G.R. No. 115849 – 322 Phil. 280 – 252 SCRA 259 – Civil Law – Conflict of Laws – Private International Law – Origin of Forum Non Conveniens
Producers Bank (now called First Philippine International Bank), which has been under conservatorship since 1984, is the owner of 6 parcels of land. The Bank had an agreement with Demetrio Demetria and Jose Janolo for the two to purchase the parcels of land for a purchase price of P5.5 million pesos. The said agreement was made by Demetria and Janolo with the Bank’s manager, Mercurio Rivera. Later however, the Bank, through its conservator, Leonida Encarnacion, sought the repudiation of the agreement as it alleged that Rivera was not authorized to enter into such an agreement, hence there was no valid contract of sale. Subsequently, Demetria and Janolo sued Producers Bank. The regional trial court ruled in favor of Demetria et al. The Bank filed an appeal with the Court of Appeals.
Meanwhile, Henry Co, who holds 80% shares of stocks with the said Bank, filed a motion for intervention with the trial court. The trial court denied the motion since the trial has been concluded already and the case is now pending appeal. Subsequently, Co, assisted by ACCRA law office, filed a separate civil case against Carlos Ejercito as successor-in-interest (assignee) of Demetria and Janolo seeking to have the purported contract of sale be declared unenforceable against the Bank. Ejercito et al argued that the second case constitutes forum shopping.
ISSUE: Whether or not there is forum shopping.
HELD: Yes. There is forum shopping because there is identity of interest and parties between the first case and the second case. There is identity of interest because both cases sought to have the agreement, which involves the same property, be declared unenforceable as against the Bank. There is identity of parties even though the first case is in the name of the bank as defendant, and the second case is in the name of Henry Co as plaintiff. There is still forum shopping here because Henry Co essentially represents the bank. Both cases aim to have the bank escape liability from the agreement it entered into with Demetria et al.
The Supreme Court also discussed that to combat forum shopping, which originated as a concept in international law, the principle of forum non conveniens was developed. The doctrine of forum non conveniens provides that a court, in conflicts of law cases, may refuse impositions on its jurisdiction where it is not the most “convenient” or available forum and the parties are not precluded from seeking remedies elsewhere.
**Forum Shopping: “occurs when a party attempts to have his action tried in a particular court or jurisdiction where he feels he will receive the most favorable judgment or verdict.”
Read other versions of this digest here: Legal Ethics – Forum Shopping; Civil Law – Sale | Corporation Law; Corporate Liability
