RULE 2

GOODLAND COMPANY, INC., petitioner, -versus- ASIA UNITED BANK,

respondents.
G.R. No. 195546, FIRST DIVISION, March 14, 2012, VILLARAMA, JR., J.

With respect to identity of cause of action, a cause of action is defined in Section 2,

Rule 2 of the Rules of Court as the act or omission by which a party violates the right
of another. This Court has laid down the test in determining whether or not the
causes of action in the first and second cases are identical, to wit: would the same
evidence support and establish both the present and former cause of action? If so,
the former recovery is a bar; if otherwise, it does not stand in the way of the former
action.

In the first case, petitioner alleged the fraudulent and irregular execution and
registration of the REM which violated its right as owner who did not consent
thereto, while in the second case petitioner cited further violation of its right as
owner when AUB foreclosed the property, consolidated its ownership and obtained a
new TCT in its name. Considering that the aforesaid violations of petitioner’s right
as owner in the two cases both hinge on the binding effect of the REM, i.e., both
cases will rise or fall on the issue of the validity of the REM, it follows that the same
evidence will support and establish the first and second causes of action.

Facts:

Goodland Company mortgaged its two parcels of land situated in Sta. Rosa, Laguna
through a Third Party Real Estate Mortgage (REM) with Smartnet to secure the loans
extended by Asia United Bank (AUB). Petitioner also executed another REM for its
Makati properties. AUB registered the mortgages with the Registry of Deed at the
concerned properties. Afterwards, Goodland repudiated the REMs. Hence, Goodland
filed a complaint for annulment of mortgage on the ground that the REM was
falsified.

Smartnet defaulted on its loan obligation which prompted AUB to extra-judicially

foreclose the REM. Goodland filed another case seeking for the annulment of the
foreclosure sale and enjoin consolidation of the title in favor of AUB. AUB moved to
dismiss both the cases filed by Goodland on the ground of forum shopping and litis
pendentia.

Issue:
Whether Goodland Company is guilty of forum shopping. (Yes)

Ruling:

There is forum shopping when the following elements are present: “(a) identity of
parties, or at least such parties as represent the same interests in both actions[;] (b)
identity of rights asserted and relief prayed for, the relief being founded on the same
facts[;] and (c) the identity of the two preceding particulars[,] 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; said requisites [are] also constitutive of
the requisites for auter action pendant or lis pendens.” The essence of forum shopping
is the filing of multiple suits involving the same parties for the same cause of action,
either simultaneously or successively, for the purpose of obtaining a favorable
judgment, through means other than by appeal or certiorari. All the foregoing
elements are present in this case.

With respect to identity of cause of action, a cause of action is defined in Section 2,

Rule 2 of the Rules of Court as the act or omission by which a party violates the right
of another. This Court has laid down the test in determining whether or not the causes
of action in the first and second cases are identical, to wit: would the same evidence
support and establish both the present and former cause of action? If so, the former
recovery is a bar; if otherwise, it does not stand in the way of the former action.

In the first case, petitioner alleged the fraudulent and irregular execution and
registration of the REM which violated its right as owner who did not consent
thereto, while in the second case petitioner cited further violation of its right as owner
when AUB foreclosed the property, consolidated its ownership and obtained a new
TCT in its name. Considering that the aforesaid violations of petitioner’s right as
owner in the two cases both hinge on the binding effect of the REM, i.e., both cases
will rise or fall on the issue of the validity of the REM, it follows that the same
evidence will support and establish the first and second causes of action.

Asia Brewery Inc. and Charles Go, Petitioners, -versus- Equitable PCI Bank
(now BDO), Respondents.
G.R. No. 190432, FIRST DIVISION, April 25, 2017, Sereno, C.J.

FACTS:
Petitioners filed a complaint for payment, reimbursement or restitution against
respondents. Petitioners alleged that 10 to 16 crossed checks were issued in the name
of Charlie Go. However, none of the checks were received by Go. Instead a certain
Raymond Keh was able to receive the said checks and deposited the same to
Respondent bank pretending to be Go. The RTC, however, RTC dismissed the
Complaint for lack of cause of action prior to trial.

ISSUE:
Whether or not the lower court correctly dismissed the case. (No)

RULING:

Failure to state a cause of action is not the same as lack of cause of action; the terms
are not interchangeable. It may be observed that lack of cause of action is not among
the grounds that may be raised in a motion to dismiss under Rule 16 of the Rules of
Court. The dismissal of a Complaint for lack of cause of action is based on Section 1
of Rule 33.

We said that ''dismissal due to lack of cause of action may be raised any time after the
questions of fact have been resolved on the basis of stipulations, admissions, or
evidence presented by the plaintiff." In the case at bar, the action has not even
reached the pre-trial stage. Even assuming that the trial court merely used the wrong
terminology, that it intended to dismiss the Complaint on the ground of failure to
state a cause of action, the Complaint would still have to be reinstated.

If the Complaint fails to state a cause of action, a motion to dismiss must be made
before a responsive pleading is filed; and the issue can be resolved only on the basis
of the allegations in the initiatory pleading. On the other hand, if the Complaint lacks
a cause of action, the motion to dismiss must be filed after the plaintiff has rested its
case.