G.R. No. 159786 - Guevara vs. BPI Securities Corp.

Petitioner Edgardo V. Guevara was hired by Ayala Securities Corporation in 1958 and later detailed to the Philippine Investment Corporation (PHILSEC, later BPI Securities Corporation).
He served as president of PHILSEC from 1 September 1980 to 31 December 1983 before serving as vice-president of Ayala Corporation until his voluntary retirement on 31 August 1997.

Ventura O. Ducat obtained separate loans from Ayala International Finance Limited (AIFL) and PHILSEC amounting to US$2,500,000.00 on 15 January 1983, secured by shares of stocks with a market value of P14,088,995.00.
Ducat arranged for a dacion en pago whereby he was to transfer a 72.21‑acre tract of land in Harris County, Texas (the subject property) to satisfy the indebtedness.
The arrangement involved 1488, Inc., a U.S.-based corporation, whose president, Drago Daic, facilitated the transfer. Ducat was also to convey to 1488 the shares used as security.
PHILSEC and AIFL, while having no desire to purchase the land, agreed to extend a loan to Athona Holdings, N.V. (ATHONA) using the land as mortgage.

On 27 January 1983 in Makati City, an agreement was executed whereby 1488 sold the subject property to ATHONA at US$2,807,209.02.
PHILSEC and AIFL loaned US$2,500,000.00 to ATHONA to subsidize the purchase price, with the balance of US$307,209.02 to be paid via a promissory note executed by ATHONA.
Following the release of Ducat from his indebtedness and the delivery of shares to 1488, ATHONA’s failure to pay the interest on the promissory note led to the balance becoming due and demandable.
Consequently, 1488 filed a collection suit in a U.S. District Court to obtain payment of the balance and damages for breach of contract and fraud in misrepresenting the marketability of the shares.

The collection suit was originally filed in the U.S. District Court of Texas and later transferred to the U.S. District Court for the Southern District of Texas.
ATHONA filed an answer with counterclaim, impleading Guevara as a counter-defendant for allegedly conspiring to overvalue the subject property.
The U.S. District Court eventually dismissed the counter-complaint against Guevara and imposed jointly and severally a penalty of US$49,450.00 against PHILSEC and AIFL in his favor under Rule 11 of the Federal Rules of Civil Procedure.
This penalty was later affirmed by the U.S. Court of Appeals for the Fifth Circuit after remand proceedings.

Amid the U.S. litigation, PHILSEC, AIFL, and ATHONA filed a civil suit in the Regional Trial Court (RTC) of Makati City (Civil Case No. 16563) seeking the annulment of the 27 January 1983 Agreement and recovery of US$2,500,000.00 along with an amount representing stock values and other expenses.
In the same period, Guevara filed Civil Case No. 95-624 against BPI Securities Corp. (renamed from PHILSEC) seeking actual, moral, and exemplary damages amounting to P11,900,000.00, contending that he was wrongly impleaded in the U.S. case.
Multiple motions to dismiss were filed in Civil Case No. 95-624 on grounds of forum shopping, litis pendentia (due to the pendency of Civil Case No. 16563 or Civil Case No. 92-1445), and prescription.
The trial court denied the motions on different dates, and the Court of Appeals subsequently affirmed the trial court’s ruling, except for dismissing the claim for damages on the basis that another related action (Civil Case No. 92-1445) was pending.

BPI Securities Corp. raised issues on the propriety of the trial court’s rulings through its Petition for Certiorari in CA-G.R. SP No. 53379.
The Court of Appeals, in its decision dated 26 January 1998 and later in a resolution dated 21 March 2003, addressed the issues of litis pendentia, forum shopping, and prescription.
Subsequently, on 19 June 1997, this Court had reversed a related decision in a different case (G.R. No. 103493) and remanded matters for consolidation of Civil Cases No. 16563 and No. 92-1070, indicating the interconnected nature of the disputes.

Guevara filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, arguing that the Court of Appeals’ previous ruling in CA-G.R. SP No. 40303 should bar the present petition and that Civil Case No. 95-624 should have been dismissed based on litis pendentia.
BPI Securities Corp. contended that his amended complaint in Civil Case No. 16563, and the subsequent impleading of Guevara, created a ground for invoking litis pendentia and forum shopping in Civil Case No. 95-624.
The issues of prescription were also raised given the time lapse between Guevara’s knowledge of the tortious act (1988) and the filing of his damages case (1995).

Whether the final and executory ruling in CA-G.R. SP No. 40303, declaring that there was no litis pendentia between Civil Case No. 16563 and Civil Case No. 95-624, serves as the law of the case in the present petition.
Whether Civil Case No. 95-624 should be dismissed on the ground of litis pendentia and forum shopping, considering the pending Civil Case No. 16563 and the related Civil Case No. 92-1445.
Whether Guevara’s cause of action in Civil Case No. 95-624 has prescribed, given that the allegations and claims are based on events that occurred several years prior to the filing of the case.