Medado vs. Heirs of the Late Antonio Consing

A complaint for injunction filed during the pendency of an action for rescission of the same deeds of sale amounts to forum shopping, all the elements of litis pendentia being present where both actions involve the same parties, the same asserted ownership founded on the same deeds, and a judgment in one would be res judicata in the other.

Spouses Meritus Rey Medado and Elsa Medado acquired Hacienda Sol in Cadiz City from the estate of the late Antonio Consing under Deeds of Sale with Assumption of Mortgage, whereby the spouses took on the estate's loan with the Philippine National Bank. The lots were subsequently placed under the government's agrarian reform program through the Department of Agrarian Reform's Voluntary Offer to Sell (VOS) scheme, under which the Land Bank of the Philippines held the compensation proceeds pending determination of the rightful recipient. The competing claims of the buyers and the sellers to those proceeds underlie the litigation.

In 1996, Spouses Meritus Rey Medado and Elsa Medado and the estate of the late Antonio Consing, represented by Soledad Consing, executed Deeds of Sale with Assumption of Mortgage for the spouses' acquisition of the property in Cadiz City known as Hacienda Sol. The sale covered the parcels under OCT No. P-498, TCT No. T-31275, TCT No. T-31276, and TCT No. T-31277, and the spouses undertook to assume the estate's loan with the Philippine National Bank (PNB).

After the sale, the Estate of Consing offered the lots to the government under the Department of Agrarian Reform's Voluntary Offer to Sell (VOS) program. On November 22, 2000, the estate instituted with the RTC, Branch 44 of Bacolod City an action for rescission and damages, docketed as Civil Case No. 00-11320, against Spouses Medado, PNB, and the Register of Deeds of Cadiz City, on the ground that the spouses had failed to meet the conditions of their agreement.

While the rescission case was pending, LBP issued in favor of the Estate of Consing a certificate of deposit of cash and agrarian reform bonds as compensation for the lots covered by the VOS. Spouses Medado feared that LBP would release the full proceeds to the estate, and claimed that they were the ones entitled to the proceeds as buyers under the Deeds of Sale with Assumption of Mortgage.

Spouses Medado then instituted Civil Case No. 797-C, an action for injunction with prayer for a temporary restraining order, with the RTC, Branch 60 of Cadiz City. They asked the trial court to issue (a) a writ of prohibitory injunction restraining LBP from releasing the remaining VOS proceeds to the Estate of Consing and restraining the estate from receiving them, and (b) a writ of mandatory injunction compelling LBP to release the remaining VOS amount to them.

On March 9, 2007, the RTC issued an Order granting the application, finding it meritorious, and directed the issuance of writs of preliminary prohibitory and mandatory injunction. The order restrained LBP from releasing the balance of the VOS proceeds to the estate and the estate from receiving them, ordered LBP to release and pay the whole remaining balance to the spouses, and fixed a bond of P5,000,000.00 executed in favor of the defendants.

The Consing heirs challenged the order through a petition for certiorari filed with the CA, impleading Presiding Executive Judge Renato D. Muñez, Spouses Medado, Sheriff IV Balbino B. Germinal, and LBP, and seeking the dismissal of the injunction complaint for violation of the rules on litis pendentia and forum shopping. They explained that they had filed motions for reconsideration and dissolution of the writs but withdrew them as moot and academic after LBP released the VOS balance to the sheriff on March 29, 2007, notwithstanding the pendency of the motions and a hearing already scheduled for March 30, 2007; on that basis they invoked the exceptions to the rule that a petition under Rule 65 will not lie without a prior motion for reconsideration. In their comment, Spouses Medado questioned the authority of Soledad to sign the petition's certification of non-forum shopping on behalf of her co-petitioners. Elsa Medado thereafter filed the present petition without naming her husband as co-petitioner, citing their alleged separation de facto.

• Verification and Certification Against Forum Shopping: Petitioner contended that the consolidated verification and certification against forum shopping in the CA petition was defective because it was signed only by Soledad Consing instead of all the petitioners, and because its jurat cited a mere community tax certificate of Soledad rather than a government-issued identification card required under the 2004 Rules on Notarial Practice.
• Motion for Reconsideration as Condition Sine Qua Non: Petitioner maintained that the CA should not have entertained the certiorari petition because no motion for reconsideration of the RTC's Order dated March 9, 2007 was filed with the lower court.
• Forum Shopping: Petitioner argued that the CA erred in holding that the rule against forum shopping was violated by the filing of the injunction complaint during the pendency of the rescission and damages case.

• Non-Joinder of Parties: Respondents raised the failure of the petitioner to join her husband as a party to the petition, considering that the action affects conjugal property.

• Verification and Certification Against Forum Shopping: Whether the CA correctly admitted the petition for certiorari notwithstanding the alleged deficiencies in its verification and certification against forum shopping.
• Motion for Reconsideration: Whether the CA correctly admitted the petition for certiorari even if no motion for reconsideration of the RTC's Order dated March 9, 2007 was filed with the lower court.
• Forum Shopping: Whether the CA correctly held that the rule against forum shopping was violated by the filing of the complaint for injunction during the pendency of the action for rescission and damages.
• Non-Joinder of Parties: Whether the petition should be dismissed for petitioner's failure to join her husband as a party, considering that the action affects conjugal property.

• Verification and Certification Against Forum Shopping: No. The requirements were substantially complied with, Soledad having signed under a special power of attorney from her co-heirs, and verification being a formal, not jurisdictional, requirement.
• Motion for Reconsideration: No. The CA properly entertained the certiorari petition because a motion for reconsideration had become useless, the acts sought to be prevented having already been carried out.
• Forum Shopping: Yes. All the elements of litis pendentia concurred between the injunction case and the rescission case, so the injunction complaint was correctly dismissed.
• Non-Joinder of Parties: Not resolved. The SC deemed it no longer necessary to take any action or rule on the non-joinder, the other grounds being sufficient to deny the petition.

• Verification and Certification Against Forum Shopping: The SC first disposed of the second ground — the jurat's citation of a community tax certificate instead of a government-issued identification card under the 2004 Rules on Notarial Practice — by noting that petitioner never raised it in her comment on the CA petition, so it could not be validly raised at this stage. On the first ground, the records showed that Soledad signed the verification and certification on behalf of her co-petitioners by virtue of a Special Power of Attorney attached to the CA petition, executed by her co-heirs Ma. Josefa Consing Saguitguit, Ma. Carmela Consing Lopez, Ma. Lourdes Consing Gonzales, and Mary Rose Consing Tuason. The SPA authorized Soledad "to protect, sue, prosecute, defend and adopt whatever action necessary and proper" relative to their rights over the subject properties, expressly naming both Civil Case No. 00-11320 and Civil Case No. 797-C and permitting elevation of those cases to the CA and the SC. That authority covered the filing of an appeal before the CA, including the execution of a verification and certification against forum shopping, as acts necessary to protect and prosecute their rights. The allegations in the CA petition did not deviate from the claims already made in the two cases named in the SPA. The SC stressed that verification simply secures an assurance that the allegations are true and correct, not the product of imagination or speculation, and that the pleading is filed in good faith. It reiterated the rule in Heirs of Domingo Hernandez, Sr. vs. Mingoa, Sr. that where the petitioners are immediate relatives who share a common interest in the property subject of the action, the fact that only one of them executed the verification or certification will not deter the court from proceeding, since the rules on forum shopping were designed to promote the orderly administration of justice and should not be interpreted with absolute literalness; the rule of substantial compliance may be availed of. Verification is a formal, not jurisdictional, requirement, and is deemed substantially complied with when one who has ample knowledge swears to the truth of the allegations and the matters alleged are made in good faith or are true and correct. It was on this principle that the SC, via its Resolution dated April 22, 2009, had allowed petitioner a chance to submit a verification complying with Section 4, Rule 7 of the Rules of Court instead of dismissing the petition outright. There was therefore no deficiency in the verification and certification.

• Motion for Reconsideration: The SC held that the CA did not err in accepting the certiorari petition even though the motion for reconsideration of the RTC Order of March 9, 2007 was withdrawn before the RTC could act on it. The requirement of a prior motion for reconsideration under Rule 65 admits of recognized exceptions, one of which is where, under the circumstances, a motion for reconsideration would be useless. As the CA correctly held, a motion for reconsideration, or the resolution of the trial court thereon, had become useless given that the particular acts which the movants sought to prevent by filing the motion were already carried out. The heirs of the late Consing had in fact filed a motion for reconsideration of the RTC's order but withdrew it only after the trial court had decided to implement the writs notwithstanding the pendency of the motion and just a day before the scheduled hearing on said motion.

• Forum Shopping: The SC ruled that forum shopping exists when the elements of litis pendentia are present, namely: (1) identity of parties, or at least such parties as represent the same interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) 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 — requisites that are also constitutive of auter action pendant or lis pendens. All three were present. On identity of parties, the rescission case named "Soledad T. Consing, for herself and as administratrix of the estate of Antonio Consing" as plaintiff against "Spouses Meritus Rey and Elsa Medado, [PNB] and the Register of Deeds of Cadiz City," while the injunction case was instituted by Spouses Medado against LBP and the Heirs of the Late Antonio Consing as represented by Dra. Soledad Consing; the primary litigants and their interests were the same. On identity of rights asserted and reliefs prayed for, both cases involved the parties' claim of ownership over the same properties, anchored on the same deeds of absolute sale and the law applicable thereto, with the spouses as buyers and the heirs as sellers; both actions necessarily required a ruling on the validity of the same contract as against the same parties, such that the decision in the rescission case would be res judicata in the injunction case and vice versa. Relying on Victronics Computers, Inc. vs. RTC, Branch 63, Makati, the SC held that it did not even matter that one action was for the enforcement of the parties' agreements while the other was for rescission, since in the final analysis what was being determined was the validity of the contract. Relying on Casil vs. CA, which in turn quoted Mendiola vs. Court of Appeals, the SC held that the test of identity of causes of action lies not in the form of the action but on whether the same evidence would support and establish the former and the present causes of action, and that a single issue cannot be litigated in more than one forum. The CA was therefore correct in ordering the dismissal of Civil Case No. 797-C, since the issue on the validity of the deeds of absolute sale could best be addressed in the action for rescission. The SC also set out the factors courts consider in determining which case to dismiss given the pendency of two actions: (1) the date of filing, with preference generally given to the first action filed to be retained; (2) whether the action sought to be dismissed was filed merely to preempt the latter action or to anticipate its filing and lay the basis for its dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the parties. It emphasized that the rules on forum shopping are meant to prevent conflicting final decisions, and that res judicata requires stability be accorded to judgments so that there may be an end to litigation.

• Non-Joinder of Parties: Given the grounds already warranting the denial of the petition, the SC deemed it no longer necessary to take any action or to rule on the issue of the non-joinder of the petitioner's husband in the petition.

• Forum Shopping and Litis Pendentia — Forum shopping exists when the elements of litis pendentia concur: (1) identity of parties, or at least such parties as represent the same interests in both actions; (2) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and (3) 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. These requisites are also constitutive of auter action pendant or lis pendens. The SC applied the test and found all three elements present between the injunction case and the rescission case.
• Test of Identity of Causes of Action — The test lies not in the form of the action but on whether the same evidence would support and establish the former and the present causes of action. A single issue cannot be litigated in more than one forum. Thus, an action for enforcement of a contract and an action for its rescission may still involve the same cause of action because both ultimately determine the validity of the same contract.
• Substantial Compliance with the Verification and Certification Against Forum Shopping — The general rule requires the certificate of non-forum shopping to be signed by all the plaintiffs, but the rules on forum shopping were designed to promote and facilitate the orderly administration of justice and should not be interpreted with absolute literalness as to subvert their objective. Where the petitioners are immediate relatives who share a common interest in the property subject of the action and invoke a common cause of action or defense, the signature of only one of them constitutes substantial compliance.
• Verification as a Formal, Not Jurisdictional, Requirement — Verification is intended merely to secure an assurance that the allegations in the pleading are true and correct and not the product of imagination or speculation, and that the pleading is filed in good faith. The court may order the correction of unverified pleadings or act on them and waive strict compliance; the requirement is deemed substantially complied with when one who has ample knowledge swears to the truth of the allegations and the matters alleged are made in good faith or are true and correct.
• Exceptions to the Motion for Reconsideration Requirement in Rule 65 — A motion for reconsideration is a condition sine qua non before a petition for certiorari may lie, its purpose being to grant the court a quo an opportunity to correct any error attributed to it. Recognized exceptions include, among others, where the order is a patent nullity for lack of jurisdiction; where the questions raised were duly raised and passed upon by the lower court; where there is urgent necessity for resolution and further delay would prejudice the interests of the Government or of the petitioner, or the subject matter is perishable; where, under the circumstances, a motion for reconsideration would be useless; where the petitioner was deprived of due process and there is extreme urgency of relief; where the proceedings in the lower court are a nullity for lack of due process; where the proceedings were ex parte or the petitioner had no opportunity to object; and where the issue raised is one purely of law or public interest is involved.
• Factors in Determining Which of Two Pending Actions to Dismiss — Courts consider: (1) the date of filing, with preference generally given to the first action filed to be retained; (2) whether the action sought to be dismissed was filed merely to preempt the latter action or to anticipate its filing and lay the basis for its dismissal; and (3) whether the action is the appropriate vehicle for litigating the issues between the parties.
• Res Judicata and the Policy Against Forum Shopping — The rules on forum shopping are meant to prevent conflicting final decisions, and the costly consequence of forum shopping should remind parties to be mindful against abusing court processes. The principle of res judicata requires that stability be accorded to judgments; controversies once decided on the merits shall remain in repose, for there should be an end to litigation which, without the doctrine, would be endless.

• "The general rule is that a motion for reconsideration is a condition sine qua non before a petition for certiorari may lie, its purpose being to grant an opportunity for the court a quo to correct any error attributed to it by re-examination of the legal and factual circumstances of the case." — States the settled rule on the motion for reconsideration requirement under Rule 65, which the SC then applied through the "uselessness" exception.
• "The test of identity of causes of action lies not in the form of an action but on whether the same evidence would support and establish the former and the present causes of action." — The canonical formulation, quoted from Casil vs. CA (itself quoting Mendiola), that supplied the decisive test for the forum shopping finding.
• "It does not even matter that one action is for the enforcement of the parties' agreements, while the other action is for the rescission thereof." — Explains why the injunction case and the rescission case, though ostensibly opposite in relief, still involved the same issue of the validity of the deeds of sale.
• "The rule of substantial compliance may be availed of with respect to the contents of the certification." — The rule that saved the verification and certification signed by Soledad Consing alone on behalf of her co-heirs.

• Heirs of Domingo Hernandez, Sr. vs. Mingoa, Sr., G.R. No. 146548, December 18, 2009, 608 SCRA 394 — Controlling precedent, followed; where petitioners are immediate relatives sharing a common interest in the land and a common cause of action, one petitioner's execution of the verification/certification constitutes substantial compliance.
• Heirs of Olarte vs. Office of the President — Quoted within Hernandez; source of the rule that the rule of substantial compliance may be availed of with respect to the contents of the certification against forum shopping.
• Domdom vs. Sandiganbayan — Quoted; source of the enumeration of exceptions to the motion for reconsideration requirement before a petition for certiorari.
• Pineda vs. Court of Appeals, G.R. No. 181643, November 17, 2010, 635 SCRA 274 — Cited; restates the rule and exceptions on the motion for reconsideration requirement.
• Making Enterprises, Inc. vs. Marfori, G.R. No. 152239, August 17, 2011 — Cited; source of the formulation of the elements of litis pendentia and forum shopping.
• Victronics Computers, Inc. vs. RTC, Branch 63, Makati, G.R. No. 104019, January 25, 1993, 217 SCRA 517 — Cited; held that an action for specific performance and an action for nullification of the same contract both determine the contract's validity, so that a judgment in one is res judicata in the other.
• Casil vs. CA, 349 Phil. 187 (1998) — Cited; held that a single issue cannot be litigated in more than one forum and that the test of identity of causes of action lies in whether the same evidence would support both.
• Villarica Pawnshop, Inc. vs. Gernale, G.R. No. 163344, March 20, 2009, 582 SCRA 67 — Cited; source of the three factors courts consider in determining which of two pending actions should be dismissed.

• Rule 45, 1997 Rules of Civil Procedure — The procedural vehicle for the petition for review on certiorari filed by Elsa Medado seeking to annul the CA's decision and resolution.
• Rule 65, Rules of Court — Governs the special civil action for certiorari filed by the Consing heirs with the CA; the SC applied its settled rule that a prior motion for reconsideration is a condition sine qua non, subject to recognized exceptions, one of which is the uselessness of the motion.
• Section 4, Rule 7, Rules of Court, as amended — The verification requirement; the SC held it substantially complied with and, on that basis, had earlier allowed petitioner to submit a compliant verification instead of dismissing the petition outright.
• 2004 Rules on Notarial Practice — Cited in connection with the requirement of a government-issued identification card in the jurat; the SC did not resolve the point because it was never raised in petitioner's comment on the CA petition.
• Rule against Forum Shopping — Applied to dismiss the injunction complaint, the SC finding that all the elements of litis pendentia concurred with the pending rescission case.