G.R. No. 199423 - Spouses De Guzman vs. Republic

Case Summary (G.R. No. 199423)

Related Properties, Titles, and Taking for NLEX

Planters Development Bank (Planters Bank) was the registered owner of a parcel of land covered by TCT No. V-71509, with an area of 1,238 sq.m. The parcel was subdivided into three lots: Lot 1047-C-2-D-1 (90 sq.m.), Lot 1047-C-2-D-2 (185 sq.m.), and Lot 1047-C-2-D-3 (963 sq.m.).

The Expropriation Case and Petitioners’ Intervention

On November 15, 2004, respondents filed a Complaint for expropriation against Planters Bank before the RTC of Valenzuela City, Branch 75, docketed as Civil Case No. 264-V-04, involving Lot 1047-C-2-D-1 (90 sq.m.). The expropriation was described as necessary for the construction and/or rehabilitation of toll facilities along the NLEX as an integral part of the NLEX Project.

On November 22, 2005, Planters Bank sold the entire property under TCT No. V-71509 to petitioners. Subsequently, petitioners filed a Complaint in Intervention in the expropriation case, asserting their ownership based on a Deed of Absolute Sale, and requesting relief consistent with their interest as purchasers. They additionally alleged, in the same intervention, that respondents had converted another portion of the property consisting of 185 sq.m. (Lot 1047-C-2-D-2) for road widening and sought payment of just compensation for that taking. The RTC granted petitioners’ intervention.

Petitioners’ Demand and the Second Action Filed in RTC Branch 171

Petitioners then communicated with the TRB through a letter dated August 30, 2006, informing the TRB that they were the new owners and demanding payment of P1,572,500.00 as just compensation for Lot 1047-C-2-D-2, which the TRB converted into a road, together with just compensation for Lot 1047-C-2-D-1. The TRB refused and failed to pay.

On September 12, 2006, petitioners filed a complaint for recovery of possession and/or payment of just compensation before the RTC of Valenzuela City, Branch 171, docketed as Civil Case No. 180-V-06. Petitioners alleged that they should also be paid just compensation for Lot 1047-C-2-D-2, which respondents included for the widening of an existing roadway. In the alternative, if respondents refused payment, petitioners prayed that the lot be reconveyed to them.

RTC Proceedings and Dismissal for Forum Shopping

Respondents moved to dismiss on grounds including: (one) lack of cause of action; (two) failure to comply with SC Administrative Circular 04-94 and Rule 7, Section 4 of the Rules of Court; and (three) the suit being against the State without consent to be sued. Respondents also argued that, in eminent domain, the government was bound to deal only with registered owners and that payment of just compensation should be made only to Planters Bank and not to petitioners. Respondents further contended that the complaint was not properly verified and that petitioners failed to state in the certification of non-forum shopping that the same prayer for just compensation and recovery of possession had already been raised in the expropriation case.

The RTC issued an Order dated April 9, 2006 dismissing the complaint for violation of the rule on non-forum shopping. The RTC treated petitioners’ intervention in the pending expropriation proceedings as evidence of forum shopping, reasoning that the expropriation with intervention case and the recovery of possession case involved the same parties, the same identity of rights asserted and reliefs prayed for, and substantially the same evidence. The RTC also ruled that petitioners sought compensation for the same adjoining lot allegedly covered by the Deed of Sale and that their evidence on ownership and entitlement to just compensation would overlap with what would be presented in the expropriation case.

Petitioners’ motion for reconsideration was denied in an RTC Order dated August 28, 2007. Petitioners then appealed to the CA.

CA Decision Affirming the Dismissal

In its Decision dated April 26, 2011, the CA affirmed the RTC dismissal on the ground of forum shopping. The CA held that there was identity of parties and identity of rights asserted between Civil Case No. 264-V-04 (expropriation with intervention) and Civil Case No. 180-V-06 (recovery of possession). The CA ruled that the same evidence, particularly the Deed of Absolute Sale dated November 22, 2005, would support both actions because petitioners would use it to prove ownership and entitlement to just compensation.

Although the CA acknowledged that the expropriation case involved Lot 1047-C-2-D-1 while the recovery case referred to Lot 1047-C-2-D-2, it emphasized that both were covered by a single title, TCT No. V-71509. The CA reasoned that a favorable ruling in the recovery case would necessarily affect the expropriation case. It therefore concluded that petitioners intended to fast-track outcomes in the expropriation case by filing the recovery suit, with the expectation that once ownership was established, their entitlement to just compensation would follow.

The CA denied reconsideration in a Resolution dated November 22, 2011, prompting petitioners to file the present Rule 45 petition.

Issue Raised on Review

The principal issue was whether petitioners were guilty of forum shopping in filing the complaint for recovery of possession and/or payment of just compensation after they had filed a complaint in intervention in the expropriation case.

Parties’ Contentions in the Supreme Court

Petitioners argued that there was no forum shopping because there was no identity of rights asserted and reliefs prayed for in the second action. They maintained that the judgment in one case would not amount to res judicata in the other. Petitioners also argued that the 185 sq.m. property in the recovery case was entirely separate from the 90 sq.m. lot subject of the expropriation. They asserted that while they sought just compensation for the 185 sq.m. portion in the expropriation case, such relief was impossible in that case because the expropriation proceedings covered only the 90 sq.m. lot.

Respondents, on the other hand, asserted that the elements of forum shopping were present, including the elements of litis pendentia: identity of parties; identity of rights asserted and reliefs prayed for; and the expectation that judgment in the recovery case would amount to res judicata in the expropriation case. Respondents further argued that ownership issues should be litigated in the expropriation court because it was empowered to entertain conflicting claims of ownership of the condemned property and adjudge the rightful owner thereof, given the intimate relationship between ownership and the claim for expropriation payment.

Governing Doctrine on Forum Shopping

The Supreme Court reiterated that forum shopping is the act of a litigant who repetitively avails of several judicial remedies in different courts, simultaneously or successively, based on the same transaction and essential facts, and raising substantially the same issues, pending in or already resolved adversely by some other court, to increase the chances of a favorable result. The Court emphasized that forum shopping is prohibited because it trifles with courts and abuses their processes, degrading the administration of justice and adding to congested dockets.

The Court stated that the test for forum shopping is whether the elements of litis pendentia are present, or whether a final judgment in one case amounts to res judicata in the other. It identified the elements as: (a) identity of parties (or parties representing the same interests); (b) identity of rights asserted and reliefs prayed for, with relief founded on the same facts; and (c) identity of the first two particulars such that any judgment in one action would, regardless of the prevailing party, amount to res judicata in the other action.

Absence of Identity of Rights and Reliefs Between the Two Cases

The Supreme Court held that the elements of litis pendentia were not present in the two cases. Although it did not deny identity of parties, it found a lack of identity of rights asserted and reliefs prayed for. The Court pointed out that petitioners were not originally parties in the expropriation case; they became parties when their complaint in intervention was granted by the RTC.

Applying the standard for identity of causes of action, the Court reasoned that the test is whether the same evidence would sustain both actions or whether there is identity in the facts essential to maintaining both actions. If the same facts or evidence sustain both, the cases are the same and the judgment in the first case bars the subsequent action.

Distinct Subject Matters: Expropriation of Ninety Square Meters vs. De Facto Expropriation of One Hundred Eighty-Five Square Meters

In the expropriation case, the subject matter was the 90 sq.m. property (Lot 1047-C-2-D-1), which respondents expropriated as necessary for implementing the NLEX project. The Court described expropriation as the procedure whereby government takes private property for public use with payment of just compensation, a forced taking against the will of the private owner.

Petitioners’ intervention in that expropriation case claimed that they were new owners affected by the disposition and were thus situated to assert an interest in the matter. By contrast, the recovery of possession case concerned a different subject matter: the 185 sq.m. lot (Lot 1047-C-2-D-2) adjoining the ninety-square-meter lot. Petitioners alleged that respondents had taken and used the 185 sq.m. lot for road widening and had not paid just compensation, and they demanded either payment or reconveyance upon refusal.

The Supreme Court anchored petitioners’ position on jurisprudence recognizing that when a landowner’s property is taken by the government for public use without the government initiating expropriation proceedings and without payment of just compensation, the landowner may recover the property if return remains feasible, or demand payment of just compensation

Case Syllabus (G.R. No. 199423)

The case involved a Petition for Review on Certiorari under Rule 45 assailing a Court of Appeals decision and resolution that affirmed the Regional Trial Court dismissal of petitioners’ complaint for forum shopping.
Petitioners Sps. Norberto De Guzman and Felicitas C. De Guzman sought reversal of the CA rulings that sustained the RTC’s finding of forum shopping between two suits.
Respondents Republic of the Philippines and the Toll Regulatory Board (TRB) defended the dismissal, insisting that the suits met the requisites of forum shopping through litis pendentia.

Parties and Procedural Posture

Petitioners filed an initial expropriation matter in the RTC of Valenzuela City, Branch 75 through an intervention after respondents initiated expropriation against Planters Development Bank.
Petitioners later filed a separate recovery of possession and/or payment of just compensation case before the RTC of Valenzuela City, Branch 171, which the RTC dismissed for violation of the rule on non-forum shopping.
Petitioners moved for reconsideration in the RTC, but the RTC denied the motion, leading to an appeal to the Court of Appeals.
The Court of Appeals affirmed the RTC dismissal and denied petitioners’ motion for reconsideration, prompting the present Rule 45 petition.

Key Factual Allegations

Planters Development Bank (Planters Bank) held TCT No. V-71509 covering a parcel of land of 1,238 sq.m., subdivided into three lots: Lot 1047-C-2-D-1 (90 sq.m.), Lot 1047-C-2-D-2 (185 sq.m.), and Lot 1047-C-2-D-3 (963 sq.m.).
On November 15, 2004, respondents filed an expropriation case against Planters Bank covering Lot 1047-C-2-D-1 (90 sq.m.) to implement the NLEX Project.
On November 22, 2005, Planters Bank sold the entire property covered by TCT No. V-71509 to petitioners.
After the sale, petitioners filed a Complaint in Intervention in the expropriation case, alleging they were the new owners by virtue of the Deed of Absolute Sale.
In the same intervention, petitioners alleged that respondents converted another portion comprising 185 sq.m. (Lot 1047-C-2-D-2) for road widening and demanded payment of just compensation for that taking.
Petitioners demanded payment through a letter dated August 30, 2006 for just compensation for Lot 1047-C-2-D-2, and respondents refused.
On September 12, 2006, petitioners filed a separate complaint for recovery of possession and/or payment of just compensation regarding Lot 1047-C-2-D-2, praying for payment and, upon refusal, reconveyance of that lot.

Claims in the Two RTC Cases

In the expropriation with intervention case, petitioners asserted legal interest as intervenors and claimed ownership based on their purchase from the registered owner.
Petitioners’ intervention sought compensation related to the taking involving the property covered by the existing expropriation proceedings and any affected adjoining portion they alleged was converted.
In the recovery of possession and/or payment of just compensation case, petitioners alleged a separate taking for the widening of an existing roadway involving Lot 1047-C-2-D-2 (185 sq.m.).
Petitioners’ recovery action was anchored on the theory that respondents took and used petitioners’ adjoining lot without paying just compensation and without the requisite condemnation proceedings.
Petitioners treated the 185 sq.m. lot as a distinct subject matter requiring judicial determination of area taken and the proper amount of just compensation.

Grounds for Dismissal

Respondents moved to dismiss the recovery complaint, invoking lack of cause of action, non-compliance with SC Administrative Circular 04-94 and Rule 7, Section 4 of the Rules of Civil Procedure, and lack of consent to be sued due to the suit being against the State.
Respondents argued that in the exercise of eminent domain, the government was obligated to deal with the registered owner and that just compensation must be made to Planters Bank, not petitioners.
Respondents also asserted that the complaint was not properly verified and that petitioners’ certification of non-forum shopping failed to disclose that the matters had already been raised in the expropriation case.

RTC Ruling on Forum Shopping

The RTC dismissed the complaint based on violation of the rule on non-forum shopping, finding petitioners’ intervention and subsequent recovery suit constituted forum shopping.
The RTC ruled that the expropriation with intervention case and the recovery of possession case involved the same parties, and it considered there to be identity of rights asserted and reliefs prayed for.
The RTC emphasized that petitioners sought compensation for an adjoining lot allegedly belonging to them under their purchase, and that both cases would require presenting similar evidence concerning ownership and entitlement.
The RTC found that petitioners’ actions effectively duplicated litigation concerning the same property and would preempt the other court’s authority to decide consequential issues.

CA Ruling and Reasoning

The CA affirmed the RTC dismissal and held that identity of parties and identity of rights asserted existed between the expropriation case and the recovery of possession case.
The CA reasoned that the same evidence, including the Deed of Absolute Sale dated November 22, 2005, would be used to prove petitioners’ ownership and entitlement to just compensation.
The CA acknowledged that the expropriation involved Lot 1047-C-2-D-1 (90 sq.m.) while the recovery action i