Kaimo Condominium Building Corporation vs. Leverne Realty & Development Corporation

Forum shopping requires a concurrence of three identities: (1) identity of parties, or at least such parties who represent the same interests in both actions; (2) identity of rights asserted and reliefs prayed for, founded on the same facts; and (3) identity of the first two particulars, such that a judgment in one action would constitute res judicata in the other. The absence of any one element negates the existence of forum shopping.

Following a public auction for real property tax delinquency, respondent Leverne Realty & Development Corporation acquired the Kaimo Building. After obtaining a Final Bill of Sale and a new transfer certificate of title, Leverne sought and was granted a writ of possession by the Regional Trial Court (Branch 220). However, upon motions from Philtrust Bank and petitioner Kaimo Condominium Building Corporation (KCBC), Branch 220 quashed the writ, noting that building occupants were condominium unit owners or lessees with separate titles. Subsequently, Leverne's representatives forcibly entered the building, prompting two separate suits: a petition for contempt filed by KCBC (the building's corporate owner) and a complaint for forcible entry filed by the Kaimos (individual unit owners).

• The Tax Sale and Title Transfer: On December 15, 2006, the Quezon City Government auctioned the Kaimo Building for tax delinquency. Respondent Leverne was the highest bidder. After the one-year redemption period lapsed without redemption, the City Treasurer issued a Final Bill of Sale to Leverne. Leverne subsequently filed a petition for confirmation of the sale and issuance of a new title, resulting in the cancellation of the original title and the issuance of TCT No. 004-2012007580 in Leverne's name.

• The Writ of Possession and Its Quashal: Leverne obtained a writ of possession from the Regional Trial Court, Branch 220. Philtrust Bank and petitioner KCBC filed motions to quash the writ. Branch 220 granted the motions, quashing the writ and noting that the building's occupants were unit owners or lessees with separate titles.

• The Forcible Entry and Ensuing Litigation: On October 22, 2015, Leverne's representatives forcibly entered the Kaimo Building, demanding tenants vacate or sign new leases. This actuation led to two lawsuits: (1) a Petition for Contempt filed by KCBC with the RTC, Branch 226, alleging Leverne defied the order quashing the writ of possession; and (2) a Complaint for Forcible Entry filed by the individual Kaimo unit owners with the Metropolitan Trial Court, alleging unlawful deprivation of possession of their specific units.

• Dismissal for Forum Shopping: Leverne moved to dismiss KCBC's contempt case, arguing forum shopping due to the pending forcible entry case. The RTC, Branch 226, agreed and dismissed the contempt case with prejudice, a decision affirmed by the Court of Appeals.

• Separate Corporate Personality: KCBC argued that it is a domestic corporation with a separate and distinct juridical personality from its shareholders, the Kaimos. The contempt case was a corporate act to vindicate its rights over the entire building, distinct from the personal actions of its members to recover possession of their individual units.
• Different Causes of Action: KCBC maintained that the contempt case was founded on Leverne's willful disobedience of the RTC's order quashing the writ of possession, while the forcible entry case was based on the Kaimos' physical dispossession of their units. The reliefs sought were also different.

• Identity of Parties and Reliefs: Leverne countered that there was identity of parties because the Kaimos, who filed the forcible entry case, are the owners and controlling interest of KCBC. It argued the separate corporate veil should be pierced.
• Same Core Grievance: Leverne argued that both cases stemmed from the same essential act—Leverne's entry into the Kaimo Building—and sought substantially the same relief: recovery of possession of the building.

• Identity of Parties: Whether the filing of the Contempt Case by KCBC and the Forcible Entry Case by the individual Kaimo unit owners constitutes forum shopping, considering the separate juridical personality of the corporation.
• Identity of Causes of Action and Reliefs: Whether the causes of action and reliefs prayed for in the Contempt Case and the Forcible Entry Case are identical, such that a judgment in one would amount to res judicata in the other.

• Identity of Parties: The element of identity of parties was absent. The doctrine of piercing the corporate veil was misapplied by the lower courts. KCBC has a separate and distinct personality from its shareholders. The Kaimos filed the forcible entry case in their personal capacity as unit owners to vindicate their individual possessory rights, not as representatives of KCBC. Leverne failed to clearly and convincingly establish bad faith or fraud warranting the piercing of the corporate veil.
• Identity of Causes of Action and Reliefs: The element of identity of rights asserted and reliefs prayed for was also absent. The Forcible Entry Case sought the recovery of possession of the Kaimos' specific units and damages for unlawful dispossession. The Contempt Case sought to punish Leverne for indirect contempt for willfully disobeying the court order that quashed the writ of possession. The causes of action, evidence required, and ultimate reliefs were fundamentally different. A judgment in one would not constitute res judicata in the other.

• Forum Shopping — Forum shopping exists when a party institutes two or more suits involving the same parties for the same cause of action on the supposition that one court would make a favorable disposition. It requires the concurrence of three identities: (1) identity of parties, (2) identity of rights asserted and reliefs prayed for, and (3) such identity that a judgment in one would amount to res judicata in the other.
• Piercing the Corporate Veil — The separate juridical personality of a corporation may be disregarded only in three basic instances: (a) when the corporate fiction defeats public convenience; (b) in fraud cases; or (c) in alter ego cases where the corporation is a mere instrumentality or conduit of another person or entity. The wrongdoing must be clearly and convincingly established; it cannot be presumed.

• "Simply stated, the action filed by the Kaimos was solely and exclusively for their own benefit and based on their own individual rights as unit owners and lawful possessors of their own respective units in the Kaimo Building and such action does not involve nor affect the other unit owners of Kaimo Building and neither is it adjudicative of KCBC's ownership of the building and thus, the Forcible Entry Case is separate and distinct from the Contempt Case filed by KCBC, as real party in interest." — This passage clarifies the distinction between corporate and individual rights in the context of a condominium, negating the identity of parties required for forum shopping.
• "The judgment in the Contempt Case would not amount to res judicata in the Forcible Entry Case as the causes of actions and reliefs sought in both cases are different from each other." — This directly addresses the third element of forum shopping and confirms its absence.

• First Philippine International Bank v. CA, 322 Phil. 280 (1996) — Cited to illustrate a situation where forum shopping was found because stockholders, in a second case, sought to accomplish what the corporation failed to do in an original case, thereby using the corporate fiction to circumvent the rule. The Court distinguished the present case from this precedent.
• Estate of Sotto v. Palicte, 587 Phil. 586 (2008) — Cited for the principle that there is identity of causes of action when the same facts or evidence support and establish the causes of action in different cases, even if the forms of action are different.
• Lorenzo Shipping Corp. v. Distribution Management Association of the Philippines, 672 Phil. 1 (2011) — Cited to define the nature of contempt proceedings and distinguish between civil and criminal contempt.

• Rule 7, Section 5, Rules of Court — The certification against forum shopping. The Court discussed the two rules embodied therein: compliance with the certification requirement and the avoidance of the act of forum shopping itself.
• Rule 71, Section 3, Rules of Court — Defines acts constituting indirect contempt, including willful disobedience of a lawful order of a court. This provision was the substantive basis for KCBC's contempt petition.

• Justice Caguioa (Chairperson)
• Justice Inting
• Justice Gaerlan
• Justice Dimaampao