JIMMY TIU AND LONG LONG MANUFACTURING CORP., PLAINTIFFS-APPELLANTS, VS. SAMUEL T. SY, DEFENDANT-APPELLEE.
CORALES, J.:
The Antecedents
Sometime in 1990, plaintiff-appellant Jimmy Tiu (Jimmy) and defendant-appellee Samuel Sy (Samuel), along with several others, formed plaintiff-appellant Long Long Manufacturing Corporation (LLMC). Both were the authorized signatories for the company’s Metrobank checking account but Samuel regularly prepared the company’s checks for payments to suppliers and for utilities, dividends, and employees’ salaries. In March 1999, Samuel resigned with a P2,000,000.00 outstanding obligation to the company which he promised to pay through monthly installments as shown by a promissory note[3] dated March 11, 1999.
LLMC later on discovered that Samuel had deposited to his personal accounts 60 company checks, which were supposedly for payments to suppliers, all payable in cash and with a total amount of P3,147,535.00. Four (4) of these checks with a total value of P323,760.00 were made payable to Alex Sy (Alex), one of LLMC’s suppliers, but the latter executed an affidavit[4] denying the payment through said checks. Samuel ignored LLMC’s demands to return the aforesaid amounts.
On August 16, 2000, Jimmy, LLMC’s incorporator and corporate secretary, filed before the Office of the City Prosecutor of Manila (OCP) a complaint-affidavit[5] for 60 counts of estafa against Samuel, docketed as I.S. No. 00H-39191-250 (the first criminal complaint). In his Counter Affidavit,[6] Samuel stressed that Jimmy was a co-signatory of the checks which were intended as compensation for the services he rendered to LLMC, as well as additional investments he had made in the company but deliberately not disclosed to Jimmy. Samuel also informed the OCP of a complaint involving the parties which is then pending before the Securities and Exchange Commission (SEC).
In the interim, Samuel filed before the RTC, Valenzuela a complaint[7] for annulment of the promissory note, accounting and determination of compensation against LLMC and its directors, docketed as Civil Case No. 43-V-01 and raffled to Branch 75 (the Valenzuela case). On the basis of an apparent compromise agreement between the parties, the RTC dismissed the Valenzuela case. However, in CA-G.R. CV No. 85368 the Court of Appeals reversed the RTC on the ground that Samuel had withdrawn his consent to the compromise agreement.[8] LLMC’s appeal from this Court’s decision is now pending before the Supreme Court as G.R. No. 189604.[9]
Meanwhile, the OCP recommended the filing of criminal charges for estafa with abuse of confidence[10] against Samuel but only for the four (4) checks ostensibly issued in favor of Alex.[11] Expectedly, LLMC lodged a petition for review with the Department of Justice (DOJ) assailing the dismissal of the complaint for the 56 other checks.[12]
On February 12, 2002, Samuel was charged with four (4) counts of estafa under an Information which was docketed as Criminal Case No. 02-199518 and raffled to RTC, Manila, Branch 1.[13] However, on December 10, 2002, Jimmy submitted an Affidavit of Desistance[14] and moved for the dismissal of Criminal Case No. 02-199518 because LLMC has no more legal interest in prosecuting the case “in view of the payment made by the accused [Samuel] as to the civil aspect pertaining to the four (4) checks subject matter of the Information”. The RTC, Branch 1 granted the motion and issued an Order disposing the case as follows:[15]
WHEREFORE, on motion of the prosecution and without objection from the defense, with the representative of Long Long Manufacturing Corporation, Mr. Jimmy Tiu having executed an Affidavit of Desistance duly marked as Exhibit “A” with submarking “A-1” to the fact that the civil aspect of the subject four (4) checks in the Information has already been settled civilly and that the prosecution has no more witness to prove the case against the Accused beyond reasonable doubt, let this case therefore against SAMUEL T. SY be hereby ordered DISMISSED. (sic) without cost.
x x x
On November 17, 2003, the DOJ also granted LLMC’s petition for review and found probable cause for the filing of estafa against Samuel based on the other 56 checks.[16] The Information[17] was subsequently docketed as Criminal Case No. 03221807 and raffled to RTC, Manila, Branch 36. Upon Samuel’s motion for reconsideration, the DOJ reversed itself and directed the OCP to withdraw the Information for the 56 counts of estafa.[18] The DOJ denied LLMC’s motion for reconsideration[19] while the RTC, Branch 36 granted the withdrawal of the Information based on the following rationale:[20]
To the mind of this Court, the joint affidavit of Gonzalo, Ong and Tiu which was used as basis of the Department of Justice to reverse the resolution of the City Prosecutor is weak and unreliable because it was submitted as an afterthought. The Court notes that said affidavit was never submitted during the preliminary investigation conducted by the City Prosecutor. That is the reason why the said joint affidavit was set aside by the DOJ in its resolution dated March 09, 2004.
x x x
In fine, this Court believes that the evidence in possession of the prosecution cannot sustain a judgment of conviction and, therefore, the prosecution is correct in asking for the withdrawal of the information filed against the accused.
WHEREFORE, the resolution of this Court dated January 04, 2004 is RECONSIDERED and SET ASIDE. The motion to withdraw information filed by the Public Prosecutor is GRANTED.
LLMC sought reconsideration to no avail.[21] Its petition for certiorari with this Court suffered the same fate and was dismissed through a Decision dated December 20, 2005 which attained finality on January 13, 2006.[22]
Unfazed, LLMC, through Jimmy, filed another complaint-affidavit before the OCP, docketed as I.S. No. 063-03884, reiterating the allegations against Samuel with respect to the 56 checks.[23] In a Resolution[24] dated June 10, 2008, the OCP dismissed this new complaint and held that the allegations and evidence presented by LLMC were the same as those in the previous criminal cases.
Thereafter, Jimmy and LLMC filed before the RTC a complaint for sum of money with prayer for issuance of preliminary attachment,[25] docketed as Civil Case No. 08-120284, in order to recover from Samuel the following amounts: the P556,758.40 unpaid balance of his promissory note plus 12% interest per annum from the filing of the complaint; and P3,100,032.00 representing the amount allegedly taken by Samuel from the corporate coffers plus 12% interest per annum from the filing of the second criminal complaint, but only P1,600,032.00 of this amount should be paid to LLMC and the balance of P1,500,000.00 should be awarded to Jimmy by virtue of a deed of assignment[26] executed by LLMC in his favor; P20,000.00 acceptance fees; P200,000.00 contingent fees; P100,000.00 nominal, moral and exemplary damages; and appearance fees plus costs of suit.
On January 9, 2009, the RTC granted LLMC’s prayer for preliminary attachment[27] and the writ was later on annotated on Transfer Certificate of Title (TCT) No. T-211069[28] covering Samuel’s parcel of land in Bulacan.
In his Answer with Affirmative Defenses (As Ground for Motion to Dismiss) With Motion to Lift Writ of Preliminary Attachment with Motion to Hold Plaintiff Jimmy Tiu and the Board of Directors of Long Long Manufacturing Corp. and their Counsel in Contempt of Court (Answer),[29] Samuel invoked the rule on forum-shopping. According to him, Jimmy and LLMC did not disclose the criminal cases for estafa, the second criminal complaint, and the Valenzuela case which has a pending appeal with the Court of Appeals, contrary to the statement they made in the certification against non-forum shopping attached to the complaint for sum of money. He also argued that the foregoing cases involved the same parties, raised similar issues and prayed for the same remedies warranting the outright dismissal of the complaint for sum of money.
The Ruling of the RTC
In its February 9, 2011 Order,[30] the RTC found merit on Samuel’s allegations of forum shopping and litis pendentia. It ordered the dismissal of the complaint for sum of money ratiocinating that:
The verification and certification against forum shopping attached to the complaint did not disclose the criminal cases filed by plaintiffs [LLMC and Jimmy] against the defendant [Samuel] and the status thereof as well as the civil case pending before the Regional Trial Court of Valenzuela. The instant case and the three others involve the same parties and raise the same issues.
xxx
It cannot be gainsaid that the allegations of the instant complaint are significantly the same allegations of herein plaintiff Tiu in his affidavit-complaint for estafa, falsification and qualified theft against herein defendant and Tiu’s affidavit-complaint subject of Criminal Case No. 03-221807 for estafa.
Indeed, the earlier cases and the instant case have identical parties, cause of action, (sic) issues and reliefs prayed for. The rule is that upon the filing of the estafa case against the respondent, where the petitioners has not made any waiver, express reservation to litigate separately or has not instituted the corresponding civil action to collect the amount and damages prior to the filing of the criminal action is deemed instituted with the criminal case. The criminal action impliedly instituted in a criminal case pertains only to the recovery of civil liability arising from the offense charged which includes recovery of indemnity under the Revised Penal Code and damages under Articles 32, 33, 34 and 2716 of the Civil Code of the Philippines arising from the same act or ommission of the accused. Failure to appeal within the reglementary period is tantamount to a waiver altogether of the remedy to recover the amount of the checks.
The criminal cases for estafa filed by Tiu against the herein defendant based on the checks alleged in the instant complaint have all been dismissed. The instant case involves the same set of checks. Forum shopping is committed by a party who having received an adverse judgment in one forum seeks another opinion in another court other than by appeal or the special civil action of certiorari.
Premises considered, finding defendant’s affirmative defenses of forum shopping and litis pendentia meritorious, the instant case is DISMISSED. (Emphasis and italics appear in the original text of the Order; citations omitted)
Feeling aggrieved, LLMC and Jimmy interposed this appeal with the following assignment of errors:
* * ONE * *
The Honorable Court-a-quo erred in its finding of fact that plaintiff-appellee (sic) did not disclose the criminal cases and thus violated Section 5, Rule 7, when the evidence spoke otherwise.
* * TWO * *
The Honorable Court-a-quo erred in ruling that plaintiff-appellee (sic) is required under Section 5, Rule 7 to state in the certificate of non-forum shopping [intra-corporate] Civil Case 43-V-01 filed by defendant when the law requires to (sic) state cases filed by the plaintiff only.
* * THREE * *
The Honorable Court-a-quo erred in its finding of fact that the criminal cases and present civil case have identical causes of action, issues and reliefs when they are actually not (sic).
* * FOUR * *
The Honorable Court-a-quo erred in ruling that there is a need for reservation in the criminal action before plaintiff-appellants can file a civil action to collect the amount defrauded by defendant-appelee (sic).
* * FIVE * *
The Honorable Court-a-quo erred in dismissing the case at bar and in applying Ching v. Sy in violation of Cancio v. Isip, 391 SCRA 393.[31]
Jimmy and LLMC insist that there is neither forum shopping nor litis pendentia in the complaint for sum of money and the criminal case for estafa considering that the issues and parties therein are different because the State was the plaintiff in the criminal case and only four (4) out of the 60 checks were involved therein. They point out that the Valenzuela case was filed by Samuel on a different cause of action and there is no similarity in the issues involved because it does not cover the 56 checks subject of their complaint for sum of money. They also argue that there could be no litis pendentia because the criminal case and complaints are no longer pending while the Valenzuela case was premised on a different cause of action. Lastly, LLMC and Jimmy emphasize that the complaint for sum of money is about Samuel’s liability based on the promissory note and the fraud he committed with the use of the company’s 56 checks.[32]
Samuel defends the appealed Order by raising the following arguments: all of the cases filed against him arose from the same transaction, entail the same evidence, involve the same parties, raise the same issues and subject matter, and pray for the same reliefs; the judgment in the Valenzuela case would constitute res judicata to the complaint for sum of money; and the complaint for his civil liability was impliedly instituted in the criminal case and complaints and the judgment therein bars the complaint for sum of money. He also asks this Court to set aside the writ of preliminary attachment issued in the proceedings a quo and cancel its annotation in TCT No. 211069.[33]
In the course of the appeal, Samuel filed an Urgent Motion to Resolve Pending Incident (Urgent Motion)[34] arguing that the assailed Order automatically dissolved the writ of attachment in the same way that the dismissal of the main case necessarily lifted the writs of preliminary injunction as held in the cases of Golez v. Leonidas and Union Bank v. Court of Appeals. In turn, LLMC and Jimmy contend, among others, that Samuel cannot seek affirmative relief from this Court as he made no appeal from the assailed Order, and he has not sought the lifting of the writ of preliminary attachment pursuant to the Rules of Court.[35]
This Court’s Ruling
The appeal lacks merit.
Forum shopping consists of the filing of multiple suits involving the same parties upon the same causes of action, either simultaneously or successively, in order to obtain a favorable judgment.[36] To forestall this pernicious practice, the rules require litigants to attach to their complaint a certification against forum shopping which shall state not only the actions or claims filed by the party executing the same but also any other actions or claims pending at that time.[37] Such a crystal-clear prescription leaves no room for interpretation and simply warrants application, as the court a quo correctly applied in its assailed ruling.[38]
Corollary, the most important factor to consider in ascertaining the existence of forum shopping is the presence of the elements of litis pendentia or res judicata.[39] Litis pendentia is a Latin term, which literally means “a pending suit.”[40] It refers to the situation wherein another action is pending between the same parties for the same causes of action, so that the second action becomes unnecessary and vexatious.[41] For litis pendentia to be invoked, the concurrence of the following requisites is necessary: a) identity of parties or at least such as represent the same interest in both actions; b) identity of rights asserted and reliefs prayed for, the reliefs being founded on the same facts; and c) the identity in the two cases should be such that the judgment that may be rendered in one would, regardless of which party is successful, amount to res judicata in the other.[42]
Res judicata, on the other hand, means “a matter adjudged”. It denotes the basic principle that a final judgment on the merits, rendered validly by a court of competent jurisdiction, is conclusive on the rights of the parties and their privies with respect to the points and matters in issue as regards all other actions in judicial tribunals of concurrent jurisdiction. This principle operates upon the concurrence of the following requisites: 1) finality of the former judgment; 2) jurisdiction by the court over the subject matter and the parties; 3) such judgment being on the merits; and 4) identity between the parties, the subject matter, and the causes of action.
In both instances, the element of identity of causes of action merely requires substantial identity and not absolute identity. The ultimate test is to ascertain whether or not the same evidence fully supports and establishes both the first and second cases[43] or whether the cause of action in the later case already existed at the time the first was instituted. If the same facts or evidence would sustain both, the two actions are considered the same, and a judgment in the first case is a bar to the subsequent action. Hence, a party cannot, by varying the form of action or adopting a different method of presenting his case, escape the operation of the principle that one and the same cause of action shall not be twice litigated between the same parties or their privies.[44]
All the foregoing elements of litis pendentia and res judicata are attendant in this case. The pendency of the Valenzuela case at the time of the filing of the complaint for sum of money is beyond dispute. The same principal parties, Samuel, Jimmy, and LLMC, are involve in these two actions which are both based on the obligation arising from the promissory note allegedly executed by Samuel. Although the reliefs sought in these two cases are different, i.e. LLMC and Jimmy prayed for the enforcement of the promissory note while Samuel asked for its invalidation, it is crystal clear that the disposition of either case would entail a ruling on the validity of the subject promissory note. As such, there is indeed an identity of causes of action between the Valenzuela case and plaintiffs-appellants’ complaint for sum of money. At the point of being repetitive, identity of causes of action is determined not by the form of an action but on whether the same allegations and the same evidence would support and establish the causes of action in both suits.[45] Accordingly, the complaint for some of money was aptly dismissed by the RTC pursuant to the sound policy against multiplicity of suits[46] and taking into consideration the priority in date of filing which is the foremost consideration in dismissing cases due to litis pendentia.[47]
This Court also affirms the findings of the RTC that LLMC and Jimmy are barred by res judicata from further litigating their claim for sum of money based on the 60 checks allegedly misappropriated by Samuel. It must be remembered that Samuel’s civil liability for the four (4) checks had already been settled in Criminal Case No. 02-199518.[48] In that case, the RTC approved the parties compromise agreement and under the law, this is considered as judgment on the merits.[49] The same holds true with respect to the second criminal case, Criminal Case No. 03-221807, where the RTC, Branch 36 dismissed the 56 counts of estafa against Samuel on the ground of insufficiency of evidence.[50] The dismissal of this second criminal case is also a judgment on the merits because the RTC, Branch 36 disposed the case after considering the parties’ evidence and giving them full legal opportunity to be heard on their respective claims and contentions by way of pleadings.[51]
We also note that the criminal cases for estafa and the complaint for sum of money arose from the same set of facts and both were based on allegations of fraud. Thus, the evidence presented in the criminal cases would necessarily be presented in the complaint for sum of money. It is therefore beyond dispute that there is substantial identity of causes of action in the foregoing cases and the dismissal of Criminal Case Nos. 02-199518 and 03-221807 constitutes res judicata to bar LLMC and Jimmy’s complaint for sum of money.
In view of Our foregoing disquisition, the dismissal of the main action for sum of money carries with it the dissolution of the writ of preliminary attachment. The case of Silangan Textile Manufacturing Corporation v. Demetria[52] is instructive on this matter, thus:
Attachment is an ancillary remedy. It is not sought for its own sake but rather to enable the attaching party to realize upon relief sought and expected to be granted in the main or principal action. Being an ancillary or auxiliary remedy, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition, and for purposes of the ultimate effects, of a final judgment in the case. They are provisional because they constitute temporary measures availed of during the pendency of the action and they are ancillary because they are mere incidents in and are dependent upon the result of the main action.
A writ of preliminary attachment is a species of provisional remedy. As such, it is a collateral proceeding, permitted only in connection with a regular action, and as one of its incidents; one of which is provided for present need, or for the occasion; that is, one adapted to meet a particular exigency. On the basis of the preceding discussion and the fact that we find the dismissal of Civil Case No. 00-00420 to be in order, the writ of preliminary attachment issued by the trial court in the said case must perforce be lifted.
WHEREFORE, the appeal is hereby DENIED. Accordingly, the assailed February 9, 2011 Order of the Regional Trial Court, Branch 19, Manila in Civil Case No. 08-120284 is AFFIRMED and the writ of attachment over Samuel Sy’s property is ordered LIFTED upon the finality of this Decision.
SO ORDERED.
CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court.
Villion, J., Chairperson and Macalino, JJ., concur.
[1] See Notice of Appeal in relation to the June 13, 2011 Order of the RTC giving due course to said appeal, records (Volume II), pages 398-400 and 403, respectively.
[2] Penned by Pairing Judge Marivic Balisi-Umali, rollo, pages 87-92.
[3] Records (Volume I), page 37.
[4] Ibid., page 74.
[5] Ibid., pages 78-82.
[6] Ibid., pages 122-123.
[7] Ibid., pages 163-169.
[8] See Court of Appeals April 29, 2009 Decision, penned by Associate Justice Amelita G. Tolentino with the concurrence of Associate Justices Sesinando E. Villon and Ramon M. Bato, Jr., records (Volume II) pages 177-186.
[9] See page 25 of the Brief for Defendant-Appellee, rollo, page 120. See also TSN, Samuel Sy, February 11, 2010, page 4.
[10] Article 315, paragraph 1(b) of the Revised Penal Code
[11] See OCP’s Resolution dated December 19, 2001, penned by Assistant City Prosecutor Edwin G. Larida, Jr., records (Volume I), pages 83-86.
[12] See page 2 of the March 9, 2004 Resolution penned by Acting Secretary Ma. Merceditas N. Gutierrez, ibid., page 101.
[13] See Information dated December 19, 2001, ibid., pages 87-88.
[14] Ibid., page 89.
[15] See December 10, 2002 Order penned by Judge Tita Bughao Alisuag, ibid., pages 90-91.
[16] See DOJ Resolution dated November 17, 2003, penned by Secretary Simeon A. Datumanong, ibid., pages 92-97.
[17] Ibid., pages 98-99.
[18] See DOJ Resolution dated March 9, 2004, penned by Secretary Ma. Merceditas N. Gutierrez, ibid., pages 100-102.
[19] See DOJ Resolution dated July 14, 2004, penned by Acting Secretary Ma. Merceditas N. Gutierrez, ibid., page 103.
[20] See Order dated July 19, 2005, penned by Acting Presiding Judge Reynaldo G. Ros, ibid., pages 112-114.
[21] See September 5, 2005 Order, ibid., pages 115-116.
[22] See Entry of Judgment dated January 13, 2006, ibid., page 120.
[23] See Affidavit-Complaint of Jimmy Tiu dated February 28, 2006, ibid., pages 205-209.
[24] Penned by 2nd Assistant City Prosecutor Evelyn M. Brul-Cruz, ibid., pages 29-32.
[25] Ibid., pages 1-25.
[26] See Deed of Assignment, ibid., pages 124-125.
[27] See Order dated January 9, 2009 and Sheriff’s Return dated May 20, 2009, ibid., pages 130 and 319, respectively.
[28] Ibid., pages 305-306.
[29] Ibid., pages 134-150.
[30] Supra, at note 2.
[31] Page 26 of Appellants’ Brief, rollo, page 42.
[32] See Appellants’ Brief, ibid., pages 12-86.
[33] See Brief for Defendant-Appellee, ibid., pages 93-135.
[34] Ibid., pages 145-147.
[35] See Ex-Parte Manifestation with Comment and Opposition, ibid., pages 157-165.
[36] See Alonso v. Relamida, A.C. No. 8481. August 3, 2010.
[37] Rules of Court, 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 thereto 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
[38] See Diaz v. Gestopa, A.M. No. MTJ-11-1786. June 22, 2011.
[39] See Yap v. Court of Appeals, G.R. No. 186730. June 13, 2012.
[40] Spouses Marasigan v. Chevron Phils., Inc., G.R. No. 184015. February 8, 2012.
[41] Villarica Pawnshhop, Inc. v. Spouses Gernale, G.R. No. 163344. March 20, 2009.
[42] City of Makati v. Municipality of Taguig, G.R. No. 163175. June 27, 2008.
[43] Perez v. Court of Appeals, G.R. No. 157616. July 22, 2005.
[44] See Yap v. Court of Appeals, supra, at note 39.
[45] See Casil v. Court of Appeals, G.R. No. 121534. January 28, 1998, citing Mendiola v. Court of Appeals, G.R. No. 122807. July 5, 1996. Cited with approval in Medado v. Heirs of Consing, G.R. No. 186720. February 8, 2012.
[46] See Marasigan v. Chevron Philippines, G.R. No. 184015. February 8, 2012.
[47] See Dotmatrix Trading v. Legaspi, G.R. No. 155622. October 26, 2009.
[48] See December 10, 2002 Order in Criminal Case No. 02-199518, supra, at note 15.
[49] See Uy v. Chua, G.R. No. 183965. September 18, 2009.
[50] See July 19, 2005 Order in Criminal Case No. 03221807, supra, at note 20.
[51] See Republic v. Court of Appeals, G.R. No. 103412. February 3, 2000.
[52] G.R. No. 166719. March 12, 2007.