Title
Goodland Co., Inc. vs. Banco de Oro-Unibank, Inc.
Case
G.R. No. 208543
Decision Date
Feb 11, 2019
Goodland’s property attached after failed dacion en pago, alleging fraud; CA dismissed petition citing litis pendentia, res judicata; Supreme Court affirmed.
certiorari
litis pendentia
consolidation of cases

Case Summary (G.R. No. 208543)

Factual Background

In 1999, Guy, acting on behalf of petitioner Goodland and other related corporations, namely Richgold Realty Corporation (Richgold), Smartnet Philippines, Inc. (Smartnet), and respondent Goodgold, secured loans and credit facilities from EPCI. The debtor corporations allegedly failed to pay monthly interest on the loan obligation. In response, they offered to settle the loan through a dacion en pago. On July 30, 2004, EPCI issued a letter agreement confirming that the Makati City property covered by TCT No. 218470, registered under the name of Goodgold, would be applied as full payment of the loan obligation at a dacion price of P245 million. A Deed of Cession was executed to formalize the dacion en pago. Despite the execution of the deed, EPCI was allegedly unable to cause the transfer of the title to its name due to the alleged fraudulent refusal of Goodgold to turn over transfer documents.

In 2007, EPCI merged with BDO, resulting in BDO as successor. On January 16, 2009, BDO filed before the RTC of Mandaluyong City, Branch 213 a Complaint for a Sum of Money with Application for Preliminary Attachment, docketed as Civil Case No. MC09-3902, against Guy, petitioner Goodland, and the other debtor corporations. BDO alleged that the defendants obtained loans through fraud in the performance of their obligation to EPCI, now BDO; that Guy conspired with the debtor corporations to delay and evade settlement; that misrepresentation extended maturity dates; that despite the dacion en pago, defendants refused to submit transfer documents; and that as of August 31, 2008, the total amount due was P409,927,978.78. BDO asserted there was insufficient security and indicated willingness to post a bond to be fixed by the court.

RTC Proceedings and the Preliminary Attachment

On February 2, 2009, the RTC issued an order granting BDO’s application for a writ of preliminary attachment. The RTC caused the attachment of multiple properties, including petitioner Goodland’s TCT No. S-97436 (451440) and several properties registered under Guy and Goodgold, among them Goodgold’s TCT No. 218470. Petitioner Goodland and Richgold sought relief through an urgent omnibus motion to lift attachment and/or discharge portions, and to stop implementation on account of alleged excessive attachment. Guy also filed a motion to discharge attachment, and Goodgold filed an ad cautelam motion to discharge attachment.

On March 3, 2010, the RTC discharged the properties of Guy and petitioner Goodland relating to TCT No. S-97436 (451440), reasoning that the properties of Goodgold covered by TCT Nos. 43837, 43838, and 218470 were sufficient to cover BDO’s claims. Both BDO and Goodgold moved for reconsideration. On October 4, 2010, the RTC partially granted Goodgold’s motion by discharging TCT No. 43838, while reinstating the attachment on Goodland’s TCT No. S-97436 (451440). BDO elevated the matter to the CA via a petition for certiorari in CA-G.R. SP No. 117223. Petitioner Goodland moved for reconsideration at the RTC, which was denied on January 24, 2011.

CA Proceedings: CA-G.R. SP No. 117223 and CA-G.R. SP No. 119327

On June 6, 2011, the CA, in CA-G.R. SP No. 117223, granted BDO’s petition for certiorari. It found the legal requisites for attachment as to Guy’s properties duly proven, and it reinstated the attachment on those properties. As to Goodgold’s properties, the CA ruled there was no sufficient basis to include them in the writ, except for Goodgold’s TCT No. 218470 subject of the dacion en pago, but only to the extent of P69,821,702.77. After motions were filed, the CA corrected a clerical error in the dispositive portion because TCT No. S-97436 (451440) was registered in the name of petitioner Goodland, not Guy. In order to rectify this, the CA amended the dispositive portion in a manner that, among others, ordered reinstatement of attachment over Goodland’s TCT No. S-97436 (451440) and retained attachment on TCT No. 218470 only to the extent stated, while directing complete discharge of the properties covered by TCT Nos. 43837, 43838 and CCT No. 1794. The CA’s amended disposition followed the denial of Guy’s motion for reconsideration, through a CA resolution dated November 29, 2012. An entry of judgment issued on July 31, 2013.

Separately, on February 22, 2013, in CA-G.R. SP No. 119327, the CA dismissed petitioner Goodland’s petition for certiorari. The CA found that the parties and issues were identical to those earlier raised in CA-G.R. SP No. 117223, and therefore that the second petition was barred by litis pendentia and/or res judicata due to the preexisting case. The CA denied Goodland’s motion for reconsideration on July 30, 2013.

The Parties’ Contentions on Petition for Review

Petitioner Goodland filed a Rule 45 petition challenging the CA’s dismissal in CA-G.R. SP No. 119327. It assigned errors, essentially asserting that the writ of preliminary attachment on Goodland’s property was null and void because BDO allegedly failed to show fraudulent intent on the part of the defendants, and that reinstatement of attachment violated the prohibition on excessive attachment. It also alleged grave abuse of discretion on the ground that the RTC reinstated attachment based on speculation and presumption rather than proper legal basis. Additionally, petitioner Goodland invoked the rule that attachment rules must be strictly construed in favor of the defendant.

BDO argued for dismissal on procedural and substantive grounds. It contended that Goodland failed to include as an assigned error the CA’s dismissal of its petition for certiorari, which allegedly rendered the dismissal final and conclusive and left no basis for the Court to resolve other issues. BDO also relied on res judicata, asserting that the propriety of reinstatement of the attachment over Goodland’s property had already been finally upheld in CA-G.R. SP No. 117223. On the merits, BDO maintained the writ was validly issued, reiterating the alleged fraudulent scheme committed by Guy and the debtor corporations. It also argued the attachment was not excessive because the dacion en pago did not extinguish the obligation.

Respondent Goodgold echoed BDO’s arguments. It maintained that the CA’s decision in CA-G.R. SP No. 117223 had already made a final definitive ruling, invoking res judicata. On the merits, it asserted the attachment was not excessive and that there was evidence of fraud attributable to Guy, Goodland, and Richgold.

Legal Basis and Reasoning

The Court held that the petition lacked merit. It recognized the general rule under Rule 51, Section 8 that only errors assigned in the petition may be considered for decision, subject to recognized exceptions. The Court acknowledged that petitioner Goodland did not properly assign as an error the CA’s dismissal of its petition for certiorari in CA-G.R. SP No. 119327. Nevertheless, the Court found it more prudent to resolve the propriety of the CA’s dismissal because the issue was necessary to achieve a just and complete resolution of the case.

In addressing that dismissal, the Court elaborated on the importance of consolidating related cases to avoid conflicting rulings among coordinate divisions of the CA. It cited the doctrine that failure to consolidate does not automatically result in dismissal unless litis pendentia or res judicata exists. It further reasoned that in this case, the dismissal was justified.

The Court then applied the requisites of litis pendentia and res judicata as grounds for dismissal. It held that litis pendentia exists when there is identity of parties, identity of rights asserted and relief prayed for, reliance on the same facts and basis, and such that any judgment in the other action would result in res judicata on the action under consideration. Res judicata, on the other hand, required a final former judgment on the merits rendered by a court with jurisdiction, involving identity of parties, subject matter, and cause of action.

Applying these principles, the Court concluded that the CA correctly dismissed petitioner Goodland’s petition for certiorari in CA-G.R. SP No. 119327 on the ground of litis pendentia, which by the time the matter matured operated in the nature of res judicata due to the finality of the June 6, 2011 CA decision in CA-G.R. SP No. 117223. The Court emphasized that the parties and issues in the two petitions were identical. In CA-G.R. SP No. 117223, BDO sought reinstatement of the attachment over Guy’s properties by asserting insufficiency of the remaining attached properties. In CA-G.R. SP No. 119327, petitioner Goodland sought discharge of its attached property by asserting that the total current market value of co-defendants’ attached properties was enough to satisfy BDO’s claim in the event of an adverse judgment. Both petitions thus turned on the sufficiency or insufficiency of the attached properties. The Court further reasoned that the argument used by petitioner Goodland—that the attached properties of Goodgold were sufficient—no longer held given the June 6, 2011 CA ruling that discharged Goodgold’s properties except TCT No. 218470, and only to a limited extent. Because petitioner Goodland failed to timely move for reconsideration or appeal the June 6, 2011 CA decision, it became bound by that ruling.

The Court also stre

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