secretary v. Gordon, 38 Gordon filed a petition for


prohibition before the Court. However, upon realizing that the proper forum
for his case is the RTC, in accordance with the doctrine of hierarchy of courts,
he withdrew his petition for prohibition before the Court, and refiled the same

36
G.R. No. 234812, November 25, 2019.
37
Id .
38
359 Phil. 266 ( 1998).
Decision 9 G.R. Nos. 192901 and 192903

before the RTC. In declaring that Gordon did not commit forum shopping, the
Court explained:

In the case at bar, although respondent Richard J. Gordon filed a


petition for prohibition before this Court and, after two days, filed
substantially the same petition before the Regional Trial Court of Olongapo
City, the fact remains that (1) before filing his petition in the Olongapo court
he first filed a notice of withdrawal of his petition which this Court later
granted and (2) he withdrew his petition in this Court for the following
reason:

Due, however, to the present policy of the Court


requiring parties and their counsel to adhere strictly to the
hierarchy of courts and in order to obviate any technical
objection on this ground, petitioner has deemed it fit to
withdraw, as he hereby withdraws, the instant petition so that
it may be filed in the proper court where it can be ventilated
on its merits.

No adverse decision had been rendered by this Court against


respondent Gordon for which reason he thought it proper to institute
the second action in the trial court. The situation he found himself in is
similar to that in which a party, after filing a suit, realizes he made a
mistake because the court in which he has brought the case has no
jurisdiction. He, therefore, withdraws his action and refiles it in the
proper forum. For, indeed, the policy of this Court respecting the hierarchy
of courts and consequently prohibiting the filing of a petition in this Court
in view of the concurrent jurisdiction with the lower courts has been
consistently observed in the absence of any compelling reason for departing
from such policy. It is clear from respondent's actions and explanation
that they had no intention of disregarding court processes. They in fact
complied with Rule 7, §5 of the Rules of Civil Procedure. 39 (Emphases
supplied)

Similarly, in Benedicto v. Lacson, 40 the Court elucidated that there can


be no forum shopping when the danger of conflicting decisions is not present.
In the said case, the plaintiffs filed for the dismissal of their Pasig Case in
accordance with Section 1, Rule 17 of the Rules ofCourt. 41 The plaintiffs then
subsequently filed the same case in Bacolod City.

In ruling that forum shopping did not exist in the said case, the Court
held:

39 Id. at 272-273.
40
634 Phil. 154 (20 I 0).
41
Section l. Dismissal upon notice by plaintiff. -A complaint may be dismissed by the plaintiff by filing
a notice of dismissal at any time before service of the answer or of a motion for summary judgment.
Upon such notice being filed , the court shall issue an order confirming the dismissal. Unless otherwise
stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication
upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based
on or including the same claim .
Decision 10 G.R. Nos. 192901 and 192903

There is no dispute that the dismissal of the complaint in the Pasig


case, upon notice of the plaintiffs therein, was sanctioned by Section 1, Rule
17 of the Revised Rules of Court. Quite clearly, the Order declared that the
dismissal of the complaint was without prejudice to the re-filing thereof.
Moreover, even if the same were tested under the rules on litis pendentia
and res judicata, the danger of conflicting decisions cannot be present,
since the Pasig case was dismissed even before a responsive pleading
was filed by petitioner. Since a party resorts to forum shopping in order
to increase his chances of obtaining a favorable decision or action, it
has been held that a party cannot be said to have sought to improve his
chances of obtaining a favorable decision or action where no
unfavorable decision has even been rendered against him in any of the
cases he has brought before the courts.

While the RTC may have been of the opinion that the Pasig Case
was nevertheless "commenced" and, therefore, the same should have been
stated by respondents in their certification of non-forum shopping in the
Bacolod case, this Court does not share the same view.42 (Emphasis
supplied; citations omitted)

Further, in Roxas v. Court of Appeals, 43 the Court ruled that when the
dismissal of a case is at the instance of the petitioner, such dismissal could not
amount to litis pendentia or res judicata, and thus, there could be no forum
shopping:

Since a paiiy resorts to forum shopping in order to increase his


chances of obtaining a favorable decision or action, it has been held that a
party cannot be said to have sought to improve his chances of obtaining
a favorable decision or action where no unfavorable decision has ever
been rendered against him in any of the cases he has brought before the
courts. Forum shopping exists where the elements of litis pendencia are
present, and where a final judgment in one case will amount to res judicata
in the other. For the principle of res judicata to apply, the following must
be present: (1) a decision on the merits; (2) by a court of competent
jurisdiction; (3) the decision is final; and (4) the two actions involve
identical pai1ies, subject matter and causes of action.

In the case at bar, there was no adverse decision against the


petitioner in Civil Case No. 97-0523 which was the first case filed and
raffled to the sala (Branch 257) of Judge How. The dismissal without
prejudice of the complaint in Civil Case No. 97-0523 at the instance of the
petitioner was pursuant to Section 1, Rule 17 of the 1997 Rules of Civil
Procedure considering that it was done before service of answer or any
responsive pleading. The dismissal does not amount to litis pendencia
nor to res judicata. There is no litis pendencia since the first case before
Judge How was dismissed or withdrawn by the plaintiff (herein
petitioner), without prejudice, upon her filing of a notice of dismissal,
pursuant to Section 1, Rule 17 of the 1997 Rules of Civil Procedure. To use
the wording of that rule, Judge How's order is one merely "confirming the

42
Benedicto v. Lacson, supra note 40 at 172-173.
43
4 15 Phil. 430 (200 I).
Decision 11 G.R. Nos. 192901 and 192903

dismissal" of the complaint by the plaintiff (herein petitioner). Neither is


there res judicata for the reason that the order of dismissal was not a
decision on the merits but a dismissal "without prejudice."

Thus, private respondent's apprehension that the case was dismissed


in order to be transferred to the sala of a judge who is allegedly more
sympathetic to the petitioner's cause is baseless and not a valid reason to
declare the petitioner guilty of forum shopping. First, the petitioner is not
assured that the case would be raffled to a more sympathetic judge. There
are five (5) RTC branches in Parafiaque, namely, branch nos. 257,258,259,
260 and 274. Second, Judge Bautista-Ricafort ofRTC of Parafiaque, Branch
260, is presumed to be fair and impartial despite private respondent's claim
that she is an alleged law school classmate of the petitioner's counsel. In
any event, at the slightest doubt of the impartiality of the said trial judge,
private respondent could have filed before the same judge a motion for her
inhibition on that ground. But private respondent did not. 44 (Emphases
supplied; citations omitted)

From the foregoing, it is clear that there is no forum shopping in this


case. Again, the Pasig and Manila Cases were immediately withdrawn, even
before the filing of any responsive pleadings therein. This means that such
withdrawal, at the instance of respondents, could not have resulted to litis
pendentia or res judicata. More compellingly, there is no possibility of
conflicting decisions in this case, because only the Makati Case remained.

Undeniably, respondents did not commit any act of forum shopping


because there is no deliberate or willful intent on their part to receive a more
favorable judgment when they filed the Makati, Pasig, and Manila Cases. All
things considered, the CA did not err when it found that respondents did not
engage in forum shopping.

WHEREFORE, the Petition for Review on Certiorari dated August 2,


2010 is DENIED. The Decision dated January 27, 2010 and the Resolution
dated July 6, 2010 of the Comi of Appeals in CA-G.R. SP No. 109312 are
AFFIRMED.

SO ORDERED.

s~
Associate =s~e

44
Id. at 443-444.
Decision 12 G.R. Nos. 192901 and 192903

WE CONCUR:

HEN . INTING
Associate Justice

~
Associate Justice

ATTEST AT ION

I attest that the conclusions ·n the above Decision had been reached in
consultation before the cases w o the writer of the opinion of the
Court's Division.

S. CAGUIOA
Decision 13 G.R. Nos. 192901 and 192903

CER TIFIC AT ION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairperson's Attestation, I certify that the conclusions in the above Decision
had been reached in consultation before the cases were assigned to the writer
of the opinion of the Court's Division.
Today is Sunday, February 18, 2024

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Manila

FIRST DIVISION

[ A.C. No. 9594. April 05, 2022 ]

THE HEIRS OF THE LATE SPOUSES JUSTICE AND MRS. SAMUEL F. REYES, HEREIN REPRESENTED BY
JUDGE ANTONIO C. REYES, COMPLAINANTS, VS. ATTY. RONALD L. BRILLANTES, RESPONDENT.

DECISION

INTING, J.:

The Court resolves the Complaint1 for disbarment filed by the Heirs of Justice Samuel F. Reyes and Mrs.
Antonia C. Reyes (complainants), represented by one of the heirs, Judge Antonio C. Reyes (Judge Reyes), against
respondent Atty. Ronald L. Brillantes (Atty. Brillantes) for alleged violation of the rule on forum shopping, the
Lawyer's Oath, and the Code of Professional Responsibility (CPR).

The Antecedents

On February 17, 2005, the Estate of the late Justice Samuel F. Reyes and Mrs. Antonia C. Reyes (the Estate),
through its administrator, Dr. Samuel C. Reyes, Jr., filed a Complaint2 for quieting of title against the Spouses
Florencio and Felicitas Divina (collectively, Spouses Divina) before Branch 19, Regional Trial Court (RTC), Cauayan
City, Isabela.3

Instead of filing an answer, Spouses Divina filed a Motion to Dismiss4 raising, among others, the following
grounds: (1) lack of jurisdiction; (2) failure to state a cause of action; and (3) failure to implead all indispensable
parties.5 The RTC, however, denied the motion for lack of merit in the Order6 dated January 3, 2006.

Despite the denial of their motion, Spouses Divina still failed to file their answer to the complaint within the
period allowed by the Rules of Court. Then, on January 17, 2006, they moved for reconsideration of the Order dated
January 3, 2006. This prompted the Estate to file a motion to declare Spouses Divina in default for their failure to file
an answer to the Complaint within the reglementary period.7

In the Order8 dated August 11, 2006, the RTC denied Spouses Divina's motion for reconsideration and declared
them in default. Hence, the Estate was allowed to present its evidence ex-parte.9

Undeterred, Spouses Divina sought a recourse from the Court of Appeals (CA) by filing a certiorari petition that
assailed the jurisdiction of the RTC over the complaint and prayed for the issuance of injunctive relief in their favor.
Notably, the CA dismissed the petition for lack of merit in its Decision10 dated July 10, 2007 which has already
become final and executory per the Corrected Entry of Judgment11 dated August 5, 2007.12

On November 21, 2007, the RTC rendered a Decision13 in favor of the Estate and cancelled the certificates of
title in the names of the Spouses Divina. On appeal, the CA affirmed the RTC Decision in toto in its Decision14 dated
January 20, 2010. The CA Decision became final and executory on February 16, 2010 as evidenced by the Entry of
Judgment15 dated May 27, 2010.

Consequently, the Estate moved for the execution of the CA Resolution, which the RTC granted in the
Order16 dated July 23, 2010.

Meanwhile, on August 9, 2011, Spouses Divina engaged the services of Atty. Brillantes in relation to the civil
case.17

On September 29, 2011, Spouses Divina, through Atty. Brillantes, filed a Petition for Annulment of
Judgment18 (Annulment Petition) with the CA that prayed for the RTC Decision to be set aside on the grounds of
extrinsic fraud and lack of jurisdiction.19 In the Annulment Petition, Atty. Brillantes argued that his clients' belated
receipt of the RTC Decision on August 19, 2011 prevented them from filing a timely appeal thereof with the CA.20

In the Resolution21 dated February 29, 2012, the CA denied due course to the Annulment Petition and dismissed
the case for being effectively barred by the Rules. The CA likewise denied the motion for reconsideration filed by
Atty. Brillantes in its Resolution22 dated July 12, 2012.

In the disbarment complaint, Judge Reyes alleged that by filing the Annulment Petition with the CA, Atty.
Brillantes had grossly and deliberately violated: (a) the Lawyer's Oath and the CPR for committing a falsehood and
for abusing and misusing the procedural rules and (b) the rule on forum shopping.23 Specifically, Judge Reyes
pointed out that Spouses Divina received a copy of the RTC Decision on November 27, 2007, and not on August 19,
2011 as Atty. Brillantes claimed in the Annulment Petition. Judge Reyes argued that Atty. Brillantes had known such
declaration to be a falsity considering that he himself had attached copies of the RTC Decision and the CA
Resolution dated January 20, 2010 to the Annulment Petition that he filed before the CA.24

Finally, Judge Reyes averred that the malicious actions of Atty. Brillantes had caused further delay in the
settlement of the Estate, which began in 1995, despite the finality of the CA Decision dated January 20, 2010.25

In his Comment,26 Atty. Brillantes countered that Spouses Divina never disclosed to him that an appeal of the
RTC Decision had already been filed and resolved by the CA.27 He explained that he only relied on the interview he
conducted with his clients and the documents they submitted to him in order to facilitate the drafting and the filing of
the Annulment Petition, which he insisted was done in good faith.28

Consequently, the Court, in its Resolution29 dated March 6, 2013, referred the disbarment complaint to the
Integrated Bar of the Philippines (IBP) for investigation, report, and recommendation.30

The Proceedings before the IBP

In his Report and Recommendation31 dated November 10, 2014 (the Report), Investigating Commissioner
Ricardo M. Espina found Atty. Brillantes guilty of violating the rule on forum shopping, the Lawyer's Oath, and the
CPR; he recommended that Atty. Brillantes be suspended from the practice of law for a period of two (2)
months.32 The IBP Board of Governors, in the Resolution No. XXI-2015-12133 dated January 31, 2015, adopted the
findings in the Report; but it increased the recommended period of suspension from two (2) to three (3) months.

Unsatisfied, Judge Reyes filed a Motion for Reconsideration34 in which he prayed for the imposition of the
penalty of disbarment against Atty. Brillantes for his transgressions.35 He argued that the Report failed to consider
the other violations of the CPR that were inherent in Atty. Brillantes' act of forum shopping.36

In the Resolution No. XXII-2016-33937 dated May 28, 2016, the IBP Board of Governors increased the
recommended penalty to be imposed against Atty. Brillantes to suspension from the practice of law for a period of
one (1) year for having deliberately misled the CA when he filed the Annulment Petition despite having knowledge
that the RTC Decision had already become final and executory.38
The IBP Board of Governors further resolved to direct Atty. Ramon S. Esguerra, then Director of the IBP
Commission on Bar Discipline, to prepare an extended resolution explaining the Board's action.39

In the Extended Resolution40 dated February 28, 2017, the IBP Board of Governors noted as follows:

First, Atty. Brillantes already admitted that he relied solely on the interview and representations of his clients as
regards their receipt of the RTC Decision purportedly on August 19, 2011. This clearly indicates that Atty. Brillantes
had failed to exercise due diligence in checking the status of the civil case at hand and retrieving all relevant
documents from the RTC in relation thereto.41

Second, under the circumstances, Atty. Brillantes had the obligation to personally check the records of the civil
case. His failure to do so negates his claim of good faith. The fact that the case had been passed from one lawyer to
another does not excuse him from his duty to diligently study a case he agreed to handle.42

And third, Atty. Brillantes' acts of preparing and filing the Annulment Petition without first verifying the status of
the civil case and retrieving the pertinent documents from the trial court amount to gross negligence.43

Thus, the IBP Board of Governors concluded that Atty. Brillantes had violated Rules 18.02, 18.03, and 18.04,
Canon 18 of the CPR and recommended that he be suspended from the practice of law for a period of one (1) year
considering his gross negligence in preparing and filing the Annulment Petition as well as the undue delay he
caused in the settlement of the Estate.44

Aggrieved, Atty. Brillantes filed a Motion for Reconsideration45 with the IBP Board of Governors and prayed for
his exoneration from the charges or the reduction of the recommended penalty against him.46 In his motion, Atty.
Brillantes admitted his shortcomings in handling the civil case and expressed his remorse for having transgressed
his duties as an officer of the Court by his reliance on the misrepresentations of his clients.47

Despite the opposition48 to the motion filed by Judge Reyes, the IBP Board of Governors, in the
Resolution49 dated June 18, 2019, reduced the recommended period of suspension of Atty. Brillantes from one (1)
year to only six (6) months.

The Issue

The sole issue for the Court's resolution is whether Atty. Brillantes should be held administratively liable for his
actions.

The Court's Ruling

After a careful review of the case, the Court concurs with the findings and recommendation of the IBP that Atty.
Brillantes be suspended from the practice of law for a period of six (6) months.

A lawyer who agrees to take up the cause of a client is expected to competently and diligently protect the latter's
rights in accordance with his or her duties under the CPR.50 Failure to do so would render the lawyer answerable not
only to his or her client, but also to the legal profession, the courts, and society.51

In particular, Rules 18.02 and 18.03, Canon 18 of the CPR provides:

CANON 18 – A lawyer shall serve his client with competence and diligence.

xxxx

Rule 18.02 – A lawyer shall not handle any legal matter without adequate preparation.

Rule 18.03 – A lawyer shall not neglect a legal matter entrusted to him, and his negligence in
connection therewith shall render him liable. 1a⍵ ⍴ h!1

In the case, there is no question that Atty. Brillantes had failed to competently handle the case of his clients to
the detriment of herein complainants, the courts, and the legal profession itself. His acts of preparing and filing the
Annulment Petition with the CA on the sole basis of his clients' misrepresentations as to the actual status of the civil
case shows just exactly how far he fell short of his obligations as an officer of the Court. Indeed, the fact that the civil
case had been transferred from one lawyer to another does not excuse Atty. Brillantes from diligently studying the
case, which obviously included reviewing the court records himself to determine, among others, the proper recourse
to undertake to protect his clients' cause.52

Worse, it appears that Atty. Brillantes had the relevant court records in the civil case in his possession when he
prepared the Annulment Petition. In fact, by his own admission, he himself had attached thereto copies of the RTC
Decision and the Notice of Appeal and the CA Decisions dated July 10, 2007 and January 20, 2010, which
dismissed his clients' certiorari petition and denied their appeal of the RTC Decision, respectively.53 For clarity and
precision, the pertinent portion of his Motion for Reconsideration is quoted below:

Nevertheless, it is the most regret of the undersigned that he has succumbed to his weakness so
that he was lured by the representations of his client spouses. x x x While it may be true that there
were documentary attachments annexed to the [Annulment Petition] of his clients, he trusted so
much the representation made by them so that respondent-movant had even let [them] execute a
Certificate of Non-Forum Shopping. Although admittedly, it is the lapse of the undersigned that he
has reposed so much trust in his clients, being foundation of a lawyer-client relationship.54 (Italics
supplied.)

Simply put, by fully relying on the inaccurate information divulged by his clients during their interview, he allowed
himself to be deceived into filing the Annulment Petition. In so doing, he inadvertently committed a falsehood before
the CA, which also constitutes a breach of the Lawyer's Oath and Rule 10.01, Canon 10 of the CPR, viz.:

CANON 10 – A lawyer owes candor, fairness and good faith to the court.

Rule 10.01 – A lawyer shall not do any falsehood, nor consent to the doing of any in Court; nor
shall he mislead, or allow the Court to be misled by any artifice.

More than that, Atty. Brillantes effectively violated the rule on forum shopping when he filed the Annulment
Petition with the CA in order to secure a favorable judgment for his clients despite the finality of the CA Decision
dated January 20, 2010, which upheld the RTC Decision in the civil case on appeal. This, too, is tantamount to a
violation of Rules 12.02 and 12.04, Canon 12 of the CPR, viz.:

CANON 12 – A lawyer shall exert every effort and consider it his duty to assist in the speedy and
efficient administration of justice.

xxxx

Rule 12.02 – A lawyer shall not file multiple actions arising from the same cause.

xxxx

Rule 12.04 - A lawyer shall not unduly delay a case, impede the execution of a judgment or misuse
Court processes.

As for the proper penalty, the Court notes these judicial precedents in relation to the violations discussed above
as regards the administrative sanctions imposed on the erring lawyers therein:

First, in Penilla v. Atty. Alcid, Jr.,55 the Court suspended the respondent lawyer from the practice of law for six (6)
months for having neglected his client's case in violation of Rules 18.03 and 18.04, Canon 18 of the CPR, among
others.

Second, the Court, in Raz v. Atty. Rivero,56 explained that the penalty for engaging in deceitful conduct under
Rule 10.01, Canon 10 of the CPR ranges from suspension from the practice of law for a period of one (1) to three
(3) years to disbarment, depending on the circumstances of each case.57
And third, in the case of Williams v. Atty. Enriquez,58 the Court suspended the respondent lawyer from the
practice of law for six (6) months for violation of the rule on forum shopping and Canon 12 of the CPR.59

In determining the proper penalty to be meted out against Atty. Brillantes, the Court also takes into account the
peculiarity of the case in that the actions of Atty. Brillantes caused direct prejudice not against his clients' cause, but
towards the opposing parties, or herein complainants, instead. As the IBP pointed out, his negligence in handling the
case caused undue delay in the settlement of the Estate, which had been pending since 1995.

However, the Court cannot just disregard the following circumstances which warrant the imposition of a lower
penalty against Atty. Brillantes: (1) his admission of his shortcomings in the handling of the civil case and his sincere
apology for his actions; (2) this is his first infraction; and (3) the negative economic impact of the Coronavirus
Disease 2019 pandemic to the country.

All things considered, the Court deems the penalty of suspension from the practice of law for a period of six (6)
months, as recommended by the IBP, to be commensurate with Atty. Brillantes' transgressions.

WHEREFORE, the Court finds respondent Atty. Ronald L. Brillantes GUILTY of violating the rule on
forum shopping, the Lawyer's Oath, and Rule 10.01, Canon 10, Rules 12.02 and 12.04, Canon 12, and
Rules 18.02 and 18.03, Canon 18 of the Code of Professional Responsibility. Accordingly, the Court
hereby SUSPENDS him from the practice of law for a period of six (6) months, with a STERN
WARNING that a repetition of the same or similar acts shall be dealt with more severely. 1a⍵ ⍴ h!1

The suspension in the practice of law shall take effect immediately upon receipt of this Decision by
respondent Atty. Ronald L. Brillantes. He is DIRECTED to immediately file a Manifestation to the Court
that his suspension has started, copy furnished all courts and quasi-judicial bodies where he has
entered his appearance as counsel.

Let copies of this Decision be furnished the Office of the Bar Confidant to be appended to the
personal records of respondent Atty. Ronald L. Brillantes, and the Office of the Court Administrator and
the Integrated Bar of the Philippines for their information and guidance.

SO ORDERED.

Gesmundo, C.J., (Chairperson), Caguioa, Gaerlan, and Dimaampao, JJ., concur.

Footnotes
1
Rollo, pp. 1-9.
2
Id. at 10-14.
3
Id. at 1-2.
4
Id. at 15-23.
5
Id. at 16-17.
6
Id. at 24-25; penned by Executive Judge Raul V. Babaran.
7
Id. at 2.
8
Id. at 36.
9
Id. at 2.
10
Id. at 56-65; penned by Associate Justice Normandie B. Pizarro with Associate Justices Edgardo P. Cruz
and Fernanda Lampas Peralta, concurring.
11
Id. at 66.
12
Id. at 3.
13
Id. at 68-73.
14
Id. at 76-94; penned by Associate Justice Antonio L. Villamor with Associate Justices Isaias P. Dicdican and
Romeo F. Barza, concurring.
15
Id. at 95.
16
Id. at 99.
17
Id. at 280.
18
Id. at 102-121.
19
Id. at 103 and 107-108
20
Id. at 103.
21
Id. at 123-125; penned by Associate Justice Hakim S. Abdulwahid with Associate Justices Marlene
Gonzales Sison and Leoncia R. Dimagiba, concurring.
22
Id. at 127-128.
23
Id. at 5.
24
Id. at 6.
25
Id.
26
Id. at 130-141.
27
Id. at 130-131.
28
Id. at 136-137.
29
Id. at 191-192.
30
Id. at 191.
31
Id. at 258-263.
32
Id. at 260-262.
33
Id. at 257, with the second page of the Resolution unpaginated.
34
Id. at 264-268.
35
Id. at 267.
36
Id.
37
Id. at 277-278.
38
Id. at 277.
39
Id. at 278.
40
Id. at 279-289.
41
Id. at 283-285.
42
Id. at 285.
43
Id.
44
Id. at 286, 288.
45
Id. at 298-304.
46
Id. at 304.
47
Id. at 300.
48
Id. at 308-311.
49
Id. at 320-321.
50
See Del Mundo v. Atty. Capistrano, 685 Phil. 687, 692-693 (2012).
51
Id. at 692.
52
See Hernandez v. Atty. Padilla, 688 Phil. 329 (2012).
53
Rollo, pp. 6, 260-261.
54
Id. at 300.
55
717 Phil. 210 (2013).
56
A.C. No. 2999, February 12, 2020.
57
Id.
58
769 Phil. 666 (2015).
59
Id. at 672-673.

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Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 175514 February 14, 2011

PHILIPPINE BANK OF COMMUNICATIONS, Petitioner,


vs.
SPOUSES JOSE C. GO and ELVY T. GO, Respondents.

DECISION

MENDOZA, J.:

This is a petition for review on certiorari under Rule 45 filed by petitioner Philippine Bank of Communications
(PBCom) seeking to set aside the July 28, 2006 Decision,1 and the November 27, 2006 Resolution2 of the Court of
Appeals (CA) in CA G.R. CV No. 77714. The CA decision reversed and set aside the January 25, 2002 Decision of
the Regional Trial Court, Branch 42, Manila (RTC), which granted the motion for summary judgment and rendered
judgment on the basis of the pleadings and attached documents.

THE FACTS

On September 30, 1999, respondent Jose C. Go (Go) obtained two loans from PBCom, evidenced by two
promissory notes, embodying his commitment to pay ₱17,982,222.22 for the first loan, and ₱80 million for the
second loan, within a ten-year period from September 30, 1999 to September 30, 2009.3

To secure the two loans, Go executed two (2) pledge agreements, both dated September 29, 1999, covering shares
of stock in Ever Gotesco Resources and Holdings, Inc. The first pledge, valued at ₱27,827,122.22, was to secure
payment of the first loan, while the second pledge, valued at ₱70,155,100.00, was to secure the second loan.4

Two years later, however, the market value of the said shares of stock plunged to less than ₱0.04 per share. Thus,
PBCom, as pledgee, notified Go in writing on June 15, 2001, that it was renouncing the pledge agreements.5

Later, PBCom filed before the RTC a complaint6 for sum of money with prayer for a writ of preliminary attachment
against Go and his wife, Elvy T. Go (Spouses Go), docketed as Civil Case No. 01-101190. PBCom alleged that
Spouses Go defaulted on the two (2) promissory notes, having paid only three (3) installments on interest payments
—covering the months of September, November and December 1999. Consequently, the entire balance of the
obligations of Go became immediately due and demandable. PBCom made repeated demands upon Spouses Go
for the payment of said obligations, but the couple imposed conditions on the payment, such as the lifting of
garnishment effected by the Bangko Sentral ng Pilipinas (BSP) on Go’s accounts.7

Spouses Go filed their Answer with Counterclaim8 denying the material allegations in the complaint and stating,
among other matters, that:

8. The promissory note referred to in the complaint expressly state that the loan obligation is payable within the
period of ten (10) years. Thus, from the execution date of September 30, 1999, its due date falls on September 30,
2009 (and not 2001 as erroneously stated in the complaint). Thus, prior to September 30, 2009, the loan obligations
cannot be deemed due and demandable.

In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired,
shall depend upon the happening of the event which constitutes the condition. (Article 1181, New Civil Code)

9. Contrary to the plaintiff’s proferrence, defendant Jose C. Go had made substantial payments in terms of his
monthly payments. There is, therefore, a need to do some accounting works (sic) to reconcile the records of both
parties.

10. While demand is a necessary requirement to consider the defendant to be in delay/default, such has not been
complied with by the plaintiff since the former is not aware of any demand made to him by the latter for the
settlement of the whole obligation.

11. Undeniably, at the time the pledge of the shares of stock were executed, their total value is more than the
amount of the loan or at the very least, equal to it. Thus, plaintiff was fully secured insofar as its exposure is
concerned.

12. And even assuming without conceding, that the present value of said shares x x x went down, it cannot be
considered as something permanent since the prices of stocks in the market either increases (sic) or decreases (sic)
depending on the market forces. Thus, it is highly speculative for the plaintiff to consider said shares to have
suffered tremendous decrease in its value. More so, it is unfair for the plaintiff to renounce or abandon the pledge
agreements.

On September 28, 2001, PBCom filed a verified motion for summary judgment9 anchored on the following grounds:

I. MATERIAL AVERMENTS OF THE COMPLAINT ADMITTED BY DEFENDANT-SPOUSES IN THEIR


ANSWER TO OBVIATE THE NECESSITY OF TRIAL

II. NO REAL DEFENSES AND NO GENUINE ISSUES AS TO ANY MATERIAL FACT WERE TENDERED BY
THE DEFENDANT-SPOUSES IN THEIR ANSWER

III. PLANTIFF’S CAUSES OF ACTIONS ARE SUPPORTED BY VOLUNTARY ADMISSIONS AND


AUTHENTIC DOCUMENTS WHICH MAY NOT BE CONTRADICTED.10

PBCom contended that the Answer interposed no specific denials on the material averments in paragraphs 8 to 11
of the complaint such as the fact of default, the entire amount being already due and demandable by reason of
default, and the fact that the bank had made repeated demands for the payment of the obligations.11

Spouses Go opposed the motion for summary judgment arguing that they had tendered genuine factual issues
calling for the presentation of evidence.12

The RTC granted PBCom’s motion in its Judgment13 dated January 25, 2002, the dispositive portion of which
states:

WHEREFORE, in view of all the foregoing, judgment is rendered for the plaintiff and against the defendants ordering
them to pay plaintiff jointly and severally the following:

1. The total amount of ₱117,567,779.75, plus interests and penalties as stipulated in the two promissory
notes;

2. A sum equivalent to 10% of the amount involved in this case, by way of attorney’s fees; and

3. The costs of suit.

SO ORDERED.14
Spouses Go moved for a reconsideration but the motion was denied in an order15 dated March 20, 2002.

RULING OF THE COURT OF APPEALS

In its Decision dated July 28, 2006, the CA reversed and set aside the assailed judgment of the RTC, denied
PBCom’s motion for summary judgment, and ordered the remand of the records to the court of origin for trial on the
merits. The dispositive portion of the decision states:

WHEREFORE, premises considered, the assailed judgment of the Regional Trial Court, Branch 42 of Manila in Civil
Case No. 01-101190 is hereby REVERSED and SET ASIDE, and a new one entered denying plaintiff-appellee’s
motion for summary judgment. Accordingly, the records of the case are hereby remanded to the court of origin for
trial on the merits.

SO ORDERED.16

The CA could not agree with the conclusion of the RTC that Spouses Go admitted paragraphs 3, 4 and 7 of the
complaint. It found the supposed admission to be insufficient to justify a rendition of summary judgment in the case
for sum of money, since there were other allegations and defenses put up by Spouses Go in their Answer which
raised genuine issues on the material facts in the action.17

The CA agreed with Spouses Go that paragraphs 3 and 4 of the complaint merely dwelt on the fact that a contract of
loan was entered into by the parties, while paragraph 7 simply emphasized the terms of the promissory notes
executed by Go in favor of PBCom. The fact of default, the amount of the outstanding obligation, and the existence
of a prior demand, which were all material to PBCom’s claim, were "hardly admitted"18 by Spouses Go in their
Answer and were, in fact, effectively questioned in the other allegations in the Answer.19

PBCom’s motion for reconsideration was denied in a resolution20 dated November 27, 2006.

Thus, this petition for review.

THE ISSUES

WHETHER THE COURT OF APPEALS ERRED OR ACTED IN GRAVE ABUSE OF DISCRETION


AMOUNTING TO LACK, OR EXCESS OF JURISDICTION IN RULING THAT THERE EXISTS A
GENUINE ISSUE AS TO MATERIAL FACTS IN THE ACTION IN SPITE OF THE UNEQUIVOCAL
ADMISSIONS MADE IN THE PLEADINGS BY RESPONDENTS; AND

II

WHETHER THE COURT OF APPEALS ERRED OR ACTED IN GRAVE ABUSE OF JURISDICTION


[DISCRETION] IN HOLDING THAT ISSUES WERE RAISED ABOUT THE FACT OF DEFAULT, THE
AMOUNT OF THE OBLIGATION, AND THE EXISTENCE OF PRIOR DEMAND, EVEN WHEN THE
PLEADING CLEARLY POINTS TO THE CONTRARY.

Petitioner PBCom’s Position: Summary judgment was proper, as there were no genuine issues raised as to
any material fact.

PBCom argues that the material averments in the complaint categorically admitted by Spouses Go obviated the
necessity of trial. In their Answer, Spouses Go admitted the allegations in paragraphs 3 and 4 of the Complaint
pertaining to the security for the loans and the due execution of the promissory notes,21 and those in paragraph 7
which set forth the acceleration clauses in the promissory note. Their denial of paragraph 5 of the Complaint
pertaining to the Schedules of Payment for the liquidation of the two promissory notes did not constitute a specific
denial required by the Rules.22

Even in the Comment23 of Spouses Go, the clear, categorical and unequivocal admission of paragraphs 3, 4, and 7
of the Complaint had been conceded.24

PBCom faults the CA for having formulated non-existent issues pertaining to the fact of default, the amount of
outstanding obligation and the existence of prior demand, none of which is borne by the pleadings or the records.25

The Spouses Go, PBCom argues, cannot negate or override the legal effect of the acceleration clauses embodied in
each of the two promissory notes executed by Go. Moreover, the non-payment of arrearages constituting default
was admitted by Go in his letters to PBCom dated March 3 and April 7, 2000, respectively.26 Therefore, by such
default, they have lost the benefit of the period in their favor, pursuant to Article 119827 of the Civil Code.

Further, PBCom claims that its causes of action are supported by authentic documents and voluntary admissions
which cannot be contradicted. It cites the March 3 and April 7, 2000 letters of Go requesting deferment of interest
payments on his past due loan obligations to PBCom, as his assets had been placed under attachment in a case
filed by the BSP.28 PBCom emphasizes that the said letters, in addition to its letters of demand duly acknowledged
and received by Go, negated their claim that they were not aware of any demand having been made.29

Respondent spouses’ position: Summary judgment was not proper.

The core contention of Spouses Go is that summary judgment was not proper under the attendant circumstances,
as there exist genuine issues with respect to the fact of default, the amount of the outstanding obligation, and the
existence of prior demand, which were duly questioned in the special and affirmative defenses set forth in the
Answer. Spouses Go agree with the CA that the admissions in the pleadings pertained to the highlight of the terms
of the contract. Such admissions merely recognized the existence of the contract of loan and emphasized its terms
and conditions.30 Moreover, although they admitted paragraphs 3, 4, and 7, the special and affirmative defenses
contained in the Answer tendered genuine issues which could only be resolved in a full-blown trial.31

On the matter of specific denial, Spouses Go posit that the Court decisions cited by PBCom32 do not apply on all
fours in this case. Moreover, the substance of the repayment schedule was not set forth in the complaint. It,
therefore, follows that the act of attaching copies to the complaint is insufficient to secure an implied admission.
Assuming arguendo that it was impliedly admitted, the existence of said schedule and the promissory notes would
not immediately make private respondents liable for the amount claimed by PBCom.33 Before respondents may be
held liable, it must be established, first, that they indeed defaulted; and second, that the obligations has remained
outstanding.34

Spouses Go also state that although they admitted paragraphs 3, 4 and 7 of the Complaint, the fact of default, the
amount of outstanding obligation and the existence of prior demand were fully questioned in the special and
affirmative defenses.35

RULING OF THE COURT

The Court agrees with the CA that "[t]he supposed admission of defendants-appellants on the x x x allegations in
the complaint is clearly not sufficient to justify the rendition of summary judgment in the case for sum of money,
considering that there are other allegations embodied and defenses raised by the defendants-appellants in their
answer which raise a genuine issue as to the material facts in the action."36

The CA correctly ruled that there exist genuine issues as to three material facts, which have to be addressed during
trial: first, the fact of default; second, the amount of the outstanding obligation, and third, the existence of prior
demand.

Under the Rules, following the filing of pleadings, if, on motion of a party and after hearing, the pleadings, supporting
affidavits, depositions and admissions on file show that, "except as to the amount of damages, there is no genuine
issue as to any material fact, and that the moving party is entitled to a judgment as a matter of law,"37 summary
judgment may be rendered. This rule was expounded in Asian Construction and Development Corporation v.
Philippine Commercial International Bank,38 where it was written:

Under Rule 35 of the 1997 Rules of Procedure, as amended, except as to the amount of damages, when there is no
genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law, summary
judgment may be allowed.39 Summary or accelerated judgment is a procedural technique aimed at weeding out
sham claims or defenses at an early stage of litigation thereby avoiding the expense and loss of time involved in a
trial.40

Under the Rules, summary judgment is appropriate when there are no genuine issues of fact which call for the
presentation of evidence in a full-blown trial. Even if on their face the pleadings appear to raise issues, when the
affidavits, depositions and admissions show that such issues are not genuine, then summary judgment as
prescribed by the Rules must ensue as a matter of law. The determinative factor, therefore, in a motion for summary
judgment, is the presence or absence of a genuine issue as to any material fact.

A "genuine issue" is an issue of fact which requires the presentation of evidence as distinguished from a sham,
fictitious, contrived or false claim. When the facts as pleaded appear uncontested or undisputed, then there is no
real or genuine issue or question as to the facts, and summary judgment is called for. The party who moves for
summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the
issue posed in the complaint is patently unsubstantial so as not to constitute a genuine issue for trial. Trial courts
have limited authority to render summary judgments and may do so only when there is clearly no genuine issue as
to any material fact. When the facts as pleaded by the parties are disputed or contested, proceedings for summary
judgment cannot take the place of trial.41 (Underscoring supplied.)

Juxtaposing the Complaint and the Answer discloses that the material facts here are not undisputed so as to call for
the rendition of a summary judgment. While the denials of Spouses Go could have been phrased more strongly or
more emphatically, and the Answer more coherently and logically structured in order to overthrow any shadow of
doubt that such denials were indeed made, the pleadings show that they did in fact raise material issues that have
to be addressed and threshed out in a full-blown trial.

PBCom anchors its arguments on the alleged implied admission by Spouses Go resulting from their failure to
specifically deny the material allegations in the Complaint, citing as precedent Philippine Bank of Communications v.
Court of Appeals,42 and Morales v. Court of Appeals. Spouses Go, on the other hand, argue that although
admissions were made in the Answer, the special and affirmative defenses contained therein tendered genuine
issues.

Under the Rules, every pleading must contain, in a methodical and logical form, a plain, concise and direct
statement of the ultimate facts on which the party pleading relies for his claim or defense, as the case may be,
omitting the statement of mere evidentiary facts.43

To specifically deny a material allegation, a defendant must specify each material allegation of fact the truth of which
he does not admit, and whenever practicable, shall set forth the substance of the matters upon which he relies to
support his denial. Where a defendant desires to deny only a part of an averment, he shall specify so much of it as
is true and material and shall deny only the remainder. Where a defendant is without knowledge or information
sufficient to form a belief as to the truth of a material averment made in the complaint, he shall so state, and this
shall have the effect of a denial.44

Rule 8, Section 10 of the Rules of Civil Procedure contemplates three (3) modes of specific denial, namely: 1) by
specifying each material allegation of the fact in the complaint, the truth of which the defendant does not admit, and
whenever practicable, setting forth the substance of the matters which he will rely upon to support his denial; (2) by
specifying so much of an averment in the complaint as is true and material and denying only the remainder; (3) by
stating that the defendant is without knowledge or information sufficient to form a belief as to the truth of a material
averment in the complaint, which has the effect of a denial.45

The purpose of requiring the defendant to make a specific denial is to make him disclose the matters alleged in the
complaint which he succinctly intends to disprove at the trial, together with the matter which he relied upon to
support the denial. The parties are compelled to lay their cards on the table.46

Again, in drafting pleadings, members of the bar are enjoined to be clear and concise in their language, and to be
organized and logical in their composition and structure in order to set forth their statements of fact and arguments
of law in the most readily comprehensible manner possible. Failing such standard, allegations made in pleadings
are not to be taken as stand-alone catchphrases in the interest of accuracy. They must be contextualized and
interpreted in relation to the rest of the statements in the pleading.

In Spouses Gaza v. Lim, the Court ruled that the CA erred in declaring that the petitioners therein impliedly admitted
respondents' allegation that they had prior and continuous possession of the property, as petitioners did in fact
enumerate their special and affirmative defenses in their Answer. They also specified therein each allegation in the
complaint being denied by them. The Court therein stated:

The Court of Appeals held that spouses Gaza, petitioners, failed to deny specifically, in their answer, paragraphs 2,
3 and 5 of the complaint for forcible entry quoted as follows:

xxx xxx xxx

2. That plaintiffs are the actual and joint occupants and in prior continuous physical possession since 1975 up to
Nov. 28, 1993 of a certain commercial compound described as follows:

A certain parcel of land situated in Bo. Sta. Maria, Calauag, Quezon. Bounded on the N., & E., by Julian de Claro;
on the W., by Luis Urrutia. Containing an area of 5,270 square meters, more or less. Declared under Ramon J. Lim's
Tax Dec. No. 4576 with an Ass. Value of P26,100.00

3. That plaintiffs have been using the premises mentioned for combined lumber and copra business. Copies of
plaintiffs' Lumber Certificate of Registration No. 2490 and PCA Copra Business Registration No. 6265/76 are hereto
attached as Annexes "A" and "B" respectively; the Mayor's unnumbered copra dealer's permit dated Dec. 31, 1976
hereto attached as Annex "C";

xxx xxx xxx

5. That defendants' invasion of plaintiffs' premises was accomplished illegally by detaining plaintiffs' caretaker Emilio
Herrera and his daughter inside the compound, then proceeded to saw the chain that held plaintiffs' padlock on the
main gate of the compound and then busted or destroyed the padlock that closes the backyard gate or exit. Later,
they forcibly opened the lock in the upstairs room of plaintiff Agnes J. Lim's quarters and defendants immediately
filled it with other occupants now. Copy of the caretaker's (Emilio Herrera) statement describing in detail is hereto
attached as Annex "D";

xxx xxx x x x7

The Court of Appeals then concluded that since petitioners did not deny specifically in their answer the above-
quoted allegations in the complaint, they judicially admitted that Ramon and Agnes Lim, respondents, "were in prior
physical possession of the subject property, and the action for forcible entry which they filed against private
respondents (spouses Gaza) must be decided in their favor. The defense of private respondents that they are the
registered owners of the subject property is unavailing."

We observe that the Court of Appeals failed to consider paragraph 2 of petitioners' answer quoted as follows:

2. That defendants specifically deny the allegations in paragraph 2 and 3 of the complaint for want of knowledge or
information sufficient to form a belief as to the truth thereof, the truth of the matter being those alleged in the special
and affirmative defenses of the defendants;"8

Clearly, petitioners specifically denied the allegations contained in paragraphs 2 and 3 of the complaint that
respondents have prior and continuous possession of the disputed property which they used for their lumber and
copra business. Petitioners did not merely allege they have no knowledge or information sufficient to form a belief as
to truth of those allegations in the complaint, but added the following:
SPECIAL AND AFFIRMATIVE DEFENSES

That defendants hereby reiterate, incorporate and restate the foregoing and further allege:

5. That the complaint states no cause of action;

"From the allegations of plaintiffs, it appears that their possession of the subject property was not supported by any
concrete title or right, nowhere in the complaint that they alleged either as an owner or lessee, hence, the alleged
possession of plaintiffs is questionable from all aspects. Defendants Sps. Napoleon Gaza and Evelyn Gaza being
the registered owner of the subject property has all the right to enjoy the same, to use it, as an owner and in support
thereof, a copy of the transfer certificate of title No. T-47263 is hereto attached and marked as Annex "A-Gaza" and
a copy of the Declaration of Real Property is likewise attached and marked as Annex "B-Gaza" to form an integral
part hereof;

6. That considering that the above-entitled case is an ejectment case, and considering further that the complaint did
not state or there is no showing that the matter was referred to a Lupon for conciliation under the provisions of P.D.
No. 1508, the Revised Rule on Summary Procedure of 1991, particularly Section 18 thereof provides that such a
failure is jurisdictional, hence subject to dismissal;

7. That the Honorable Court has no jurisdiction over the subject of the action or suit;

The complaint is for forcible entry and the plaintiffs were praying for indemnification in the sum of ₱350,000.00 for
those copra, lumber, tools, and machinery listed in par. 4 of the complaint and ₱100,000.00 for unrealized income in
the use of the establishment, considering the foregoing amounts not to be rentals, Section 1 A (1) and (2) of the
Revised Rule on Summary Procedure prohibits recovery of the same, hence, the Honorable Court can not acquire
jurisdiction over the same. Besides, the defendants Napoleon Gaza and Evelyn Gaza being the owners of those
properties cited in par. 4 of the complaint except for those copra and two (2) live carabaos outside of the subject
premises, plaintiffs have no rights whatsoever in claiming damages that it may suffer, as and by way of proof of
ownership of said properties cited in paragraph 4 of the complaint attached herewith are bunche[s] of documents to
form an integral part hereof;

8. That plaintiffs' allegation that Emilio Herrera was illegally detained together with his daughter was not true and in
support thereof, attached herewith is a copy of said Herrera's statement and marked as Annex "C-Gaza."

xxx xxx x x x9

The above-quoted paragraph 2 and Special and Affirmative Defenses contained in petitioners' answer glaringly
show that petitioners did not admit impliedly that respondents have been in prior and actual physical possession of
the property. Actually, petitioners are repudiating vehemently respondents' possession, stressing that they
(petitioners) are the registered owners and lawful occupants thereof.

Respondents' reliance on Warner Barnes and Co., Ltd. v. Reyes10 in maintaining that petitioners made an implied
admission in their answer is misplaced. In the cited case, the defendants' answer merely alleged that they were
"without knowledge or information sufficient to form a belief as to the truth of the material averments of the
remainder of the complaint" and "that they hereby reserve the right to present an amended answer with special
defenses and counterclaim."11 In the instant case, petitioners enumerated their special and affirmative defenses in
their answer. They also specified therein each allegation in the complaint being denied by them. They particularly
alleged they are the registered owners and lawful possessors of the land and denied having wrested possession of
the premises from the respondents through force, intimidation, threat, strategy and stealth. They asserted that
respondents' purported possession is "questionable from all aspects." They also averred that they own all the
personal properties enumerated in respondents' complaint, except the two carabaos. Indeed, nowhere in the answer
can we discern an implied admission of the allegations of the complaint, specifically the allegation that petitioners
have priority of possession.

Thus, the Court of Appeals erred in declaring that herein petitioners impliedly admitted respondents' allegation that
they have prior and continuous possession of the property.47 (Underscoring supplied.)

In this case, as in Gaza, the admissions made by Spouses Go are to be read and taken together with the rest of the
allegations made in the Answer, including the special and affirmative defenses.

For instance, on the fact of default, PBCom alleges in paragraph 8 of the Complaint that Go defaulted in the
payment for both promissory notes, having paid only three interest installments covering the months of September,
November, and December 1999.

In paragraph 6 of the Answer, Spouses Go denied the said allegation, and further alleged in paragraphs 8 to 13 that
Go made substantial payments on his monthly loan amortizations.

The portions of the pleadings referred to are juxtaposed below:

Complaint Answer
8. The defendant defaulted in the payment of the 6. Defendants deny the allegations in paragraphs
obligations on the two (2) promissory notes 8, 9, 10 and 11 of the Complaint;
(Annexes "A" and "B" hereof) as he has paid only
three (3) installments on interests (sic) payments xxx
covering the months of September, November
and December, 1999, on both promissory notes, 8. The promissory notes referred to in the
respectively. As a consequence of the default, the complaint expressly state that the loan obligation
entire balance due on the obligations of the is payable within the period of ten (10) years.
defendant to plaintiff on both promissory notes Thus, from the execution date of September 30,
immediately became due and demandable 1999, its due date falls on September 3o, 2009
pursuant to the terms and conditions embodied in (and not 2001 as erroneously stated in the
complaint). Thus, prior to September 30, 2009,
the two (2) promissory notes;48
the loan obligations cannot be deemed due and
demandable.

In conditional obligations, the acquisition of rights,


as well as the extinguishment or loss of those
already acquired, shall depend upon the
happening of the event which constitutes the
condition. (Article 1181, New Civil Code)

9. Contrary to the plaintiff’s preference, defendant


Jose C. Go has made substantial payments in
terms of his monthly payments. There is therefore,
a need to do some accounting works (sic) just to
reconcile the records of both parties.

10. While demand is a necessary requirement to


consider the defendant to be in delay/default,
such has not been complied with by the plaintiff
since the former is not aware of any demand
made to him by the latter for the settlement of the
whole obligation.

11. Undeniably, at the time the pledge of the


shares of stocks were executed, their total value
is more than the amount of the loan, or at the very
least, equal to it. Thus, plaintiff was fully secured
insofar as its exposure is concerned.49

12. And even assuming without conceding, that


the present value of said shares has went (sic)
down, it cannot be considered as something
permanent since, the prices of stocks in the
market either increases (sic) or (sic) decreases
depending on the market forces. Thus, it is highly
speculative for the plaintiff to consider said shares
to have suffered tremendous decrease in its
value. Moreso (sic), it is unfair for the plaintiff to
renounce or abandon the pledge agreements.

13. As aptly stated, it is not aware of any


termination of the pledge agreement initiated by
the plaintiff.

Moreover, in paragraph 10 of the Answer, Spouses Go also denied the existence of prior demand alleged by
PBCom in paragraph 10 of the Complaint. They stated therein that they were not aware of any demand made by
PBCom for the settlement of the whole obligation. Both sections are quoted below:

Complaint Answer
10. Plaintiff made repeated demands from (sic)
defendant for the payment of the obligations
which the latter acknowledged to have incurred
however, defendant imposed conditions such as
[that] his [effecting] payments shall depend upon 10. While demand is a necessary requirement to
the lifting of garnishment effected by the Bangko consider the defendant to be in delay/default,
Sentral on his accounts. Photocopies of such has not been complied with by the plaintiff
defendant’s communication dated March 3, 2000 since the former is not aware of any demand
and April 7, 2000, with plaintiff are hereto attached made to him by the latter for the settlement of the
as Annexes "F" and "G" hereof, as well as its whole obligation.
demand to pay dated April 18, 2000. Demand by
plaintiff is hereto attached as Annex "H"
hereof.50 [Emphases supplied]

Finally, as to the amount of the outstanding obligation, PBCom alleged in paragraph 9 of the Complaint that the
outstanding balance on the couples’ obligations as of May 31, 2001 was ₱21,576,668.64 for the first loan and
₱95,991,111.11, for the second loan or a total of ₱117,567,779.75.

In paragraph 9 of the Answer, however, Spouses Go, without stating any specific amount, averred that substantial
monthly payments had been made, and there was a need to reconcile the accounting records of the parties.

Complaint Answer
9. Defendants’ outstanding obligations under the
9. Contrary to the plaintiff’s preference, defendant
two (2) promissory notes as of May 31, 2001 are:
Jose C. Go has made substantial payments in
P21,576,668.64 (Annex "A") and P95,991,111.11
terms of his monthly payments. There is therefore,
(Annex "B"), or a total of P117,567,779.75. Copy
a need to do some accounting works just to
of the Statement of Account is hereto attached as
reconcile the records of both parties.52
Annex "E" hereof.51

Clearly then, when taken within the context of the entirety of the pleading, it becomes apparent that there was no
implied admission and that there were indeed genuine issues to be addressed.

As to the attached March 3, 2000 letter, the Court is in accord with the CA when it wrote:

The letter dated March 3, 2000 is insufficient to support the material averments in PBCom’s complaint for being
equivocal and capable of different interpretations. The contents of the letter do not address all the issues material to
the bank’s claim and thus do not conclusively establish the cause of action of PBCom against the spouses Go. As
regards the letter dated April 7, 2000, the trial court itself ruled that such letter addressed to PBCom could not be
considered against the defendants-appellants simply because it was not signed by defendant-appellant Jose Go.

Notably, the trial court even agreed with the defendant-appellants on the following points:

The alleged default and outstanding obligations are based on the Statement of Account. This Court agrees with the
defendants that since the substance of the document was not set forth in the complaint although a copy thereof was
attached thereto, or the said document was not set forth verbatim in the pleading, the rule on implied admission
does not apply.53

It must also be pointed out that the cases cited by PBCom do not apply to this case. Those two cases involve denial
1avvphi1

of lack of knowledge of facts "so plainly and necessarily within [the knowledge of the party making such denial] that
such averment of ignorance must be palpably untrue."54 Also, in both cases, the documents denied were the same
documents or deeds sued upon or made the basis of, and attached to, the complaint.

In Philippine Bank of Communications v. Court of Appeals,55 the Court ruled that the defendant’s contention that it
had no truth or information sufficient to form a belief as to the truth of the deed of exchange was an invalid or
ineffectual denial pursuant to the Rules of Court,56 as it could have easily asserted whether or not it had executed
the deed of exchange attached to the petition. Citing Capitol Motors Corporations v. Yabut,57 the Court stated that:

x x x The rule authorizing an answer to the effect that the defendant has no knowledge or information sufficient to
form a belief as to the truth of an averment and giving such answer the effect of a denial, does not apply where the
fact as to which want of knowledge is asserted, is so plainly and necessarily within the defendant’s knowledge that
his averment of ignorance must be palpably untrue.58

The Warner Barnes case cited above sprung from a suit for foreclosure of mortgage, where the document that
defendant denied was the deed of mortgage sued upon and attached to the complaint. The Court then ruled that it
would have been easy for the defendants to specifically allege in their answer whether or not they had executed the
alleged mortgage.

Similarly, in Capitol Motors, the document denied was the promissory note sued upon and attached to the complaint.
In said case, the Court ruled that although a statement of lack of knowledge or information sufficient to form a belief
as to the truth of a material averment in the complaint was one of the modes of specific denial contemplated under
the Rules, paragraph 2 of the Answer in the said case was insufficient to constitute a specific denial.59 Following the
ruling in the Warner Barnes case, the Court held that it would have been easy for defendant to specifically allege in
the Answer whether or not it had executed the promissory note attached to the Complaint.60

In Morales v. Court of Appeals,61 the matter denied was intervenor’s knowledge of the plaintiff’s having claimed
ownership of the vehicle in contention. The Court therein stated:

Yet, despite the specific allegation as against him, petitioner, in his Answer in Intervention with Counterclaim and
Crossclaim, answered the aforesaid paragraph 11, and other paragraphs, merely by saying that "he has no
knowledge or information sufficient to form a belief as to its truth." While it may be true that under the Rules one
could avail of this statement as a means of a specific denial, nevertheless, if an allegation directly and specifically
charges a party to have done, performed or committed a particular act, but the latter had not in fact done, performed
or committed it, a categorical and express denial must be made. In such a case, the occurrence or non-occurrence
of the facts alleged may be said to be within the party’s knowledge. In short, the petitioner herein could have simply
expressly and in no uncertain terms denied the allegation if it were untrue. It has been held that when the matters of
which a defendant alleges of having no knowledge or information sufficient to form a belief, are plainly and
necessarily within his knowledge, his alleged ignorance or lack of information will not be considered as specific
denial. His denial lacks the element of sincerity and good faith, hence, insufficient.62

Borrowing the phraseology of the Court in the Capitol Motors case, clearly, the fact of the parties’ having executed
the very documents sued upon, that is, the deed of exchange, deed or mortgage or promissory note, is so plainly
and necessarily within the knowledge of the denying parties that any averment of ignorance as to such fact must be
palpably untrue.

In this case, however, Spouses Go are not disclaiming knowledge of the transaction or the execution of the
promissory notes or the pledge agreements sued upon. The matters in contention are, as the CA stated, whether or
not respondents were in default, whether there was prior demand, and the amount of the outstanding loan. These
are the matters that the parties disagree on and by which reason they set forth vastly different allegations in their
pleadings which each will have to prove by presenting relevant and admissible evidence during trial.

Furthermore, in stark contrast to the cited cases where one of the parties disclaimed knowledge of something so
patently within his knowledge, in this case, respondents Spouses Go categorically stated in the Answer that there
was no prior demand, that they were not in default, and that the amount of the outstanding loan would have to be
ascertained based on official records.

WHEREFORE, the petition is DENIED.

SO ORDERED.

JOSE CATRAL MENDOZA


Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. NACHURA DIOSDADO M. PERALTA


Associate Justice Associate Justice

ROBERTO A. ABAD
Associate Justice

ATTE STATI O N

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

C E RTI F I CATI O N

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of
the opinion of the Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

1 Rollo, pp. 33-42.

2
Id. at 44-45.
3 Id. at 34.

4 Id.

5
Id.
6 Id. at 46-56.

7 Id. at 35.

8
Id. at 35-36.
9 Id. at 64.

10 Id.

11
Id. at 36.
12 Id.

13 Id. at 80-86.

14
Id. at 86.
15 Id. at 37.

16 Id. at 41.

17
Id. at 39.
18 Id.

19
Id. at 39-40.
20 Id. at 44-45. Penned by Associate Justice Rodrigo V. Cosico, with Associate Justices Edgardo F. Sundiam
and Apolinario D. Bruselas, Jr. (in lieu of Associate Justice Japar B. Dimaampao who was on leave per Office
Order No. 300-06-RTR dated November 14, 2006), concurring.

21 Id. at 236.

22
Id. at 237
23 Id. at 174.

24 Id. at 240.

25
Id. at 241.
26 Id. at 242.

27 Article 1198 of the Civil Code provides: "The debtor shall lose every right to make use of the period:
(1) When after the obligation has been contracted, he becomes insolvent, unless he gives a guaranty
or security for the debt;

(2) When he does not furnish to the creditor the guaranties or securities which he has promised;

(3) When by his own acts he has impaired said guaranties or securities after their establishment, and
when through a fortuitous event they disappear, unless he immediately gives new ones equally
satisfactory;

(4) When the debtor violates any undertaking, in consideration of which the creditor agreed to the
period;

(5) When the debtor attempts to abscond."

28 Rollo, pp. 242-243.

29
Id. at 244.
30 Id. at 210.

31 Id. at 211.

32
Philippine Bank of Communications v. Court of Appeals, G.R. No. 92067, March 22, 1991, 195 SCRA 567
and Morales v. Court of Appeals, 274 Phil.674 (1991).

33 Rollo, p. 215.

34 Id.

35
Id. at 213.
36 Id. at 39.

37 Rule 35, Rules of Civil Procedure.

38
G.R. No. 153827, April 25, 2006, 488 SCRA 192.
39 Citing Northwest Airlines v. CA, 348 Phil. 438, 449 (1998).

40 Citing Excelsa Industries, Inc, v. CA, 317 Phil. 664, 671 (1995).

41
Supra note 38 at 202-203, citing Evadel Realty and Development Corporation v. Soriano, 409 Phil. 450,
461 (2001).

42 G.R. No. 92067, March 22, 1991, 195 SCRA 567.

43 Section 1, Rule 8, Rules of Civil Procedure.

44
Section 10, Rule 8, Rules of Civil Procedure.
45 Spouses Gaza. v. Ramon J. Lim and Agnes J. Lim, 443 Phil. 337, 345 (2003).

46
Aquintey v. Tibong, G.R. No. 166704, December 20, 2006, 511 SCRA 414, 432.
47 Supra note 45.

48 Rollo, p. 50.

49
Id. at 59.
50 Id. at 50.

51 Id.

52
Id. at 59.
53 Id. at 40.

54 Warner Barnes & Co., Ltd. v. Reyes, 103 Phil. 662, 665 (1958), citing Icle Plant Equipment Co. v. Marcello,
D.C. Pa. 1941, 43 F. Supp. 281.
55
Philippine Bank of Communications v. Court of Appeals, supra note 32.
56 Id. at 574.

57 Id.

58
Id., citing Warner Barnes & Co., Ltd. v. Reyes, 103 Phil. 662 (1958).
59 Id.

60 Id.

61
274 Phil. 674, 686 (1991).
62 Id. at 674, citing Gutierrez v. Court of Appeals, 165 Phil. 752 (1976) and Warner Barnes & Co. v. Reyes,
103 Phil. 662 (1958).

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