SOLID HOMES, INC., PETITIONER, VS. HON. COURT OF APPEALS, AND EVELYN VERGEL DE DIOS, RESPONDENTS.

Solid Homes versus Court of Appeals

The Case

This is a petition for review on certiorari brought by Solid Homes, Incorporated against the Court of Appeals and Evelyn Vergel de Dios. Solid Homes asks the Supreme Court to annul the decision of the Court of Appeals which affirmed the order of the Regional Trial Court of Bulacan denying Solid Homes' application for a writ of preliminary injunction in its complaint for quieting of title. The case matters because it is a clean teaching vehicle on two things every practitioner must know cold: the statutory bar on injunctions in cases involving natural resource permits, and the vice of forum-shopping — the filing of the same cause in two fora in the hope that one will rule favorably.

Procedural History

Solid Homes filed a complaint for quieting of title before the Regional Trial Court of Bulacan, Branch 20, and asked for a temporary restraining order and a writ of preliminary injunction to stop Evelyn Vergel de Dios from entering and mining Lot 3863. The trial court issued a temporary restraining order but denied the injunction for lack of jurisdiction, relying on Section 1 of Presidential Decree 605. Solid Homes then went to the Court of Appeals on certiorari and mandamus, alleging grave abuse of discretion. The Court of Appeals affirmed the trial court and additionally ruled that Solid Homes was guilty of forum-shopping. Solid Homes moved for reconsideration; the Court of Appeals denied it. Hence this petition for review before the Supreme Court.

Facts

Lot 3863 in Barangay Banaban, Angat, Bulacan, was registered in the name of Santiago Papa under Transfer Certificate of Title No. T-130829. By a Deed of Exchange dated February 28, 1980, Papa transferred the property and his interests in it to Solid Homes, including a pending quarry permit application. On March 20, 1980, the Bureau of Mines and Geo-Sciences granted Quarry Permit No. 103 to Papa for five years, renewable but not to exceed twenty-five years in total. After the five years lapsed, Papa did not renew the permit.

On June 16, 1989, Evelyn Vergel de Dios applied for a Small Scale Mining Permit over the same property. The DENR Regional Office approved it on July 19, 1989, issuing Small Mining Permit No. 111-43 for two years, renewable for another two. Papa complained to the Governor of Bulacan, who referred the matter to the DENR Regional Director. Solid Homes submitted documents claiming priority rights over the land, which it asserted was private land.

On April 15, 1991, Vergel de Dios sought renewal of her permit. While its protest was pending, Solid Homes also applied for a small scale mining permit, but its application was not accepted because of the pending protest. On December 16, 1991, the DENR Regional Executive Director dismissed Solid Homes' protest; reconsideration was denied on March 11, 1992. Solid Homes appealed to the Secretary of the DENR. On April 28, 1992, the Regional Director granted the renewal of the permit to Vergel de Dios. While that appeal was pending, Solid Homes filed its complaint for quieting of title before the Regional Trial Court of Bulacan.

Issues

• Whether or not the Court of Appeals acted with grave abuse of discretion in affirming the trial court's denial of the application for a writ of preliminary injunction.
• Whether or not Solid Homes was guilty of forum-shopping in filing the complaint for quieting of title while its protest was pending appeal before the Secretary of the DENR.

Applicable Provisions

Section 1 of Presidential Decree 605, cited by the trial court as the ground for denying the injunction, provides:

No court of the Philippines shall have jurisdiction to issue any restraining order, preliminary injunction or preliminary mandatory injunction in any case involving or growing out of the issuance, approval, or disapproval, revocation or suspension of, or any action whatsoever by the proper administrative official or body on concessions, licenses, permits, patents, or public grants of any kind in connection with the disposition, exploitation, utilization, exploration, and/or development of the natural resources of the Philippines.

This provision removes from the courts the power to enjoin the very act complained of — the grant and use of a mining permit — which is why the trial court refused the injunction.

Supreme Court Circular 28-91, requiring a certification against forum-shopping, provides:

shall certify under oath that a) he has not theretofore commenced any other action or proceedings involving the same issues in the Supreme Court, the Court of Appeals, or any other tribunal or agency.

This is the procedural rule whose violation the Court treats as a ground for dismissal.

Ruling

On the first issue, the Court upheld the denial of the injunction. The action grew out of the issuance of a mining permit by the DENR, and Section 1 of Presidential Decree 605 strips the courts of jurisdiction to issue injunctive relief in such cases. The trial court therefore did not gravely abuse its discretion.

On the second issue, the Court held that Solid Homes was indeed guilty of forum-shopping. It defined the vice through Chemphil Export and Import Corporation versus Court of Appeals:

Forum-shopping x x x, or the institution of two (2) cases or more actions or proceedings grounded on the same cause on the supposition that one or the other court would make a favorable disposition, has been characterized as an act of malpractice that is prohibited and condemned as trifling with Courts and abusing their processes.

The Court stressed that it is not the caption of the pleading but the allegations therein that determine the nature of the action. Comparing the complaint for quieting of title with the protest pending appeal before the DENR Secretary, the Court found the reliefs to be the same: both sought to exclude Vergel de Dios from mining the property and to establish who had the better right to the permit. A resolution by the DENR Secretary would necessarily resolve the ancillary issues in the quieting of title case. The Court applied the test from Buan versus Lopez, as reiterated in First Philippine International Bank versus Court of Appeals:

forum-shopping exists where the elements of litis pendentia are present or where a final judgment in one case will amount to res judicata in the other.

The Court also quoted Villanueva versus Adre:

There is forum-shopping whenever, as a result of an adverse opinion in one forum, a party seeks a favorable opinion (other than by appeal or certiorari) in another.

What ultimately matters, the Court said, is the vexation caused to the courts and the parties by a litigant who asks different courts and administrative agencies to rule on the same or related causes, creating the possibility of conflicting decisions.

Doctrine

First, under Section 1 of Presidential Decree 605, no court has jurisdiction to issue a restraining order or preliminary injunction in any case involving or growing out of any action by an administrative official on permits and public grants concerning the exploitation and development of natural resources. Second, forum-shopping exists where the elements of litis pendentia are present, or where a final judgment in one case will amount to res judicata in the other; it also exists where, after an adverse ruling in one forum, a party seeks a favorable ruling in another. Third, the nature of an action is determined not by its caption but by the allegations in the pleading and the reliefs sought. Fourth, filing a complaint for quieting of title under Article 476 of the New Civil Code while a protest over the same mining permit is pending before the DENR is forum-shopping, because the ultimate objective in both is the same.

Disposition

The Supreme Court affirmed the decision of the Court of Appeals denying the petition for certiorari and mandamus on the ground of forum-shopping; Solid Homes lost.

Remember This

Memorize this line: it is not the caption of the pleading but the allegations and the reliefs sought that determine whether a party is forum-shopping. Examiners use this case to test the jurisdiction-bar under Presidential Decree 605 on natural resource permits and the identity-of-reliefs test for forum-shopping between a court action and a pending administrative proceeding.