G.R. No. 100113 - Cayetano vs. Monsod

In February 1998, petitioner Florpina Benavidez approached respondent Nestor Salvador to secure a loan for repurchasing her foreclosed property in Tanay, Rizal.
The parties agreed that in exchange for the loan, Benavidez would furnish several documents including a real estate mortgage, a promissory note, a deed of sale, and a special power of attorney (SPA) executed by her daughter, Florence B. Baning.

Salvador disbursed the loan by issuing a manager’s check for P1,000,000.00 and releasing P500,000.00 in cash.
Benavidez executed the promissory note (dated March 11, 1998), but she failed to deliver the required SPA.
She subsequently defaulted on her obligation, evidenced by the dishonor of postdated checks issued to pay interest.

In response to her default, Salvador sent a demand letter with a statement of account (January 11, 2000).
Salvador later filed a complaint for collection of a sum of money with damages and a prayer for preliminary attachment in RTC-Antipolo.
Benavidez moved to dismiss the case on grounds of litis pendentia, claiming she had filed a Complaint for Collection for Sum of Money, Annulment of Contract, and Checks with Prayer for Preliminary Injunction in RTC-Morong prior to the RTC-Antipolo case.

Benavidez’s motion to dismiss (asserting litis pendentia) was denied by RTC-Antipolo on July 31, 2000.
She filed an answer with counterclaim on September 15, 2000; however, both she and her counsel failed to appear at the scheduled pre-trial conference on May 2, 2001.
Consequentially, Salvador was allowed to present evidence ex parte, and RTC-Antipolo rendered judgment on June 1, 2001 ordering Benavidez to pay a computed amount (P4,810,703.21), exemplary damages, attorney’s fees, and costs.

Benavidez’s motion for reconsideration was denied by RTC-Antipolo on August 10, 2001.
Dissatisfied with the decision, she appealed to the Court of Appeals (CA) while simultaneously maintaining the existence of another pending complaint (filed in RTC-Morong) seeking annulment of the promissory note.
The CA, in its November 22, 2005 Decision, affirmed in toto the RTC-Antipolo ruling but later modified its decision on June 08, 2006 by deleting the award for exemplary damages and attorney’s fees.

Benavidez filed a petition for review under Rule 45 challenging the CA decisions.
She raised several issues including the applicability of litis pendentia, defective certification against forum shopping, the alleged unconscionability and voidness of the promissory note, and the trial court’s allowance of ex parte evidence due to her and her counsel’s absence.

Whether the RTC-Antipolo case should have been dismissed on the ground of litis pendentia due to the existence of a pending case in RTC-Morong involving the same parties and issues.
Whether the outcome of the pending RTC-Morong case (which sought annulment of the promissory note) would determinatively affect the collection case filed in RTC-Antipolo.

Whether the certification attached to Salvador’s complaint regarding non-forum shopping was defective and should have warranted dismissal of the RTC-Antipolo case.

Whether the executed promissory note is void for being unconscionable and shocking to the conscience, particularly given the alleged excessive and iniquitous interest stipulation.

Whether the trial court erred in allowing Salvador to present evidence ex parte due to Benavidez’s and her counsel’s failure to appear at the pre-trial conference and failure to file the required pre-trial brief.
Whether such absence, attributable to both counsel’s negligence and her personal circumstances, justifies reopening the case.