Chua v. Metrobank

University of the Philippines College of Law | Remedial Law Review | Prof. T.
Salvador
Topic in Syllabus Cause of Action

Case Name Chua and Filiden Realty v. Metrobank
Case No. & Date G.R. No. 182311, August 19, 2009
Ponente Chico-Nazario, J.
RELEVANT FACTS
1. Chua is the president of Filident, a realty business that obtained in 1988 a loan from Metrobank a sum of Php 4M
secured by a real estate mortgage of lands under Chua’s name.
a. The value of the collateral was more than the value of the loan so Chua was given an open credit for loans.
Consequently, Chua obtained more loans from Metrobank.
2. Chua, however, failed to pay his obligations so a Debt Settlement Agreement was entered into and the loan
obligations were restructured. In total, Petitioners’ debt amounted to Php 103M by 2001. When Petitioners failed
to pay their debts still, Metrobank sought to extra-judicially foreclose the properties. Upon a verified Petition for
Foreclosure filed by Metrobank on 25 April 2001, respondent Atty. Romualdo Celestra (Atty. Celestra) issued a
Notice of Sale dated 26 April 2001, wherein the mortgage debt was set at P88M, excluding unpaid interest and
penalties (to be computed from 14 September 1999), attorney’s fees, legal fees, and other expenses for the
foreclosure and sale. The auction sale was scheduled on 31 May 2001. On 4 May 2001, petitioners received a copy
of the Notice of Sale.
a. Chua filed before the RTC of Paranaque a complaint for injunction with TRO which was granted by the
RTC.
i. When the TRO expired, however, and no injunction was issued by the RTC, Atty. Celestra reset
the auction sale to 8 Nov. 2001. On 8 Nov 2001, the rescheduled date of the auction sale, RTC-
Branch 257 issued an Order directing that the said sale be reset anew after 8 November 2001.
ii. The Order was served on 8 Nov 2001, on Atty. Celestra’s daughter, Arlene Celestra, at a coffee
shop owned by the former’s other daughter, Grace Celestra Aguirre. The auction sale, however,
proceeded on 8 November 2001, and a Certificate of Sale was accordingly issued to Metrobank
as the highest bidder of the foreclosed properties.
3. Petitioners filed on Feb 2002 an amended complaint claiming that the Certificate of Sale was a falsified document
since there was no actual sale that took place on 8 November 2001. And, even if an auction sale was conducted,
the Certificate of Sale would still be void because the auction sale was done in disobedience to a lawful order of
the RTC. The petitioners additionally prayed for an award for damages and sought for a TRO to enjoin persons
from proceeding with the foreclosure sale.
a. The RTC denied the application for TRO and did not act on the subsequent MR filed by the Petitioners.
The Petitioners then filed a petition for certiorari to the CA who reversed the RTC and remanded the
proceedings.
4. The cases (added one for damages against Metrobank and its lawyers) filed by the petitioners were consolidated
and the RTC ruled against the petitioners. A subsequent MR in the CA was denied, hence the petition for review
on certiorari under Rule 45.
Issue Ratio
Did the petitioner YES
commit forum
shopping? Forum shopping can be committed in three ways: (1) filing multiple cases based on the same cause
of action and with the same prayer, the previous case not having been resolved yet (where the
ground for dismissal is litis pendentia); (2) filing multiple cases based on the same cause of action
and the same prayer, the previous case having been finally resolved (where the ground for dismissal
is res judicata); and (3) filing multiple cases based on the same cause of action, but with different
University of the Philippines College of Law | Remedial Law Review | Prof. T. Salvador
prayers (splitting of causes of action, where the ground for dismissal is also either litis pendentia or
res judicata).
In the present case, not only did the petitioners fail to state in their certificate of non-forum
shopping the existence of a civil case pending before another RTC branch, they have – more
importantly – filed multiple cases based on the same cause of action.
Sections 3 and 4, Rule 2 of the Rules of Court proscribe the splitting of a single cause of action:
Section 3. A party may not institute more than one suit for a single cause of action.
Section 4. Splitting a single cause of action; effect of.—If two or more suits are instituted on the
basis of the same cause of action, the filing of one or a judgment upon the merits in any one is
available as a ground for the dismissal of the others.
Forum shopping occurs although the actions seem to be different, when it can be seen that there is
a splitting of a cause of action. A cause of action is understood to be the delict or wrongful act or
omission committed by the defendant in violation of the primary rights of the plaintiff. It is true
that a single act or omission can violate various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct legal obligations. However,
where there is only one delict or wrong, there is but a single cause of action regardless of the
number of rights that may have been violated belonging to one person.
In this case, the damages being claimed by the petitioners in one civil case were also occasioned by
the supposedly fictitious foreclosure sale which was subject of the other case. Hence, the cases were
all premised on the same cause of action i.e. the purportedly wrongful conduct of respondents in
connection with the foreclosure sale of the subject properties. The rule against splitting a cause of
action is intended to prevent repeated litigation between the same parties in regard to the same
subject of controversy, to protect the defendant from unnecessary vexation; and to avoid the
costs and expenses incident to numerous suits. It comes from the old maxim nemo debet bis
vexari, pro una et eadem causa (no man shall be twice vexed for one and the same cause).
Since the petitioners did not commit forum shopping willfully and deliberately, the case shall be
dismissed without prejudice.
Ruling / Dispositive Portion:
Petition denied.

Chua v. Metrobank

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University of the Philippines College of Law | Remedial Law Review | Prof. T.

Topic in Syllabus Cause of Action

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