Young vs. Sy

The defense of forum shopping is waived if not raised in the original Motion to Dismiss; moreover, forum shopping does not exist where the prior case was dismissed for lack of cause of action (without prejudice) before the filing of the second case, as neither litis pendentia nor res judicata applies, and the false certification, while constituting indirect contempt, does not automatically warrant dismissal where substantial justice requires resolution on the merits.

The case arises from a dispute between Emilio Young and John Keng Seng regarding an agency relationship and accounting of properties. After the dismissal of the first complaint for lack of cause of action, the plaintiff filed a second complaint which the defendant sought to dismiss on grounds of forum shopping based on a false certification, raising this ground only in a motion for reconsideration of the order denying the original motion to dismiss.

• On September 16, 1996, respondent John Keng Seng filed a complaint for accounting of general agency, injunction, turning over of properties, and damages against petitioner Emilio Young and his wife Tita Young before the RTC of Bacolod City, Branch 53 (Civil Case No. 96-9508).
• The spouses Young filed a Motion to Dismiss for lack of cause of action.
• On March 6, 1997, RTC Branch 53 dismissed Civil Case No. 96-9508 for lack of cause of action; the Motion for Reconsideration was denied on April 2, 1997.
• On June 23, 1997, respondent filed another complaint for accounting and damages against petitioner alone before RTC Bacolod City, Branch 44 (Civil Case No. 97-9830).
• Petitioner filed a Motion to Dismiss the Second Case on the ground that the complaint failed to state a good, valid, and/or worthwhile cause of action.
• The RTC denied the Motion to Dismiss on August 19, 1997.
• Petitioner filed a Motion for Reconsideration raising for the first time the grounds that the complaint failed to state a cause of action and that respondent violated the rule against forum shopping by deliberately submitting a false certification under oath.
• On September 23, 1997, RTC granted the Motion for Reconsideration and dismissed Civil Case No. 97-9830.
• Respondent filed a Motion for Reconsideration of the dismissal order.
• On October 24, 1997, Judge Anastacio I. Lobaton inhibited himself from hearing the case and ordered the records forwarded for re-raffle.
• The case was re-raffled to RTC Branch 54, presided by Judge Demosthenes L. Magallanes.
• On December 16, 1998, Judge Magallanes issued an order reconsidering the dismissal, holding that respondent had not violated the rule on forum shopping because the First Case was no longer pending when the Second Case was filed, and directing the Clerk of Court to set the case for further proceedings.
• Petitioner moved for reconsideration of the December 16, 1998 order, but the motion was denied on April 23, 1999.
• The respondent's certification in the Second Case stated that he had not commenced any other action involving the same issue and that no such action was pending, which was inaccurate because it failed to disclose the filing of Civil Case No. 96-9508.

• The Court of Appeals erred in holding that respondent did not violate the rule against forum shopping despite the record clearly showing the willful and deliberate submission of a false certification against forum shopping and non-compliance with the undertaking under Rule 7, Section 5 of the Rules of Court.
• The certification submitted by respondent was false because it failed to disclose the prior filing of Civil Case No. 96-9508.
• The violation of the rule on forum shopping warrants the dismissal of the Second Case with prejudice and constitutes direct contempt.
• The CA's decision was not in accord with law and jurisprudence and sanctioned a substantial departure from the accepted and usual course of judicial proceedings.

• The petitioner waived the right to invoke forum shopping as a ground for dismissal because he failed to raise it in his original Motion to Dismiss filed with the trial court, raising it only in his Motion for Reconsideration.
• The Court of Appeals did not sanction a substantial departure from the accepted and usual course of judicial proceedings in upholding the order dated December 16, 1998 denying the motion to dismiss.
• The First Case was already dismissed when the Second Case was filed, hence there was no forum shopping.

• Procedural Issues: Whether the petitioner waived the defense of forum shopping by failing to raise it in his original Motion to Dismiss and only raising it in his Motion for Reconsideration.
• Substantive Issues:
  • Whether the respondent violated the rule against forum shopping by submitting a false certification.
  • Whether such violation warrants the automatic dismissal of the Second Case.

• Procedural: The petitioner waived the defense of forum shopping by failing to invoke it at the first opportunity in his Motion to Dismiss filed with the trial court. Under Section 1 of Rule 9 and Section 8 of Rule 15 of the Rules of Court, defenses and objections not pleaded in a motion to dismiss or answer are deemed waived. The Court held that petitioner's appeal should have been denied outright for this procedural lapse, but proceeded to discuss the merits for the benefit of the bench and the bar.
• Substantive: While the respondent's certification was indeed inaccurate or false for failing to disclose the First Case, no forum shopping technically existed because: (1) Civil Case No. 96-9508 was dismissed on March 6, 1997, while Civil Case No. 97-9830 was filed on June 23, 1997, meaning the element of litis pendentia was absent; and (2) the dismissal of the First Case was for lack of cause of action, which does not bar the refiling of the same action and does not constitute res judicata. The Court emphasized that the certification requirement is a formal, not a jurisdictional, requirement. Furthermore, substantial justice requires the resolution of controversies on their merits, and procedural rules should be liberally construed to ensure the just, speedy, and inexpensive disposition of actions.

• Forum Shopping — Defined as the institution of two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same or related causes and/or to grant the same or substantially the same reliefs. It is an act of malpractice prohibited because it trifles with the courts and abuses their processes.
• Test for Forum Shopping — 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, requiring identity of parties, rights or causes of action, and reliefs sought.
• Waiver of Defenses — Defenses and objections not pleaded in a motion to dismiss or in an answer are deemed waived, except for lack of jurisdiction over the subject matter, pendency of another action between the same parties for the same cause, bar by prior judgment, or statute of limitations.
• Certification Against Forum Shopping — Under Section 5 of Rule 7, the plaintiff must certify under oath that he has not commenced any other action involving the same issues. Failure to comply is not curable by mere amendment, but submission of a false certification constitutes indirect contempt.
• Dismissal for Lack of Cause of Action — A dismissal based on failure to state a cause of action is without prejudice and does not bar the refiling of the same action or claim with proper allegations.
• Liberal Construction of Procedural Rules — Procedural rules should be liberally construed to ensure the just, speedy, and inexpensive disposition of actions and proceedings on their merits, and the rule on forum shopping should not be interpreted literally at all times.

• "In general, violation of the rule on forum shopping should be raised at the earliest opportunity in a motion to dismiss or a similar pleading. Invoking it in the later stages of the proceedings or on appeal may result in the dismissal of the action as an exception only if the violation arises from or will result in (1) the loss of jurisdiction over the subject matter, (2) the pendency of another action between the same parties for the same cause, (3) the barring of the action by a prior judgment, or (4) the crossing of the Statute of Limitations."
• "Forum shopping is the institution of two or more suits in different courts, either simultaneously or successively, in order to ask the courts to rule on the same or related causes and/or to grant the same or substantially the same reliefs."
• "It is an act of malpractice that is prohibited and condemned because it trifles with the courts and abuses their processes. It degrades the administration of justice and adds to the already congested court dockets."
• "The test for determining whether a party violated the rule against forum shopping has been laid down... that is, 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 fact that the Circular requires that it be strictly complied with merely underscores its mandatory nature in that it cannot be dispensed with or its requirements altogether disregarded, but it does not thereby interdict substantial compliance with its provisions under justifiable circumstances."

• First Philippine International Bank v. Court of Appeals — Cited for the test to determine forum shopping: whether elements of litis pendentia are present or a final judgment in one case will amount to res judicata in the other, requiring identity of parties, rights asserted, and relief prayed for.
• Buan v. Lopez — Cited as the origin of the test for forum shopping regarding identity of parties, rights, and reliefs.
• Loyola v. Court of Appeals — Cited for the principle that the rule on non-forum shopping should not be interpreted literally at all times and that substantial compliance is acceptable under justifiable circumstances.
• Executive Secretary v. Gordon — Cited for the definition and condemnation of forum shopping as an act of malpractice.
• Roxas v. Court of Appeals — Cited for the elements of res judicata and the consideration of vexation caused to courts in forum shopping.
• Basco v. Court of Appeals and Magno-Adamos v. Bagasao — Cited for the principle of substantial justice.

• Rule 7, Section 5 of the Rules of Court — Certification against forum shopping; provides for the requirement of certification under oath, the consequences of failure to comply (dismissal without prejudice), submission of false certification (indirect contempt), and willful and deliberate forum shopping (summary dismissal with prejudice and direct contempt).
• Rule 9, Section 1 of the Rules of Court — Provides that defenses and objections not pleaded in a motion to dismiss or answer are deemed waived, except for lack of jurisdiction, pendency of another action, bar by prior judgment, or statute of limitations.
• Rule 15, Section 8 of the Rules of Court — Provides that a motion attacking a pleading, order, judgment, or proceeding shall include all objections then available, and all objections not so included shall be deemed waived.
• Rule 1, Section 6 of the Rules of Court — Construction of the Rules; provides that the Rules should be liberally construed to secure their just, speedy, and inexpensive disposition.